PA 16-155—sSB 26

Higher Education and Employment Advancement Committee

Appropriations Committee

AN ACT CONCERNING PRIVATE OCCUPATIONAL SCHOOLS

SUMMARY: This act makes various changes to laws governing private occupational schools, which are privately controlled schools that offer instruction in trades or industrial, commercial, professional, service, or other occupations for remuneration. They are regulated by the Office of Higher Education (OHE).

Specifically, the act does the following:

1. conforms state law to federal regulations by defining private occupational schools as “postsecondary career schools” (i. e. , institutions authorized to operate educational programs beyond secondary education) ( 1);

2. specifies that private occupational schools include hospital-based occupational schools, hairdressing schools, and barbering schools ( 1);

3. allows OHE's executive director to accept, for hospital-offered occupational instruction, programmatic accreditation to satisfy authorization renewal requirements unless there is reasonable cause not to rely upon such accreditation ( 2);

4. allows OHE to compensate members of its occupational school evaluation teams at the executive director's discretion provided they are not state employees, eliminating a blanket prohibition under prior law against compensating any team members ( 2);

5. requires barbering and hairdressing schools enrolling fewer than 10 students to submit to OHE's executive director, for both initial authorization and reauthorization purposes, financial statements compiled by an independent licensed certified public accountant or independent licensed public accountant ( 2 & 4);

6. requires any entity seeking to offer instruction through a private occupational school or establish new school branches to meet additional application and evaluation requirements ( 2-4 & 5);

7. allows OHE's executive director to seize a private occupational school's letter of credit (see BACKGROUND), which must be payable to the private occupational school student protection account, if the school (a) closes before graduating all current students and (b) does not meet statutory closure requirements ( 6 & 7); and

8. allows OHE's executive director, in the event a private occupational school closes, to (a) spend student protection account funds for a “teach-out” (see below)of remaining students and (b) issue completion certificates to students who have completed their course of study ( 7).

The act also makes several technical and conforming changes.

EFFECTIVE DATE: July 1, 2016

APPLICATION AND EVALUATION REQUIREMENTS

The act requires any entity that wishes to offer instruction through a private occupational school or establish new school branches to meet additional application and evaluation requirements. These new requirements affect the entity's initial and renewal applications for authorization and evaluation process, all of which OHE oversees. By law, entities that may offer occupational instruction include a person, board, association, partnership, corporation, limited liability company, or other entity.

Authorization Renewal ( 3)

The act requires the entity to provide evidence to OHE, at the executive director's discretion, that it is current on its rent and mortgage obligations in order for OHE to renew its certificate of authorization to operate.

New Branch Establishment ( 5)

The act requires an OHE-authorized private occupational school to request authorization to open additional school branches or sites at least 60 days before establishing the new location, doubling the 30-day notification period prior law required.

Financial Statements ( 2 & 4)

The act requires barbering and hairdressing schools enrolling fewer than 10 students to submit financial statements compiled by an independent licensed certified public accountant or independent licensed public accountant (1) when submitting an initial application for authorization to OHE and (2) as a condition for authorization renewal. By law, other private occupational schools must, for the same purposes, submit financial statements that are instead prepared by management and reviewed and audited by such accountants.

Evaluation Process ( 2)

The law requires the OHE executive director or his designee to evaluate any private occupational school that applies for initial or renewal authorization to operate. The act requires the executive director to appoint an evaluation team either (1) within 60 days after receiving its complete initial application for authorization or (2) 60 days before the expiration date of the school's current authorization certificate. By law, the executive director must notify an applicant within 120 days after the evaluation team's appointment about whether it has been authorized to operate.

The act also reduces the amount of time a school has to demonstrate compliance with the evaluation team report for an initial or renewal authorization. By law, an evaluation team must submit a written report outlining evidence of noncompliance by the school, to which the school previously had 60 days to respond with evidence of compliance. The act reduces the school response deadline to 30 days from the report date.

6 & 7 — TEACH-OUTS AND CERTIFICATES OF COMPLETION

In the event a private occupational school closes without complying with statutory procedures, the act allows the OHE executive director to (1) spend funds from the private occupational school student protection account as needed for a “teach-out” of any remaining students and (2) issue completion certificates to students whom the OHE executive director determines have successfully completed their course of study. Under existing law, unchanged by the act, the account may also be used to provide tuition refunds to students who do not complete a course because of a school's insolvency or closure. The account is funded by (1) quarterly assessments on private occupational schools' tuition revenue received from Connecticut students and (2) other fees related to the schools' operations.

The act defines a “teach-out” as the completion of a course or program of study in which a student was enrolled. If the course is part of a program of study, then the teach-out must include the entire program. The act defines “certificate of completion” as a written credential issued to a student who completes a course or program of study offered by a private occupational school.

By law, a private occupational school must provide at least 60 days' notice to the OHE executive director before closing. The school also must, among other things, provide evidence that all current students' coursework is or will be completed.

BACKGROUND

Letter of Credit

By law, a private occupational school must file with the OHE executive director an irrevocable $40,000 letter of credit, issued by a bank with its main office or branch in Connecticut, guaranteeing the school's payments to the private occupational school student protection account (CGS 10a-22c(d)).

OLR Tracking: MGS; JSB; PF; bs