NY Educ L § 5001 (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 5001 - Licensed Private Career Schools.

§ 5001. Licensed  private  career  schools.  1. Schools required to be licensed. No private school which charges tuition  or  fees  related  to instruction and which is not exempted hereunder shall be operated by any person  or  persons,  firm, corporation, or private organization for the purpose of teaching or giving instruction in any  subject  or  subjects, unless it is licensed by the department. As used in this article:   a. "licensed private career school" or "licensed private school" shall mean any entity offering to instruct or teach any subject by any plan or method  including  written,  visual  or  audio-visual methods, and shall include any institution licensed or registered as a registered  business school  or  computer  training facility on the effective date of chapter three hundred eighty-one of the laws of two thousand  twelve.  Following such  effective date, there shall be no distinction between institutions previously  defined  as  "registered  business  schools"  or   "computer training  facilities"  and  other  licensed  private  schools,  and  any reference in law to a registered business school  or  computer  training facility  shall  be  deemed  a  reference  to  a licensed private career school. Institutions holding a valid  business  school  registration  on such  effective date, including computer-training facilities, shall have such registrations replaced  by  the  commissioner,  at  no  cost,  with licenses  valid  until  the  expiration  date  listed  on  such previous registration;   b. "certified English as a second language school" or  "certified  ESL school" shall mean a language school conducted for-profit which provides instruction  in English as a second language and which accepts no public funds and is certified pursuant to paragraph f of  subdivision  four  of this section; and   c.  "online  education  marketplace"  shall  mean  a  website or other internet-based online technology tool  with  which  a  licensed  private career  school  or  certified  ESL  school  contracts  for  marketing or advertising services, or services in connection with the  collection  of tuition  and/or  fees,  to the extent authorized in subdivision three of section five thousand four of this article.   2. Exempt  schools.  The  following  schools  are  exempted  from  the licensing requirement of this section:   a. institutions authorized to confer degrees in this state;   b.  schools  providing  kindergarten, nursery, elementary or secondary education, except schools conducted for profit which provide instruction in  English  as  a  second  language  or  preparation  for  high  school equivalency examinations to out-of-school youth or adults;   c. schools operated by governmental agencies or authorities;   d.  schools  which  engage  exclusively  in  training of students with disabilities as defined  in  section  forty-four  hundred  one  of  this chapter;   e.   schools   conducted   on  a  not-for-profit  basis  by  firms  or organizations for the training of their  own  employees  only,  provided that such instruction is offered at no charge to such employees, or by a fraternal society or benevolent order for its members or their immediate relatives only;   f.  schools  which provide instruction in the following subjects only: religion, dancing, music, painting, drawing, sculpture, poetry, dramatic art, languages, reading comprehension,  mathematics,  recreation,  yoga, martial  arts, pilates and athletics, including the training of students to teach such subjects, provided, however, that  schools  conducted  for the  purpose  of  training personal trainers shall be excluded from this exemption and shall be required to obtain licensure;    g. schools in which the course of instruction is licensed,  registered or  approved  under  any  other  section of this chapter or by any other department or agency of the state;   h. schools which provide instruction designed solely for giving flight training and/or related ground school instruction;   i.  schools in which instruction designed solely to prepare applicants for admission to professional licensing examinations administered by the department pursuant to title eight of this chapter, and  applicants  for examination for admission to the practice of law;   j.  schools  which  offer continuing education courses exclusively for individuals licensed by the department pursuant to title eight  of  this chapter and for individuals admitted to the practice of law;   k. schools which provide instruction given exclusively to employees of a  person  or  organization  which has contracted with another person or organization to provide such instruction at no cost to the employees;   l.  conferences,  trade  shows,  workshops,  seminars,  institutes  or courses of study offered and sponsored either jointly or individually by recognized trade, business or professional organizations for the benefit of their membership;   m. schools that limit their total conferences, trade shows, workshops, seminars,  institutes or other course offerings to no more than twice in one calendar year with each of those offerings for  no  more  than  five days;   n.  schools  which provide instruction exclusively to persons employed full-time or part-time in  the  field  in  which  instruction  is  being offered,  where the instruction is provided to meet continuing education standards required for professional licensure as defined by law in  this state;   o.  schools  in  candidacy  status  pursuant  to  subparagraph (iv) of paragraph b of subdivision four of this section; and   p. schools which provide instruction in  photography  exclusively  for non-occupational purposes.   2-a.  Schools exempted pursuant to subdivision two of this section may waive such exemption and apply for a license;  provided,  however,  that the  review  of such applications shall be left to the discretion of the commissioner.   2-b. Programs offered by licensed private career schools to  employees of  a person or organization which has contracted with another person or organization to provide such instruction at no  cost  to  the  employees shall be exempt from the requirements of this article, provided that the following requirements are met:   a.  Only  employees  of  the  employer  for which the program is being offered may enroll in classes that make up the program.   b. Certificates or diplomas awarded to students in the program may not reference in any way the department.   c. Prior to the commencement of the program, such schools shall submit to the department a disclosure form,  prescribed  by  the  commissioner, copies  of  which  shall  be  provided  to  all  students in such exempt program, which shall  include  but  not  be  limited  to  the  following information:  (i) a description of the location and time period in which the program will be offered;  (ii)  a  statement that the students enrolled in the program shall not be subject to any tuition  liability  for  the  program,  even  if  such students do not complete the program;  (iii)  a statement that the program being provided to the employer has not been approved by the department and is not  under  the  department's  jurisdiction  and  that the students in the program have been advised of the fact; and  (iv)  the signatures of the school director or owner of the school and the representative of the  employer  for  which  the  program  is  being offered certifying the accuracy of the statements on the form.   d.  Any  additional student openings in a program deemed exempt by the department may be made available to students  not  affiliated  with  the employer  on  the condition that such students execute a disclosure form as prescribed in paragraph c of this subdivision. Such admitted students shall only constitute up to ten percent of the  exempt  program's  total capacity.   4.   Application,   renewal   application  and  application  fees.  a. Application and renewal application for a license as  a  private  career school  required  by the commissioner shall be filed on forms prescribed and provided by the department. Except as provided in subparagraph (iii) of paragraph e of this  subdivision,  each  renewal  application  for  a private career school licensed pursuant to this section shall include an audited  financial  statement  audited  according  to generally accepted auditing standards by an independent certified public accountant  or  an independent  public  accountant and statistical reports certified by the owner or operator of  the  school,  as  required  by  the  commissioner; provided,  however,  that  the  commissioner  shall  accept  a copy of a current financial statement previously filed by a school with any  other governmental  agency in compliance with the provisions of any federal or state laws, or rules or regulations if such statement  contains  all  of the  information  required  under  this subdivision and conforms to this subdivision's requirements of auditing, review  and  certification.  Any required  audit  of  the  financial  statement  shall  be a condition of licensure and shall be paid for by the school, and the  results  of  the audit   shall   be  forwarded  to  the  commissioner.  Applications  not accompanied  by  the  audits  and  reports  required  pursuant  to  this subdivision  shall  not  be considered for approval by the commissioner. Initial applications  shall  be  accompanied  by  financial  reports  as required  by  the  commissioner.  The  applicant shall receive a written approval or denial together with  the  reasons  for  a  denial  of  such application.   b.  (i)  An  initial license issued pursuant to the provisions of this article shall be valid for a period of two years. A renewal  of  license issued  pursuant  to the provisions of this article shall be valid for a period of four years.  (ii) Every applicant and renewal applicant shall pay to the department a  nonrefundable,   nontransferable   application   fee.   The   initial application fee for new schools shall be five thousand dollars, of which three  thousand  dollars  shall  accrue to the credit of the proprietary vocational school supervision account and  two  thousand  dollars  shall accrue  to  the  tuition  reimbursement account. For additional licensed locations of currently operating schools, the application fee  shall  be two  thousand  five hundred dollars, which shall accrue to the credit of the proprietary  vocational  school  supervision  account.  For  renewal applications,  the  fee shall be based on gross annual tuition income as determined by the annual financial statements required in paragraph a of this subdivision for the most recent school fiscal  year,  according  to the following schedule:       GROSS ANNUAL TUITION INCOME           FEE       0-$199,999                            $   750.00      $200,000-$499,999                     $ 1,500.00       $500,000-$999,999                     $ 2,225.00      $1,000,000-$4,999,999                 $ 4,500.00      $5,000,000-$9,999,999                 $ 9,000.00      $10,000,000 or above                  $18,000.00    Such  renewal  fees  shall  accrue  to  the  credit of the proprietary vocational school supervision account. If the evaluation of a particular course or facility requires the services of an expert  not  employed  by the  department,  the department shall retain such expert and the school shall reimburse the department for the reasonable cost of such services.  (iii) Each school shall display, near the entrance to the school,  the license  which  has  been  issued  to  it.  Such  authorization shall be displayed only during the period of its validity.   * (iv) A school which has applied for a private career school  license may  request  candidacy status for one time only. Candidacy status shall not be issued to schools offering programs to  train  students  to  pass licensure  examinations  such  as  appearance enhancement tests, achieve nurse aide  or  nurse  assistant  certification,  or  pass  examinations leading to licensure in any other profession or occupation determined by the  commissioner  to  require full licensure status.   Candidacy status shall allow a school to operate unlicensed  for  an  initial  period  of twelve  months  during  the  licensure application process, which may be extended to a maximum, non-renewable period of  eighteen  months,  under the following conditions:  (1) the prospective school submits a candidate school application fee, separate from the school application fee, of five thousand dollars which shall  accrue  to  the  credit  of  the  proprietary  vocational  school supervision account;  (2) the school shall not represent that it is  licensed  or  that  its programs are approved through the department;  (3)  to  every  prospective  student,  the  school shall disseminate a statement, provided by the department, that the facilities, instructors, and programs being provided have not been approved and are not under the department's jurisdiction during the candidacy  period.  Such  statement shall  indicate  that students attending candidate schools shall have no recourse through the department's student complaint process nor have any restitution available from the tuition reimbursement  account.  Students shall  sign  an attestation to the receipt of this statement. The school shall retain the signed attestation and provide the student with a  copy of such signed statement;  (4)  the  school  shall  demonstrate financial viability through means deemed  appropriate  by  the  commissioner.  Such  means   may   include submitting  an  audited  financial  statement based on the most recently completed fiscal year; securing  and  maintaining  a  performance  bond, payable  to  the commissioner, in an amount appropriate to eliminate any liability to the tuition reimbursement account in the event  the  school ceases  operation;  limiting  the collection of tuition funds until each student completes the program of study; or other means acceptable to the commissioner; and  (5) any breach of the above conditions shall result in the disapproval of the school's licensure application and the  forfeiture  of  candidate status.  Continued  operation  after  this disapproval shall subject the school to the  disciplinary  action  prescribed  under  paragraph  b  of subdivision six of section five thousand three of this article.  (6)  On  or  before  the  end  of  the  initial twelve-month period of candidacy status, the commissioner shall review the school's application for licensure and  documentation  relating  to  the  school's  candidacy status  and  shall  determine  whether  such  candidacy status should be  extended to the full eighteen months and whether the school may continue to enroll students beyond the  eighteen-month  period  or  the  school's application  for  licensure will be initially disapproved for failure to meet required standards.   * NB Repealed December 15, 2021   c.  An  application  for  renewal of any license shall be submitted at least one hundred twenty days  prior  to  the  expiration  date  of  the current  authorization  to  operate  accompanied  by  the  nonrefundable application fee  and  such  certified  statistical  reports  and  annual financial statements required pursuant to this subdivision.   d.  When  complete and timely application has been made for renewal of any license, the school shall receive  a  written  approval  or  denial, together  with  the reasons for denial of renewal, from the commissioner no less than thirty days prior to the date such license expires.   e. Financial statements and statistical reports. (i) Licensed  private career  schools  and  candidate  schools  shall  submit  such  certified statistical reports and annual financial statements as required  by  the commissioner.  The  commissioner may require audited statistical reports upon a determination that a school  has  provided  false  or  inaccurate certified  statistical  reports. The financial statements shall be based on the fiscal year of the school and  shall  also  include  an  itemized account  of  tuition refunds due and owing to past or presently enrolled students. Statistical reports shall include,  but  not  be  limited  to, enrollment,  completion  and  placement data. The commissioner shall use such financial statements and  statistical  reports  submitted  for  the purposes  of  licensure  of  schools,  establishing  fees or assessments pursuant to this article and determining standards pursuant to paragraph b of subdivision five of section five thousand two of this article.  The attorney  general,  the  comptroller  and  the  president  of the higher education services corporation shall have  access  to  this  information when it is necessary to perform their duties as required by state law.  (ii)  Any  school which received five hundred thousand dollars or more in gross tuition in a school fiscal year shall be required to submit  to the  commissioner  an  annual  audited  financial  statement prepared in accordance with generally accepted accounting principles for that fiscal year. In addition, any school which has a gross  tuition  of  less  than five hundred thousand dollars in a school fiscal year but whose combined state  and federal student financial aid in such year equals one hundred thousand dollars or more shall also submit an annual  audited  financial statement to the commissioner for that fiscal year.  (iii)  Schools  whose gross tuition is less than five hundred thousand dollars in a school fiscal year and which receive less than one  hundred thousand  dollars in state and federal student financial aid in a school fiscal year shall file with  the  commissioner  an  unaudited  financial statement in a format prescribed by the commissioner, provided, however, that  any  such  school  shall  file  an audited financial statement the fiscal year after a reviewed financial statement is submitted. For  such schools,  audited  financial statements are required every two years, at minimum, with reviewed financial statements allowed during the alternate year. Upon a  determination  by  the  commissioner  that  a  school  has submitted   false  or  inaccurate  statements  or  that  a  significant, unsubstantiated decline in gross tuition has occurred, the  commissioner may  require  any  such  school  to  file an audited financial statement pursuant to this paragraph even during  alternate  years  when  reviewed statements would ordinarily be allowed.   f.   Alternate  licensing  provision.  The  commissioner  shall  issue regulations  which   define   alternate   licensing   or   certification requirements for the following:  (1)  correspondence schools in which all approved programs and courses are under three hundred hours;  (2)  schools  which  are eligible for exemption under this section but which elect to be licensed;  (3) non-profit schools exempt from taxation under section 501(c)(3) of the internal revenue code whose programs  are  funded  entirely  through donations   from   individuals   or   philanthropic   organizations,  or endowments, and interest accrued thereon; and  (4) language schools conducted for-profit which provide instruction in English as a second language and which accept no public funds.   5. Required  disclosure  for  licensure.  a.  The  commissioner  shall require that each applicant for a license for the operation of a private career school disclose the following information:  (1)   Whether   the   applicant,   or  any  corporation,  partnership, association or organization or person holding an  ownership  or  control interest  in  such  school, or any employee responsible in a supervisory capacity for the administration of student funds or governmental  funds, has  been  convicted  of  a  crime defined in this article, or any other crime involving the operation of any educational  or  training  program, or,  in  connection  with  the  operation  of  any such program, a crime involving the unlawful  acquisition,  use,  payment  or  expenditure  of educational or training program funds; and  (2)   Whether   the   applicant,   or  any  corporation,  partnership, association or organization or person holding an  ownership  or  control interest  in  such  school, or any employee responsible in a supervisory capacity for the administration of student funds or  governmental  funds has been convicted:  (A)  in  this  state  of  any of the following felonies defined in the penal  law:  bribery  involving  public  servants;  commercial  bribery; perjury in the second degree; rewarding official misconduct; larceny, in connection  with  the  provision  of  services or involving the theft of governmental funds; offering a false instrument for  filing,  falsifying business  records; tampering with public records; criminal usury; scheme to defraud; or defrauding the government; or  (B) in any other jurisdiction of an  offense  which  is  substantially similar   to  any  of  the  felonies  defined  in  clause  (A)  of  this subparagraph and for which a sentence  to  a  term  of  imprisonment  in excess  of  one  year  was  authorized  and  is authorized in this state regardless of whether such sentence was imposed; and  (3)  Whether  the  applicant,   or   any   corporation,   partnership, association  or  organization  or person holding an ownership or control interest in such school, or any employee responsible  in  a  supervisory capacity  for the administration of student funds or governmental funds, has been finally determined in any administrative or civil proceeding to have committed a violation of any provision of this article or any rules and regulations promulgated pursuant thereto, or any  related  order  or determination  of  the  commissioner,  or  of any similar statute, rule, regulation, order or determination of another jurisdiction pertaining to the licensure and operation of any educational or training program; and  (4) Whether any school owned or operated by the  applicant  closed  or ceased  operation  and,  if  so,  whether at the time of the closing the applicant was subject to a pending  disciplinary  action,  disallowance, fine  or  other  penalty  and  whether it owed refunds to any government agency or students.   b. No application for any license pursuant to this  article  shall  be denied  by  reason  of  disclosure  pursuant  to this subdivision of the applicant, or any corporation, partnership, association or  organization or  person  holding  an ownership or control interest in such school, or  any  employee  responsible   in   a   supervisory   capacity   for   the administration  of  student  funds  or  governmental  funds  unless  the commissioner makes a  written  determination  that  there  is  a  direct relationship  between  one  or  more  of  such previous offenses and the license sought,  or  that  issuance  of  the  license  would  create  an unreasonable  risk to property or to the safety, education or welfare of specific  individuals  or   the   general   public.   In   making   such determination, the commissioner shall be guided by the factors set forth in section seven hundred fifty-three of the correction law. For purposes of this subdivision, "ownership or control interest" means: with respect to  a  school that is organized as or owned by a corporation, a position as an officer or director of such corporation; or,  with  respect  to  a school  that  is organized as or owned by a partnership, a position as a partner; or any other interest totaling ten  percent  or  more,  whether direct or indirect, in the total equity or assets of such school.   c.  The commissioner may deny, suspend, revoke or decline to renew any license: (1) if the significance of the  convictions  or  administrative violations  warrant such action; (2) if the commissioner determines that a school did not make any disclosure required by  this  subdivision;  or (3)  if  the commissioner determines that a school's financial condition may result in the interruption or cessation of instruction or jeopardize student tuition funds.   6. If,  during  the  period  for  which  a  license  is  granted,  the commissioner  determines  that a school's financial condition may result in the interruption or cessation of instruction  or  jeopardize  student tuition  funds,  the  commissioner may, upon notice to the school, place the school on probation for a period of no more  than  one  year  during which  time  the  school and the department must make efforts to resolve the problems at the school.  The school shall submit  a  report  on  its financial  condition  to  the commissioner within the time prescribed by the commissioner. Such report shall be in the  form  and  shall  include content  prescribed  by  the  commissioner  and shall be reviewed by the commissioner  to  determine  the  school's  financial   viability.   The commissioner  may  suspend  or  revoke  the school's license, as well as require the cessation of student enrollment, upon a  determination  that the  school's  financial  condition continues to threaten its ability to educate students and/or the student tuition funds. Alternatives for  the school  to  demonstrate  a fiscally sound operation may include securing and maintaining a performance bond, payable to the commissioner,  in  an appropriate   amount   to   eliminate   any  liability  to  the  tuition reimbursement account should the school cease  operation,  limiting  the collection  of tuition funds until each student completes the program of study, or other means acceptable to the commissioner. If  no  resolution can  be  attained,  a hearing, pursuant to subdivisions two and three of section five thousand three of this  article  will  be  scheduled.  Such probation may include additional monitoring, inspections, limitations on enrollment,  teaching  out some or all of a school's present students or temporary cessation of instruction.   7. No license granted under this  section  shall  be  transferable  or assignable  without  the  approval of the commissioner. Upon transfer or assignment of any interest totaling twenty-five percent or more, whether direct or indirect, in the total equity or  assets  of  a  school,  such school  shall  be  deemed  a  new school required to submit a new school application  and  obtain  a  new  license  pursuant  to  this   article. Provided,  however, that upon such a substantial change in interest, the previous school license shall remain in effect until the new license  is issued  or  denied  or  the  previous  license  expires  or  is revoked, whichever occurs first.    8. No licensed school shall discontinue  operation  or  surrender  its license  unless thirty days written notice of its intention to do so and a plan for maintenance of safe keeping of the records of the  school  is provided  to  the  commissioner.  However,  upon  good  cause shown, the commissioner may waive the thirty days notice requirement.   9.   Annual   supervision   fund  and  tuition  reimbursement  account assessment.  a. The commissioner shall annually  assess  each  school  a total  percentage of that school's gross tuition pursuant to subdivision three of section five thousand two of this article, as determined by the annual audited  financial  statement  required  by  this  article.  This assessment  shall  be  based  upon  each school's gross tuition from the previous year, and  shall  be  payable  to  the  commissioner  in  equal quarterly  installments  which  shall  be  due  on June first, September first, December first and March first.   b. (i) Such annualized assessment shall be  one  percent  for  schools which  have  paid  less  than  sixteen quarters of assessments, but such annual assessment shall not fall below five hundred dollars.  (ii) Such annualized assessment shall be eight-tenths of  one  percent for schools which have paid sixteen or more quarters of assessments, but such annual assessment shall not fall below five hundred dollars.   c. (i) Of the total assessment provided for herein, five-tenths of one percent  shall accrue to the credit of the tuition reimbursement account pursuant to section five  thousand  seven  of  this  article  for  those schools  which  have  paid less than sixteen quarters of assessments. Of the total assessment provided for schools which  have  paid  sixteen  or more  quarters  of assessments, three-tenths of one percent shall accrue to the credit of the tuition reimbursement account pursuant  to  section five  thousand  seven  of this article.   For schools paying the minimum five hundred dollars annual assessment, none shall accrue to the tuition reimbursement account.  (ii) The balance of the total assessment provided for herein shall  be dedicated  to  fund  the  department's  supervision  and  regulation  of licensed private schools pursuant to  an  annual  appropriation  and  an annual  plan of expenditure prepared by the commissioner and approved by the director of the budget.   d. Payments made within thirty days following the due  date  shall  be subject  to  interest  at  one  percent above the prevailing prime rate. Thereafter, late payments may result in suspension of licensure  by  the commissioner.  Payments required by this subdivision shall be considered a condition of licensure.