§ 5001 — Licensed private career schools

New York § 5001

• Jurisdiction: New York
• Law EDN: Education
• Title 6: Special Schools and Instruction
• Art. 101: Licensed Private Career Schools and Certified English As a Second Language Schools

Text

§ 5001. Licensed private career schools. 1. Schools required to be\nlicensed. No private school which charges tuition or fees related to\ninstruction and which is not exempted hereunder shall be operated by any\nperson or persons, firm, corporation, or private organization for the\npurpose of teaching or giving instruction in any subject or subjects,\nunless it is licensed by the department. As used in this article:\n a. "licensed private career school" or "licensed private school" shall\nmean any entity offering to instruct or teach any subject by any plan or\nmethod including written, visual or audio-visual methods, and shall\ninclude any institution licensed or registered as a registered business\nschool or computer training facility on the effective date of chapter\nthree hundred eighty-one of the laws of two thousand twelve. Following\nsuch effective date, there shall be no distinction between institutions\npreviously defined as "registered business schools" or "computer\ntraining facilities" and other licensed private schools, and any\nreference in law to a registered business school or computer training\nfacility shall be deemed a reference to a licensed private career\nschool. Institutions holding a valid business school registration on\nsuch effective date, including computer-training facilities, shall have\nsuch registrations replaced by the commissioner, at no cost, with\nlicenses valid until the expiration date listed on such previous\nregistration;\n b. "certified English as a second language school" or "certified ESL\nschool" shall mean a language school conducted for-profit which provides\ninstruction in English as a second language and which accepts no public\nfunds and is certified pursuant to paragraph f of subdivision four of\nthis section; and\n c. "online education marketplace" shall mean a website or other\ninternet-based online technology tool with which a licensed private\ncareer school or certified ESL school contracts for marketing or\nadvertising services, or services in connection with the collection of\ntuition and/or fees, to the extent authorized in subdivision three of\nsection five thousand four of this article.\n 2. Exempt schools. The following schools are exempted from the\nlicensing requirement of this section:\n a. institutions authorized to confer degrees in this state;\n b. schools providing kindergarten, nursery, elementary or secondary\neducation, except schools conducted for profit which provide instruction\nin English as a second language or preparation for high school\nequivalency examinations to out-of-school youth or adults;\n c. schools operated by governmental agencies or authorities;\n d. schools which engage exclusively in training of students with\ndisabilities as defined in section forty-four hundred one of this\nchapter;\n e. schools conducted on a not-for-profit basis by firms or\norganizations for the training of their own employees only, provided\nthat such instruction is offered at no charge to such employees, or by a\nfraternal society or benevolent order for its members or their immediate\nrelatives only;\n f. schools which provide instruction in the following subjects only:\nreligion, dancing, music, painting, drawing, sculpture, poetry, dramatic\nart, languages, reading comprehension, mathematics, recreation, yoga,\nmartial arts, pilates and athletics, including the training of students\nto teach such subjects, provided, however, that schools conducted for\nthe purpose of training personal trainers shall be excluded from this\nexemption and shall be required to obtain licensure;\n g. schools in which the course of instruction is licensed, registered\nor approved under any other section of this chapter or by any other\ndepartment or agency of the state;\n h. schools which provide instruction designed solely for giving flight\ntraining and/or related ground school instruction;\n i. schools in which instruction designed solely to prepare applicants\nfor admission to professional licensing examinations administered by the\ndepartment pursuant to title eight of this chapter, and applicants for\nexamination for admission to the practice of law;\n j. schools which offer continuing education courses exclusively for\nindividuals licensed by the department pursuant to title eight of this\nchapter and for individuals admitted to the practice of law;\n k. schools which provide instruction given exclusively to employees of\na person or organization which has contracted with another person or\norganization to provide such instruction at no cost to the employees;\n l. conferences, trade shows, workshops, seminars, institutes or\ncourses of study offered and sponsored either jointly or individually by\nrecognized trade, business or professional organizations for the benefit\nof their membership;\n m. schools that limit their total conferences, trade shows, workshops,\nseminars, institutes or other course offerings to no more than twice in\none calendar year with each of those offerings for no more than five\ndays;\n n. schools which provide instruction exclusively to persons employed\nfull-time or part-time in the field in which instruction is being\noffered, where the instruction is provided to meet continuing education\nstandards required for professional licensure as defined by law in this\nstate;\n o. schools in candidacy status pursuant to subparagraph (iv) of\nparagraph b of subdivision four of this section; and\n p. schools which provide instruction in photography exclusively for\nnon-occupational purposes.\n 2-a. Schools exempted pursuant to subdivision two of this section may\nwaive such exemption and apply for a license; provided, however, that\nthe review of such applications shall be left to the discretion of the\ncommissioner.\n 2-b. Programs offered by licensed private career schools to employees\nof a person or organization which has contracted with another person or\norganization to provide such instruction at no cost to the employees\nshall be exempt from the requirements of this article, provided that the\nfollowing requirements are met:\n a. Only employees of the employer for which the program is being\noffered may enroll in classes that make up the program.\n b. Certificates or diplomas awarded to students in the program may not\nreference in any way the department.\n c. Prior to the commencement of the program, such schools shall submit\nto the department a disclosure form, prescribed by the commissioner,\ncopies of which shall be provided to all students in such exempt\nprogram, which shall include but not be limited to the following\ninformation:\n (i) a description of the location and time period in which the program\nwill be offered;\n (ii) a statement that the students enrolled in the program shall not\nbe subject to any tuition liability for the program, even if such\nstudents do not complete the program;\n (iii) a statement that the program being provided to the employer has\nnot been approved by the department and is not under the department's\njurisdiction and that the students in the program have been advised of\nthe fact; and\n (iv) the signatures of the school director or owner of the school and\nthe representative of the employer for which the program is being\noffered certifying the accuracy of the statements on the form.\n d. Any additional student openings in a program deemed exempt by the\ndepartment may be made available to students not affiliated with the\nemployer on the condition that such students execute a disclosure form\nas prescribed in paragraph c of this subdivision. Such admitted students\nshall only constitute up to ten percent of the exempt program's total\ncapacity.\n 4. Application, renewal application and application fees. a.\nApplication and renewal application for a license as a private career\nschool required by the commissioner shall be filed on forms prescribed\nand provided by the department. Except as provided in subparagraph (iii)\nof paragraph e of this subdivision, each renewal application for a\nprivate career school licensed pursuant to this section shall include an\naudited financial statement audited according to generally accepted\nauditing standards by an independent certified public accountant or an\nindependent public accountant and statistical reports certified by the\nowner or operator of the school, as required by the commissioner;\nprovided, however, that the commissioner shall accept a copy of a\ncurrent financial statement previously filed by a school with any other\ngovernmental agency in compliance with the provisions of any federal or\nstate laws, or rules or regulations if such statement contains all of\nthe information required under this subdivision and conforms to this\nsubdivision's requirements of auditing, review and certification. Any\nrequired audit of the financial statement shall be a condition of\nlicensure and shall be paid for by the school, and the results of the\naudit shall be forwarded to the commissioner. Applications not\naccompanied by the audits and reports required pursuant to this\nsubdivision shall not be considered for approval by the commissioner.\nInitial applications shall be accompanied by financial reports as\nrequired by the commissioner. The applicant shall receive a written\napproval or denial together with the reasons for a denial of such\napplication.\n b. (i) An initial license issued pursuant to the provisions of this\narticle shall be valid for a period of two years. A renewal of license\nissued pursuant to the provisions of this article shall be valid for a\nperiod of four years.\n (ii) Every applicant and renewal applicant shall pay to the department\na nonrefundable, nontransferable application fee. The initial\napplication fee for new schools shall be five thousand dollars, of which\nthree thousand dollars shall accrue to the credit of the proprietary\nvocational school supervision account and two thousand dollars shall\naccrue to the tuition reimbursement account. For additional licensed\nlocations of currently operating schools, the application fee shall be\ntwo thousand five hundred dollars, which shall accrue to the credit of\nthe proprietary vocational school supervision account. For renewal\napplications, the fee shall be based on gross annual tuition income as\ndetermined by the annual financial statements required in paragraph a of\nthis subdivision for the most recent school fiscal year, according to\nthe following schedule:\n GROSS ANNUAL TUITION INCOME FEE\n 0-$199,999 $ 750.00\n $200,000-$499,999 $ 1,500.00\n $500,000-$999,999 $ 2,225.00\n $1,000,000-$4,999,999 $ 4,500.00\n $5,000,000-$9,999,999 $ 9,000.00\n $10,000,000 or above $18,000.00\n Such renewal fees shall accrue to the credit of the proprietary\nvocational school supervision account. If the evaluation of a particular\ncourse or facility requires the services of an expert not employed by\nthe department, the department shall retain such expert and the school\nshall reimburse the department for the reasonable cost of such services.\n (iii) Each school shall display, near the entrance to the school, the\nlicense which has been issued to it. Such authorization shall be\ndisplayed only during the period of its validity.\n c. An application for renewal of any license shall be submitted at\nleast one hundred twenty days prior to the expiration date of the\ncurrent authorization to operate accompanied by the nonrefundable\napplication fee and such certified statistical reports and annual\nfinancial statements required pursuant to this subdivision.\n d. When complete and timely application has been made for renewal of\nany license, the school shall receive a written approval or denial,\ntogether with the reasons for denial of renewal, from the commissioner\nno less than thirty days prior to the date such license expires.\n e. Financial statements and statistical reports. (i) Licensed private\ncareer schools and candidate schools shall submit such certified\nstatistical reports and annual financial statements as required by the\ncommissioner. The commissioner may require audited statistical reports\nupon a determination that a school has provided false or inaccurate\ncertified statistical reports. The financial statements shall be based\non the fiscal year of the school and shall also include an itemized\naccount of tuition refunds due and owing to past or presently enrolled\nstudents. Statistical reports shall include, but not be limited to,\nenrollment, completion and placement data. The commissioner shall use\nsuch financial statements and statistical reports submitted for the\npurposes of licensure of schools, establishing fees or assessments\npursuant to this article and determining standards pursuant to paragraph\nb of subdivision five of section five thousand two of this article. The\nattorney general, the comptroller and the president of the higher\neducation services corporation shall have access to this information\nwhen it is necessary to perform their duties as required by state law.\n (ii) Any school which received five hundred thousand dollars or more\nin gross tuition in a school fiscal year shall be required to submit to\nthe commissioner an annual audited financial statement prepared in\naccordance with generally accepted accounting principles for that fiscal\nyear. In addition, any school which has a gross tuition of less than\nfive hundred thousand dollars in a school fiscal year but whose combined\nstate and federal student financial aid in such year equals one hundred\nthousand dollars or more shall also submit an annual audited financial\nstatement to the commissioner for that fiscal year.\n (iii) Schools whose gross tuition is less than five hundred thousand\ndollars in a school fiscal year and which receive less than one hundred\nthousand dollars in state and federal student financial aid in a school\nfiscal year shall file with the commissioner an unaudited financial\nstatement in a format prescribed by the commissioner, provided, however,\nthat any such school shall file an audited financial statement the\nfiscal year after a reviewed financial statement is submitted. For such\nschools, audited financial statements are required every two years, at\nminimum, with reviewed financial statements allowed during the alternate\nyear. Upon a determination by the commissioner that a school has\nsubmitted false or inaccurate statements or that a significant,\nunsubstantiated decline in gross tuition has occurred, the commissioner\nmay require any such school to file an audited financial statement\npursuant to this paragraph even during alternate years when reviewed\nstatements would ordinarily be allowed.\n f. Alternate licensing provision. The commissioner shall issue\nregulations which define alternate licensing or certification\nrequirements for the following:\n (1) correspondence schools in which all approved programs and courses\nare under three hundred hours;\n (2) schools which are eligible for exemption under this section but\nwhich elect to be licensed;\n (3) non-profit schools exempt from taxation under section 501(c)(3) of\nthe internal revenue code whose programs are funded entirely through\ndonations from individuals or philanthropic organizations, or\nendowments, and interest accrued thereon; and\n (4) language schools conducted for-profit which provide instruction in\nEnglish as a second language and which accept no public funds.\n 5. Required disclosure for licensure. a. The commissioner shall\nrequire that each applicant for a license for the operation of a private\ncareer school disclose the following information:\n (1) Whether the applicant, or any corporation, partnership,\nassociation or organization or person holding an ownership or control\ninterest in such school, or any employee responsible in a supervisory\ncapacity for the administration of student funds or governmental funds,\nhas been convicted of a crime defined in this article, or any other\ncrime involving the operation of any educational or training program,\nor, in connection with the operation of any such program, a crime\ninvolving the unlawful acquisition, use, payment or expenditure of\neducational or training program funds; and\n (2) Whether the applicant, or any corporation, partnership,\nassociation or organization or person holding an ownership or control\ninterest in such school, or any employee responsible in a supervisory\ncapacity for the administration of student funds or governmental funds\nhas been convicted:\n (A) in this state of any of the following felonies defined in the\npenal law: bribery involving public servants; commercial bribery;\nperjury in the second degree; rewarding official misconduct; larceny, in\nconnection with the provision of services or involving the theft of\ngovernmental funds; offering a false instrument for filing, falsifying\nbusiness records; tampering with public records; criminal usury; scheme\nto defraud; or defrauding the government; or\n (B) in any other jurisdiction of an offense which is substantially\nsimilar to any of the felonies defined in clause (A) of this\nsubparagraph and for which a sentence to a term of imprisonment in\nexcess of one year was authorized and is authorized in this state\nregardless of whether such sentence was imposed; and\n (3) Whether the applicant, or any corporation, partnership,\nassociation or organization or person holding an ownership or control\ninterest in such school, or any employee responsible in a supervisory\ncapacity for the administration of student funds or governmental funds,\nhas been finally determined in any administrative or civil proceeding to\nhave committed a violation of any provision of this article or any rules\nand regulations promulgated pursuant thereto, or any related order or\ndetermination of the commissioner, or of any similar statute, rule,\nregulation, order or determination of another jurisdiction pertaining to\nthe licensure and operation of any educational or training program; and\n (4) Whether any school owned or operated by the applicant closed or\nceased operation and, if so, whether at the time of the closing the\napplicant was subject to a pending disciplinary action, disallowance,\nfine or other penalty and whether it owed refunds to any government\nagency or students.\n b. No application for any license pursuant to this article shall be\ndenied by reason of disclosure pursuant to this subdivision of the\napplicant, or any corporation, partnership, association or organization\nor person holding an ownership or control interest in such school, or\nany employee responsible in a supervisory capacity for the\nadministration of student funds or governmental funds unless the\ncommissioner makes a written determination that there is a direct\nrelationship between one or more of such previous offenses and the\nlicense sought, or that issuance of the license would create an\nunreasonable risk to property or to the safety, education or welfare of\nspecific individuals or the general public. In making such\ndetermination, the commissioner shall be guided by the factors set forth\nin section seven hundred fifty-three of the correction law. For purposes\nof this subdivision, "ownership or control interest" means: with respect\nto a school that is organized as or owned by a corporation, a position\nas an officer or director of such corporation; or, with respect to a\nschool that is organized as or owned by a partnership, a position as a\npartner; or any other interest totaling ten percent or more, whether\ndirect or indirect, in the total equity or assets of such school.\n c. The commissioner may deny, suspend, revoke or decline to renew any\nlicense: (1) if the significance of the convictions or administrative\nviolations warrant such action; (2) if the commissioner determines that\na school did not make any disclosure required by this subdivision; or\n(3) if the commissioner determines that a school's financial condition\nmay result in the interruption or cessation of instruction or jeopardize\nstudent tuition funds.\n 6. If, during the period for which a license is granted, the\ncommissioner determines that a school's financial condition may result\nin the interruption or cessation of instruction or jeopardize student\ntuition funds, the commissioner may, upon notice to the school, place\nthe school on probation for a period of no more than one year, during\nwhich time the school and the department must make efforts to resolve\nthe problems at the school. The school shall submit a report on its\nfinancial condition to the commissioner within the time prescribed by\nthe commissioner. Such report shall be in the form and shall include\ncontent prescribed by the commissioner and shall be reviewed by the\ncommissioner to determine the school's financial viability. The\ncommissioner may suspend or revoke the school's license, as well as\nrequire the cessation of student enrollment, upon a determination that\nthe school's financial condition continues to threaten its ability to\neducate students and/or the student tuition funds. Alternatives for the\nschool to demonstrate a fiscally sound operation may include securing\nand maintaining a performance bond, payable to the commissioner, in an\nappropriate amount to eliminate any liability to the tuition\nreimbursement account should the school cease operation, limiting the\ncollection of tuition funds until each student completes the program of\nstudy, or other means acceptable to the commissioner. If no resolution\ncan be attained, a hearing, pursuant to subdivisions two and three of\nsection five thousand three of this article will be scheduled. Such\nprobation may include additional monitoring, inspections, limitations on\nenrollment, teaching out some or all of a school's present students or\ntemporary cessation of instruction.\n 7. No license granted under this section shall be transferable or\nassignable without the approval of the commissioner. Upon transfer or\nassignment of any interest totaling twenty-five percent or more, whether\ndirect or indirect, in the total equity or assets of a school, such\nschool shall be deemed a new school required to submit a new school\napplication and obtain a new license pursuant to this article.\nProvided, however, that upon such a substantial change in interest, the\nprevious school license shall remain in effect until the new license is\nissued or denied or the previous license expires or is revoked,\nwhichever occurs first.\n 8. No licensed school shall discontinue operation or surrender its\nlicense unless thirty days written notice of its intention to do so and\na plan for maintenance of safe keeping of the records of the school is\nprovided to the commissioner. However, upon good cause shown, the\ncommissioner may waive the thirty days notice requirement.\n 9. Annual supervision fund and tuition reimbursement account\nassessment. a. The commissioner shall annually assess each school a\ntotal percentage of that school's gross tuition pursuant to subdivision\nthree of section five thousand two of this article, as determined by the\nannual audited financial statement required by this article. This\nassessment shall be based upon each school's gross tuition from the\nprevious year, and shall be payable to the commissioner in equal\nquarterly installments which shall be due on June first, September\nfirst, December first and March first.\n b. (i) Such annualized assessment shall be one percent for schools\nwhich have paid less than sixteen quarters of assessments, but such\nannual assessment shall not fall below five hundred dollars.\n (ii) Such annualized assessment shall be eight-tenths of one percent\nfor schools which have paid sixteen or more quarters of assessments, but\nsuch annual assessment shall not fall below five hundred dollars.\n c. (i) Of the total assessment provided for herein, five-tenths of one\npercent shall accrue to the credit of the tuition reimbursement account\npursuant to section five thousand seven of this article for those\nschools which have paid less than sixteen quarters of assessments. Of\nthe total assessment provided for schools which have paid sixteen or\nmore quarters of assessments, three-tenths of one percent shall accrue\nto the credit of the tuition reimbursement account pursuant to section\nfive thousand seven of this article. For schools paying the minimum\nfive hundred dollars annual assessment, none shall accrue to the tuition\nreimbursement account.\n (ii) The balance of the total assessment provided for herein shall be\ndedicated to fund the department's supervision and regulation of\nlicensed private schools pursuant to an annual appropriation and an\nannual plan of expenditure prepared by the commissioner and approved by\nthe director of the budget.\n d. Payments made within thirty days following the due date shall be\nsubject to interest at one percent above the prevailing prime rate.\nThereafter, late payments may result in suspension of licensure by the\ncommissioner. Payments required by this subdivision shall be considered\na condition of licensure.\n