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General Assembly Substitute Bill No. 998
January Session, 2021
AN ACT CONCERNING TH E RECOMMENDATIONS OF THE OFFICE
OF HIGHER EDUCATION REGARDING PRIVATE OC CUPATIONAL
SCHOOLS AND CLOSURE PLANS OF INSTITUTIONS OF HIGHER
EDUCATION.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subsection (c) of section 10a-22b of the general statutes is 1
repealed and the following is substituted in lieu thereof (Effective July 1, 2
2021): 3
(c) Each person, board, association, partnership, corporation, limited 4
liability company or other entity which seeks to offer occupational 5
instruction shall submit to the executive director, or the executive 6
director's designee, in such manner as the executive director, or the 7
executive director's designee, prescribes, an application for a certificate 8
of authorization which includes, but need not be limited to, (1) the 9
proposed name of the school; (2) ownership and organization of the 10
school including the names and addresses of all principals, officers, 11
members and directors; (3) names and addresses of all stockholders of 12
the school, except for applicants which are listed on a national securities 13
exchange; (4) addresses of any building or premises on which the school 14
will be located; (5) description of the occupational instruction to be 15
offered; (6) the proposed student enrollment agreement, which includes 16
for each program of occupational instruction offered a description, in 17 Substitute Bill No. 998
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plain language, of any requirements for employment in such occupation 18
or barriers to such employment pursuant to state law or regulations; (7) 19
the proposed school catalog, which includes for each program of 20
occupational instruction offered a description of any requirements for 21
employment in such occupation or barriers to such employment 22
pursuant to state law or regulations; (8) financial statements detailing 23
the financial condition of the school pursuant to subsection (d) of this 24
section and subsection (g) of section 10a-22d, as amended by this act, 25
prepared by management and reviewed or audited, or, for a 26
nonaccredited school annually [enrolling fewer than ten students] 27
receiving less than fifty thousand dollars in tuition revenue, compiled, 28
by an independent licensed certified public accountant or independent 29
licensed public accountant; and (9) an agent for service of process. Each 30
application for initial authorization shall be accompanied by a 31
nonrefundable application fee made payable to the private occupational 32
school student protection account in the amount of two thousand 33
dollars for the private occupational school and two hundred dollars for 34
each branch of a private occupational school in this state. Any 35
application for initial authorization that remains incomplete six months 36
after the date such application was first submitted to the Office of 37
Higher Education shall expire and the office shall not approve such 38
expired application for authorization. 39
Sec. 2. Subsection (g) of section 10a-22d of the general statutes is 40
repealed and the following is substituted in lieu thereof (Effective July 1, 41
2021): 42
(g) Each private occupational school shall keep financial records in 43
conformity with generally accepted accounting principles. An annual 44
financial statement detailing the financial status of the school shall be 45
prepared by school management and reviewed or audited, or, for a 46
nonaccredited school annually [enrolling fewer than ten students] 47
receiving less than fifty thousand dollars in tuition revenue, compiled, 48
by a licensed certified public accountant or licensed public accountant 49
in accordance with standards established by the American Institute of 50 Substitute Bill No. 998
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Certified Public Accountants. A copy of such financial statement shall 51
be filed with the executive director on or before the last day of the fourth 52
month following the end of the school's fiscal year, except in the case of 53
a nationally accredited school recognized by the United States 54
Department of Education, in which case such financial statement shall 55
be due on or before the last day of the sixth month following the end of 56
the school's fiscal year. Only audited financial statements shall be 57
accepted from a nationally accredited school. Upon a nonaccredited 58
school's written request, the executive director may authorize, for good 59
cause shown, a filing extension for a period not to exceed sixty days. No 60
filing extensions shall be granted to a nationally accredited school. 61
Sec. 3. Section 10a-22d of the general statutes is amended by adding 62
subsection (h) as follows (Effective July 1, 2021): 63
(NEW) (h) The failure of any private occupational school to submit 64
an application to the Office of Higher Education for the renewal of a 65
certificate of authorization on the date on which it is due may result in 66
the loss of authorization under section 10a-22f, as amended by this act. 67
The executive director of said office may deny the renewal of such 68
certificate of authorization if there exists a failure to file such renewal 69
application by the date on which it is due, or the end of any period of 70
extension authorized pursuant to subsection (e) of this section. 71
Sec. 4. Subsection (a) of section 10a-22f of the general statutes is 72
repealed and the following is substituted in lieu thereof (Effective July 1, 73
2021): 74
(a) A certificate of authorization issued to a private occupational 75
school pursuant to sections 10a-22a to 10a-22o, inclusive, as amended 76
by this act, and sections 10a-22u to 10a-22w, inclusive, as amended by 77
this act, may be revoked by the executive director if such school (1) 78
ceases to meet the conditions of its authorization; (2) commits a material 79
or substantial violation of sections 10a-22a to 10a-22o, inclusive, as 80
amended by this act, or sections 10a-22u to 10a-22w, inclusive, as 81
amended by this act, or the regulations prescribed thereunder; (3) makes 82 Substitute Bill No. 998
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a false statement about a material fact in application for authorization 83
or renewal; [or] (4) fails to make a required payment to the private 84
occupational school student protection account pursuant to section 10a-85
22u, as amended by this act; or (5) fails to submit a complete application 86
for a renewed certificate of authorization pursuant to section 10a-22d, 87
as amended by this act. 88
Sec. 5. Section 10a-22h of the general statutes is repealed and the 89
following is substituted in lieu thereof (Effective July 1, 2021): 90
(a) No representative of a private occupational school not authorized 91
pursuant to sections 10a-22a to 10a-22o, inclusive, as amended by this 92
act, and sections 10a-22u to 10a-22w, inclusive, as amended by this act, 93
shall visit the residence of any prospective student, solicit enrollments, 94
sell occupational instruction in any form or manner, make 95
representations or give counsel to prospective students without first 96
obtaining a permit from the executive director. Such permit shall not be 97
represented to constitute approval of the school itself. Any contract 98
entered into in violation of this section shall not be enforceable by such 99
school. 100
(b) Any person seeking to represent an out-of-state private 101
occupational school not authorized pursuant to sections 10a-22a to 10a-102
22o, inclusive, as amended by this act, and sections 10a-22u to 10a-22w, 103
inclusive, as amended by this act, shall file an application with the Office 104
of Higher Education on forms prescribed by the executive director. 105
Upon issuance of a permit, such representative shall pay a 106
nonrefundable fee of five hundred dollars into the private occupational 107
student protection account. The permit shall be valid for a period of one 108
year from date of issuance. 109
(c) Any out-of-state private occupational school that seeks to operate 110
a distance learning program in the state shall submit an application to 111
the Office of Higher Education in the form and manner prescribed by 112
the office. Each such private occupational school shall agree to abide by 113
standards established by the office. The office shall approve or reject 114 Substitute Bill No. 998
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such private occupational school's application in accordance with the 115
standards established by the office. Authorization by the office to 116
operate a distance learning program in the state shall be valid for a 117
period of one year and may be renewed by the office for additional one-118
year periods. The office shall establish a schedule of application and 119
renewal fees for all out-of-state private occupational schools that are 120
approved by the office. As used in this subsection, "distance learning 121
program" means a program of study in which lectures are broadcast or 122
classes are conducted by correspondence or over the Internet, without 123
requiring a student to attend in person. 124
Sec. 6. Subsection (a) of section 10a-22u of the general statutes is 125
repealed and the following is substituted in lieu thereof (Effective July 1, 126
2021): 127
(a) There shall be an account to be known as the private occupational 128
school student protection account within the General Fund. Each 129
private occupational school authorized in accordance with the 130
provisions of sections 10a-22a to 10a-22o, inclusive, as amended by this 131
act, shall pay to the State Treasurer an amount equal to four-tenths of 132
one per cent of the tuition received by such school per calendar quarter 133
exclusive of any refunds paid, except that distance learning and 134
correspondence schools authorized in accordance with the provisions of 135
[sections 10a-22a to 10a-22o, inclusive,] subsection (c) of section 10a-22h, 136
as amended by this act, shall contribute to said account only for 137
Connecticut residents enrolled in such schools. Payments shall be made 138
by January thirtieth, April thirtieth, July thirtieth and October thirtieth 139
in each year for tuition received during the three months next preceding 140
the month of payment. In addition to amounts received based on tuition, 141
the account shall also contain any amount required to be deposited into 142
the account pursuant to sections 10a-22a to 10a-22o, inclusive, as 143
amended by this act. Said account shall be used for the purposes of 144
section 10a-22v, as amended by this act. Any interest, income and 145
dividends derived from the investment of the account shall be credited 146
to the account. All direct expenses for the maintenance of the account 147 Substitute Bill No. 998
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may be charged to the account upon the order of the State Comptroller. 148
The executive director may assess the account for all direct expenses 149
incurred in the implementation of the purposes of this section which are 150
in excess of the normal expenditures of the Office of Higher Education. 151
Sec. 7. Section 10a-22v of the general statutes is repealed and the 152
following is substituted in lieu thereof (Effective July 1, 2021): 153
Any student enrolled in a private occupational school authorized in 154
accordance with the provisions of sections 10a-22a to 10a-22o, inclusive, 155
as amended by this act, who is unable to complete an approved course 156
or unit of instruction at such school because of the insolvency or 157
cessation of operation of the school and who has paid tuition for such 158
course or unit of instruction, may, not later than two years after the date 159
on which such school became insolvent or ceased operations, make 160
application to the executive director for a refund of tuition from the 161
account established pursuant to section 10a-22u, as amended by this act, 162
to the extent that such account exists or has reached the level necessary 163
to pay outstanding approved claims, except that in the case of distance 164
learning and correspondence schools authorized in accordance with the 165
provisions of [sections 10a-22a to 10a-22o, inclusive,] subsection (c) of 166
section 10a-22h, as amended by this act, only Connecticut residents 167
enrolled in such schools may be eligible for such refund. Upon such 168
application, the executive director shall determine whether the 169
applicant is unable to complete a course or unit of instruction because 170
of the insolvency or cessation of operation of the school to which tuition 171
has been paid. The executive director may summon by subpoena any 172
person, records or documents pertinent to the ma king of a 173
determination regarding insolvency or cessation of operation. For the 174
purpose of making any tuition refund pursuant to this section, a school 175
shall be deemed to have ceased operation whenever it has failed to 176
complete a course or unit of instruction for which the student has paid 177
a tuition fee and, as a result, the school's authorization has been revoked 178
pursuant to section 10a-22f, as amended by this act. If the executive 179
director finds that the applicant is entitled to a refund of tuition because 180 Substitute Bill No. 998
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of the insolvency or cessation of operation of the school, the executive 181
director shall determine the amount of an appropriate refund which 182
shall be equal to the tuition paid for the uncompleted course or unit of 183
instruction. Thereafter the executive director shall direct the State 184
Treasurer to pay, per order of the Comptroller, the refund to the 185
applicant or persons, agencies or organizations indicated by the 186
applicant who have paid tuition on the student's behalf. If the student is 187
a minor, payment shall be made to the student's parent, parents or legal 188
guardian. In no event shall a refund be made from the student 189
protection account for any financial aid provided to or on behalf of any 190
student in accordance with the provisions of Title IV, Part B of the 191
Higher Education Act of 1965, as amended from time to time. Each 192
recipient of a tuition refund made in accordance with the provisions of 193
this section shall assign all rights to the state of any action against the 194
school or its owner or owners for tuition amounts reimbursed pursuant 195
to this section. Upon such assignment, the state may take appropriate 196
action against the school or its owner or owners in order to reimburse 197
the student protection account for any expenses or claims that are paid 198
from the account and to reimburse the state for the reasonable and 199
necessary expenses in undertaking such action. Any student who 200
falsifies information on an application for tuition reimbursement shall 201
lose his or her right to any refund from the account. 202
Sec. 8. Section 10a-34e of the general statutes is amended by adding 203
subsections (c) and (d) as follows (Effective July 1, 2021): 204
(NEW) (c) Not later than January 1, 2022, each independent 205
institution of higher education shall submit to the Office of Higher 206
Education a closure plan, which shall include, but need not be limited 207
to, (1) how such institution will respond to a natural disaster, pandemic, 208
data security threat or other catastrophic event, and (2) how such 209
institution will manage student records, provide a continuity of 210
education for enrolled students and administer student financial aid 211
and refunds. An independent institution of higher education that is 212
regionally accredited may comply with the requirements of this 213 Substitute Bill No. 998
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subsection by submitting to said office the same closure plan that the 214
institution submitted to the regional accreditation agency. If an 215
independent institution of higher education updates its closure plan, 216
then such institution shall submit such updated closure plan not later 217
than thirty days after the governing board of such institution approves 218
such updated closure plan. 219
(NEW) (d) Any independent institution of higher education that 220
plans to close permanently shall submit a written notice to the Office of 221
Higher Education not later than thirty days after the governing board of 222
such institution authorizes such closure. Such written notice shall 223
include, but need not be limited to, (1) the planned date of termination 224
of operations; (2) the planned date and location for the transfer of 225
student records; (3) the name and address of the organization that will 226
receive and maintain student records; (4) the name and contact 227
information of the designated office or official who will manage 228
transcript requests; (5) the arrangement for the continued education of 229
enrolled students through the facilitation of a teach-out, as defined in 230
section 10a-22m, or other means; (6) evidence of communication with 231
the United States Department of Education and said office regarding the 232
management of student refunds, state or federal grants and scholarships 233
and state loans; and (7) if such institution is regionally accredited, 234
evidence of communication with the regional accreditation agency 235
regarding such closure.236
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2021 10a-22b(c)
Sec. 2 July 1, 2021 10a-22d(g)
Sec. 3 July 1, 2021 10a-22d
Sec. 4 July 1, 2021 10a-22f(a)
Sec. 5 July 1, 2021 10a-22h
Sec. 6 July 1, 2021 10a-22u(a)
Sec. 7 July 1, 2021 10a-22v
Sec. 8 July 1, 2021 10a-34e
Substitute Bill No. 998
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Statement of Legislative Commissioners:
In Section 3, "on the date" was changed to "on or before the date" for
clarity and in Section 8, subdiv. (c)(1), "that impacts the operations of
such institutions" was inserted for clarity.
HED Joint Favorable Subst.