AMENDMENTS TO CHAPTER 807
CAREER SCHOOLS AND COLLEGES RULES
POLICY CONCEPT
Background
Based on a thorough review of underlying statutes, policy implementation, and application processing, including, in part through the Rapid Process Improvement (RPI) process, the Texas Workforce Commission’s (TWC) Career Schools and Colleges (CSC) staff has identified the need for amendments to Chapter 807 to:
· provide clarity and remove unnecessary regulation for career schools and colleges;
· ensure that students seeking to further their education are provided clear information, receive timely refunds, as appropriate, and have timely access to school outcome data; and
· streamline agency processes
· changes are separated into those that are technical in nature and those that are substantive
Substantive Changes:
Issue 1
Currently, a school must have been licensed for one year to be exempt from TWC regulation under §807.5. When originally put in place, the requirement for licensure was to ensure that a school could demonstrate compliance for at least one year prior to being able to apply for an exemption. However, our experience with this amendment is that licensure for one year does not increase student protections. The school must also be able to demonstrate that they have approval from the Texas Higher Education Coordinating Board (THECB) to grant baccalaureate or higher level degrees, or a letter from THECB saying approval is not required, that they are accredited by a THECB recognized accrediting body, that they are in good standing with their accreditor and that a simple majority of credits earned are transferable to an equivalent or higher academic level (ex. baccalaureate to baccalaureate or masters) at a junior college or university supported entirely or partly by taxation from a local or state source that is within the same local/regional area. Based on these other requirements, the necessity for licensure for one year is not necessary and adds unnecessary expense and administrative burden to schools that are otherwise eligible for exemption.
Recommendation
Staff recommends removing this requirement. In practice, this requirement has been burdensome to schools that only seek licensure to become eligible to request an exemption a year later.
Issue 2
Current rules establish deadlines of 180 days to process an original school application and 30 days for a school to respond to a request for information pertaining to the application. CSC recently completed the RPI project, reviewing existing processes to find efficiency improvements. As a result, CSC’s school application review time frames have been reduced to approximately 90 days, with response to requests from schools now expected at 21 days. Additionally, completion of the RPI project eliminated a number of forms and made this information available on the CSC web page. One of the eliminated forms was the Director’s Statement which was a redundant restatement of requirements that were already incorporated into Rule as duties of the school director..
Recommendation
Staff recommends amending current rule §807.11 to reflect and support improvement in the original application process and the time frame for responses from schools by amending the overall time for completing an application from the current 180 days to 90 days and the time allowed for a school’s response from the current 30 days to 21 days, as well as amending §807.62 to remove the requirement for the school director to sign and agree to the terms of the Director’s Statement.
Issue 3
Although §807.15 requires schools to notify CSC of legal actions to which the school or certain individuals are party, which can include lawsuits filed by or against the school, current rules do not require schools to report changes in accreditation status or changes in Title IV status. Accreditation and Title IV status are critical pieces of information for the Agency, students and Boards; as such changes can impact the quality of education or even continued operation of the school.
Recommendation
Staff recommends amending §807.15 to rename it “Notification of Actions” and to add the requirement for a school to notify CSC of any change to accreditation status or change in Title IV status.
Issue 4
When a licensed school program fails for the third year in a row to meet the minimum rate for students “employed in the field for which they were trained” established by the Commission (currently 60 percent), CSC revokes the program. Current rules do not prohibit a school from reapplying for approval of the same program after its approval has been revoked.
Recommendation
Staff recommends amending §807.121 to include language that would prohibit a school from applying for a period of one year for approval of a program that was previously revoked by CSC because the program did not meet the minimum rate for students being employed in the field for which they were trained for three consecutive years. A school whose remaining programs are all meeting the minimum rate at the time of application and who provides an implementation plan for a revoked program may reapply for approval. Programs found to be substantially similar to a revoked program would also be subject to the same requirements.
Issue 5
Current rules do not have specific requirements for what information a school catalog must contain regarding tuition and fees based on one or more period of time, e.g., semester, quarter, etc.
Recommendation
Staff recommends amending §807.175 to include specific guidance to schools that charge tuition and fees based on one or more period about how to completely disclose information to students that will allow them to understand the charges.
Issue 6
When schools submit new catalogs or enrollment agreements, they are required to use a CSC form to list changes from the previous version and to acknowledge that they are accepting responsibility for compliance with the Act and CSC rules.
Recommendation
Staff recommends modifying §807.175 to emphasize that the school must disclose all changes and to advise them that there are sanctions for failing to comply.
Issue 7
Texas Education Code (the Act), at §132.2415(d) states that the Commission shall attempt to provide a full refund to each student of a closed career school or college. However, the Tuition Trust Account (TTA) is limited by §132.242(e) to an amount not to exceed $150,000 for refunds per campus closure. In circumstances in which a full refund cannot be provided to each student, the total amount of refunds is determined and then each student receives the same percent of their individual refund. To maximize this percentage and to ensure that a refund is still needed, each student’s refund is calculated after the amount of any federal loan discharge or credit card discharge is determined.
Additionally, recommended amendments to §807.262 will establish the order of refunds made by schools. Using the same order for refunds from the TTA would result in significant reduction in the amount of individual refunds in many cases because of the statutory maximum amount available for the closure.
Related to this, neither the Act nor current TWC rule delineate the recipients of, and the order of, refunds to students by schools.
Recommendation
Staff recommends amending §807.342 to clarify that discharges will be determined before making refunds and that other funding sources are only refunded if an amount remains after the Commission has attempted to provide full refunds to students.
Staff also recommends amending §807.262 to clarify that refunds will be paid to benefit students in the following order: 1) any federal loans; 2) any private loans; 3) credit card or cash payments made by the student; and, 4) other funding sources, including Workforce Boards
Current rule provides direction for the payment of penalties resulting from late refunds but only includes the student and tuition trust account. Many students have their tuition and fees paid by WOIA funds. Additionally, the current rule provides that penalties of $15 or less for grants be paid to the TTA.
Staff recommends amending §807.264 by adding new language including Workforce Boards in the payment of penalties and by removing the payment of penalties of $15 or less to the TTA.
Issue 8
Current rule provides that if the Agency determines that a school is not calculating refunds correctly or that a school does not routinely pay refunds timely, the school shall submit an audited report conducted by an accountant of the refunds due former students that includes any penalty due as specified in the Act for the four years prior to the date of the Agency's request. In practice, an audit only samples school records and does not provide a full review of whether refunds were made correctly.
Recommendation
After discussion with Fiscal Monitoring, staff recommends amending §807.264 by deleting the requirement for an audited report and opinion letter and instead requiring an agreed upon procedures engagement that requires an independent CPA to examine all files for students that did not complete a course of study to determine compliance with the most restrictive of: 1) the Act; 2) this chapter; or, 3) the school catalog current at the time of the student’s enrollment.
Issue 9
Current rules do not clarify that records may be either paper or electronic and do not provide specific guidance on the proper maintenance and disposal of student records. Providing detail by rule regarding appropriate methods of record maintenance and destruction will improve accountability for protection of students’ sensitive personal information, provide clarity regarding minimum record destruction standards and enhance objective evaluation of compliance.
Recommendations
Staff recommends amending §807.281, clarifying that records may be electronic and adding that records must be protected against damage, loss or misuse.
Staff also recommends renaming §807.282 “Student Information and Records” as defined at TEC §132.024, and adding specific minimum requirements for proper destruction.
Issue 10 Current rules do not provide a clear definition of “instance” as it pertains to a violation which will result in a penalty and are therefore unclear on the amount of many penalties. In addition to ensuring standardization, schools could benefit from TWC providing examples of how first and subsequent penalties will be applied.
Recommendation
Staff recommends amending §807.353 to add an additional column to the penalty matrix to define what constitutes an “instance” of each violation.
Issue 11
As part of the cease and desist process; after a hearing decision has been issued, a party may request oral argument on a written appeal before the Commission. Opportunity for oral argument before the Commission exists in no other area of rule. Moreover, because §807.365(c) requires that the decision of the Commission must be made on the basis of the record made before the hearing officer, there is little or no benefit to the provision for oral argument. In practice, only one institution of 16 issued cease and desist orders has made this request.
Recommendation
Staff recommends amending §807.365 to eliminate the provision for oral argument, while preserving the right of written appeal to the Commission.
Technical changes:
Issue 12
As part of the cease and desist process, the TWC-issued statement of charges and notice of hearing are required to include a copy of the CSC rules. This document is currently 71 pages long.
Recommendation
Staff recommends deleting the requirement to send a copy of the CSC rules, as this requirement is not a statutory requirement, adds costs, and is unnecessary given that all rules are accessible and up-to-date on the TWC website.
Issue 13
Licensed career schools and colleges are required to report all approved programs’ student completion, placement and employment (CPE) data yearly to CSC, with a reporting deadline of December 1 each year. Additionally, other communications with schools contain standard deadlines. CSC rules do not address whether the deadline is still effective when it falls on a weekend day or holiday.
Recommendation
Staff recommends amending §807.2 to add a new definition “Response Deadline” which will clarify that if a deadline falls on a weekend, an official state holiday, a state holiday for which minimal staffing is required, or a federal holiday, the deadline will be extended to the next working day. This will aid employers’ understanding by conforming to the UI rules.
Issue 14
The Act, at §132.1(6) “Notice to the career school or college”, uses the term “address of record” but does not define it. Schools have changed mailing addresses without notifying CSC and, as a result, official correspondence is sent to the old address, resulting in lost or returned mail that must be resent once the correct address is obtained. This delays and complicates the administrative process. Also, CSC staff regularly uses e-mail to communicate highly important information with the schools it licenses and regulates, and typically directs e-mails to the currently approved director for a school. When school staff changes occur, e-mail addresses are not always updated with CSC. Thus, schools can miss important information which can adversely affect licensure status. Additionally, schools routinely request that CSC copy additional staff.
Recommendations
Staff recommends amending §807.2 to add a new definition “Address of record” which will define the term as used in the Act. Additionally, staff recommends requiring that each career school or college establish an e-mail address of record for a distribution list that consistently maintains a minimum of two current subscribers or more at the school’s discretion, with the format of the address to be “School#Director@xdomain,” e.g., .
Issue 15
The definition of “Date of Notice” is not consistent between statute and rule.
Recommendation
Staff recommends that the definition in rule for “Date of Notice” be updated to match the definition in statute. This will allow consistency and remove any ambiguity in application.
Issue 16
Currently, both §807.5 and §807.7 are titled “Exemptions.” Two exemption sections are not needed.
Recommendation
Staff recommends deleting §807.5 and amending §807.7 to include the language from §807.5.
Chapter 807 Publication Copy 1 051016NK0300