2016 Indiana Code
TITLE 21. HIGHER EDUCATION
ARTICLE 18.5. ADMINISTRATION OF HIGHER EDUCATION FINANCIAL AID AND POSTSECONDARY CREDIT BEARING PROPRIETARY EDUCATIONAL INSTITUTION ACCREDITATION
CHAPTER 6. POSTSECONDARY CREDIT BEARING PROPRIETARY EDUCATIONAL INSTITUTION ACCREDITATION
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<![CDATA[IC 21-18.5-6
Chapter 6. Postsecondary Credit Bearing Proprietary
Educational Institution Accreditation
IC 21-18.5-6-1
Purpose
Sec. 1. The general assembly recognizes that the private school is
an essential part of the educational system. It is the purpose of this
chapter to protect students, educational institutions, the general
public, and honest and ethical operators of private schools from
dishonest and unethical practices.
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-2
Authorization required; exception for religious institution
Sec. 2. A person may not do business as a postsecondary credit
bearing proprietary educational institution in Indiana without having
obtained authorization by the board for proprietary education under
this chapter, except for a religious institution that offers educational
instruction or an educational program of a clearly religious nature.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.10.
IC 21-18.5-6-2.5
Accreditation required; exception for religious institution
Sec. 2.5. A person may not do business as a degree granting
institution in Indiana unless:
(1) the institution is accredited by an accrediting agency
recognized by the United States Department of Education or is
seeking and progressing toward accreditation by an accrediting
agency recognized by the United States Department of
Education; or
(2) the institution is a religious institution that offers
educational instruction or an educational program of a clearly
religious nature.
As added by P.L.273-2013, SEC.11.
IC 21-18.5-6-3
Applications; fee
Sec. 3. Applications for authorization under this chapter must be
filed with the board for proprietary education and accompanied by
an application fee of at least one hundred dollars ($100) for
processing the application and evaluating the postsecondary credit
bearing proprietary educational institution.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.12.
IC 21-18.5-6-4
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Applications; contents
Sec. 4. An application for authorization under this chapter must
include at least the following information:
(1) The name and address of the postsecondary credit bearing
proprietary educational institution and the institution's officers.
(2) The places where the courses are to be provided.
(3) The types of courses to be offered, the form of instruction
to be followed with the class, shop, or laboratory, and the hours
required for each curriculum.
(4) The form of certificate, diploma, or degree to be awarded.
(5) A statement of the postsecondary credit bearing proprietary
educational institution's finances.
(6) A description of the postsecondary credit bearing
proprietary educational institution's physical facilities,
including classrooms, laboratories, library, machinery, and
equipment.
(7) An explicit statement of policy with reference to:
(A) solicitation of students;
(B) payment and amount of student fees; and
(C) conditions under which students are entitled to a refund
in part or in full of fees paid, including a statement
concerning the existence of the career college student
assurance fund established under section 6 of this chapter.
(8) Provisions for liability insurance of students.
(9) Maximum student-teacher ratio to be maintained.
(10) Minimum requirements for instructional staff.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.13.
IC 21-18.5-6-5
Curriculum catalog and promotional brochure; contents
Sec. 5. The board for proprietary education shall require each
postsecondary credit bearing proprietary educational institution to
include in each curriculum catalog and promotional brochure the
following:
(1) A statement indicating that the postsecondary credit bearing
proprietary educational institution is authorized by the board for
proprietary education under this chapter.
(2) The board for proprietary education's mailing address and
telephone number.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.14.
IC 21-18.5-6-6
Career college student assurance fund; administration
Sec. 6. (a) The career college student assurance fund is
established to provide indemnification to a student or an enrollee of
a postsecondary credit bearing proprietary educational institution
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who suffers loss or damage as a result of:
(1) the failure or neglect of the postsecondary credit bearing
proprietary educational institution to faithfully perform all
agreements, express or otherwise, with the student, enrollee,
one (1) or both of the parents of the student or enrollee, or a
guardian of the student or enrollee as represented by the
application for the institution's authorization and the materials
submitted in support of that application;
(2) the failure or neglect of the postsecondary credit bearing
proprietary educational institution to maintain and operate a
course or courses of instruction or study in compliance with the
standards of this chapter; or
(3) an agent's misrepresentation in procuring the student's
enrollment.
(b) The board for proprietary education shall administer the fund.
(c) The expenses of administering the fund shall be paid from
money in the fund.
(d) The treasurer of state shall invest the money in the fund not
currently needed to meet the obligations of the fund in the same
manner as other public funds may be invested.
(e) Money in the fund at the end of a state fiscal year does not
revert to the state general fund but remains available to be used for
providing money for reimbursements allowed under this chapter.
(f) Upon the fund acquiring fifty thousand dollars ($50,000), the
balance in the fund must not become less than fifty thousand dollars
($50,000). If:
(1) a claim against the fund is filed that would, if paid in full,
require the balance of the fund to become less than fifty
thousand dollars ($50,000); and
(2) the board for proprietary education determines that the
student is eligible for a reimbursement under the fund;
the board for proprietary education shall prorate the amount of the
reimbursement to ensure that the balance of the fund does not
become less than fifty thousand dollars ($50,000), and the student is
entitled to receive that balance of the student's claim from the fund
as money becomes available in the fund from contributions to the
fund required under this chapter.
(g) The board for proprietary education shall ensure that all
outstanding claim amounts described in subsection (f) are paid as
money in the fund becomes available in the chronological order of
the outstanding claims.
(h) A claim against the fund may not be construed to be a debt of
the state.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.15.
IC 21-18.5-6-7
Quarterly contributions to fund; determination
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Sec. 7. (a) Except as otherwise provided in this section, each
postsecondary credit bearing proprietary educational institution shall
make quarterly contributions to the fund. The quarters begin January
1, April 1, July 1, and October 1.
(b) For each quarter, each postsecondary credit bearing
proprietary educational institution shall make a contribution equal to
the STEP THREE amount derived under the following formula:
STEP ONE: Determine the total amount of tuition and fees
earned during the quarter.
STEP TWO: Multiply the STEP ONE amount by one-tenth of
one percent (0.1%).
STEP THREE: Add the STEP TWO amount and sixty dollars
($60).
(c) After June 30, 2012, upon the career college student assurance
fund achieving at least an initial balance of five hundred thousand
dollars ($500,000), a postsecondary credit bearing proprietary
educational institution that contributes to the career college student
assurance fund when the initial quarterly contribution is required
under this chapter after the fund's establishment is not required to
make contributions to the fund.
(d) The board for proprietary education shall determine the
number of quarterly contributions required for the career college
student assurance fund to initially accumulate five hundred thousand
dollars ($500,000).
(e) Except as provided in subsections (a), (b), and (f), a
postsecondary credit bearing proprietary educational institution that
begins making contributions to the career college student assurance
fund after the initial quarterly contribution as required under this
section shall make contributions to the fund for the same number of
quarters as determined by the board for proprietary education under
subsection (d).
(f) If, after a career college student assurance fund acquires five
hundred thousand dollars ($500,000), the balance in the fund
becomes less than two hundred fifty thousand dollars ($250,000), all
postsecondary credit bearing proprietary educational institutions not
required to make contributions to the career college student
assurance fund as described in subsection (c) or (e) shall make
contributions to the career college student assurance fund for the
number of quarters necessary for the fund to accumulate five
hundred thousand dollars ($500,000).
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-8
Investigation
Sec. 8. (a) Upon receipt of an application for authorization under
this chapter, the board for proprietary education shall make an
investigation to determine the accuracy of the statements in the
application to determine if the postsecondary credit bearing
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proprietary educational institution meets the minimum standards for
authorization.
(b) During the investigation under subsection (a), the board for
proprietary education may grant a temporary status of authorization.
The temporary status of authorization is sufficient to meet the
requirements of this chapter until a determination on authorization
is made.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.16.
IC 21-18.5-6-9
Inspection fee
Sec. 9. The cost of performing a team onsite investigation for
purposes of section 8 of this chapter shall be paid by the applicant
postsecondary credit bearing proprietary educational institution.
However, the total cost of an inspection, including room, board, and
mileage that does not require travel outside Indiana, may not exceed
one thousand dollars ($1,000) for any one (1) postsecondary credit
bearing proprietary educational institution.
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-10
Student records; submission to board for proprietary education
upon request; disposition if institution ceases operation
Sec. 10. (a) A postsecondary credit bearing proprietary
educational institution shall maintain at least the following records
for each student:
(1) The program in which the student enrolls.
(2) The length of the program.
(3) The date of the student's initial enrollment in the program.
(4) A transcript of the student's academic progress.
(5) The amount of the student's tuition and fees.
(6) A copy of the enrollment agreement.
(b) Upon the request of the board for proprietary education, a
postsecondary credit bearing proprietary educational institution shall
submit the records described in subsection (a) to the board for
proprietary education.
(c) If a postsecondary credit bearing proprietary educational
institution ceases operation, the postsecondary credit bearing
proprietary educational institution shall submit the records described
in subsection (a) to the Indiana archives and records administration
not later than thirty (30) days after the institution ceases to operate.
As added by P.L.107-2012, SEC.58. Amended by P.L.171-2015,
SEC.44.
IC 21-18.5-6-11
Authorization standards
Sec. 11. Full authorization under this chapter may not be issued
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unless and until the board for proprietary education finds that the
postsecondary credit bearing proprietary educational institution
meets minimum standards that are appropriate to that type or class of
postsecondary credit bearing proprietary educational institution,
including the following minimum standards:
(1) The postsecondary credit bearing proprietary educational
institution has a sound financial structure with sufficient
resources for continued support.
(2) The postsecondary credit bearing proprietary educational
institution has satisfactory training or educational facilities with
sufficient tools, supplies, or equipment and the necessary
number of work stations or classrooms to adequately train,
instruct, or educate the number of students enrolled or proposed
to be enrolled.
(3) The postsecondary credit bearing proprietary educational
institution has an adequate number of qualified instructors or
teachers, sufficiently trained by experience or education, to give
the instruction, education, or training contemplated.
(4) The advertising and representations made on behalf of the
postsecondary credit bearing proprietary educational institution
to prospective students are truthful and free from
misrepresentation or fraud.
(5) The charge made for the training, instruction, or education
is clearly stated and based upon the services rendered.
(6) The premises and conditions under which the students work
and study are sanitary, healthful, and safe according to modern
standards.
(7) The postsecondary credit bearing proprietary educational
institution has and follows a refund policy approved by the
board for proprietary education.
(8) The owner or chief administrator of the postsecondary credit
bearing proprietary educational institution is subject to a
background check by the board for proprietary education and
has not been convicted of a felony.
(9) The owner or chief administrator of the postsecondary credit
bearing proprietary educational institution has not been the
owner or chief administrator of a postsecondary credit bearing
proprietary educational institution that has had its authorization
revoked or has been closed involuntarily in the five (5) year
period preceding the application for authorization. However, if
the owner or chief administrator of the postsecondary credit
bearing proprietary educational institution has been the owner
or chief administrator of a postsecondary credit bearing
proprietary educational institution that has had its authorization
revoked or has been closed involuntarily more than five (5)
years before the application for authorization, the board for
proprietary education may issue full authorization at the board
for proprietary education's discretion.
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As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.17.
IC 21-18.5-6-12
Issuance of authorization
Sec. 12. (a) After an investigation and a finding that the
information in the application is true and that the postsecondary
credit bearing proprietary educational institution meets the minimum
standards, the board for proprietary education shall issue an
authorization to the postsecondary credit bearing proprietary
educational institution upon payment of an additional fee of at least
twenty-five dollars ($25). An applicant's market research may not be
considered or required by the board for proprietary education as a
condition for authorizing or renewing the accreditation of or for
authorization of the programs of a postsecondary credit bearing
proprietary educational institution.
(b) The board for proprietary education may waive inspection of
a postsecondary credit bearing proprietary educational institution that
has been authorized by an accrediting agency recognized by the
United States Department of Education whose standards are
approved by the board for proprietary education as meeting or
exceeding the requirements of this chapter.
(c) A valid license, authorization to operate, or other form of
authorization issued to a postsecondary credit bearing proprietary
educational institution by another state may be accepted, instead of
inspection, if:
(1) the requirements of that state meet or exceed the
requirements of this chapter; and
(2) the other state will, in turn, extend reciprocity to
postsecondary credit bearing proprietary educational
institutions authorized by the board for proprietary education.
(d) The board for proprietary education may join interstate
reciprocity agreements and authorize an institution to operate in
Indiana, if the:
(1) institution; and
(2) state in which both the institution's:
(A) principal campus is located; and
(B) institutional accreditation is provided;
are members of the interstate reciprocity agreement.
(e) An authorization issued under this section expires one (1) year
following the authorization's issuance.
(f) An authorized postsecondary credit bearing proprietary
educational institution may renew the institution's authorization
annually upon:
(1) the payment of a fee of at least twenty-five dollars ($25);
and
(2) continued compliance with this chapter.
As added by P.L.107-2012, SEC.58. Amended by P.L.13-2013,
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SEC.61; P.L.273-2013, SEC.18.
IC 21-18.5-6-13
Revocation
Sec. 13. Authorization may be revoked by the board for
proprietary education:
(1) for cause upon notice and an opportunity for a hearing
before the board for proprietary education; and
(2) for the authorized postsecondary credit bearing proprietary
educational institution failing to make the appropriate quarterly
contributions to the career college student assurance fund not
later than forty-five (45) days after the end of a quarter.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.19.
IC 21-18.5-6-14
Hearing
Sec. 14. (a) A postsecondary credit bearing proprietary
educational institution, after notification that the institution's
authorization has been refused, revoked, or suspended, may apply for
a hearing before the board for proprietary education concerning the
institution's qualifications. The application for a hearing must be
filed in writing with the board for proprietary education not more
than thirty (30) days after receipt of notice of the denial, revocation,
or suspension.
(b) The board for proprietary education shall give a hearing
promptly and with not less than ten (10) days notice of the date, time,
and place. The postsecondary credit bearing proprietary educational
institution is entitled to be represented by counsel and to offer oral
and documentary evidence relevant to the issue.
(c) Not more than fifteen (15) days after a hearing, the board for
proprietary education shall make written findings of fact, a written
decision, and a written order based solely on the evidence submitted
at the hearing, either granting or denying authorization to the
postsecondary credit bearing proprietary educational institution.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.20.
IC 21-18.5-6-15
Suspension
Sec. 15. A postsecondary credit bearing proprietary educational
institution's authorization shall be suspended at any time if the
authorized postsecondary credit bearing proprietary educational
institution denies enrollment to a student or makes a distinction or
classification of students on the basis of race, color, or creed.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.21.
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IC 21-18.5-6-16
Representations
Sec. 16. A person may not do the following:
(1) Make, or cause to be made, a statement or representation,
oral, written, or visual, in connection with the offering or
publicizing of a course, if the person knows or should
reasonably know the statement or representation is false,
deceptive, substantially inaccurate, or misleading.
(2) Promise or guarantee employment to a student or
prospective student using information, training, or skill
purported to be provided or otherwise enhanced by a course,
unless the person offers the student or prospective student a
bona fide contract of employment agreeing to employ the
student or prospective student for a period of at least ninety (90)
days in a business or other enterprise regularly conducted by the
person in which that information, training, or skill is a normal
condition of employment.
(3) Do an act that constitutes part of the conduct of
administration of a course if the person knows, or should
reasonably know, that the course is being carried on by the use
of fraud, deception, or other misrepresentation.
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-17
Liability of institution as principal
Sec. 17. A postsecondary credit bearing proprietary educational
institution is liable for the actions of the institution's agents.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.22.
IC 21-18.5-6-18
Repealed
(As added by P.L.107-2012, SEC.58. Repealed by P.L.273-2013,
SEC.23.)
IC 21-18.5-6-19
Remedy; damages or other relief
Sec. 19. The fact that the career college student assurance fund
exists does not limit or impair a right of recovery and the amount of
damages or other relief to which a plaintiff may be entitled.
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-20
Claims against balance of career college student assurance fund;
determination; priorities
Sec. 20. (a) This section applies to claims against the balance of
the career college student assurance fund.
(b) A student or enrollee of a postsecondary credit bearing
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proprietary educational institution who believes that the student or
enrollee has suffered loss or damage resulting from any of the
occurrences described in section 6(a) of this chapter may file a claim
with the board for proprietary education against the balance of the
fund.
(c) A claim under this section is limited to a refund of the
claimant's applicable tuition and fees.
(d) All claims must be filed not later than five (5) years after the
occurrence resulting in the loss or damage to the claimant occurs.
(e) Upon the filing of a claim under this section, the board for
proprietary education shall review the records submitted by the
appropriate postsecondary credit bearing proprietary educational
institution described under section 12 of this chapter and shall
investigate the claim.
(f) Upon a determination by the board for proprietary education
that a claimant shall be reimbursed under the career college student
assurance fund, the board for proprietary education shall prioritize
the reimbursements under the following guidelines:
(1) A student's educational loan balances.
(2) Federal grant repayment obligations of the student.
(3) Other expenses paid directly by the student.
As added by P.L.107-2012, SEC.58. Amended by P.L.13-2013,
SEC.62.
IC 21-18.5-6-21
Remedy; void contracts
Sec. 21. An obligation, negotiable or nonnegotiable, providing for
payment for a course or courses of instruction is void if the
postsecondary credit bearing proprietary educational institution is not
authorized to operate in Indiana.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.24.
IC 21-18.5-6-22
Misrepresentation
Sec. 22. The issuance of authorization may not be considered to
constitute endorsement of a course, a person, or an institution. A
representation to the contrary is a misrepresentation.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.25.
IC 21-18.5-6-22.5
Deceptive acts
Sec. 22.5. A person who knowingly and intentionally violates
section 16 or 22 of this chapter commits a deceptive act that is
actionable by the attorney general under IC 24-5-0.5 and is subject
to the penalties and remedies available to the attorney general under
IC 24-5-0.5.
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As added by P.L.273-2013, SEC.26.
IC 21-18.5-6-23
Relief; injunction
Sec. 23. The prosecuting attorney of the county in which an
offense under this chapter occurred shall, at the request of the board
for proprietary education or on the prosecuting attorney's own
motion, bring any appropriate action, including a mandatory and
prohibitive injunction.
As added by P.L.107-2012, SEC.58.
IC 21-18.5-6-24
Adjudication
Sec. 24. An action of the board for proprietary education
concerning the issuance, denial, or revocation of an authorization
under this chapter is subject to review under IC 4-21.5.
As added by P.L.107-2012, SEC.58. Amended by P.L.273-2013,
SEC.27.
IC 21-18.5-6-25
Violations
Sec. 25. (a) Except as provided in subsection (b), a person who
knowingly, intentionally, or recklessly violates this chapter commits
a Class B misdemeanor.
(b) A person who, with intent to defraud, represents the person to
be an agent of a postsecondary credit bearing proprietary educational
institution commits a Level 5 felony.
As added by P.L.107-2012, SEC.58. Amended by P.L.158-2013,
SEC.252.
IC 21-18.5-6-26
Postsecondary credit bearing proprietary educational institution
authorization fund; fees
Sec. 26. (a) As used in this section, "fund" means the
postsecondary credit bearing proprietary educational institution
authorization fund established by subsection (b).
(b) The postsecondary credit bearing proprietary educational
institution authorization fund is established.
(c) The fund shall be administered by the commission (as defined
in IC 21-18.5-2-7.).
(d) Money in the fund at the end of a state fiscal year does not
revert to the general fund.
(e) All fees collected by the board for proprietary education under
this chapter shall be deposited in the fund.
(f) Money in the fund shall be used by the board for proprietary
education to administer this chapter.
As added by P.L.107-2012, SEC.58. Amended by P.L.13-2013,
SEC.63; P.L.273-2013, SEC.28.
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IC 21-18.5-6-27
Rules
Sec. 27. The board for proprietary education may adopt rules
under IC 4-22-2 to implement this chapter.
As added by P.L.107-2012, SEC.58.
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