NY Educ L § 5007 (2021)
2021 New York Laws EDN - Education Title 6 - Special Schools and Instruction Article 101 - Licensed Private Career Schools and Certified English as a Second Language Schools 5007 - Tuition Reimbursement Account.

§ 5007. Tuition reimbursement account. 1. Except as otherwise provided in subdivision six of this section, the portion of the annual assessment of  schools  licensed  pursuant  to  section  five  thousand one of this article as prescribed in subdivision nine of such section and all fines, penalties and settlements received pursuant to  this  article  shall  be transferred upon receipt into the tuition reimbursement account.   3. a. The commissioner shall develop a complaint form and provide such form  to  students. In order to claim a refund, a student shall apply to the fund with a complaint form pursuant to the requirements  of  section five  thousand  three  of  this article. Except as otherwise provided in this article, the commissioner shall compute the refund, if  any,  using the  refund  formula  established  by  subdivision three of section five thousand two of this article.   b. Claimants who had been enrolled in schools which have not closed or ceased operation shall be required to show in a manner determined by the commissioner that:  (1) the student is eligible for a refund;  (2) the student has made a request to the school for a refund; and  (3) the school has failed to make the refund within  the  time  period required by this article.   c.  The  commissioner  shall  act on each refund request within thirty business days of such request.   4. Students may be eligible for refunds under this section as follows:   a. A student who is offered a teachout  plan  for  the  curriculum  in which  the  student was enrolled at the time the school closed or ceased operation, which has been approved  by  the  department,  may  elect  to continue  instruction  pursuant  to  the teachout plan or may decline to continue instruction and may instead apply for a full refund under  this section. The option to apply for a refund shall extend to the end of the first week of instruction at the teachout school.   b.  A  student  who  was  enrolled in a school which has not closed or ceased operation is entitled to a refund computed in accordance with the refund policy established by subdivision three of section five  thousand two of this article.   c.  A  student  who  was  enrolled  in a school at the time the school closes or ceases operation is entitled to a refund of the full amount of prepaid tuition.  In  addition,  commencing  September  first,  nineteen hundred  ninety-three,  a  student who drops out of a school, where such school closes within thirty days of the student's termination and  prior to  completion  of such student's program as specified in the enrollment agreement, shall be entitled to a full refund of all tuition,  fees  and book  charges  paid  for  by  or  on behalf of the student in cash or in loans, excluding funding provided by any government agencies.   d. A student who was enrolled in a school  which  has  not  closed  or ceased  operation, and who has dropped out, is entitled to a full refund of all tuition, fees and other required costs paid by the student if the student has submitted a complaint  form  to  the  commissioner  and  the commissioner  has  determined  that  a  violation  of  this  article has occurred which warrants a  refund.  The  commissioner  shall  promulgate regulations identifying those violations that warrant a refund.   e.  Commencing  September  first,  nineteen  hundred  ninety-three,  a student who drops out of a school, which subsequently closes, and who is owed a refund for the failure of such school to  follow  the  provisions enumerated  in  subdivision  three  of section five thousand two of this article shall be eligible for a refund from  the  tuition  reimbursement fund  according  to  the provisions of subdivision three of section five thousand two of this article.    f. Commencing September  first,  nineteen  hundred  ninety-three,  any student   enrolled  in  a  school  based  upon  an  ability  to  benefit examination shall be eligible for a full refund, regardless  of  whether the  student  is  currently  enrolled,  graduated or dropped out, if the school  enrolled  the student contrary to the provisions of the approved entrance requirements and the student complies with the requirements  of subdivision one of section five thousand three of this article.   5.  a.  For  a  student who had been enrolled in a school that has not closed or ceased operation, the refund shall be paid as follows:  (1) guaranteed student loans, if any, in which case  the  commissioner shall  notify  the student of such payment and shall be paid directly to the lender or guarantee agency where appropriate;  (2) actual personal tuition expenditures, if any; and  (3) tuition assistance program awards and other governmental aid.   b. For schools that have closed or ceased operation, the  commissioner shall  refund actual personal tuition, fees and book expenditures to the student. The repayment of any loans incurred by the student as  part  of the  actual  personal  tuition, fees and book expenditures shall be paid directly to the lender or the guarantee agency where appropriate.   6. a. Where a claim is paid to a student of an operating  school,  the commissioner shall immediately notify the school.   b.  Within  ten  days  of  the receipt of the notice, the school shall either request a hearing to challenge the  commissioner's  determination that  a  refund was owed to the student or reimburse the fund the amount paid to the claimant plus a penalty up to two times  such  amount.  This payment  shall  also incur interest for each day it remains unpaid at an annual  interest  rate  of  one  percent  above  the  prime  rate.   The commissioner   may  promulgate  streamlined  procedures  for  conducting hearings pursuant to this paragraph. Any  penalty  assessed  under  this paragraph  shall be in addition to any other penalties assessed pursuant to this article.  Notwithstanding any other provision of law,  penalties and  interest paid pursuant to this paragraph shall accrue to the credit of the proprietary vocational school supervision account to support  the costs associated with the hearings authorized in this subdivision.   7.  Notwithstanding  the  notice  procedures  described in subdivision three  of  this  section,  in  the  event  of  a  school  closing,   the commissioner on his or her own initiative may take appropriate action in accordance  with  this section to process refund claims on behalf of all of the students of the closed school.   8. Assignment of rights. Persons and entities receiving refunds  under this  section  shall  be  deemed  to  have  assigned or subrogated their tuition reimbursement rights  to  the  commissioner  on  behalf  of  the tuition  reimbursement  fund only for the amount refunded by the tuition reimbursement fund. Within ninety days of any refund  made  pursuant  to this  section,  the  commissioner  or  the  attorney  general shall take appropriate action to recover the total amount of the refunds made, plus administrative costs, from the school.   9. a. A student whose loan liability is exempted  pursuant  to  former section  six  hundred eighty-three of this chapter and is entitled to or owed  a  refund  shall  transfer  to  the  higher   education   services corporation  the right to claim the refund owed and due from the tuition reimbursement fund. In such event, the corporation shall be entitled  to receive  a  refund  for  that  portion  of  the  claim  not  paid to the corporation by the United States Secretary of Education pursuant to  the federal guaranteed loan program.   b.  Any amounts remaining in the tuition reimbursement fund as of June first, nineteen hundred ninety-three and  on  every  March  thirty-first thereafter,  shall  be  made  available to the higher education services  corporation for payment of student loans on  which  collection  activity has  ceased  pursuant  to  the  provisions  of subdivision six of former section six hundred eighty-three of this chapter. No  amounts  shall  be paid  to  the  higher  education services corporation for loans on which collection activity has ceased because of the operation of  section  437 of the Higher Education Act of 1965, as amended.   10.  Management  of  the  tuition reimbursement account. a. As used in this subdivision, net balance is defined as the actual cash  balance  of the  account  as  determined  by  the  commissioner  on  June thirtieth, nineteen hundred ninety-three and every three months thereafter. For the purpose of calculating the net balance, the commissioner shall not  take into  consideration  any  refunds  made  from  the  account  pursuant to paragraphs d and f of subdivision four of  this  section  for  the  year immediately preceding the date on which the calculation is made.   b.  In  the  event  that  the account has accumulated a net balance in excess of one million eight hundred thousand dollars,  the  commissioner shall,  with the approval of the director of the budget, waive an amount not to exceed the amount due for the next quarterly assessment  pursuant to  this  section  and  subdivision nine of section five thousand one of this article for schools which have paid sixteen  quarters  or  more  of assessments only. In such event, payment of future quarterly assessments shall  be suspended for schools which have paid sixteen quarters or more of assessments until the net balance of  the  account  falls  below  one million three hundred thousand dollars.   c. In the event the net balance of the account falls below one million three  hundred  thousand  dollars,  if the quarterly assessment has been suspended for schools which  have  paid  sixteen  quarters  or  more  of assessments  pursuant  to  paragraph  b of this subdivision, it shall be reinstated  for  the  next  quarterly  assessment  and  all   subsequent quarterly assessments until the account has accumulated a net balance in excess of one million eight hundred thousand dollars.   d.  Notwithstanding the provisions of paragraph b of this subdivision, in the event that the balance of the account is in excess of one million three  hundred  thousand  dollars,  all  schools  licensed  after   June thirtieth,  nineteen  hundred  ninety-nine shall be required to pay into the account the equivalence of three years of annual assessments over  a five year period.   e.  Notwithstanding  the provisions of paragraph b of this subdivision all schools licensed after June thirtieth, nineteen hundred ninety-three and before July first, nineteen hundred ninety-nine will be required  to pay   into  the  account  the  equivalence  of  three  years  of  annual assessments within four years of the effective date of  this  paragraph. This  amount  to be assessed shall be determined based upon the school's gross tuition in its first three years of licensure.   g. In the event that the balance of the tuition reimbursement  account is  equal  to  or in excess of two million dollars, the amounts assessed the schools in accordance with the provisions of paragraphs d and  e  of this   subdivision  shall  be  deposited  directly  to  the  proprietary vocational school supervision account.   h. The commissioner may annually apportion from the account an  amount up to two hundred thousand dollars for the purpose of securing, scanning and  otherwise  making  student records from closed schools available to students who attended such schools. Provided, however, that in  no  case shall such apportionment cause the account to fall below the balance set forth  in  paragraph c of this subdivision, nor shall such apportionment cause schools whose quarterly assessments have  been  suspended  to  pay additional quarterly assessments.    11.  Fund  audit.  The  state  comptroller  shall audit or cause to be audited the tuition reimbursement fund once every two years and  produce an   audited   financial   statement  according  to  generally  accepted accounting principles.   12.  New  schools. Within the first year that a school begins licensed operation, the commissioner shall assess such school  an  amount  to  be deposited   into  the  fund  in  an  amount  to  be  determined  by  the commissioner.