New York Laws
Article 101 - Licensed Private Career Schools and Certified English as a Second Language Schools
5007 - Tuition Reimbursement Account.

(1) the student is eligible for a refund;
(2) the student has made a request to the school for a refund; and
(3) the school has failed to make the refund within the time period
required by this article.
c. The commissioner shall act on each refund request within thirty
business days of such request.
4. Students may be eligible for refunds under this section as follows:
a. A student who is offered a teachout plan for the curriculum in
which the student was enrolled at the time the school closed or ceased
operation, which has been approved by the department, may elect to
continue instruction pursuant to the teachout plan or may decline to
continue instruction and may instead apply for a full refund under this
section. The option to apply for a refund shall extend to the end of the
first week of instruction at the teachout school.
b. A student who was enrolled in a school which has not closed or
ceased operation is entitled to a refund computed in accordance with the
refund policy established by subdivision three of section five thousand
two of this article.
c. A student who was enrolled in a school at the time the school
closes or ceases operation is entitled to a refund of the full amount of
prepaid tuition. In addition, commencing September first, nineteen
hundred ninety-three, a student who drops out of a school, where such
school closes within thirty days of the student's termination and prior
to completion of such student's program as specified in the enrollment
agreement, shall be entitled to a full refund of all tuition, fees and
book charges paid for by or on behalf of the student in cash or in
loans, excluding funding provided by any government agencies.
d. A student who was enrolled in a school which has not closed or
ceased operation, and who has dropped out, is entitled to a full refund
of all tuition, fees and other required costs paid by the student if the
student has submitted a complaint form to the commissioner and the
commissioner has determined that a violation of this article has
occurred which warrants a refund. The commissioner shall promulgate
regulations identifying those violations that warrant a refund.
e. Commencing September first, nineteen hundred ninety-three, a
student who drops out of a school, which subsequently closes, and who is
owed a refund for the failure of such school to follow the provisions
enumerated in subdivision three of section five thousand two of this
article shall be eligible for a refund from the tuition reimbursement
fund according to the provisions of subdivision three of section five
thousand two of this article.

f. Commencing September first, nineteen hundred ninety-three, any
student enrolled in a school based upon an ability to benefit
examination shall be eligible for a full refund, regardless of whether
the student is currently enrolled, graduated or dropped out, if the
school enrolled the student contrary to the provisions of the approved
entrance requirements and the student complies with the requirements of
subdivision one of section five thousand three of this article.
5. a. For a student who had been enrolled in a school that has not
closed or ceased operation, the refund shall be paid as follows:
(1) guaranteed student loans, if any, in which case the commissioner
shall notify the student of such payment and shall be paid directly to
the lender or guarantee agency where appropriate;
(2) actual personal tuition expenditures, if any; and
(3) tuition assistance program awards and other governmental aid.
b. For schools that have closed or ceased operation, the commissioner
shall refund actual personal tuition, fees and book expenditures to the
student. The repayment of any loans incurred by the student as part of
the actual personal tuition, fees and book expenditures shall be paid
directly to the lender or the guarantee agency where appropriate.
6. a. Where a claim is paid to a student of an operating school, the
commissioner shall immediately notify the school.
b. Within ten days of the receipt of the notice, the school shall
either request a hearing to challenge the commissioner's determination
that a refund was owed to the student or reimburse the fund the amount
paid to the claimant plus a penalty up to two times such amount. This
payment shall also incur interest for each day it remains unpaid at an
annual interest rate of one percent above the prime rate. The
commissioner may promulgate streamlined procedures for conducting
hearings pursuant to this paragraph. Any penalty assessed under this
paragraph shall be in addition to any other penalties assessed pursuant
to this article. Notwithstanding any other provision of law, penalties
and interest paid pursuant to this paragraph shall accrue to the credit
of the proprietary vocational school supervision account to support the
costs associated with the hearings authorized in this subdivision.
7. Notwithstanding the notice procedures described in subdivision
three of this section, in the event of a school closing, the
commissioner on his or her own initiative may take appropriate action in
accordance with this section to process refund claims on behalf of all
of the students of the closed school.
8. Assignment of rights. Persons and entities receiving refunds under
this section shall be deemed to have assigned or subrogated their
tuition reimbursement rights to the commissioner on behalf of the
tuition reimbursement fund only for the amount refunded by the tuition
reimbursement fund. Within ninety days of any refund made pursuant to
this section, the commissioner or the attorney general shall take
appropriate action to recover the total amount of the refunds made, plus
administrative costs, from the school.
9. a. A student whose loan liability is exempted pursuant to former
section six hundred eighty-three of this chapter and is entitled to or
owed a refund shall transfer to the higher education services
corporation the right to claim the refund owed and due from the tuition
reimbursement fund. In such event, the corporation shall be entitled to
receive a refund for that portion of the claim not paid to the
corporation by the United States Secretary of Education pursuant to the
federal guaranteed loan program.
b. Any amounts remaining in the tuition reimbursement fund as of June
first, nineteen hundred ninety-three and on every March thirty-first
thereafter, shall be made available to the higher education services

corporation for payment of student loans on which collection activity
has ceased pursuant to the provisions of subdivision six of former
section six hundred eighty-three of this chapter. No amounts shall be
paid to the higher education services corporation for loans on which
collection activity has ceased because of the operation of section 437
of the Higher Education Act of 1965, as amended.
10. Management of the tuition reimbursement account. a. As used in
this subdivision, net balance is defined as the actual cash balance of
the account as determined by the commissioner on June thirtieth,
nineteen hundred ninety-three and every three months thereafter. For the
purpose of calculating the net balance, the commissioner shall not take
into consideration any refunds made from the account pursuant to
paragraphs d and f of subdivision four of this section for the year
immediately preceding the date on which the calculation is made.
b. In the event that the account has accumulated a net balance in
excess of one million eight hundred thousand dollars, the commissioner
shall, with the approval of the director of the budget, waive an amount
not to exceed the amount due for the next quarterly assessment pursuant
to this section and subdivision nine of section five thousand one of
this article for schools which have paid sixteen quarters or more of
assessments only. In such event, payment of future quarterly assessments
shall be suspended for schools which have paid sixteen quarters or more
of assessments until the net balance of the account falls below one
million three hundred thousand dollars.
c. In the event the net balance of the account falls below one million
three hundred thousand dollars, if the quarterly assessment has been
suspended for schools which have paid sixteen quarters or more of
assessments pursuant to paragraph b of this subdivision, it shall be
reinstated for the next quarterly assessment and all subsequent
quarterly assessments until the account has accumulated a net balance in
excess of one million eight hundred thousand dollars.
d. Notwithstanding the provisions of paragraph b of this subdivision,
in the event that the balance of the account is in excess of one million
three hundred thousand dollars, all schools licensed after June
thirtieth, nineteen hundred ninety-nine shall be required to pay into
the account the equivalence of three years of annual assessments over a
five year period.
e. Notwithstanding the provisions of paragraph b of this subdivision
all schools licensed after June thirtieth, nineteen hundred ninety-three
and before July first, nineteen hundred ninety-nine will be required to
pay into the account the equivalence of three years of annual
assessments within four years of the effective date of this paragraph.
This amount to be assessed shall be determined based upon the school's
gross tuition in its first three years of licensure.
g. In the event that the balance of the tuition reimbursement account
is equal to or in excess of two million dollars, the amounts assessed
the schools in accordance with the provisions of paragraphs d and e of
this subdivision shall be deposited directly to the proprietary
vocational school supervision account.
h. The commissioner may annually apportion from the account an amount
up to two hundred thousand dollars for the purpose of securing, scanning
and otherwise making student records from closed schools available to
students who attended such schools. Provided, however, that in no case
shall such apportionment cause the account to fall below the balance set
forth in paragraph c of this subdivision, nor shall such apportionment
cause schools whose quarterly assessments have been suspended to pay
additional quarterly assessments.

11. Fund audit. The state comptroller shall audit or cause to be
audited the tuition reimbursement fund once every two years and produce
an audited financial statement according to generally accepted
accounting principles.
12. New schools. Within the first year that a school begins licensed
operation, the commissioner shall assess such school an amount to be
deposited into the fund in an amount to be determined by the
commissioner.