NY State Senate Bill 2019-S5798

Senate Bill S5798

2019-2020 Legislative Session

Relates to directing the commissioner of education to establish a system for grading for-profit institutions of higher education

download bill text pdf

Archive: Last Bill Status - In Senate Committee Higher Education Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to higher education
May 15, 2019	referred to higher education

2019-S5798 (ACTIVE) - Details

See Assembly Version of this Bill:: A7760
Current Committee:: Senate Higher Education
Law Section:: Education Law
Laws Affected:: Amd §305, Ed L
Versions Introduced in 2021-2022 Legislative Session:: S152

2019-S5798 (ACTIVE) - Summary

Directs the commissioner of education to establish a database of information on for-profit institutions of higher education and a system for grading such institutions, and requires for-profit institutions of higher education to prominently display on its website the letter grade most recently assigned.

2019-S5798 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5798

SPONSOR: THOMAS
 
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.

2019-S5798 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5798
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               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  commis-
   sioner  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  ASSEM-
 BLY, 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 GUID-
 ANCE COUNSELING AND MENTAL HEALTH SERVICES;
   (VII) MEDIAN TIME IN WHICH A STUDENT COMPLETES A  FOR-PROFIT  INSTITU-
 TION 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 SUBDIVI-
 SION NECESSARY FOR THE COMMISSIONER TO ESTABLISH AND MAINTAIN THE  DATA-
 BASE 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  ESTAB-
 LISHED  PURSUANT TO THIS SUBDIVISION.  SUCH GRADE SHALL BE UPDATED ANNU-
 ALLY.
   (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  FRESH-
 MEN AND STUDENTS WHO TRANSFER IN.
   (IV)  "TOTAL  PLACEMENT RATE" MEANS THE PRODUCT OF THE GRADUATE PLACE-
 MENT 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 CUMULA-
 TIVE DEBT, INCLUDING PRIVATE, INSTITUTIONAL, AND FEDERAL, INCURRED BY  A
 STUDENT WHO ATTENDED A FOR-PROFIT INSTITUTION OF HIGHER EDUCATION WHETH-
 ER 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  succeed-
 ing the date on which it shall have become a law. Effective immediately,
 the  addition,  amendment and/or repeal of any rule or regulation neces-
 sary for the implementation of  this  act  on  its  effective  date  are
 authorized to be made and completed on or before such effective date.

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