Bill Text: NJ S2588 | 2020-2021 | Regular Session | Introduced
Bill Title: Establishes certain requirements for closures of institutions of postsecondary education.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-08-25 - Combined with S1271/2660 (SCS) [S2588 Detail]
Download: New_Jersey-2020-S2588-Introduced.html
Sponsored by:
Senator SANDRA B. CUNNINGHAM
District 31 (Hudson)
SYNOPSIS
Establishes certain requirements for closures of institutions of postsecondary education.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning institutions of postsecondary education and supplementing P.L.1989, c.293 (C.34:15C-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Closure" means the cessation of an educational instruction in at least one program by a private career school or institute of postsecondary education that causes a student to be unable to complete the program prior to the cessation of educational instruction.
"Commissioner" means the Commissioner of Labor and Workforce Development.
"Disorderly closure" means a closure that does not meet the requirements of this act.
"Eligible transfer institution" means a private career school or an institution of postsecondary education that has been approved by the commissioner pursuant to section 4 of this act.
"Institution of postsecondary education" means a government unit, person, association, firm, corporation, private organization, or any entity doing business or maintaining facilities within the State, whether operating on a for profit or not for profit basis, which:
(1) offers or maintains a course of instruction or instructional program utilized to prepare individuals for future education or the workplace, including instruction in literacy or basic skills, or provides supplemental instruction in recognized occupational skills, pre-employment skills or literacy skills;
(2) offers instruction by any method including, but not limited to, classroom, shop, laboratory experience, correspondence, Internet and other distance learning media, or any combination thereof;
(3) offers instruction to the general public or in conjunction with New Jersey's workforce investment system; and
(4) charges tuition or other fees or costs, or receives public funding for the delivery of any of the above types of instruction.
"Institution of postsecondary education" shall not include:
(1) employers offering instruction to their employees directly or through a contract instructor, where there is no cost to the employee and no profit to the employer; or
(2) schools offering instruction which is avocational, cultural or recreational in nature.
"Institutional debt" means:
(1) the amount outstanding on any credit, including unpaid charges, extended by or on behalf of a private career school or an institution of postsecondary education that a student is obligated to repay, whether the amount has been reduced to a judgment or the school classifies it as a loan; or
(2) a nonfederal loan or debt agreement that is issued expressly for postsecondary education expenses and that is guaranteed by a private career school or an institution of postsecondary education or a private educational lender that is affiliated with a private career school or an institution of postsecondary education.
"Institutional financial aid agreement" means any contract, promissory note, part of an enrollment agreement, or other agreement in which a student agrees to pay an institutional debt.
"Private career school" means a privately owned and privately operated institution of postsecondary education, other than an institution of higher education, that furnishes or offers to furnish programs, whether or not requiring a payment of tuition or fee, for the purpose of training, retraining, or upgrading individuals for gainful employment as workers in recognized or emerging occupations.
"Student" means an individual enrolled at a private career school or an institution of postsecondary education in New Jersey, or a New Jersey resident enrolled at a private career school or an institution located outside of this State.
2. a. This act shall apply to a private career school or an institution of postsecondary education that operates in this State.
b. A private career school or an institution of postsecondary education shall provide the commissioner a close-out plan. The close-out plan shall be updated as required by the commissioner.
c. A close-out plan shall include any information required by the commissioner and shall state that:
(1) the school or institution shall make all reasonable efforts to ensure that any closure of a program complies with the requirements of this act;
(2) the chief executive officer and the members of the governing body of the school or institution were not in an executive position or a member of a governing body of a school in which a disorderly closure occurred;
(3) the chief executive officer and the members of the governing body agree to be jointly and severally personally liable for an amount determined by the commissioner, not to exceed $1,000 for each student who is enrolled at the time of a disorderly closure; and
(4) any institutional financial aid agreement offered to a student shall contain language stating that, in the event of a disorderly closure, the institutional debt shall be void and shall not be recovered, collected, or enforced.
d. A private career school or an institution of postsecondary education shall furnish a performance bond or irrevocable letter of credit in an amount equal to the school's gross tuition and fees for the prior academic year. The commissioner shall waive this requirement for any institution of postsecondary education that is operated by the State. The commissioner shall adopt regulations to carry out the requirements of this subsection.
e. The commissioner shall seek an injunction or other judicial remedy against a private career school or an institution of postsecondary education that fails to comply with the requirements of this section, including requiring the school to refund all tuition and fees paid by any student.
3. a. A private career school or an institution of postsecondary education shall enter into a school-to-school teach-out agreement prior to the closure of any program of educational instruction.
b. In order to satisfy the requirements of this section, a school-to-school teach-out agreement shall:
(1) be arranged by the closing private career school or institution of postsecondary education;
(2) be agreed to by an eligible transfer institution, the closing private career school or institution of postsecondary education, and the commissioner; and
(3) unless waived for good cause by the commissioner, specify that the eligible transfer institution shall:
(a) be located within a reasonable distance of the closing school or institution, if the closing school or institution has a physical presence in the State;
(b) accept the transfer of all completed credits from students affected by the closure; and
(c) allow a student affected by the closure to complete the student's program with substantially the same number of credit hours as was required by the school or institution operating the closing program; and
(4) not charge a student tuition or fees in excess of the lesser of:
(a) the remaining amount that a student affected by the closure would have paid to the closing school or institution to complete the program; or
(b) the transfer institution's applicable tuition and fees; and
(5) specify that, on request by a student affected by the closure, the closing school or institution shall provide a complete academic record and an official transcript to the student at no cost to the student.
c. A student enrolled at a private career school or an institution of postsecondary education within 120 days of a disorderly closure shall be entitled to reimbursement from the school's bond or letter of credit of all tuition and fees paid to the school.
4. a. The Commissioner of Labor and Workforce Development shall approve a private career school or an institution of postsecondary education to act as an eligible transfer institution if the school or institution:
(1) is in good standing with its accreditor and, if applicable, its licensing body;
(2) if applicable, has cohort loan default rates, as most recently reported by the U.S. Department of Education, that are less than or equal to the cohort loan default rates of the closing institution;
(3) is not currently under financial aid restrictions by the U.S. Department of Education;
(4) within the previous five years, has not entered into any settlement agreements related to a consumer protection law with a law enforcement agency, or had any judgments related to a consumer protection law entered against it in favor of a law enforcement agency; and
(5) meets the requirements provided in section 3 of this act, and any additional standards provided pursuant to subsection b. of this section.
b. The commissioner may establish additional standards on a case-by-case basis for approving an eligible transfer institution.
5. a. Before any private career school or an institution of postsecondary education ceases educational instruction or administrative operation, the school shall file with the commissioner copies of all essential records of the current or former students of the school. The obligation of a school or institution under this subsection shall not be discharged in bankruptcy.
b. The records shall present, as separate documents:
(1) the official academic transcript of each student;
(2) any other academic information usually required by institutions of postsecondary education when considering students for transfer or advanced study; and
(3) if requested by the commissioner, the financial aid and financial account information of each student.
c. The records shall be accompanied by an affidavit as to the accuracy and completeness of the records on behalf of the school's or institution's board of trustees, bursar, chief administrative officer, chief executive officer, chief financial officer, or registrar.
d. The commissioner shall maintain a permanent file of all records filed with the commissioner under this section.
e. (1) If a student who attended a private career school or an institution of postsecondary education that closed in accordance with this act requests a copy of the student's official academic transcript from the commissioner and the commissioner determines that the requested transcript is missing, incomplete, or in a format inaccessible to the student, the commissioner may issue a replacement transcript for the student based solely on the most recent information provided by the school that the student attended.
(2) A replacement transcript issued in accordance with paragraph (1) of this subsection shall be signed by a designee of the commissioner, contain an explanation of the closure of the institution, and contain an explanation of the source of all information contained in the replacement transcript.
f. (1) Except as provided in paragraph (2) of this subsection, a replacement transcript issued in accordance with this section shall be accepted as an official transcript by any institution of postsecondary education operating in the State.
(2) For purposes of student transfer, an institution of postsecondary education may consider, instead of or in addition to a replacement transcript, an unofficial transcript or other transcript information provided by the student that the receiving institution or program deems relevant.
g. (1) The commissioner shall adopt regulations necessary to carry out the provisions of this section, which shall include the manner and format in which student records are to be filed with the commissioner, and a description of the circumstances under which a private career school or an institution of postsecondary education may cease educational instruction or administrative operation.
h. If a private career school or an institution of postsecondary education does not file all essential records with the commissioner in accordance with this section, the commissioner may:
(1) require the school or institution to refund all tuition and fees paid by a student whose records are not filed in accordance with this section; and
(2) seek an injunction or other judicial remedy against the private career school or institution of postsecondary education.
6. a. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for any private career school, institution of postsecondary education, person, or entity to collect on a student's institutional debt if the institutional financial aid agreement does not contain the language required under paragraph (4) of subsection c. of section 2 of this act.
b. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a private career school or institution of postsecondary education to collect on the institutional debt of a student who attended a program in which a disorderly closure occurred.
7. The Commissioner of Labor and Workforce Development, in consultation with the Commissioner of Education, shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the purposes of this act.
8. This act shall take
effect on the 120th day next following enactment.
STATEMENT
This bill establishes certain requirements for the closure of private career schools and institutions of postsecondary education.
Under the bill, a private career school is a privately owned and privately operated institution of postsecondary education, other than an institution of higher education, that furnishes or offers to furnish programs, whether or not requiring a payment of tuition or fee, for the purpose of training, retraining, or upgrading individuals for gainful employment as workers in recognized or emerging occupations.
The bill applies to private career schools and institutions of postsecondary education that operate in this State.
The bill requires private career schools and institutions of postsecondary education to provide the Commissioner of Labor and Workforce Development with a close-out plan, which must be updated as required by the commissioner.
The close-out plan must include any information required by the commissioner and must state that:
(1) the school or institution shall make all reasonable efforts to ensure that any closure of a program complies with the requirements of the bill;
(2) the chief executive officer and the members of the governing body of the school or institution were not in an executive position or a member of a governing body of a school or institution in which a disorderly closure occurred;
(3) the chief executive officer and the members of the governing body agree to be jointly and severally personally liable for an amount determined by the commissioner, not to exceed $1,000 for each student who is enrolled at the time of a disorderly closure and
(4) any institutional financial aid agreement offered to a student shall contain language stating that, in the event of a disorderly closure, the institutional debt shall be void and shall not be recovered, collected, or enforced. A disorderly closure is a closure that fails to meet the closure requirements of the bill.
The bill requires private career schools and institutions of postsecondary education to furnish a performance bond or irrevocable letter of credit in an amount equal to the school gross tuition and fees for the prior academic year for the school or institution. This requirement shall be waived for institutions of postsecondary education that are operated by the State.
The bill requires private career schools and institutions of postsecondary education to enter into a school-to-school teach-out agreement if the school or institution ceases educational instruction in at least one program, and a student is unable to complete the program prior to the cessation of educational instruction.
In order to satisfy the requirements of the bill, a school-to-school teach-out agreement must be arranged by the closing private career school or institution of postsecondary education and be agreed to by an eligible transfer institution, the closing school or institution, and the commissioner.
The bill specifies that, unless waived for good cause by the commissioner, a teach-out agreement must specify that the eligible transfer institution shall:
(1) be located within a reasonable distance of the closing school or institution, if the closing school or institution has a physical presence in the State;
(2) accept the transfer of all completed credits from students affected by the closure; and
(3) allow a student affected by the closure to complete the student's program with substantially the same number of credit hours as was required by the school or institution operating the closing program.
Under a teach-out agreement, a student may not be charged tuition or fees in excess of the lesser of:
(1) the remaining amount that a student affected by the closure would have paid to the closing school or institution to complete the program; or
(2) the transfer institution's applicable tuition and fees.
A teach-out agreement must also specify that, on request by a student affected by the closure, the closing school or institution shall provide a complete academic record and an official transcript to the student at no cost to the student.
A student enrolled at a private career school within 120 days of a closure that does not satisfy the teach-out agreement requirements is entitled to reimbursement from the school's bond or letter of credit of all tuition and fees paid to the school.
The bill provides that the commissioner shall approve a private career school or an institution of postsecondary education to act as an eligible transfer institution if the school or institution:
(1) is in good standing with its accreditor and, if applicable, its licensing body;
(2) if applicable, has cohort loan default rates, as most recently reported by the U.S. Department of Education, that are less than or equal to the cohort loan default rates of the closing institution;
(3) is not currently under financial aid restrictions by the U.S. Department of Education; and
(4) within the previous five years, has not entered into any settlement agreements related to a consumer protection law with a law enforcement agency, or had any judgments related to a consumer protection law entered against it in favor of a law enforcement agency.
The bill allows the commissioner to establish additional standards on a case-by-case basis for approving an eligible transfer institution.
Before any private career school or institution of postsecondary education ceases educational instruction or administrative operation, the school is required to file with the commissioner copies of all essential records of the current or former students of the school. This obligation of a school or institution may not be discharged in bankruptcy.
The bill requires that the records present, as separate documents:
(1) the official academic transcript of each student;
(2) any other academic information usually required by institutions of postsecondary education when considering students for transfer or advanced study; and
(3) if requested by the commissioner, the financial aid and financial account information of each student.
The bill requires the records to be accompanied by an affidavit as to the accuracy and completeness of the records on behalf of the school's board of trustees, bursar, chief administrative officer, chief executive officer, chief financial officer, or registrar.
The commissioner is required to maintain a permanent file of all records filed with the commissioner.
If a private career school or an institution of postsecondary education does not file all essential records with the commissioner in accordance with the bill, the commissioner may require the school or institution to refund all tuition and fees paid by a student whose records are not filed, and seek an injunction or other judicial remedy against the school or institution.
The bill provides that it is an unlawful practice and a violation of the State consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), for any private career school, institution of postsecondary education, person, or entity to collect on a student's institutional debt if the institutional financial aid agreement does not contain the language required by the bill, or for a private career school or an institution of postsecondary education to collect on an institutional debt of a student who attended a program in which a disorderly closure occurred.
