2023 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.
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.