The purpose is to develop standards and procedures to ensure new institutions seeking licensure have sufficient resources, including financial resources, and to increase the protection afforded students by requiring training and reporting ...

DEPARTMENT OF EDUCATION
Commission for Independent Education

Rule No.: RULE TITLE
6E-2.004: Standards and Procedures for Licensure
PURPOSE AND EFFECT: The purpose is to develop standards and procedures to ensure new institutions seeking licensure have sufficient resources, including financial resources, and to increase the protection afforded students by requiring training and reporting requirements for institutional personnel who recruit and enroll students at an institution.
SUBJECT AREA TO BE ADDRESSED: Financial licensure standards for institutions with a provisional license and recruitment and admission licensure standards for enrollment personnel.
SPECIFIC AUTHORITY: 1005.22(1)(e), 1005.31(2), (3), 1005.34, 1005.39 FS.
LAW IMPLEMENTED: 1005.04, 1005.31, 1005.33(1), 1005.34, 1005.39 FS.
A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: October 25, 2010, 10:30 a.m.
PLACE: Howey-In-The-Hills, 10400 County Road 48, Howey-In-The-Hills, Florida 34737
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting: Commission for Independent Education, 325 West Gaines Street, Suite 1414, Tallahassee, Florida 32399-0400. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Samuel L. Ferguson, Executive Director, Commission for Independent Education, 325 West Gaines Street, Suite 1414, Tallahassee, Florida 32399-0400, [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

6E-2.004 Standards and Procedures for Licensure.

(1) through (4) No change.

(5) Standard 5: Recruitment and Admissions. In all admissions and recruitment-related activities, the institution shall comply with the fair consumer practices provisions of Sections 1005.04 and 1005.34, F.S., and Rule 6E-1.0032, F.A.C., and the rule regarding Agents, Rule 6E-2.010, F.A.C.

(a) An institution’s recruitment efforts shall be designed to target students who are qualified and likely to complete and benefit from the training provided by the institution.

(b) Recruiting Practices. Each institution must observe ethical practices and procedures in the recruitment of its students. Ethical practices and procedures include, at a minimum, the following:

1. An institution shall use only individuals, whether its own employees or agents, who are trained and licensed as agents pursuant to Rule 6E-2.010, F.A.C., to enroll students off-campus. Outside the United States, its territories, or its possessions, the institution may use third-party agents for recruiting; however, the institution remains responsible for the accuracy of advertising and of representations made to prospective students regarding the institution, its programs and policies, financial aid eligibility, availability and procedures, and other pertinent information. Other institutional officials who are not licensed agents may participate in occasional College Week or Career Week programs at area high schools or community centers, or give speeches regarding the institution to groups when invited; but no misleading information shall be communicated, no students shall be enrolled, and no tuition or fees shall be collected.

2. An institution shall not use employment agencies to recruit prospective students, or place advertisements in help-wanted sections of classified advertisements, or otherwise lead prospective students to believe they are responding to a job opportunity.

3. An institution shall ensure that its recruiting agents and other personnel do not make false or misleading statements about the institution, its personnel, its programs, its services, its licensure status, its accreditation, or any other pertinent information.

4. An institution shall not permit its recruiting agents or other personnel to recruit prospective students in or near welfare offices, unemployment lines, food stamp centers, homeless shelters, nursing homes, or other circumstances or settings where such persons cannot reasonably be expected to make informed and considered enrollment decisions. Institutions may, however, recruit and enroll prospective students at one-stop centers operated under government auspices, provided that all other recruitment and admissions requirements are met.

5. An institution shall inform each student accurately about financial assistance and obligations for repayment of loans.

6. An institution shall not make explicit or implicit promises of employment or salary expectations to prospective students.

7. An institution shall not permit the payment of cash or other nonmonetary incentives, such as but not limited to travel or gift certificates, to any student or prospective student as an inducement to enroll. An institution shall not use the word “free” or its synonyms in reference to any equipment, tuition, books, or other items in conjunction with recruiting or advertising. Tuition or fee discounts are not permissible; any reductions of tuition or fees must comply with subsection 6E-1.0032(7), F.A.C.

8. An institution must provide the applicant with a copy of the completed enrollment agreement, signed by both parties.

9. Ethical practices shall be followed in all aspects of the recruiting process. An institution shall ensure that its personnel do not discredit other institutions by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or similar negative characteristics; making other false representations; disparaging the character, nature, quality, value or scope of their program of instruction or services; or demeaning their students. An institution shall also ensure that its personnel do not knowingly influence any student to leave another institution or encourage a student to change plans after signing an enrollment application and paying a registration fee to another institution.

(c) Admissions Acceptance Policies. The purpose of this section is to ensure that institutions admit only those students who are capable of successfully completing the training offered. Admission decisions shall be based on fair, effective, and consistently applied criteria that enable the institution to make an informed judgment as to an applicant’s ability to achieve the program’s objectives.

1. An institution shall determine with reasonable certainty that each applicant for enrollment is fully informed as to the nature of the training provided. The institution shall advise each applicant prior to admission to ensure that the applicant understands the program’s responsibilities and demands.

2. An institution shall consistently and fairly apply its admission standards as published. It shall determine that applicants admitted meet such standards and are capable of benefitting from the training offered, and that applicants rejected did not meet such standards. The institution shall ensure that each applicant admitted has the proper qualifications, abilities, and skills necessary to complete the training, and shall secure and maintain documentation to demonstrate that each applicant meets all admissions requirements.

3. If an institution enrolls a person who does not have a high school diploma or recognized equivalency certificate, the determination of the applicant’s ability to benefit from the training offered must be confirmed as provided in subparagraph (4)(o)3. of this rule.

4. An institution shall not deny admission or discriminate against students enrolled at the institution on the basis of race, creed, color, sex, age, disability or national origin. Institutions must reasonably accommodate applicants and students with disabilities to the extent required by applicable law.

5. An institution shall not accept enrollment from a person of compulsory school age, or one attending a school at the secondary level, unless the institution has established through contact with properly responsible parties that pursuit of the training will not be detrimental to the student’s regular schoolwork.

6. The institution shall document its reasons for denying admission to any prospective student. Records of denied applicants must be kept on file for at least one year.

(d) To ensure that the requirements of subsection (5) are met, it shall be the responsibility of an institution to require a training program for all staff who recruit prospective students, or who participate in the admission of prospective students, at the institution.

1. With each application for an annual license, an institution shall submit CIE Form XYZ, to demonstrate that the institution has instituted a training program that meets the requirements of subsection (5) and that all recruiting and admission staff have completed the training at least once annually.

2. The provisions of this paragraph shall apply to applications submitted by institutions beginning January 2012.

(6) Standard 6: Finances. All institutions must demonstrate that the financial structure of the institution is sound, with resources sufficient for the proposed operations of the institution and the discharge of its obligations to the students. To demonstrate this, the school shall provide the following:

(a) Provisional License:

1. A plan setting forth the sources, kinds and amounts of both current and anticipated financial resources. The plan shall include a budget for the institution’s first year of operation, clearly identifying sources of revenue to ensure effective operations. The plan shall include estimates of projected operating expenses including the following areas: academics, administrative costs, occupancy, adverstising, admission, and learning resources.

2. A pro forma balance sheet prepared in accordance with Generally Accepted Accounting Principles for the type of institution making application.

3. If the corporation that controls the institution is ongoing, the institution shall provide a financial statement of the parent corporation complied, reviewed or audited in accordance with Generally Accepted Accounting Principles, prepared by an independent certified public accountant.

4. Institutions that are new and do not have a history of educational operations shall provide financial statements of the controlling principals, compiled, reviewed, or audited by an independent certified public accountant. These statements must demonstrate sufficient resources to ensure appropriate institutional development.

5. A school applying for the initial provisional license or a school receiving an extended provisional license shall provide evidence of cash reserves, a letter of credit or a bond to cover operating expenses for a minimum of six months.

(b) Annual License, Extended Annual License, or Annual Review:

1. Licensed nondegree schools shall provide annually a review or audit, prepared in accordance with Generally Accepted Accounting Principles by an independent certified public accountant. Licensed colleges and universities shall provide annually an audit, prepared in accordance with Generally Accepted Accounting Principles by an independent certified public accountant. This annual financial statement shall demonstrate that the current assets of the institution exceed the current liabilities, and that there was a positive net working capital and a profit or surplus for the prior year. If an institution does not meet the above requirements, the Commission shall require an explanation of the financial condition of the institution including a financial improvement plan or teach-out plan or form of surety guaranteeing that the resources are sufficient to protect the current students. Financial improvement plans shall include information on projected operating expenses including the following areas: academics, administrative costs, occupancy, adverstising, admission, and learning resources.

This plan shall If the Commission determines that the institution does not have sufficient resources, it shall take actions up to and including revocation of licensure.

2. If an independent postsecondary educational institution earns less than $100,000 gross tuition revenue per the institution’s fiscal year, the institution shall provide both a financial statement of the institution and of the controlling principles. The financial statement shall be compiled, reviewed, or audited by an independent certified public accountant. These statements must demonstrate sufficient resources to ensure appropriate institutional development.

3. Non-Florida corporations having one or more Florida location shall provide a profit and loss statement for each location in order to assess the financial stability of each individual location.

(c) License by Means of Accreditation: All institutions shall submit an annual audit prepared in accordance with Generally Accepted Accounting Principles by an independent certified public accountant. This audit shall demonstrate that the current assets of the institution exceed the current liabilities, and that there was a positive net working capital and a profit or surplus for the prior year. If an institution does not meet the above requirements, the Commission shall require an explanation of the financial condition of the institution including a financial improvement plan or teach-out plan or form of surety guaranteeing that the resources are sufficient to protect the current students. If the Commission determines that the institution does not have sufficient resources, it shall take actions up to and including revocation of licensure.

(7) through (12) No change.

Rulemaking Specific Authority 1005.22(1)(e), 1005.31(2), (3), 1005.34, 1005.39 FS. Law Implemented 1005.04, 1005.31, 1005.33(1), 1005.34, 1005.39 FS. History–Repromulgated 12-5-74, Formerly 6E-3.01(1), Readopted 11-11-75, Amended 3-7-77, 5-7-79, 10-13-83, Formerly 6E-2.04, Amended 11-27-88, 11-29-89, 12-10-90, 10-19-93, 4-2-96, 4-11-00, 1-7-03, 4-5-04, 5-24-04, 7-20-04, 5-18-05, 7-10-06, 7-23-07,________.