A 2182: Establishes the Non-Degree Proprietary School Supervision and Student Protection Act.

  
  STATE OF NEW YORK ________________________________________________________________________ 2182 2025-2026 Regular Sessions  IN ASSEMBLY January 15, 2025 ___________ Introduced by M. of A. HYNDMAN -- read once and referred to the Commit- tee on Higher Education AN ACT to amend the education law, in relation to enacting the "Non-De- gree Proprietary School Supervision and Student Protection Act" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "Non-Degree Proprietary School Supervision and Student Protection 3 Act". 4 § 2. The education law is amended by adding a new section 239-c to 5 read as follows: 6 § 239-c. Arbitration clauses in proprietary institution enrollment 7 contracts. 1. No proprietary institution of higher education shall 8 include any provision requiring mandatory binding arbitration of 9 disputes regarding any student enrollment contract or agreement. 10 2. For purposes of this section, "proprietary institution" shall be 11 defined as any licensed private career school, certified English as a 12 second language school, or online education marketplace as defined in 13 paragraph c of subdivision one of section five thousand one of this 14 chapter or any approved for-profit degree-granting institution pursuant 15 to the department. 16 § 3. Subparagraphs 1 and 2 of paragraph c of subdivision 1 of section 17 5003 of the education law, as amended by chapter 381 of the laws of 18 2012, are amended to read as follows: 19 (1) Any person who believes [he or she has] they have been aggrieved 20 by a violation of this section, except a person aggrieved by the actions 21 or omissions of a candidate school, shall have the right to file a writ- 22 ten complaint within: (A) [two] six years of the alleged violation; or 23 (B) one year of receiving notification from the higher education 24 services corporation or any other guarantee agency that the student has 25 defaulted on a student loan payment[; provided, however, that no EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04995-01-5 
 A. 2182 2 1 complaint may be filed after three years from the date of the alleged 2 violation]. The commissioner shall maintain a written record of each 3 complaint that is made. The commissioner shall also send to the 4 complainant a form acknowledging the complaint and requesting further 5 information if necessary and shall advise the director of the school 6 that a complaint has been made and, where appropriate the nature of the 7 complaint. 8 (2) The commissioner shall within twenty days of receipt of such writ- 9 ten complaint commence an investigation of the alleged violation and 10 shall within ninety days of the receipt of such written complaint, issue 11 a written finding. The commissioner shall furnish such findings to the 12 person who filed the complaint and to the chief operating officer of the 13 school cited in the complaint. If the commissioner finds that there has 14 been a violation of this section, the commissioner shall take appropri- 15 ate action. If the commissioner shall find that there has been a 16 violation of this section, the commissioner shall also place such a 17 finding on a publicly accessible website disclosing the institution that 18 was in violation and the substance of the complaint within thirty days 19 of the commissioner's finding. 20 § 4. Paragraphs a and b of subdivision 6 of section 5003 of the educa- 21 tion law, as amended by chapter 381 of the laws of 2012, are amended to 22 read as follows: 23 a. A hearing officer may recommend, and the commissioner may impose, a 24 civil penalty not to exceed [three] five thousand [five hundred] dollars 25 for any violation of this article, including a school's failure to offer 26 a course or program as approved by the commissioner. In the case of a 27 second or further violation committed within five years of the previous 28 violation, the liability shall be a civil penalty not to exceed [seven] 29 ten thousand [five hundred] dollars for each such violation. 30 b. Notwithstanding the provisions of paragraph a of this subdivision, 31 a hearing officer may recommend, and the commissioner may impose a civil 32 penalty not to exceed [seventy-five] one hundred thousand dollars or 33 double the documented amount from which the school benefited, whichever 34 is greater, for any of the following violations: (1) operation of a 35 school without a license in violation of section five thousand one of 36 this article; (2) operation of a school knowing that the school's 37 license has been suspended or revoked; (3) use of false, misleading, 38 deceptive or fraudulent advertising; (4) employment of recruiters on the 39 basis of a commission, bonus or quota, except as authorized by the 40 commissioner; (5) directing or authorizing recruiters to offer guaran- 41 tees of jobs upon completion of a course; (6) failure to make a tuition 42 refund when such failure is part of a pattern of misconduct; (7) the 43 offering of a course or program that has not been approved by the 44 commissioner; (8) admitting students, who subsequently drop out, who 45 were admitted in violation of the admission standards established by the 46 commissioner, where such admissions constitute a pattern of misconduct 47 and where the drop out resulted at least in part from such violation; 48 (9) failure to provide the notice of discontinuance and the plan 49 required by subdivision seven of section five thousand one of this arti- 50 cle; or (10) violation of any other provision of this article, or any 51 rule or regulation promulgated pursuant thereto, when such violation 52 constitutes part of a pattern of misconduct which significantly impairs 53 the educational quality of the program or programs being offered by the 54 school. For each enumerated offense, a second or further violation 55 committed within five years, shall be subject to a civil penalty not to 
 A. 2182 3 1 exceed one and one-half times the amount of the previous violation for 2 each such violation. 3 § 5. Subdivision 10 of section 5007 of the education law, as amended 4 by chapter 381 of the laws of 2012, is amended to read as follows: 5 10. Management of the tuition reimbursement account. a. As used in 6 this subdivision, net balance is defined as the actual cash balance of 7 the account as determined by the commissioner on June thirtieth, nine- 8 teen hundred ninety-three and every three months thereafter. For the 9 purpose of calculating the net balance, the commissioner shall not take 10 into consideration any refunds made from the account pursuant to para- 11 graphs d and f of subdivision four of this section for the year imme- 12 diately preceding the date on which the calculation is made. 13 b. In the event that the account has accumulated a net balance in 14 excess of [one] two million eight hundred thousand dollars, the commis- 15 sioner shall, with the approval of the director of the budget, waive an 16 amount not to exceed the amount due for the next quarterly assessment 17 pursuant to this section and subdivision nine of section five thousand 18 one of this article for schools which have paid sixteen quarters or more 19 of assessments only. In such event, payment of future quarterly assess- 20 ments shall be suspended for schools which have paid sixteen quarters or 21 more of assessments until the net balance of the account falls below 22 [one] two million three hundred thousand dollars. 23 c. In the event the net balance of the account falls below [one] two 24 million three hundred thousand dollars, if the quarterly assessment has 25 been suspended for schools which have paid sixteen quarters or more of 26 assessments pursuant to paragraph b of this subdivision, it shall be 27 reinstated for the next quarterly assessment and all subsequent quarter- 28 ly assessments until the account has accumulated a net balance in excess 29 of [one] two million eight hundred thousand dollars. 30 d. Notwithstanding the provisions of paragraph b of this subdivision, 31 in the event that the balance of the account is in excess of [one] two 32 million three hundred thousand dollars, all schools licensed after June 33 thirtieth, nineteen hundred ninety-nine shall be required to pay into 34 the account the equivalence of three years of annual assessments over a 35 five year period. 36 e. Notwithstanding the provisions of paragraph b of this subdivision 37 all schools licensed after June thirtieth, nineteen hundred ninety-three 38 and before July first, nineteen hundred ninety-nine will be required to 39 pay into the account the equivalence of three years of annual assess- 40 ments within four years of the effective date of this paragraph. This 41 amount to be assessed shall be determined based upon the school's gross 42 tuition in its first three years of licensure. 43 f. In the event that the balance of the tuition reimbursement account 44 is equal to or in excess of three million dollars, up to five hundred 45 thousand dollars of the amounts assessed to schools in accordance with 46 the provisions of paragraphs d and e of this subdivision shall be appro- 47 priated to the department for the hiring of additional staff to perform 48 regulatory oversight of the schools covered under this article. 49 g. In the event that the balance of the tuition reimbursement account 50 is equal to or in excess of [two] three million five hundred one 51 dollars, the amounts assessed the schools in accordance with the 52 provisions of paragraphs d and e of this subdivision shall be deposited 53 directly to the proprietary vocational school supervision account. 54 h. The commissioner may annually apportion from the account an amount 55 up to two hundred thousand dollars for the purpose of securing, scanning 56 and otherwise making student records from closed schools available to 
 A. 2182 4 1 students who attended such schools. Provided, however, that in no case 2 shall such apportionment cause the account to fall below the balance set 3 forth in paragraph c of this subdivision, nor shall such apportionment 4 cause schools whose quarterly assessments have been suspended to pay 5 additional quarterly assessments. 6 § 6. Subdivision 5 of section 5002 of the education law is amended by 7 adding a new paragraph g to read as follows: 8 g. (1) The commissioner shall require annually, that available data be 9 submitted on the gainful employment outcomes of students for each 10 curriculum, course, or program of any school licensed pursuant to 11 section five thousand one of this article. The commissioner shall be 12 authorized to promulgate rules and regulations that define and detail 13 what shall be required as part of such submission. The submission must, 14 at a minimum include the average amount of student debt a student has 15 incurred through a school's curriculum, course, or program and the aver- 16 age adjusted gross income that students attain three years after the 17 students have completed the curriculum, course, or program. 18 (2) Schools submitting student data pertaining to gainful employment 19 outcomes shall attest to the completeness and accuracy of the informa- 20 tion submitted to the commissioner under penalty for violation of frau- 21 dulent statements or representations to the department as outlined under 22 section five thousand three of this article. 23 (3) For the purpose of this section, a school shall have satisfied the 24 completeness and accuracy of the information submitted if they reported 25 the average adjusted gross income of applicable former students through 26 such school's available access to tax data of such applicable former 27 students. However, if the school does not have available access to tax 28 data of such applicable former students then the school can satisfy the 29 completeness and accuracy of the information submitted requirement by 30 conducting a survey of applicable former students related to their 31 earned income. Such survey shall be done pursuant to regulations and 32 guidance promulgated by the commissioner. 33 § 7. If any clause, sentence, paragraph, or part of this act or the 34 application thereof to any person or circumstances, shall, for any 35 reason, be adjudged by a court of competent jurisdiction to be invalid, 36 such judgment shall not affect, impair, or invalidate the remainder of 37 this act, and the application thereof to other person or circumstances, 38 but shall be confined in its operation to the clause, sentence, para- 39 graph, or part thereof directly involved in the controversy in which 40 such judgment shall have been rendered and to the person or circum- 41 stances involved. It is hereby declared to be the legislative intent 42 that this act would have been adopted had such invalid provisions not 43 been included. 44 § 8. This act shall take effect on the one hundred eightieth day after 45 it shall have become a law. Effective immediately, the addition, amend- 46 ment and/or repeal of any rule or regulation necessary for the implemen- 47 tation of this act on its effective date are authorized to be made and 48 completed on or before such effective date.