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 › 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.