S T A T E O F N E W Y O R K
________________________________________________________________________
8170
2019-2020 Regular Sessions
I N A S S E M B L Y
June 4, 2019
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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:
Section 1. Short title. This act shall be known and may be cited as
the "Non-Degree Proprietary School Supervision and Student Protection
Act".
§ 2. The education law is amended by adding a new section 239-c to
read as follows:
§ 239-C. ARBITRATION CLAUSES IN PROPRIETARY INSTITUTION ENROLLMENT
CONTRACTS. 1. NO PROPRIETARY INSTITUTION OF HIGHER EDUCATION SHALL
INCLUDE ANY PROVISION REQUIRING MANDATORY BINDING ARBITRATION OF
DISPUTES REGARDING ANY STUDENT ENROLLMENT CONTRACT OR AGREEMENT.
2. FOR PURPOSES OF THIS SECTION, "PROPRIETARY INSTITUTION" SHALL BE
DEFINED AS ANY LICENSED PRIVATE CAREER SCHOOL, CERTIFIED ENGLISH AS A
SECOND LANGUAGE SCHOOL, OR ONLINE EDUCATION MARKETPLACE AS DEFINED IN
PARAGRAPH C OF SUBDIVISION ONE OF SECTION FIVE THOUSAND ONE OF THIS
CHAPTER OR ANY APPROVED FOR-PROFIT DEGREE-GRANTING INSTITUTION PURSUANT
TO THE DEPARTMENT.
§ 3. Subparagraphs 1 and 2 of paragraph c of subdivision 1 of section
5003 of the education law, as amended by chapter 381 of the laws of
2012, are amended to read as follows:
(1) Any person who believes he or she has been aggrieved by a
violation of this section, except a person aggrieved by the actions or
omissions of a candidate school, shall have the right to file a written
complaint within: (A) [two] SIX years of the alleged violation; or (B)
one year of receiving notification from the higher education services
corporation or any other guarantee agency that the student has defaulted
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
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filed after three years from the date of the alleged violation]. The
commissioner shall maintain a written record of each complaint that is
made. The commissioner shall also send to the complainant a form
acknowledging the complaint and requesting further information if neces-
sary and shall advise the director of the school that a complaint has
been made and, where appropriate the nature of the complaint.
(2) The commissioner shall within twenty days of receipt of such writ-
ten complaint commence an investigation of the alleged violation and
shall within ninety days of the receipt of such written complaint, issue
a written finding. The commissioner shall furnish such findings to the
person who filed the complaint and to the chief operating officer of the
school cited in the complaint. If the commissioner finds that there has
been a violation of this section, the commissioner shall take appropri-
ate action. IF THE COMMISSIONER SHALL FIND THAT THERE HAS BEEN A
VIOLATION OF THIS SECTION, THE COMMISSIONER SHALL ALSO PLACE SUCH A
FINDING ON A PUBLICLY ACCESSIBLE WEBSITE DISCLOSING THE INSTITUTION THAT
WAS IN VIOLATION AND THE SUBSTANCE OF THE COMPLAINT WITHIN THIRTY DAYS
OF THE COMMISSIONER'S FINDING.
§ 4. Paragraphs a and b of subdivision 6 of section 5003 of the educa-
tion law, as amended by chapter 381 of the laws of 2012, are amended to
read as follows:
a. A hearing officer may recommend, and the commissioner may impose, a
civil penalty not to exceed [three] FIVE thousand [five hundred] dollars
for any violation of this article, including a school's failure to offer
a course or program as approved by the commissioner. In the case of a
second or further violation committed within five years of the previous
violation, the liability shall be a civil penalty not to exceed [seven]
TEN thousand [five hundred] dollars for each such violation.
b. Notwithstanding the provisions of paragraph a of this subdivision,
a hearing officer may recommend, and the commissioner may impose a civil
penalty not to exceed [seventy-five] ONE HUNDRED thousand dollars or
double the documented amount from which the school benefited, whichever
is greater, for any of the following violations: (1) operation of a
school without a license in violation of section five thousand one of
this article; (2) operation of a school knowing that the school's
license has been suspended or revoked; (3) use of false, misleading,
deceptive or fraudulent advertising; (4) employment of recruiters on the
basis of a commission, bonus or quota, except as authorized by the
commissioner; (5) directing or authorizing recruiters to offer guaran-
tees of jobs upon completion of a course; (6) failure to make a tuition
refund when such failure is part of a pattern of misconduct; (7) the
offering of a course or program that has not been approved by the
commissioner; (8) admitting students, who subsequently drop out, who
were admitted in violation of the admission standards established by the
commissioner, where such admissions constitute a pattern of misconduct
and where the drop out resulted at least in part from such violation;
(9) failure to provide the notice of discontinuance and the plan
required by subdivision seven of section five thousand one of this arti-
cle; or (10) violation of any other provision of this article, or any
rule or regulation promulgated pursuant thereto, when such violation
constitutes part of a pattern of misconduct which significantly impairs
the educational quality of the program or programs being offered by the
school. For each enumerated offense, a second or further violation
committed within five years, shall be subject to a civil penalty not to
exceed one and one-half times the amount of the previous violation for
each such violation.
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§ 5. Subdivision 10 of section 5007 of the education law, as amended
by chapter 381 of the laws of 2012, is amended to read as follows:
10. Management of the tuition reimbursement account. a. As used in
this subdivision, net balance is defined as the actual cash balance of
the account as determined by the commissioner on June thirtieth, nine-
teen hundred ninety-three and every three months thereafter. For the
purpose of calculating the net balance, the commissioner shall not take
into consideration any refunds made from the account pursuant to para-
graphs d and f of subdivision four of this section for the year imme-
diately preceding the date on which the calculation is made.
b. In the event that the account has accumulated a net balance in
excess of [one] TWO million eight hundred thousand dollars, the commis-
sioner shall, with the approval of the director of the budget, waive an
amount not to exceed the amount due for the next quarterly assessment
pursuant to this section and subdivision nine of section five thousand
one of this article for schools which have paid sixteen quarters or more
of assessments only. In such event, payment of future quarterly assess-
ments shall be suspended for schools which have paid sixteen quarters or
more of assessments until the net balance of the account falls below
[one] TWO million three hundred thousand dollars.
c. In the event the net balance of the account falls below [one] TWO
million three hundred thousand dollars, if the quarterly assessment has
been suspended for schools which have paid sixteen quarters or more of
assessments pursuant to paragraph b of this subdivision, it shall be
reinstated for the next quarterly assessment and all subsequent quarter-
ly assessments until the account has accumulated a net balance in excess
of [one] TWO million eight hundred thousand dollars.
d. Notwithstanding the provisions of paragraph b of this subdivision,
in the event that the balance of the account is in excess of [one] TWO
million three hundred thousand dollars, all schools licensed after June
thirtieth, nineteen hundred ninety-nine shall be required to pay into
the account the equivalence of three years of annual assessments over a
five year period.
e. Notwithstanding the provisions of paragraph b of this subdivision
all schools licensed after June thirtieth, nineteen hundred ninety-three
and before July first, nineteen hundred ninety-nine will be required to
pay into the account the equivalence of three years of annual assess-
ments within four years of the effective date of this paragraph. This
amount to be assessed shall be determined based upon the school's gross
tuition in its first three years of licensure.
F. IN THE EVENT THAT THE BALANCE OF THE TUITION REIMBURSEMENT ACCOUNT
IS EQUAL TO OR IN EXCESS OF THREE MILLION DOLLARS, UP TO FIVE HUNDRED
THOUSAND DOLLARS OF THE AMOUNTS ASSESSED TO SCHOOLS IN ACCORDANCE WITH
THE PROVISIONS OF PARAGRAPHS D AND E OF THIS SUBDIVISION SHALL BE APPRO-
PRIATED TO THE DEPARTMENT FOR THE HIRING OF ADDITIONAL STAFF TO PERFORM
REGULATORY OVERSIGHT OF THE SCHOOLS COVERED UNDER THIS ARTICLE.
g. In the event that the balance of the tuition reimbursement account
is equal to or in excess of [two] THREE million FIVE HUNDRED ONE
dollars, the amounts assessed the schools in accordance with the
provisions of paragraphs d and e of this subdivision shall be deposited
directly to the proprietary vocational school supervision account.
h. The commissioner may annually apportion from the account an amount
up to two hundred thousand dollars for the purpose of securing, scanning
and otherwise making student records from closed schools available to
students who attended such schools. Provided, however, that in no case
shall such apportionment cause the account to fall below the balance set
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forth in paragraph c of this subdivision, nor shall such apportionment
cause schools whose quarterly assessments have been suspended to pay
additional quarterly assessments.
§ 6. Subdivision 5 of section 5002 of the education law is amended by
adding a new paragraph g to read as follows:
G. (1) THE COMMISSIONER SHALL REQUIRE ANNUALLY, THAT AVAILABLE DATA BE
SUBMITTED ON THE GAINFUL EMPLOYMENT OUTCOMES OF STUDENTS FOR EACH
CURRICULUM, COURSE, OR PROGRAM OF ANY SCHOOL LICENSED PURSUANT TO
SECTION FIVE THOUSAND ONE OF THIS ARTICLE. THE COMMISSIONER SHALL BE
AUTHORIZED TO PROMULGATE RULES AND REGULATIONS THAT DEFINE AND DETAIL
WHAT SHALL BE REQUIRED AS PART OF SUCH SUBMISSION. THE SUBMISSION MUST,
AT A MINIMUM INCLUDE THE AVERAGE AMOUNT OF STUDENT DEBT A STUDENT HAS
INCURRED THROUGH A SCHOOL'S CURRICULUM, COURSE, OR PROGRAM AND THE AVER-
AGE ADJUSTED GROSS INCOME THAT STUDENTS ATTAIN THREE YEARS AFTER THE
STUDENTS HAVE COMPLETED THE CURRICULUM, COURSE, OR PROGRAM.
(2) SCHOOLS SUBMITTING STUDENT DATA PERTAINING TO GAINFUL EMPLOYMENT
OUTCOMES SHALL ATTEST TO THE COMPLETENESS AND ACCURACY OF THE INFORMA-
TION SUBMITTED TO THE COMMISSIONER UNDER PENALTY FOR VIOLATION OF FRAU-
DULENT STATEMENTS OR REPRESENTATIONS TO THE DEPARTMENT AS OUTLINED UNDER
SECTION FIVE THOUSAND THREE OF THIS ARTICLE.
(3) FOR THE PURPOSE OF THIS SECTION, A SCHOOL SHALL HAVE SATISFIED THE
COMPLETENESS AND ACCURACY OF THE INFORMATION SUBMITTED IF THEY REPORTED
THE AVERAGE ADJUSTED GROSS INCOME OF APPLICABLE FORMER STUDENTS THROUGH
SUCH SCHOOL'S AVAILABLE ACCESS TO TAX DATA OF SUCH APPLICABLE FORMER
STUDENTS. HOWEVER, IF THE SCHOOL DOES NOT HAVE AVAILABLE ACCESS TO TAX
DATA OF SUCH APPLICABLE FORMER STUDENTS THEN THE SCHOOL CAN SATISFY THE
COMPLETENESS AND ACCURACY OF THE INFORMATION SUBMITTED REQUIREMENT BY
CONDUCTING A SURVEY OF APPLICABLE FORMER STUDENTS RELATED TO THEIR
EARNED INCOME. SUCH SURVEY SHALL BE DONE PURSUANT TO REGULATIONS AND
GUIDANCE PROMULGATED BY THE COMMISSIONER.
§ 7. If any clause, sentence, paragraph, or part of this act or the
application thereof to any person or circumstances, shall, for any
reason, be adjudged by a court of competent jurisdiction to be invalid,
such judgment shall not affect, impair, or invalidate the remainder of
this act, and the application thereof to other person or circumstances,
but shall be confined in its operation to the clause, sentence, para-
graph, or part thereof directly involved in the controversy in which
such judgment shall have been rendered and to the person or circum-
stances involved. It is hereby declared to be the legislative intent
that this act would have been adopted had such invalid provisions not
been included.
§ 8. This act shall take effect on the one hundred eightieth day after
it shall have become a law. Effective immediately, the addition, amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation of this act on its effective date are authorized to be made and
completed on or before such effective date.