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A bill to tighten regulation of Utah's postsecondary proprietary schools is advancing through the Senate with the support of the for-profit education industry, which has come under severe criticism in recent years for its reliance on federal student-aid dollars.
SB210 would require certain for-profit schools to demonstrate financial viability, file separate registration and exemption applications for each campus they operate in Utah, and would enable the Division of Consumer Protection to field and act on complaints against bad actors, sponsor Sen. Curtis Bramble, R-Provo, and supporters told the Senate Education Committee Wednesday morning.
Bramble crafted the bill to bring Utah into compliance with changes in federal rules regulating for-profit schools' access to Title IV student aid, set to take effect in July. Industry leaders hailed the bill as a "win-win-win" because they say it ensures financial aid access to students at for-profit schools while not imposing excessive regulations.
"These regulations meets federal standards without placing an added burden on the state," said Ryan Sagers, president of the Utah Association of Private Sector Colleges and Universities. "Over-regulation detracts from a college's primary role of educating and preparing students for the workforce. As we all know, regulatory expenses are passed onto students in the form of tuition increases."
The bill would require new schools to produce commercial credit reports, as well as consumer credit reports for owners. Schools open for more than a year would have to produce a detailed financial statement and a fiscal audit. Another reporting provision would require owners to divulge failures to "maintain fiscal responsibility" at schools they've owned in the past.
Schools that have been in business for 20 years or more would be exempt from these financial reporting requirements, Bramble said. But criminal background checks could be ordered on any owner, officer, director, administrator, staff or faculty member.
"This is a good bill. Other states should model this," said Darris Howe, who heads the University of Phoenix's Utah operations.
Schools may seek exemptions from the rules if they hold accreditation recognized by the U.S. Department of Education. Also exempt are tribal schools or schools that award religious certificates, Sagers told the education committee, which moved the bill on to the Senate.
Some 97 schools are expected to apply for the exemption, requiring a $1,500 annual fee. This would generate $145,500 in annual revenue, netting the state about $12,300, according to a fiscal note. —
New rules for proprietary schools?
Under SB210, schools would be subject to rigorous financial reporting requirements and criminal background checks, and the state would be empowered to act against poorly-run schools.