•  Summary 
  •  
  •  Actions 
  •  
  •  Committee Votes 
  •  
  •  Floor Votes 
  •  
  •  Memo 
  •  
  •  Text 
  •  
  •  LFIN 
  •  
  •  Chamber Video/Transcript 

A08170 Summary:

BILL NOA08170
 
SAME ASSAME AS S05581-A
 
SPONSORHyndman
 
COSPNSR
 
MLTSPNSR
 
Add 239-c, amd 5003, 5007 & 5002, Ed L
 
Establishes the Non-Degree Proprietary School Supervision and Student Protection Act.
Go to top    

A08170 Actions:

BILL NOA08170
 
06/04/2019referred to higher education
Go to top

A08170 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8170
 
SPONSOR: Hyndman
  TITLE OF BILL: An act to amend the education law, in relation to enacting the "Non-Degree Proprietary School Supervision and Student Protection Act"   PURPOSE OR GENERAL IDEA OF BILL: To strengthen protections for students and bolster oversight of non-de- gree granting proprietary schools.   SUMMARY OF PROVISIONS: Section 1 of the bill provides for the short title of the bill, the "Non-Degree Proprietary School Supervision and Student Protection Act." Section. 2 adds a new section 239-c to the education law to bar arbi- tration clauses in student enrollment contracts. Section 3 extends the time period for students to file complaints from two to six years from the date of the alleged violation, requires the commissioner to publicly disclose violations. Section 4 raises the maximum penalties for non-compliance and raises the statutory cap on the tuition reimbursement account from $2 million to $3.5 minion. Section 5 allows the state education department to allocate not more than five hundred thousand dollars towards staff necessary to provide oversight of proprietary schools if the tuition reimbursement account balance is equal to or exceeds $3 million. Section 6 requires schools to submit gainful employment data, attest to the completeness and accuracy of the data, and penalizes misrepresen- tations. Section 7 provides for the severability clause. Section 8 provides for the act to take effect 180 days after enactment.   JUSTIFICATION: The bill enhances protections for students at proprietary non-degree granting institutions by barring forced arbitration clauses, increasing penalties for schools that are out of compliance with extant SED regu- lations, and ensuring sufficient monies are available for tuition refunds for students with substantiated complaints.   PRIOR LEGISLATIVE HISTORY: New bill. FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: 180 days after enactment.
Go to top

A08170 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8170
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 4, 2019
                                       ___________
 
        Introduced  by M. of A. HYNDMAN -- read once and referred to the Commit-
          tee on Higher Education
 
        AN ACT to amend the education law, in relation to enacting the  "Non-De-
          gree Proprietary School Supervision and Student Protection Act"
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the  "Non-Degree  Proprietary  School Supervision and Student Protection
     3  Act".
     4    § 2. The education law is amended by adding a  new  section  239-c  to
     5  read as follows:
     6    §  239-c.    Arbitration clauses in proprietary institution enrollment
     7  contracts. 1. No  proprietary  institution  of  higher  education  shall
     8  include   any  provision  requiring  mandatory  binding  arbitration  of
     9  disputes regarding any student enrollment contract or agreement.
    10    2. For purposes of this section, "proprietary  institution"  shall  be
    11  defined  as  any  licensed private career school, certified English as a
    12  second language school, or online education marketplace  as  defined  in
    13  paragraph  c  of  subdivision  one  of section five thousand one of this
    14  chapter or any approved for-profit degree-granting institution  pursuant
    15  to the department.
    16    §  3. Subparagraphs 1 and 2 of paragraph c of subdivision 1 of section
    17  5003 of the education law, as amended by chapter  381  of  the  laws  of
    18  2012, are amended to read as follows:
    19    (1)  Any  person  who  believes  he  or  she  has  been aggrieved by a
    20  violation of this section, except a person aggrieved by the  actions  or
    21  omissions  of a candidate school, shall have the right to file a written
    22  complaint within: (A) [two] six years of the alleged violation;  or  (B)
    23  one  year  of  receiving notification from the higher education services
    24  corporation or any other guarantee agency that the student has defaulted
    25  on a student loan payment[; provided, however, that no complaint may  be

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11533-04-9

        A. 8170                             2

     1  filed  after  three  years  from the date of the alleged violation]. The
     2  commissioner shall maintain a written record of each complaint  that  is
     3  made.  The  commissioner  shall  also  send  to  the  complainant a form
     4  acknowledging the complaint and requesting further information if neces-
     5  sary  and  shall  advise the director of the school that a complaint has
     6  been made and, where appropriate the nature of the complaint.
     7    (2) The commissioner shall within twenty days of receipt of such writ-
     8  ten complaint commence an investigation of  the  alleged  violation  and
     9  shall within ninety days of the receipt of such written complaint, issue
    10  a  written  finding. The commissioner shall furnish such findings to the
    11  person who filed the complaint and to the chief operating officer of the
    12  school cited in the complaint. If the commissioner finds that there  has
    13  been  a violation of this section, the commissioner shall take appropri-
    14  ate action. If the  commissioner  shall  find  that  there  has  been  a
    15  violation  of  this  section,  the  commissioner shall also place such a
    16  finding on a publicly accessible website disclosing the institution that
    17  was in violation and the substance of the complaint within  thirty  days
    18  of the commissioner's finding.
    19    § 4. Paragraphs a and b of subdivision 6 of section 5003 of the educa-
    20  tion  law, as amended by chapter 381 of the laws of 2012, are amended to
    21  read as follows:
    22    a. A hearing officer may recommend, and the commissioner may impose, a
    23  civil penalty not to exceed [three] five thousand [five hundred] dollars
    24  for any violation of this article, including a school's failure to offer
    25  a course or program as approved by the commissioner. In the  case  of  a
    26  second  or further violation committed within five years of the previous
    27  violation, the liability shall be a civil penalty not to exceed  [seven]
    28  ten thousand [five hundred] dollars for each such violation.
    29    b.  Notwithstanding the provisions of paragraph a of this subdivision,
    30  a hearing officer may recommend, and the commissioner may impose a civil
    31  penalty not to exceed [seventy-five] one  hundred  thousand  dollars  or
    32  double  the documented amount from which the school benefited, whichever
    33  is greater, for any of the following  violations:  (1)  operation  of  a
    34  school  without  a  license in violation of section five thousand one of
    35  this article; (2) operation  of  a  school  knowing  that  the  school's
    36  license  has  been  suspended  or revoked; (3) use of false, misleading,
    37  deceptive or fraudulent advertising; (4) employment of recruiters on the
    38  basis of a commission, bonus or  quota,  except  as  authorized  by  the
    39  commissioner;  (5)  directing or authorizing recruiters to offer guaran-
    40  tees of jobs upon completion of a course; (6) failure to make a  tuition
    41  refund  when  such  failure  is part of a pattern of misconduct; (7) the
    42  offering of a course or program  that  has  not  been  approved  by  the
    43  commissioner;  (8)  admitting  students,  who subsequently drop out, who
    44  were admitted in violation of the admission standards established by the
    45  commissioner, where such admissions constitute a pattern  of  misconduct
    46  and  where  the  drop out resulted at least in part from such violation;
    47  (9) failure to  provide  the  notice  of  discontinuance  and  the  plan
    48  required by subdivision seven of section five thousand one of this arti-
    49  cle;  or  (10)  violation of any other provision of this article, or any
    50  rule or regulation promulgated pursuant  thereto,  when  such  violation
    51  constitutes  part of a pattern of misconduct which significantly impairs
    52  the educational quality of the program or programs being offered by  the
    53  school.  For  each  enumerated  offense,  a  second or further violation
    54  committed within five years, shall be subject to a civil penalty not  to
    55  exceed  one  and one-half times the amount of the previous violation for
    56  each such violation.

        A. 8170                             3
 
     1    § 5. Subdivision 10 of section 5007 of the education law,  as  amended
     2  by chapter 381 of the laws of 2012, is amended to read as follows:
     3    10.  Management  of  the  tuition reimbursement account. a. As used in
     4  this subdivision, net balance is defined as the actual cash  balance  of
     5  the  account  as determined by the commissioner on June thirtieth, nine-
     6  teen hundred ninety-three and every three  months  thereafter.  For  the
     7  purpose  of calculating the net balance, the commissioner shall not take
     8  into consideration any refunds made from the account pursuant  to  para-
     9  graphs  d  and  f of subdivision four of this section for the year imme-
    10  diately preceding the date on which the calculation is made.
    11    b. In the event that the account has  accumulated  a  net  balance  in
    12  excess  of [one] two million eight hundred thousand dollars, the commis-
    13  sioner shall, with the approval of the director of the budget, waive  an
    14  amount  not  to  exceed the amount due for the next quarterly assessment
    15  pursuant to this section and subdivision nine of section  five  thousand
    16  one of this article for schools which have paid sixteen quarters or more
    17  of  assessments only. In such event, payment of future quarterly assess-
    18  ments shall be suspended for schools which have paid sixteen quarters or
    19  more of assessments until the net balance of  the  account  falls  below
    20  [one] two million three hundred thousand dollars.
    21    c.  In  the event the net balance of the account falls below [one] two
    22  million three hundred thousand dollars, if the quarterly assessment  has
    23  been  suspended  for schools which have paid sixteen quarters or more of
    24  assessments pursuant to paragraph b of this  subdivision,  it  shall  be
    25  reinstated for the next quarterly assessment and all subsequent quarter-
    26  ly assessments until the account has accumulated a net balance in excess
    27  of [one] two million eight hundred thousand dollars.
    28    d.  Notwithstanding the provisions of paragraph b of this subdivision,
    29  in the event that the balance of the account is in excess of  [one]  two
    30  million  three hundred thousand dollars, all schools licensed after June
    31  thirtieth, nineteen hundred ninety-nine shall be required  to  pay  into
    32  the  account the equivalence of three years of annual assessments over a
    33  five year period.
    34    e. Notwithstanding the provisions of paragraph b of  this  subdivision
    35  all schools licensed after June thirtieth, nineteen hundred ninety-three
    36  and  before July first, nineteen hundred ninety-nine will be required to
    37  pay into the account the equivalence of three years  of  annual  assess-
    38  ments  within  four  years of the effective date of this paragraph. This
    39  amount to be assessed shall be determined based upon the school's  gross
    40  tuition in its first three years of licensure.
    41    f.  In the event that the balance of the tuition reimbursement account
    42  is equal to or in excess of three million dollars, up  to  five  hundred
    43  thousand  dollars  of the amounts assessed to schools in accordance with
    44  the provisions of paragraphs d and e of this subdivision shall be appro-
    45  priated to the department for the hiring of additional staff to  perform
    46  regulatory oversight of the schools covered under this article.
    47    g.  In the event that the balance of the tuition reimbursement account
    48  is equal to or in  excess  of  [two]  three  million  five  hundred  one
    49  dollars,  the  amounts  assessed  the  schools  in  accordance  with the
    50  provisions of paragraphs d and e of this subdivision shall be  deposited
    51  directly to the proprietary vocational school supervision account.
    52    h.  The commissioner may annually apportion from the account an amount
    53  up to two hundred thousand dollars for the purpose of securing, scanning
    54  and otherwise making student records from closed  schools  available  to
    55  students  who  attended such schools. Provided, however, that in no case
    56  shall such apportionment cause the account to fall below the balance set

        A. 8170                             4
 
     1  forth in paragraph c of this subdivision, nor shall  such  apportionment
     2  cause  schools  whose  quarterly  assessments have been suspended to pay
     3  additional quarterly assessments.
     4    §  6. Subdivision 5 of section 5002 of the education law is amended by
     5  adding a new paragraph g to read as follows:
     6    g. (1) The commissioner shall require annually, that available data be
     7  submitted on the  gainful  employment  outcomes  of  students  for  each
     8  curriculum,  course,  or  program  of  any  school  licensed pursuant to
     9  section five thousand one of this article.   The commissioner  shall  be
    10  authorized  to  promulgate  rules and regulations that define and detail
    11  what shall be required as part of such submission. The submission  must,
    12  at  a  minimum  include the average amount of student debt a student has
    13  incurred through a school's curriculum, course, or program and the aver-
    14  age adjusted gross income that students attain  three  years  after  the
    15  students have completed the curriculum, course, or program.
    16    (2)  Schools  submitting student data pertaining to gainful employment
    17  outcomes shall attest to the completeness and accuracy of  the  informa-
    18  tion  submitted to the commissioner under penalty for violation of frau-
    19  dulent statements or representations to the department as outlined under
    20  section five thousand three of this article.
    21    (3) For the purpose of this section, a school shall have satisfied the
    22  completeness and accuracy of the information submitted if they  reported
    23  the  average adjusted gross income of applicable former students through
    24  such school's available access to tax data  of  such  applicable  former
    25  students.  However,  if the school does not have available access to tax
    26  data of such applicable former students then the school can satisfy  the
    27  completeness  and  accuracy  of the information submitted requirement by
    28  conducting a survey of  applicable  former  students  related  to  their
    29  earned  income.  Such  survey  shall be done pursuant to regulations and
    30  guidance promulgated by the commissioner.
    31    § 7. If any clause, sentence, paragraph, or part of this  act  or  the
    32  application  thereof  to  any  person  or  circumstances, shall, for any
    33  reason, be adjudged by a court of competent jurisdiction to be  invalid,
    34  such  judgment  shall not affect, impair, or invalidate the remainder of
    35  this act, and the application thereof to other person or  circumstances,
    36  but  shall  be  confined in its operation to the clause, sentence, para-
    37  graph, or part thereof directly involved in  the  controversy  in  which
    38  such  judgment  shall  have  been  rendered and to the person or circum-
    39  stances involved. It is hereby declared to  be  the  legislative  intent
    40  that  this  act  would have been adopted had such invalid provisions not
    41  been included.
    42    § 8. This act shall take effect on the one hundred eightieth day after
    43  it shall have become a law. Effective immediately, the addition,  amend-
    44  ment and/or repeal of any rule or regulation necessary for the implemen-
    45  tation  of  this act on its effective date are authorized to be made and
    46  completed on or before such effective date.
Go to top