Bureau of Proprietary School Supervision Room 974 EBA Albany, NY 12234 www.highered.nysed.gov/bpss

August 16, 2006

TO:                  Owners and Directors of Licensed Private, Registered Business, and

                        Certified ESL Schools in the State of New York

FROM:            Carole W. Yates, Director

SUBJECT:      Tuition Assessment

          As you know, the Tuition Reimbursement Account (TRA) is designed to reimburse students in two categories.  One is for those students who were in attendance at a non-degree granting proprietary school at the time of the school’s closure.  The other is for an enrolled student who filed a complaint against a school, the complaint was substantiated by the Bureau of Proprietary School Supervision (BPSS), and the school did not provide an appropriate tuition refund to the student. In accordance with Education Law, the TRA is supported by assessments from licensed/registered schools and from fines.  Schools are required to pay three-tenths of one percent of its gross tuition into the fund each year.  This assessment is collected in quarterly installments. Section 5007(10)(b) of the Education Law allows for the suspension of the TRA quarterly assessments when the TRA exceeds $1.8 million.  This was the condition of the TRA prior to April 2004.

          With the closure of Hendricks Institutes and an approximate $2 million payout from the TRA to students in attendance at the time of closure, the TRA rapidly dropped.  Section 5007(10)(c) of the Education Law states that when the TRA drops below $1.3 million, the quarterly TRA assessment must be reinstated. This was the case in the TRA as of April 1, 2004, and the quarterly assessment was reinstated.

          In Acting Bureau Chief Joseph Frey’s April 1, 2004 memorandum, institutions were notified that, with the reinstatement of the quarterly assessment, another section of Education Law went into effect concerning the “special assessment.”  After the Legislature enacted the provisions of the Tuition Reimbursement Account, the Fund rapidly gained a sufficient amount of revenue to suspend quarterly payments.  There was a period of time when many new schools who had not initially contributed to the Fund because the quarterly payments were suspended still had the benefit of the Fund.  The Legislature then amended the Law to require all new institutions to pay the equivalent of three years of annual assessment into the TRA within either a four- or five-year period depending upon when they were initially licensed. This special assessment was suspended during a period of time when the Fund was below $1.3 million, as set forth in Sections 5007(10)(d) and (e).

          As of June 30, 2006, the TRA was in excess of $1.6 million.  Since it was in excess of the $1.3 million identified in the above section of Education Law, the special assessment must now be reinstituted for schools licensed after June 30, 1999 who have not paid the equivalent of three years of annual assessments.

          The quarterly assessments for funding the TRA will only be suspended when the Account exceeds $1.8 million. We will notify all institutions at that time.

          Please note that the quarterly assessments for funding the Bureau of Proprietary School Supervision (five tenths of one percent of a school’s annual gross tuition income) remain in effect for all schools.  Schools required to pay the special assessment will receive separate bills for the regular assessment and special assessment.

          If you have any questions regarding the requirements set forth in Education Law, please contact David Sherwood, Associate in Higher Education, at (518) 474-3969 or via E-mail at dsherwoo@mail.nysed.gov.  Any specific questions regarding billing amounts should be directed to Barbara Ruchel, Agency Program Aide, at (518) 473-0788 or via E-mail at bruchel@mail.nysed.gov.