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(Parenthesis ( ) Indicate Revenue Decreases)

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SOURCES OF INFORMATION

Commission on Higher Education (CHE)

SUMMARY

Synopsis of Amendment

This amendment clarifies that teach-out services are provided to students deprived of education at private post-secondary educational institutions and strikes language requiring that eligible students be residents of the state.

Synopsis of Bill

This bill creates the Private Post-Secondary Student Tuition Protection Act and the Student Tuition Recovery Fund to be administered by the CHE in consultation with the Advisory Council for Proprietary Education. Assessments collected from private proprietary post-secondary institutions operating in New Mexico and licensed by the CHE shall be credited to the Fund. Money in the Fund is appropriated to the CHE for the following: 1) to pay for tuition refunds to students enrolled at private proprietary institutions that terminated operations prior to providing educational services; 2) for costs resulting from such closures that did not comply with the Post-Secondary Educational Institution Act; and 3) to carry out the provisions of this Act.

This bill provides that annual assessments shall be based on newly enrolled students at the private proprietary schools in order to maintain a minimum balance of $300.0 and not to exceed $500.0. Claims against the Fund are to be within one year of termination of educational services and the order of disbursements from the Fund is provided. This bill gives claimants the option to accept educational services through a teach-out program in lieu of a refund of tuition from the Fund.

This bill amends the Post-Secondary Educational Institution Act to increase the required minimum surety bond from $5.0 to $10.0 for those institutions first authorized to operate in New Mexico after the effective date of this Act, July 1, 1999.

Significant Issues

Since the enactment of the Post-Secondary Educational Institution Act of 1994, the CHE has had the responsibility to oversee and license certain private proprietary post-secondary institutions. The CHE regulations include guidelines for how such schools should conduct business when terminating their services to students. Current provisions, however, do not provide a remedy for students harmed by the improper closure of private proprietary post-secondary schools.

FISCAL IMPLICATIONS

The proposed Student Tuition Recovery Fund will be supported by assessments on each private proprietary post-secondary institution licensed by the CHE. Money in the Fund may be invested pursuant to the New Mexico Finance Authority Act and all interest earned shall be credited to the Fund. Money remaining in the Fund at the end of any fiscal year shall not revert to the general fund.

ADMINISTRATIVE IMPLICATIONS

The CHE notes an administrative impact to the agency.

OTHER SUBSTANTIVE ISSUES

According to the CHE, a benefit of implementation of this bill is the protection students would receive from losing tuition already paid as well as from the inability to complete their educational goals should a private proprietary school shut its doors without notice as had occurred with the Franklin College in August of 1998.

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