TITLE 17. EDUCATION

CHAPTER 24-A. PROPRIETARY SCHOOLS

 

17:3141.16  Proprietary School Student Protection Fund and program

 

A. There shall be established in the state treasury as a special permanent fund the Proprietary School Students Protection Fund, hereinafter referred to as the "Student Protection Fund".  Following compliance with the requirements of Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond Security and Redemption Fund, all monies generated pursuant to the provisions of this Section shall be deposited into the Student Protection Fund, and monies in this fund shall be used solely to make refunds of unearned tuition as provided for by this Chapter.  The monies in this fund shall be invested by the state treasurer in the same manner as for the state general fund and interest earned on the investment of these monies shall be credited to the Student Protection Fund.  All unexpended and unencumbered monies in this fund at the end of a fiscal year shall remain in such fund and be available for expenditure in the next fiscal year.  The legislature shall make yearly appropriations from the fund to the Board of Regents for the purposes of the proprietary school student protection program.

 

B. (1) All proprietary schools licensed under the provisions of this Chapter prior to September 3, 1989, shall make payments to the Student Protection Fund according to the following graduated schedule beginning July 1, 1991, and annually thereafter.  For the calculation of the first payment, the assessment period shall be July 1, 1990 to June 30, 1991.  Subsequent payments shall be calculated upon annual assessment period beginning July first of each year.

 

(2) Except for the initial payment, all proprietary schools licensed subsequent to September 3, 1989, shall make payments to the Student Protection Fund according to the following graduated schedule beginning one year after licensure by the board and annually thereafter.  The first payment to the Student Protection Fund by such schools shall be one thousand dollars and shall accompany application for licensure.  Should the gross tuition collected by such a school during the first assessment period after licensure require an adjustment, such adjustment shall be made in accordance with the applicable provisions of this Section.

 

STUDENT PROTECTION FUND SCHEDULE

 

 Gross Tuition Collected During         Annual Payment

       Assessment Period

$           1 "                24,999              $  200.00

$   25,000 "                49,999              $  250.00

$   50,000 "                99,999              $  300.00

$  100,000 "              199,999              $  400.00

$  200,000 "              299,999              $  500.00

$  300,000 "              399,999              $  600.00

$  400,000 "              499,999              $  700.00

$  500,000 "              749,999             $1,000.00

$  750,000 "              999,999             $1,250.00

$1,000,000 "           1,499,999             $1,500.00

$1,500,000 "           and above             $2,000.00

 

(3) All payments to the Student Protection Fund shall be made to the executive secretary of the Advisory Commission on Proprietary Schools.  Except in cases of overpayment, all payments to the Student Protection Fund shall be nonrefundable.

 

(4) Non-tuition revenues and all income generated from contract training services shall be exempt from the calculation of a school's gross tuition revenues.

 

(5) Repealed by Acts 1991, No. 943, § 2, eff. July 24, 1991.

 

(6) Payments required pursuant to R.S. 17:3141.16 shall be a condition of doing business in the state and failure to make any such payment within thirty days following the date on which it is due shall result in the loss of licensure as granted under the provisions of R.S. 17:3141.4. The executive secretary of the Advisory Commission on Proprietary Schools shall provide written notice of the required payment to each school not less than thirty days prior to the due date of such payment.

 

(7) If an audit of tuition revenues conducted by the Board of Regents determines that a school has paid into the Proprietary School Student Protection Fund an amount less than was required, the school shall pay said amount required to the executive secretary of the Advisory Commission on Proprietary Schools within thirty days of receipt of written notice from the superintendent or his designee of the amount of the underpayment.

 

(8) If an audit of tuition revenues conducted by the Board of Regents determines that a school has paid into the Proprietary School Student Protection Fund an amount more than was required, subsequent payment or payments by the school shall be appropriately credited by the commissioner of higher education or his designee until such credited payment or payments equal the amount of the overpayment.

 

C. (1) Forms developed and provided annually by the commissioner of higher education to calculate payments due the Student Protection Fund shall be completed by the school and submitted annually to the executive secretary of the Advisory Commission on Proprietary Schools.  The school director or persons designated to sign on his behalf shall attest that the information provided is correct and complete.

 

(2) A school shall maintain accurate and complete financial records showing all tuition amounts paid to such school by or on behalf of each student.

 

D. (1) No payment shall be paid from the fund until the avails from the surety bond required by R.S. 17:3141.5(D) have been exhausted.

 

(2) Claims against the fund shall be considered from currently enrolled students only when there is a lack of availability for that student to transfer for the time remaining in his course of study, at no additional cost, to a similar program within the student's local area, as determined by the Advisory Commission on Proprietary Schools.  The receiving school shall in no way be liable for any transferring student's tuition refunds.

 

(3) A school shall keep records of:

 

(a) The name and permanent address of each student.

 

(b) The date each student began instruction at the school.

 

(c) The enrollment agreement of each student.

 

(d) Information about each program in which the student was or is enrolled, including the names of the program, length in hours where applicable, or for home study schools, program length in lessons, tuition paid in each calendar quarter, number of hours where applicable, of instruction or where appropriate, completed by the student at the end of each calendar quarter, and date of last instruction or of program completion.

 

(e) Other such information as required by the Board of Regents by rule.

 

(4) These records shall be kept current and on file at the school and be available for inspection by the commissioner of higher education or his designee upon request.  In the event of cessation of operation, these records shall be transferred to the commissioner of higher education within ten days of cessation of operation.  In the event of seizure or confiscation of records by those legally authorized, a copy of all records of students affected by the cessation of operation shall be sent to the commissioner of higher education.

 

(5) A school shall inform its students in writing of their rights under the provisions governing the Student Protection Fund.  Application for refund shall be made on forms provided by the commissioner of higher education after determination of cessation of operation of the school.

 

(6) A student in applying for refund under the provisions of this Section shall specify any and all sources and amounts of tuition which were paid on the student's behalf.  The commissioner of higher education shall direct the executive secretary of the Advisory Commission on Proprietary Schools to pay pro rata refunds to the student or appropriate individuals or organizations which paid tuition on behalf of the student.

 

(7) A student, as a condition of accepting the refund payment, must sign such forms as prescribed by the superintendent that subrogate to the state of Louisiana all rights of action, claims, and demands which the student may have against the school for tuition reimbursement to the extent of the refund the student receives from the state.

 

(8) If a school's cessation of operation renders eligible a student, governmental agency or other organization, or any person for a refund, reasonable effort must be made to acquire such a refund from such school, surety bond as required by R.S. 17:3141.5(D), or any other school resources, and any refund payments for tuition from any other source made to a student as a result of this cessation of operation shall be deducted from the obligation of the fund.

 

(9) A claim shall be made against the fund only if it arises out of the cessation of operation by an institution on or after September 3, 1989 and after claims are made against the surety bond or other school resources.

 

(10) In the event of the cessation of operation of any authorized school after July 1, 1999, the Board of Regents shall have the authority to authorize the seizure and sale at public auction of all unsecured assets of the school, with all proceeds to be deposited in the Proprietary School Student Protection Fund.  Cessation of operation shall mean the cessation of all instructional and business operations directly related to the offering of education and training as authorized under the provisions of this Chapter, with no reasonable prospect of resuming operations.

 

E. (1)(a) Any student enrolled in a proprietary school licensed under the provisions of R.S. 17:3141.4 through 3141.17, who is unable to complete a course or unit of instruction at such school because of cessation of operation of the school and who has paid tuition for such course or unit of instruction, may make application to the commissioner of higher education for a refund of tuition from the Student Protection Fund established pursuant to R.S. 17:3141.16 to the extent that such fund exists or has reached the level necessary to pay outstanding approved claims.

 

(b) Upon such application, the commissioner of higher education shall determine whether the applicant is unable to complete a course or unit of instruction because of the cessation of operation of the school to which tuition has been paid.  The commissioner of higher education may summon by subpoena any person, records, or documents pertinent to the making of a determination regarding cessation of operation.

 

(c) If the commissioner of higher education finds that the applicant is entitled to a refund of tuition because of the cessation of operation of the school, the commissioner of higher education shall determine the amount of an appropriate refund which shall be equal to or a portion of the tuition paid for the uncompleted course or unit of instruction.   Thereafter, if the commissioner of higher education determines that the surety bond or other school financial resources are inadequate to repay the obligation, the commissioner of higher education shall direct the executive secretary of the Advisory Commission on Proprietary Schools to pay the refund to the applicant or persons, agencies, or organizations indicated by the applicant who has paid tuition on the student's behalf.  If the student is a minor, payment shall be made to the student's parent, parents, or legal guardian.

 

(2) Each recipient of a tuition refund made in accordance with the provisions of this Section shall assign all rights to the state of any action against the school or its owner or owners for tuition amounts reimbursed pursuant to this Section.  Upon such assignment, the Board of Regents may take appropriate action against the school or its owner or owners in order to reimburse the Student Protection Fund for any expenses or claims that are paid from the fund and to reimburse the state for the reasonable and necessary expenses in undertaking such action.

 

F. The Board of Regents shall adopt necessary rules and regulations based on recommendations from the commission providing for the cessation of payments into the Student Protection Fund by schools licensed under the provisions of this Chapter upon the fund balance reaching a minimum of eight hundred thousand dollars and for the resumption of payments into the fund whenever the fund balance is less than seven hundred fifty thousand dollars.

 

G. (1) Notwithstanding the provisions of Subsection A of this Section, there is hereby established a special account within the Proprietary School Students Protection Fund to be known as the Proprietary School Student Records and Administration Account, hereinafter referred to as the "Administration Account".  Any balance in the Student Protection Fund on July 1, 2000, that exceeds eight hundred thousand dollars, as provided in Subsection F of this Section, shall be deposited into the Administration Account.  All interest earned on the fund after July 1, 2000, shall be deposited in the Administration Account.  All deposits made to the Student Protection Fund after July 1, 2000, shall be made in accordance with the provisions of Subsection B of this Section.

 

(2) Amounts from the Administration Account shall be pledged and dedicated solely and exclusively for costs associated with the Board of Regents functions as they relate to the administration of proprietary schools and for the creation of a digital student records management system.

 

Added by Acts 1989, No. 798, § 1.  Amended by Acts 1991, No. 943, § 1, eff. July 24, 1991;  Acts 1998, 1st Ex.Sess., No. 151, § 1, eff. July 1, 1999;  Acts 2000, 1st Ex.Sess., No. 63, § 1, eff. April 17, 2000