§ 5007 — Tuition reimbursement account

New York § 5007

• 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

§ 5007. Tuition reimbursement account. 1. Except as otherwise provided\nin subdivision six of this section, the portion of the annual assessment\nof schools licensed pursuant to section five thousand one of this\narticle as prescribed in subdivision nine of such section and all fines,\npenalties and settlements received pursuant to this article shall be\ntransferred upon receipt into the tuition reimbursement account.\n 3. a. The commissioner shall develop a complaint form and provide such\nform to students. In order to claim a refund, a student shall apply to\nthe fund with a complaint form pursuant to the requirements of section\nfive thousand three of this article. Except as otherwise provided in\nthis article, the commissioner shall compute the refund, if any, using\nthe refund formula established by subdivision three of section five\nthousand two of this article.\n b. Claimants who had been enrolled in schools which have not closed or\nceased operation shall be required to show in a manner determined by the\ncommissioner that:\n (1) the student is eligible for a refund;\n (2) the student has made a request to the school for a refund; and\n (3) the school has failed to make the refund within the time period\nrequired by this article.\n c. The commissioner shall act on each refund request within thirty\nbusiness days of such request.\n 4. Students may be eligible for refunds under this section as follows:\n a. A student who is offered a teachout plan for the curriculum in\nwhich the student was enrolled at the time the school closed or ceased\noperation, which has been approved by the department, may elect to\ncontinue instruction pursuant to the teachout plan or may decline to\ncontinue instruction and may instead apply for a full refund under this\nsection. The option to apply for a refund shall extend to the end of the\nfirst week of instruction at the teachout school.\n b. A student who was enrolled in a school which has not closed or\nceased operation is entitled to a refund computed in accordance with the\nrefund policy established by subdivision three of section five thousand\ntwo of this article.\n c. A student who was enrolled in a school at the time the school\ncloses or ceases operation is entitled to a refund of the full amount of\nprepaid tuition. In addition, commencing September first, nineteen\nhundred ninety-three, a student who drops out of a school, where such\nschool closes within thirty days of the student's termination and prior\nto completion of such student's program as specified in the enrollment\nagreement, shall be entitled to a full refund of all tuition, fees and\nbook charges paid for by or on behalf of the student in cash or in\nloans, excluding funding provided by any government agencies.\n d. A student who was enrolled in a school which has not closed or\nceased operation, and who has dropped out, is entitled to a full refund\nof all tuition, fees and other required costs paid by the student if the\nstudent has submitted a complaint form to the commissioner and the\ncommissioner has determined that a violation of this article has\noccurred which warrants a refund. The commissioner shall promulgate\nregulations identifying those violations that warrant a refund.\n e. Commencing September first, nineteen hundred ninety-three, a\nstudent who drops out of a school, which subsequently closes, and who is\nowed a refund for the failure of such school to follow the provisions\nenumerated in subdivision three of section five thousand two of this\narticle shall be eligible for a refund from the tuition reimbursement\nfund according to the provisions of subdivision three of section five\nthousand two of this article.\n f. Commencing September first, nineteen hundred ninety-three, any\nstudent enrolled in a school based upon an ability to benefit\nexamination shall be eligible for a full refund, regardless of whether\nthe student is currently enrolled, graduated or dropped out, if the\nschool enrolled the student contrary to the provisions of the approved\nentrance requirements and the student complies with the requirements of\nsubdivision one of section five thousand three of this article.\n 5. a. For a student who had been enrolled in a school that has not\nclosed or ceased operation, the refund shall be paid as follows:\n (1) guaranteed student loans, if any, in which case the commissioner\nshall notify the student of such payment and shall be paid directly to\nthe lender or guarantee agency where appropriate;\n (2) actual personal tuition expenditures, if any; and\n (3) tuition assistance program awards and other governmental aid.\n b. For schools that have closed or ceased operation, the commissioner\nshall refund actual personal tuition, fees and book expenditures to the\nstudent. The repayment of any loans incurred by the student as part of\nthe actual personal tuition, fees and book expenditures shall be paid\ndirectly to the lender or the guarantee agency where appropriate.\n 6. a. Where a claim is paid to a student of an operating school, the\ncommissioner shall immediately notify the school.\n b. Within ten days of the receipt of the notice, the school shall\neither request a hearing to challenge the commissioner's determination\nthat a refund was owed to the student or reimburse the fund the amount\npaid to the claimant plus a penalty up to two times such amount. This\npayment shall also incur interest for each day it remains unpaid at an\nannual interest rate of one percent above the prime rate. The\ncommissioner may promulgate streamlined procedures for conducting\nhearings pursuant to this paragraph. Any penalty assessed under this\nparagraph shall be in addition to any other penalties assessed pursuant\nto this article. Notwithstanding any other provision of law, penalties\nand interest paid pursuant to this paragraph shall accrue to the credit\nof the proprietary vocational school supervision account to support the\ncosts associated with the hearings authorized in this subdivision.\n 7. Notwithstanding the notice procedures described in subdivision\nthree of this section, in the event of a school closing, the\ncommissioner on his or her own initiative may take appropriate action in\naccordance with this section to process refund claims on behalf of all\nof the students of the closed school.\n 8. Assignment of rights. Persons and entities receiving refunds under\nthis section shall be deemed to have assigned or subrogated their\ntuition reimbursement rights to the commissioner on behalf of the\ntuition reimbursement fund only for the amount refunded by the tuition\nreimbursement fund. Within ninety days of any refund made pursuant to\nthis section, the commissioner or the attorney general shall take\nappropriate action to recover the total amount of the refunds made, plus\nadministrative costs, from the school.\n 9. a. A student whose loan liability is exempted pursuant to former\nsection six hundred eighty-three of this chapter and is entitled to or\nowed a refund shall transfer to the higher education services\ncorporation the right to claim the refund owed and due from the tuition\nreimbursement fund. In such event, the corporation shall be entitled to\nreceive a refund for that portion of the claim not paid to the\ncorporation by the United States Secretary of Education pursuant to the\nfederal guaranteed loan program.\n b. Any amounts remaining in the tuition reimbursement fund as of June\nfirst, nineteen hundred ninety-three and on every March thirty-first\nthereafter, shall be made available to the higher education services\ncorporation for payment of student loans on which collection activity\nhas ceased pursuant to the provisions of subdivision six of former\nsection six hundred eighty-three of this chapter. No amounts shall be\npaid to the higher education services corporation for loans on which\ncollection activity has ceased because of the operation of section 437\nof the Higher Education Act of 1965, as amended.\n 10. Management of the tuition reimbursement account. a. As used in\nthis subdivision, net balance is defined as the actual cash balance of\nthe account as determined by the commissioner on June thirtieth,\nnineteen hundred ninety-three and every three months thereafter. For the\npurpose of calculating the net balance, the commissioner shall not take\ninto consideration any refunds made from the account pursuant to\nparagraphs d and f of subdivision four of this section for the year\nimmediately preceding the date on which the calculation is made.\n b. In the event that the account has accumulated a net balance in\nexcess of one million eight hundred thousand dollars, the commissioner\nshall, with the approval of the director of the budget, waive an amount\nnot to exceed the amount due for the next quarterly assessment pursuant\nto this section and subdivision nine of section five thousand one of\nthis article for schools which have paid sixteen quarters or more of\nassessments only. In such event, payment of future quarterly assessments\nshall be suspended for schools which have paid sixteen quarters or more\nof assessments until the net balance of the account falls below one\nmillion three hundred thousand dollars.\n c. In the event the net balance of the account falls below one million\nthree hundred thousand dollars, if the quarterly assessment has been\nsuspended for schools which have paid sixteen quarters or more of\nassessments pursuant to paragraph b of this subdivision, it shall be\nreinstated for the next quarterly assessment and all subsequent\nquarterly assessments until the account has accumulated a net balance in\nexcess of one million eight hundred thousand dollars.\n d. Notwithstanding the provisions of paragraph b of this subdivision,\nin the event that the balance of the account is in excess of one million\nthree hundred thousand dollars, all schools licensed after June\nthirtieth, nineteen hundred ninety-nine shall be required to pay into\nthe account the equivalence of three years of annual assessments over a\nfive year period.\n e. Notwithstanding the provisions of paragraph b of this subdivision\nall schools licensed after June thirtieth, nineteen hundred ninety-three\nand before July first, nineteen hundred ninety-nine will be required to\npay into the account the equivalence of three years of annual\nassessments within four years of the effective date of this paragraph.\nThis amount to be assessed shall be determined based upon the school's\ngross tuition in its first three years of licensure.\n g. In the event that the balance of the tuition reimbursement account\nis equal to or in excess of two million dollars, the amounts assessed\nthe schools in accordance with the provisions of paragraphs d and e of\nthis subdivision shall be deposited directly to the proprietary\nvocational school supervision account.\n h. The commissioner may annually apportion from the account an amount\nup to two hundred thousand dollars for the purpose of securing, scanning\nand otherwise making student records from closed schools available to\nstudents who attended such schools. Provided, however, that in no case\nshall such apportionment cause the account to fall below the balance set\nforth in paragraph c of this subdivision, nor shall such apportionment\ncause schools whose quarterly assessments have been suspended to pay\nadditional quarterly assessments.\n 11. Fund audit. The state comptroller shall audit or cause to be\naudited the tuition reimbursement fund once every two years and produce\nan audited financial statement according to generally accepted\naccounting principles.\n 12. New schools. Within the first year that a school begins licensed\noperation, the commissioner shall assess such school an amount to be\ndeposited into the fund in an amount to be determined by the\ncommissioner.\n