What's happening
This bill requires the New York State Education Department to create a grading system and public database for for-profit colleges, including metrics like graduation rates, debt, and job placement.
Why it matters
Increases transparency and consumer protection. By requiring for-profit colleges to publicly report detailed data—such as graduation rates, job placement, student debt, and loan default rates—prospective students and families gain clearer insight into the risks and benefits of attending these institutions.
Promotes accountability for for-profit colleges. The annual grading system incentivizes schools to improve student outcomes (e.g., graduation and job placement rates) and support services, since poor performance would be visible to the public and could deter new enrollments.
Facilitates oversight and policy decisions. The centralized database enables state agencies, lawmakers, and watchdogs to identify underperforming or predatory institutions, potentially informing future regulations, funding decisions, or enforcement actions.
Empowers students to make informed choices. By mandating that colleges display their annual grade on their websites, the bill ensures that students see an institution’s track record before applying or enrolling, helping them avoid high-cost, low-return programs.
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Headline styles
Grade For-Profit Colleges
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to higher education
- Referred to higher education
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Grade For-Profit Colleges
In Assembly Committee · Higher Education · Sponsor Harvey Epstein
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5798
2019-2020 Regular Sessions
IN SENATE
May 15, 2019
Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Higher Education
AN ACT to amend the education law, in relation to directing the commissioner of education to establish a system for grading for-profit institutions of higher education
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 305 of the education law is amended by adding a new subdivision 60 to read as follows:
60. a. The commissioner is authorized and directed to establish and maintain a database of the following information on every for-profit institution of higher education:
(i) total for-profit institution of higher education program cost;
(ii) graduation rate;
(iii) graduate placement rate;
(iv) total placement rate;
(v) community service programs provided to students to do volunteer work for either a corporation, association, organization or trust described in section 501 (c) (3) of the United States internal revenue code or a government agency;
(vi) support services available to students including career and guidance counseling and mental health services;
(vii) median time in which a student completes a for-profit institution of higher education program;
(viii) median cumulative student debt amount;
(ix) average amount borrowed;
(x) cohort default rate;
(xi) post school earnings; and
(xii) outstanding student debt of for-profit institution of higher education graduates ten years out.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11237-02-9
S. 5798 2
b. (i) Annually on or before July first, each for-profit institution of higher education shall report to the department all information regarding subparagraphs (i) through (vi) of paragraph a of this subdivision necessary for the commissioner to establish and maintain the database pursuant to paragraph a of this subdivision. The commissioner shall promulgate rules and regulations regarding the form and content of such report.
(ii) The commissioner shall utilize all information reported by a for-profit institution of higher education and information publicly available from the federal government and any other source as deemed necessary by such commissioner to carry out the provisions of this subdivision.
c. (i) The commissioner shall devise a method for assigning and publishing a letter grade to every for-profit institution of higher education based upon the information contained in the database established pursuant to this subdivision. Such grade shall be updated annually.
(ii) Each for-profit institution of higher education shall prominently display on its website the letter grade most recently assigned to such institution pursuant to subparagraph (i) of this paragraph.
d. As used in this subdivision, the following terms shall have the following meanings:
(i) "For-profit institution of higher education" means a school that:
(1) provides a program leading to an associates or baccalaureate degree;
(2) is legally authorized in New York state to provide a program of education beyond secondary education; and
(3) is neither a public or non-profit institution.
(ii) "Graduation rate" means the number of students at a for-profit institution of higher education who received certificates, diplomas, or degrees in the program during the latest two calendar years, divided by the number of students who enrolled in the program during the latest two calendar years. The graduation rate shall be determined within one hundred eighty days from the end of each calendar year and shall be calculated separately for students admitted as freshmen and students who transfer in.
(iii) "Graduate placement rate" means the number of students obtaining full time (at least thirty-two hours per week), non-temporary employment in the field of study during the latest two calendar years for which the for-profit institution of higher education has obtained verification, divided by the number of all students graduating from the program during the latest two calendar years. The graduate placement rate shall be determined within one hundred eighty days from the end of each calendar year and shall be calculated separately for students admitted as freshmen and students who transfer in.
(iv) "Total placement rate" means the product of the graduate placement rate and the graduation rate. The total placement rate shall be determined within one hundred eighty days from the end of each calendar year.
(v) "Median cumulative debt amount" means the median amount of cumulative debt, including private, institutional, and federal, incurred by a student who attended a for-profit institution of higher education whether or not they completed a program at such institution.
(vi) "Average amount borrowed" means the average amount of private, institutional, and federal, loans a student who attended a for-profit
S. 5798 3
institution of higher education borrows to enroll in a program at such institution.
(vii) "Post school earnings" means the sum of any wages, deferred compensation and self-employment earnings.
(viii) "Cohort default rate" means the percentage of a for-profit institution of higher education's borrowers who enter repayment on any private, institutional and federal loans during the fiscal year and default within the cohort default period. Cohort default rate shall be calculated for the periods of three years, five years and ten years.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the education law, in relation to directing the commissioner of education to establish a system for grad- ing for-profit institutions of higher education
Summary of provisions
Section 1 amends section 305 of the education law to add a new subdivi- sion 60 to:
- direct the commissioner to maintain a database of certain information for every for profit institution of higher education and requires such institutions to annually report to the department such information.
-direct the commissioner to assign a letter grade to each for-profit institution based
- on a method devised by the commissioner for the purpose of informing prospective students about the institutions standards.
- Require every for-profit institution is to prominently display the up-to-date grade on the institutions website. - define terms.
Section 2 provides the effective date
Justification
For-profit institutions compete withnon-profit institutions for students' aid. In 2015-16, $68 million of New York taxpayers' dollars flowed into for-profits' coffers--20 percent of all state scholarship funds that year. These private, profit-driven companies, rely on state and federal aid to do business but our investment in for-profits has not always yielded a good return.
Reports have shown that 38 percent of for-profits leave a majority of their students with earnings below those of an average, high school graduate worker. Worse, 25 percent of New Yorkers who attended a for- profit defaulted on their student loans. Over a dozen years, the default rate for for-profit students was quadruple that of their public and non-profit counterparts. New Yorkers of color bear the brunt of these concerning statistics: 72 percent of black students attending for-pro- fits default within twelve years.
Prospective students need better ways of understanding the standards and outcomes at an institution where they may be considering enrolling. This bill establishes a system for grading for-profit institutions based on metrics that are important for prospective students to consider such as job placement rates, post-school earnings, and loan default rates.
Providing clear information to students with plans to pursue,their education at a for-profit institution will enable them to make informed choices about what is best for their goals and long-term success.
Prior legislative history
New bill.
Fiscal implications for state and local governments
To be determined
Effective date
The January 1st after becoming law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.