2019 Louisiana Laws
Revised Statutes
Title 17 - Education
§3140.11. Proprietary School Student Protection Fund
RS 3140.11 - Proprietary School Student Protection Fund
A. There shall be established in the state treasury as a special permanent fund the Proprietary School Student Protection Fund. Following compliance with the requirements of Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond Security and Redemption Fund, all monies generated pursuant to the provisions of this Section shall be deposited into the Proprietary School Student Protection Fund, and monies in this fund shall be used solely to make refunds of unearned tuition as provided in this Chapter. The monies in the fund shall be invested by the state treasurer in the same manner as for the state general fund and interest earned on the investment of these monies shall be credited to the fund. All unexpended and unencumbered monies in the fund at the end of a fiscal year shall remain in the fund and be available for expenditure in the next fiscal year. The legislature shall make yearly appropriations from the fund to the board for the purposes of the proprietary school student protection program.
B.(1) Each licensed proprietary school shall make payments to the Proprietary School Student Protection Fund. The first payment to the fund by a school shall be one thousand dollars and shall accompany application for licensure. Beginning one year after licensure by the board and annually thereafter, the annual payment shall be determined based on the graduated schedule as provided in this Paragraph. If the gross tuition collected by a school during the first assessment period after licensure requires an adjustment, the adjustment shall be made in accordance with the applicable provisions of this Section.
PROPRIETARY SCHOOL STUDENT PROTECTION FUND SCHEDULE
Gross Tuition Collected During Annual Payment
Assessment Period
$ 1 - 24,999 $ 200.00
$ 25,000 - 49,999 $ 250.00
$ 50,000 - 99,999 $ 300.00
$ 100,000 - 199,999 $ 400.00
$ 200,000 - 299,999 $ 500.00
$ 300,000 - 399,999 $ 600.00
$ 400,000 - 499,999 $ 700.00
$ 500,000 - 749,999 $ 1,000.00
$ 750,000 - 999,999 $ 1,250.00
$ 1,000,000 - 1,499,999 $ 1,500.00
$ 1,500,000 - and above $ 2,000.00
(2) All payments to the Proprietary School Student Protection Fund shall be made payable to the "Student Protection Fund". Except in cases of overpayment, all payments to the Proprietary School Student Protection Fund shall be nonrefundable.
(3) Nontuition revenues and all income generated from contract training services shall be exempt from the calculation of a school's gross tuition revenues.
(4) Payments required pursuant to this Section shall be a condition of doing business in the state and failure to make a payment within thirty days following the date on which it is due shall result in the loss of licensure as granted under the provisions of this Chapter. The commission shall provide written notice of the required payment to each school not less than thirty days prior to the due date of the payment.
(5) If an audit of tuition revenues conducted by the board determines that a school has paid into the Proprietary School Student Protection Fund an amount less than was required, the school shall pay the amount required to the commission within thirty days of receipt of written notice from the board of the amount of the underpayment.
(6) If an audit of tuition revenues conducted by the board determines that a school has paid into the Proprietary School Student Protection Fund an amount more than was required, subsequent payment or payments by the school shall be appropriately credited by the commissioner of higher education or his designee until the credited payment or payments equal the amount of the overpayment.
C. Forms developed and provided annually to calculate payments due the Proprietary School Student Protection Fund shall be completed by the school and submitted annually to the commission. The school director or persons designated to sign on his behalf shall attest that the information provided is correct and complete.
D. Claims against the fund shall be considered from currently enrolled students only when there is a lack of availability for that student to transfer for the time remaining in his course of study at no additional cost to a similar program within the student's local area as determined by the commission or other teach-out options.
E. A school shall inform its students in writing of their rights under the provisions governing the Proprietary School Student Protection Fund.
F. Any student enrolled in a proprietary school licensed under the provisions of this Chapter who is unable to complete a course or unit of instruction at a school because of cessation of operation of the school and who has paid tuition for the course or unit of instruction may make application to the board for a refund of tuition from the Proprietary School Student Protection Fund to the extent that the fund exists or has reached the level necessary to pay outstanding approved claims.
G.(1) Application for refund shall be made on forms provided by the board after determination of cessation of operation of the school.
(2) In applying for a refund pursuant to the provisions of this Section, a student shall specify all sources and amounts of tuition which were paid on the student's behalf.
H.(1) Upon application, the board shall determine whether the applicant is unable to complete a course or unit of instruction because of the cessation of operation of the school to which tuition has been paid. The board may summon by subpoena any person, records, or documents pertinent to the making of a determination regarding cessation of operation.
(2) If the board finds that the applicant is entitled to a tuition refund because of the cessation of operation of the school, the board shall determine the amount of an appropriate refund which shall be equal to or a portion of the tuition paid for the uncompleted course or unit of instruction. The board shall direct the commission to pay the refund to the applicant or persons, agencies, or organizations indicated by the applicant who has paid tuition on the student's behalf. If the student is a minor, payment shall be made to the student's parent or legal guardian.
(3) Each recipient of a tuition refund made in accordance with the provisions of this Section shall assign all rights to the state of any action against the school or its owner or owners for tuition amounts reimbursed pursuant to this Section. Upon assignment, the board may take appropriate action against the school or its owner or owners in order to reimburse the Proprietary School Student Protection Fund for any expenses or claims that are paid from the fund and to reimburse the state for the reasonable and necessary expenses in undertaking the action.
I. A claim shall be made against the fund only if it arises out of the cessation of operation and after claims are made against the surety bond or other school financial resources.
J. The board shall adopt necessary rules and regulations based on recommendations from the commission providing for the cessation of payments into the Proprietary School Student Protection Fund by schools licensed under the provisions of this Chapter upon the fund balance reaching a minimum of eight hundred thousand dollars and for the resumption of payments into the fund whenever the fund balance is less than seven hundred fifty thousand dollars.
K.(1) Notwithstanding the provisions of Subsection A of this Section, there is hereby established a special account within the Proprietary School Student Protection Fund to be known as the Proprietary School Student Records and Administration Account, hereafter in this Subsection referred to as the "administration account". Any balance in the Proprietary School Student Protection Fund on July 1, 2000, that exceeds eight hundred thousand dollars, as provided in Subsection J of this Section, shall be deposited into the administration account. All interest earned on the fund after July 1, 2000, shall be deposited in the administration account. All deposits made to the Proprietary School Student Protection Fund after July 1, 2000, shall be made in accordance with the provisions of this Section.
(2) Amounts from the administration account shall be pledged and dedicated solely and exclusively for costs associated with board functions as they relate to the administration of proprietary schools and for the creation of a digital student records management system.
NOTE: §3140.11 eff. July 1, 2020. See Acts 2019, No. 404.
RS 3140.11 - Proprietary School Student Protection Dedicated Fund Account
A. There shall be established in the state treasury as a special permanent fund the Proprietary School Student Protection Dedicated Fund Account. Following compliance with the requirements of Article VII, Section 9(B) of the Constitution of Louisiana relative to the Bond Security and Redemption Fund, all monies generated pursuant to the provisions of this Section shall be deposited into the Proprietary School Student Protection Dedicated Fund Account, and monies in this fund shall be used solely to make refunds of unearned tuition as provided in this Chapter. The monies in the fund shall be invested by the state treasurer in the same manner as for the state general fund and interest earned on the investment of these monies shall be credited to the fund. All unexpended and unencumbered monies in the fund at the end of a fiscal year shall remain in the fund and be available for expenditure in the next fiscal year. The legislature shall make yearly appropriations from the fund to the board for the purposes of the proprietary school student protection program.
B.(1) Each licensed proprietary school shall make payments to the Proprietary School Student Protection Dedicated Fund Account. The first payment to the fund by a school shall be one thousand dollars and shall accompany application for licensure. Beginning one year after licensure by the board and annually thereafter, the annual payment shall be determined based on the graduated schedule as provided in this Paragraph. If the gross tuition collected by a school during the first assessment period after licensure requires an adjustment, the adjustment shall be made in accordance with the applicable provisions of this Section.
PROPRIETARY SCHOOL STUDENT PROTECTION DEDICATED FUND ACCOUNT SCHEDULE
Gross Tuition Collected During Annual Payment
Assessment Period
$ 1 - 24,999 $ 200.00
$ 25,000 - 49,999 $ 250.00
$ 50,000 - 99,999 $ 300.00
$ 100,000 - 199,999 $ 400.00
$ 200,000 - 299,999 $ 500.00
$ 300,000 - 399,999 $ 600.00
$ 400,000 - 499,999 $ 700.00
$ 500,000 - 749,999 $ 1,000.00
$ 750,000 - 999,999 $ 1,250.00
$ 1,000,000 - 1,499,999 $ 1,500.00
$ 1,500,000 - and above $ 2,000.00
(2) All payments to the Proprietary School Student Protection Dedicated Fund Account shall be made payable to the "Student Protection Fund". Except in cases of overpayment, all payments to the Proprietary School Student Protection Dedicated Fund Account shall be nonrefundable.
(3) Nontuition revenues and all income generated from contract training services shall be exempt from the calculation of a school's gross tuition revenues.
(4) Payments required pursuant to this Section shall be a condition of doing business in the state and failure to make a payment within thirty days following the date on which it is due shall result in the loss of licensure as granted under the provisions of this Chapter. The commission shall provide written notice of the required payment to each school not less than thirty days prior to the due date of the payment.
(5) If an audit of tuition revenues conducted by the board determines that a school has paid into the Proprietary School Student Protection Dedicated Fund Account an amount less than was required, the school shall pay the amount required to the commission within thirty days of receipt of written notice from the board of the amount of the underpayment.
(6) If an audit of tuition revenues conducted by the board determines that a school has paid into the Proprietary School Student Protection Dedicated Fund Account an amount more than was required, subsequent payment or payments by the school shall be appropriately credited by the commissioner of higher education or his designee until the credited payment or payments equal the amount of the overpayment.
C. Forms developed and provided annually to calculate payments due the Proprietary School Student Protection Dedicated Fund Account shall be completed by the school and submitted annually to the commission. The school director or persons designated to sign on his behalf shall attest that the information provided is correct and complete.
D. Claims against the fund shall be considered from currently enrolled students only when there is a lack of availability for that student to transfer for the time remaining in his course of study at no additional cost to a similar program within the student's local area as determined by the commission or other teach-out options.
E. A school shall inform its students in writing of their rights under the provisions governing the Proprietary School Student Protection Dedicated Fund Account.
F. Any student enrolled in a proprietary school licensed under the provisions of this Chapter who is unable to complete a course or unit of instruction at a school because of cessation of operation of the school and who has paid tuition for the course or unit of instruction may make application to the board for a refund of tuition from the Proprietary School Student Protection Dedicated Fund Account to the extent that the fund exists or has reached the level necessary to pay outstanding approved claims.
G.(1) Application for refund shall be made on forms provided by the board after determination of cessation of operation of the school.
(2) In applying for a refund pursuant to the provisions of this Section, a student shall specify all sources and amounts of tuition which were paid on the student's behalf.
H.(1) Upon application, the board shall determine whether the applicant is unable to complete a course or unit of instruction because of the cessation of operation of the school to which tuition has been paid. The board may summon by subpoena any person, records, or documents pertinent to the making of a determination regarding cessation of operation.
(2) If the board finds that the applicant is entitled to a tuition refund because of the cessation of operation of the school, the board shall determine the amount of an appropriate refund which shall be equal to or a portion of the tuition paid for the uncompleted course or unit of instruction. The board shall direct the commission to pay the refund to the applicant or persons, agencies, or organizations indicated by the applicant who has paid tuition on the student's behalf. If the student is a minor, payment shall be made to the student's parent or legal guardian.
(3) Each recipient of a tuition refund made in accordance with the provisions of this Section shall assign all rights to the state of any action against the school or its owner or owners for tuition amounts reimbursed pursuant to this Section. Upon assignment, the board may take appropriate action against the school or its owner or owners in order to reimburse the Proprietary School Student Protection Dedicated Fund Account for any expenses or claims that are paid from the fund and to reimburse the state for the reasonable and necessary expenses in undertaking the action.
I. A claim shall be made against the fund only if it arises out of the cessation of operation and after claims are made against the surety bond or other school financial resources.
J. The board shall adopt necessary rules and regulations based on recommendations from the commission providing for the cessation of payments into the Proprietary School Student Protection Dedicated Fund Account by schools licensed under the provisions of this Chapter upon the fund balance reaching a minimum of eight hundred thousand dollars and for the resumption of payments into the fund whenever the fund balance is less than seven hundred fifty thousand dollars.
K.(1) Notwithstanding the provisions of Subsection A of this Section, there is hereby established a special account within the Proprietary School Student Protection Dedicated Fund Account to be known as the Proprietary School Student Records and Administration Account, hereafter in this Subsection referred to as the "administration account". Any balance in the Proprietary School Student Protection Dedicated Fund Account on July 1, 2000, that exceeds eight hundred thousand dollars, as provided in Subsection J of this Section, shall be deposited into the administration account. All interest earned on the fund after July 1, 2000, shall be deposited in the administration account. All deposits made to the Proprietary School Student Protection Dedicated Fund Account after July 1, 2000, shall be made in accordance with the provisions of this Section.
(2) Amounts from the administration account shall be pledged and dedicated solely and exclusively for costs associated with board functions as they relate to the administration of proprietary schools and for the creation of a digital student records management system.
Acts 2019, No. 404, §§ 2, 19, eff. July 1, 2020; Acts 2019, No. 437, §1.
NOTE: See Acts 2019, No. 404 providing for the effects of the conversion of certain dedicated funds to special statutorily dedicated fund accounts.
NOTE: Section 19(A) of Acts 2019, No. 404 states that the funds enumerated in Section 19(A) of the Act were converted to accounts in Acts 2018, No. 612 and shall be considered as statutorily dedicated fund accounts containing fees and self-generated revenues. Although enumerated in Section 19(A)(8) of Acts 2019, No. 404, the "Proprietary School Student Protection Fund created in R.S. 17:3141.16" was not provided for in Acts 2018, No. 612.
