NY State Senate Bill 2021-S776

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 05, 2022	referred to higher education
Jan 06, 2021	referred to higher education

2021-S776 (ACTIVE) - Details

See Assembly Version of this Bill:: A3295
Current Committee:: Senate Higher Education
Law Section:: Education Law
Laws Affected:: Add §239-c, Ed L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S5800, A7763
2023-2024: S948

2021-S776 (ACTIVE) - Summary

Requires for-profit higher education institutions to spend no less than fifty percent of such institution's annual revenues on expenditures in the areas of student instruction, academic support and advising, or career services.

2021-S776 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S776

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the education law, in relation to standards for for-pro-
fit higher education institutions

 
PURPOSE OR GENERAL IDEA OF BILL:

Beginning in the 2019-2020 academic year, a for-profit school must spend
no less than 50% of school's annual revenue on student instruction,
academic support and advising and career services. If a school does not
meet this new requirement, they are not allowed to enroll new students
for at least two academic years following the year the school failed to
meet the 50% requirement. To be able to re-enroll students, the school
must show that they met the 50% requirement for two academic years
following the year in which they did not meet the 50% requirement.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends the education law by adding a new section
239-c:  Subdivision 1 paragraph (a) defines "for-profit institution of
higher education", "student instruction", "academic support and advis-
ing", and "career services".

Subdivision 2 paragraph (a) requires that all for-profit schools spend
at least 50% of their revenues on student instruction, academic support,
and advising or career services. Subdivision 2, paragraph (b) states
that expenditures in the areas of student instruction, academic support
and advising, or career services do not include expenditures for market-
ing student recruitment or the expenses of staff whose duties do not
relate to student instruction, academic support and advising, or career
services. Subdivision 2, paragraph (c) describes the penalties placed
upon a for-profit school for its failure to meet the provisions of para-
graph (a) of this subdivision.

Subdivision 3 requires a for-profit school to submit a detailed finan-
cial statement disclosing the institution's revenues and expenditures
for the prior academic year to the commissioner.

Subdivision 4' authorize the commissioner to promulgate emergency rules
and regulations necessary to implement the provisions of the section.

Section 2 provides the effective date.

 
JUSTIFICATION:

For-profit colleges depend on students spending their state-funded aid
packages at their institutions like non-profit and public schools but
unlike those schools, for-profits spend far less of their students'
tuition dollars on services on which students rely while charging far
more in tuition. Analysis of for-profit schools' financial statements
has shown that on average these institutions spend $0.41 for every $1 of
tuition revenue received. Nonprofit schools spent more than double that
in 2015.

If for-profit students' employment outcomes were significantly better
than students at their nonprofit and public counterparts, perhaps the
higher tuition and the choice to spend relatively little on instruction
would be acceptable. Data show the opposite is true.  Close to 40
percent of for-profit schools leave degree-holders with earnings below
those of an average worker with a high school diploma, according to a
2018 report.

Spending a comparably small sum on student instruction leaves for-pro-
fits plenty of revenue to pay executives' salaries and implement aggres-
sive recruitment and marketing campaigns to target prospective students,
many of whom would be the first in their families to attend college.
According to New York City's Department of Consumer Affairs,. some for-
profits recruiters have engaged in misrepresentation to deceive students
into enrolling in a program that does not meet their career goals or
turns out to be more expensive than what the student had initially
understood. As a result of these practices, many of these students end
up with suffocating student debt and lackluster job prospects.

This bill would bring for-profits in line with the best practices of
nonprofit and public institutions by requiring them to spend more of
their annual revenues on resources that their students need to succeed
such as high-quality classroom instruction, academic support and advis-
ing, and career services.

 
PRIOR LEGISLATIVE HISTORY:

2019-20: S.5800. (Thomas) / A.7763 (Epstein) - Referred to Higher Educa-
tion.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

 
EFFECTIVE DATE:
Immediately after becoming law.

2021-S776 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    776
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 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 standards for for-pro-
   fit higher education institutions

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The education law is amended by adding a new section 239-c
 to read as follows:
   § 239-C. STANDARDS FOR FOR-PROFIT HIGHER  EDUCATION  INSTITUTIONS.  1.
 FOR  THE  PURPOSES  OF  THIS  SECTION THE FOLLOWING TERMS SHALL HAVE THE
 FOLLOWING MEANINGS:
   (A) "FOR-PROFIT INSTITUTION OF HIGHER EDUCATION" MEANS A SCHOOL THAT:
   (I) PROVIDES A PROGRAM  LEADING  TO  AN  ASSOCIATES  OR  BACCALAUREATE
 DEGREE;
   (II)  IS  LEGALLY AUTHORIZED IN NEW YORK STATE TO PROVIDE A PROGRAM OF
 EDUCATION BEYOND SECONDARY EDUCATION; AND
   (III) IS NEITHER A PUBLIC OR NON-PROFIT INSTITUTION.
   (B) "STUDENT INSTRUCTION"  MEANS  EXPENDITURES  FOR  SALARIES,  FRINGE
 BENEFITS,  PROFESSIONAL DEVELOPMENT EXPENSES, AND OTHER PAYMENTS MADE TO
 INSTRUCTORS RELATED TO CLASSROOM INSTRUCTION.
   (C) "ACADEMIC SUPPORT AND ADVISING" MEANS EXPENDITURES RELATED TO  THE
 ADVISEMENT OF STUDENTS ON COURSE SELECTION OR OUT OF CLASSROOM TUTORING.
   (D)  "CAREER SERVICES" MEANS EXPENDITURES IN ASSISTING STUDENTS IN THE
 AREAS OF RESUME AND COVER LETTER WRITING,  INTERVIEWING  AND  STRATEGIES
 FOR GETTING A JOB.
   2.  (A)  COMMENCING IN THE TWO THOUSAND TWENTY-ONE--TWO THOUSAND TWEN-
 TY-TWO ACADEMIC YEAR AND THEREAFTER, A FOR-PROFIT INSTITUTION OF  HIGHER
 EDUCATION  SHALL  SPEND NO LESS THAN FIFTY PERCENT OF SUCH INSTITUTION'S
 ANNUAL REVENUES ON EXPENDITURES IN THE  AREAS  OF  STUDENT  INSTRUCTION,
 ACADEMIC SUPPORT AND ADVISING, OR CAREER SERVICES.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD02084-01-1

 S. 776                              2
 
   (B) EXPENDITURES MADE FOR IN THE AREAS OF STUDENT INSTRUCTION, ACADEM-
 IC  SUPPORT  AND ADVISING, OR CAREER SERVICES SHALL NOT INCLUDE EXPENDI-
 TURES FOR STUDENT RECRUITMENT, MARKETING, DIRECT MAILING OR EXPENSES  OF
 NON-INSTRUCTIONAL  STAFF  WHOSE  PRIMARY DUTIES ARE NOT STUDENT INSTRUC-
 TION, ACADEMIC SUPPORT AND ADVISING, OR CAREER SERVICES.
   (C)  A  FOR-PROFIT  INSTITUTION OF HIGHER EDUCATION THAT FAILS TO MEET
 THE REQUIREMENT OF PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE INELIGIBLE
 TO ENROLL NEW STUDENTS PARTICIPATING IN  ANY  PROGRAM  AUTHORIZED  UNDER
 THIS  CHAPTER FOR A PERIOD OF NOT LESS THAN TWO ACADEMIC YEARS, COMMENC-
 ING WITH THE ACADEMIC YEAR IMMEDIATELY FOLLOWING THE YEAR IN  WHICH  THE
 INSTITUTION'S  FINANCIAL  STATEMENT  DEMONSTRATING  FAILURE  TO MEET THE
 REQUIREMENT FOR THE ACADEMIC  YEAR  IS  SUBMITTED  TO  THE  COMMISSIONER
 PURSUANT  TO SUBDIVISION THREE OF THIS SECTION. TO REGAIN ELIGIBILITY TO
 ENROLL NEW STUDENTS PARTICIPATING IN THE PROGRAMS AUTHORIZED UNDER  THIS
 CHAPTER,  A FOR-PROFIT INSTITUTION OF HIGHER EDUCATION SHALL DEMONSTRATE
 COMPLIANCE WITH PARAGRAPH (A) OF THIS SUBDIVISION FOR A MINIMUM  OF  TWO
 CONSECUTIVE ACADEMIC YEARS AFTER THE ACADEMIC YEAR IN WHICH THE INSTITU-
 TION BECAME INELIGIBLE.
   3.  ON  OR  BEFORE SEPTEMBER FIRST, A FOR-PROFIT INSTITUTION OF HIGHER
 EDUCATION SHALL ANNUALLY SUBMIT TO THE COMMISSIONER A DETAILED FINANCIAL
 STATEMENT DISCLOSING THE INSTITUTION'S REVENUES AND EXPENDITURES FOR THE
 PRIOR ACADEMIC YEAR AND SHALL DISCLOSE THE SOURCES OF REVENUE BY TYPE AS
 WELL AS TYPES OF EXPENDITURES. SUCH STATEMENT SHALL ALSO INCLUDE A LIST-
 ING OF THE TOTAL INDIVIDUAL COMPENSATION FROM  THE  INSTITUTION  TO  ALL
 OFFICERS,  DIRECTORS,  BOARD  MEMBERS,  TRUSTEES, SHAREHOLDERS, MEMBERS,
 OWNERS, AND SENIOR ADMINISTRATORS, INCLUDING ALL FRINGE BENEFITS, BONUS-
 ES, AND PERFORMANCE INCENTIVES PAID IN THE  PRIOR  ACADEMIC  YEAR.  SUCH
 STATEMENT  SHALL  ADHERE TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND
 SHALL BE CERTIFIED BY AN INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANT  AND
 CERTIFIED  BY  THE PRESIDENT OF THE INSTITUTION. SUCH STATEMENT SHALL BE
 SUBMITTED IN A FORM AND MANNER AS DETERMINED BY THE COMMISSIONER.
   4. THE COMMISSIONER IS AUTHORIZED TO PROMULGATE RULES AND REGULATIONS,
 AND MAY PROMULGATE EMERGENCY REGULATIONS, NECESSARY FOR THE  IMPLEMENTA-
 TION OF THE PROVISIONS OF THIS SECTION.
   § 2. This act shall take effect immediately.

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Senate Bill S776

Sponsored By

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

2021-S776 (ACTIVE) - Details

2021-S776 (ACTIVE) - Summary

2021-S776 (ACTIVE) - Sponsor Memo

2021-S776 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S776

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Sponsored By

Kevin Thomas

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

2021-S776 (ACTIVE) - Details

2021-S776 (ACTIVE) - Summary

2021-S776 (ACTIVE) - Sponsor Memo

2021-S776 (ACTIVE) - Bill Text download pdf

Comments