13 KAR 1:020. Private college licensing.

13 KAR 1:020. Private college licensing.

RELATES TO: KRS 164.945, 164.946, 164.947, 164.992

STATUTORY AUTHORITY: KRS 164.947

NECESSITY, FUNCTION, AND CONFORMITY: This administrative regulation is promulgated pursuant to KRS 164.945 to 164.947 and 164.992 which require that the Council on Postsecondary Education license nonpublic institutions to protect bona fide institutions and to protect citizens of the Commonwealth from fraudulent practices, unfair competition or substandard educational programs.

Section 1. Definitions. (1) "Accredited" means the approval of an accrediting agency.

(2) "Accrediting agency" means a national or regional agency which evaluates colleges and is recognized by the United States Department of Education, the Council on Postsecondary Accreditation, or the Council on Postsecondary Education.

(3) "Agent" means any person employed by a college to act as solicitor, broker, or independent contractor to procure students for the college by solicitation in any form made at any place other than the main campus of the college.

(4) The definition of "college" is governed by KRS 164.945.

(5) "In-state college" means a college that is chartered by, organized within, and has its principal location in Kentucky.

(6) "Out-of-state college" means a college that is chartered, organized, or has its principal location outside Kentucky.

(7) "Unearned tuition" means the excess of cumulative collections of tuition and other instructional charges over the cumulative amount of earned tuition and other instructional charges in accordance with the college's refund policy.

Section 2. General Requirements. (1) A college which offers courses or conducts academic programs in Kentucky shall be licensed.

(2) An out-of-state college shall be licensed separately for each instructional site in Kentucky.

(3) A college awarding a diploma, associate degree, baccalaureate degree, master's degree, doctoral degree, or other degree, whether the degree is earned or honorary, shall be licensed. If a college's program is also required to be licensed or approved by another state agency as well as the Council on Postsecondary Education, the president shall attempt to coordinate the licensing function with that agency.

(4) A college shall offer only those degrees and degree programs, including honorary degrees, specifically authorized in the license. If a college is licensed to offer specific courses, only those courses authorized in the license shall be offered.

Section 3. Licensure Application Procedures. The following procedures shall be observed in considering applications for a license:

(1) Application for a license shall be in the form and manner prescribed by the president. Colleges not licensed as of the effective date of this administrative regulation shall submit an application for a license within sixty (60) days. Providing false or misleading information on any application may be deemed as sufficient grounds for denying licensure.

(2) Documents to accompany application. Each application shall be accompanied by copies of the following:

(a) College charter;

(b) College catalog;

(d) Student enrollment application;

(e) Student contract or agreement; and

(f) Documentation of accreditation, licensure or approval by appropriate agencies.

(3) Site visits. Within thirty (30) days of the receipt of a full and complete application for a license, or license renewal, the president may conduct, or may have conducted, a site visit at the location or locations where the applicant college offers, or proposes to offer, courses of instruction. Personnel conducting the site visit shall possess the expertise appropriate to the type of college to be visited. The purpose of a site visit shall be to make an assessment of the instructional program, library, faculty, student services, administration, financial status, facilities, and equipment and of such other factors which are of significance in determining the college's qualifications for licensure.

(4) Cost of site visits. A college applying for a license, or license renewal, or a college to which a site visit is necessary in order to administer KRS 164.945 to 164.947, may be required to bear the cost of the site visit. Costs connected with a site visit and subsequent visits as may be necessary, such as travel, meals, lodging, and honoraria are paid by the college. The estimated cost of the site visit, and final settlement regarding actual expenses incurred shall be made within thirty (30) days following the site visit. Failure to pay these costs may result in license suspension or revocation.

(5) New colleges. In the case of a proposed new college, the president may issue a license if he determines that the college may reasonably be expected to meet the standards set forth in these administrative regulations:

(a) Within three (3) years if the college proposes to award a degree no higher than an associate degree. Annual reports shall be submitted to the president demonstrating the progress being made in meeting the licensure standards.

(b) Within five (5) years if the college proposes to offer a baccalaureate or higher degree. Annual reports shall be submitted to the president demonstrating the progress being made in meeting the licensure standards.

(6) Action on license applications. Within thirty (30) working days of the completion of the site visit or within sixty (60) working days of the submission of an application, the president shall do one (1) of the following:

(a) Issue a license for a period of no less than two (2) years, nor more than five (5) years;

(b) Deny application for license; or

(7) Failure to apply for a license. If a college which is subject to the provisions of this administrative regulation fails to apply for a license, the president shall take the following action:

(a) Notify the college by registered mail of the requirement to obtain a license;

(b) If a license application is not received within sixty (60) days of notification, require the chief administrative officer to appear for a hearing as provided in Section 9 of this administrative regulation;

(c) If the chief administrative officer does not appear for the hearing, refer the case to the appropriate county attorney for enforcement.

Section 4. License Renewal and Supplementary Application Procedures. (1) A college shall apply for license renewal on the date specified in the license.

(2) An application for license renewal, or a supplementary application, in such form and manner as may be prescribed by the president, shall be required within thirty (30) days following any of these developments:

(a) Scheduled expiration of the licensure period;

(b) A change in the name of a college;

(d) A change in ownership or governance of a college;

(e) Proposed additions or deletions of degree programs or majors, and other concentrations and specialties;

(f) Establishment of an instructional site away from the main campus of an in-state college for the purpose of offering courses for college credit which comprise at least twenty-five (25) percent of the course requirements for a degree program;

(g) Action by an accrediting agency which results in a college being placed in a probationary status for more than one (1) year, or which results in the loss of the college's accreditation; or

(h) Determination by the president that other sufficient cause exists which requires a supplementary application or an application for license renewal.

(3) Action on license renewal and supplementary applications. Within thirty (30) working days of the submission of a license renewal or supplementary application, the president shall do one (1) of the following:

(a) Renew the license for a period of no less than five (5) years nor more than ten (10) years;

(b) Amend the current license without changing the renewal date;

(d) Notify the applicant college of deficiencies which must be corrected before a license can be issued.

Section 5. Annual Reports. Colleges shall submit an annual report to the president.

(1) The annual report for in-state colleges shall contain the following:

(a) Statements from the Kentucky Higher Education Assistance Authority related to programs administered by that agency and from the United States Department of Education related to programs administered by that department that the college is in good standing;

(b) A statement prepared by an independent certified public accountant confirming that:

1. The amount of the surety bond coverage is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

2. The amount of the college's unrestricted endowment is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

3. The letter of credit is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

4. Any combination of surety bond coverage, unrestricted endowment, and letter of credit is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year.

(d) The student headcount enrollment for the fall term in each licensed program submitted through the Council on Postsecondary Education data collection system; and

(e) The number of students completing each licensed program submitted through the Council on Postsecondary Education data collection system.

(2) The annual report for the Kentucky site of out-of-state colleges shall contain the following:

(b) A statement prepared by an independent certified public accountant confirming that:

1. The amount of the surety bond coverage is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

3. The letter of credit is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

(d) The student headcount enrollment for the fall term in each licensed program submitted on forms provided by the president; and

(e) The number of students completing each licensed program submitted on forms provided by the president.

Section 6. License Expiration. A license shall automatically expire within sixty (60) days following any of these developments:

(1) A license renewal application is not submitted;

(2) An in-state college ceases operation; or

(3) An out-of-state college ceases operation at a Kentucky site.

Section 7. Standards for Licensure. The president may determine that an in-state college meets the standards and requirements of this section if the college has been accredited by an accrediting agency. The president shall determine that the following requirements or standards are met in considering applications for a license and for license renewal:

(1) Financial stability. The college shall adhere to generally accepted accounting practices and present evidence of financial stability, including the following:

(a) A financial statement including assets and liabilities and the audit report of an independent certified public accountant for each corporation of the college;

(b) The name of a bank or other financial institution as reference; and

(c) Statements from the Kentucky Higher Education Assistance Authority related to programs administered by that agency and from the United States Department of Education related to programs administered by that department that the college is in good standing.

(2) A college shall be responsible for the actions of its agents and shall guarantee the refund of any unearned tuition held by the college in one (1) of the following ways:

(a) Maintain a surety bond which shall be executed by a surety company qualified and authorized to do business in Kentucky and shall be made payable to the Council on Postsecondary Education; or

(b) Maintain an unrestricted endowment; or

(d) An in-state college shall provide a statement by an independent certified public accountant confirming that:

1. The amount of the surety bond coverage is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

2. The unrestricted endowment is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

3. The letter of credit is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

(e) An out-of-state college shall provide a statement by an independent certified public accountant confirming that for the Kentucky site or sites:

1. The amount of the surety bond coverage is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

2. The unrestricted endowment is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

3. The letter of credit is equal to or in excess of the largest amount of unearned tuition held by the college at any time during the most recently completed fiscal year; or

(f) A college applying for a license for the first time shall estimate the amount of unearned tuition based on projected enrollment and tuition and other instructional charges.

(g) If the surety bond is terminated, the college shall notify the president and the license shall automatically expire with the bond unless a replacement bond is provided without a lapse in bonding.

(h) If the unrestricted endowment falls below the required amount, the college shall notify the president and the college shall obtain a surety bond for the amount of coverage or a letter of credit, which in combination with the unrestricted endowment, is equal to or in excess of the largest amount of unearned tuition held by the college in the most recently completed fiscal year.

(3) Personnel requirements.

(a) The college may be required to furnish information regarding the administrative officers, the directors, the owners, and the faculty.

(b) The chief administrator shall hold at least an earned baccalaureate degree from an accredited or licensed college and shall have sufficient experience to qualify for the position.

(c) Faculty members shall possess academic, scholarly, and teaching qualifications usually required for faculty in accredited colleges which offer degrees at comparable levels.

(d) There shall be a sufficient number of full-time faculty to insure continuity and stability of the educational program.

(e) Teaching loads of faculty members shall be consistent with recognized educational practices, and shall be appropriate to the field, the variety of courses assigned, class size, and other related factors.

(4) Facilities and equipment.

(a) The college shall be maintained and operated in compliance with the safety and health requirements set forth in local, city, and county ordinances, and federal and state law, including rules and administrative regulations adopted pursuant thereto.

(b) Adequate and appropriate space shall be maintained for instruction in classrooms and laboratories. Enrollment shall not exceed the design characteristics of the facilities. The instructional program shall not be conducted in substandard facilities and the quality and quantity of equipment shall be adequate and appropriate for the program.

(5) Library. The library shall be appropriate to support the programs offered by the college:

(a) The collection of books, periodicals, newspapers, teaching aids, and other instructional materials and equipment shall be adequate for the needs of the educational program, shall be appropriately housed, and shall be readily accessible to the faculty and students.

(b) A program for continuous acquisition of current library materials and for the recording of all library holdings shall be clearly outlined and maintained.

(c) Library expenditures, expressed as a percentage of the total educational and general budget, shall be consistent with the percentage of library expenditures commonly observed in accredited colleges of similar types.

(d) A professionally trained and competent library staff, adequate to serve the needs of the students and to support the educational program, shall be provided.

(e) Sufficient seating and work space for a reasonable proportion of the faculty and students to be accommodated at one (1) time shall be provided.

(f) The physical environment of the library shall be conducive to reflective intellectual pursuits common to institutions of higher learning.

(g) A college which does not provide its own library facilities and must rely on other institutions to provide library resources shall demonstrate that permission to utilize library resources has been obtained prior to implementation of its programs. The extent of dependence on other libraries shall be clearly stated and the nature and details of the agreements or contracts with the participating libraries shall be explained and exhibited. The details of the contractual agreements with other libraries must meet the criteria outlined in the above standards.

(6) Curriculum. Earned degrees shall be bona fide academic degrees and the courses offered in degree programs shall be of collegiate quality as determined by the president using the following criteria:

(a) Courses offered in degree programs shall be consistent with those generally transferable for credit among accredited colleges in programs of corresponding degree levels, and for credit toward the baccalaureate degree if such programs are at the associate degree level; or

(b) Courses are not usually transferable because of the uniqueness of a program, or for other valid educational reasons are determined to be of collective quality.

(c) A college shall not offer a master's degree, a doctoral degree, or any other graduate-level degree, as determined by the president, unless the college is accredited.

(d) The college shall have a systematic program of curriculum revision in order to maintain the general standards of accredited colleges with similar programs.

(e) The college shall have a program of evaluation which includes a periodic assessment of the changes in student achievement.

(7) General education.

(a) A reasonable percentage of the total credits comprising associate degrees and baccalaureate degrees shall be earned in general education, including science-mathematics, social and behavioral sciences, and humanities. A college which offers an interdisciplinary general education program, a block-type program, or other unique general education program shall be considered to be in compliance with the general education requirement if the president determines that the program content and distribution are appropriately related to the degree and institutional purposes.

(b) A new college, and any existing college which initiates a new associate degree or baccalaureate degree program or major, or other concentration or specialty, after the effective date of these administrative regulations, shall comply fully from the outset with the general education requirements.

(8) Program supervision and instructional support. Regardless of location, type of program, method of instruction, or other characteristics, an instructional program for which degree credit is awarded shall include the following:

(a) Adequate supervision by the college; and

(b) Other instructional support as may be required to maintain a program of acceptable quality.

(9) Truth in advertising. A college shall observe the following standards in its advertising:

(a) Advertisements, announcements, and promotional material of any kind which are distributed in Kentucky shall not contain any statements that are untrue, deceptive, or misleading with respect to the college, its personnel, its services, or the content, accreditation status and transferability of its courses or degree programs.

(b) Advertisements, announcements, or other materials produced by or on behalf of the college shall not indicate that the college is "supervised," "recommended," "endorsed," or "accredited" by the Commonwealth of Kentucky, by the Council on Postsecondary Education, or by any other state agency. An advertising statement, if any, shall be in exactly the following form: "(Name of College) is licensed by the Kentucky Council on Postsecondary Education."

(10) Recruitment and enrollment procedures. A college shall furnish the following to each student prior to enrollment:

(a) The college's policies on grades, attendance, and conduct;

(b) A description of the instructional program;

(d) The schedule of refunds of all charges, rentals, and deposits; and

(e) The student enrollment application, contract, or agreement.

(11) Student affairs.

(a) Students admitted to the college shall have completed a state-approved secondary school program or its equivalent.

(b) A student admitted to an instructional program shall have demonstrated a readiness for such instruction in the field or specialty, and the student's preparation, aptitude, and interest shall be determined to provide reasonable assurance that the student has the potential to benefit from the instruction offered.

(c) The college shall provide academic counseling by faculty or staff to each student at the time of admission and throughout the program.

(d) The college shall make assistance and counseling available to each student who completes a technical or vocational program for the purpose of assisting the student with an appropriate job placement or with transfer.

(e) The college shall maintain sufficient records for each student to provide an understanding of his background, to record his progress through the instructional program, and for reference purposes.

(f) Administrative officers of the college shall be knowledgeable of the federal and state laws and administrative regulations concerning the disclosure of student information and shall comply with such laws and administrative regulations.

(g) A college which plans to cease operation in Kentucky shall make adequate provision for the maintenance of student records. The location of student records shall be approved in advance by the president.

(h) The college shall establish suitable policies and procedures whereby a student is assured due process.

(12) College policies.

(a) The college shall maintain records in an orderly manner and make them available for inspection by the president or his designated representative.

(b) A catalog shall be published at least every two (2) years and shall include general information, administrative policies, and academic policies of the college as indicated below:

1. General information.

a. Official name and address of the college, name of the chief administrative officers, members of the governing body, and names of principal owners.

b. The college's calendar for the period covered by the catalog including beginning and ending dates of each term or semester, registration and examination dates, legal holidays, and other important dates.

c. Names of faculty, including relevant education and experience.

d. Full disclosure of the philosophy and purpose of the institution and its capacity to fulfill these objectives.

2. Administrative policies.

a. Admissions policies and procedures, applicable to the various programs, including policies regarding granting of credit for previous education.

b. Policies and procedures regarding student conduct and behavior and the process for dealing with cases which culminate in probation or dismissal.

c. Schedules for all tuition and instructional charges, and refund schedules for such tuition and instructional charges.

d. Statement of financial aid available to students.

e. Procedures for obtaining transcripts in a timely fashion and at reasonable cost.

3. Academic policies.

a. Policy on class attendance.

b. Description of grading system.

c. Description of the degree, diploma, certificate, and other programs, including the course requirements and the time normally required to complete each.

d. Full description of the nature and objectives of all degrees offered.

(c) Refund policy on tuition and other instructional charges. The refund policy shall meet the following minimum requirements:

1. If tuition and other instructional charges are collected in advance of enrollment and the student fails to enroll, then not more than $100, or not more than ten (10) percent of the tuition and other instructional charges for a term or semester, whichever is less, shall be retained by the college.

2. Tuition and other instructional charges ordinarily shall be charged by the enrollment period, and the student shall not be obligated for tuition or other instructional charges relating to an enrollment period that had not begun when the student withdrew. However, the president may approve program tuition for specific programs at a college if a student may only enroll at the beginning of the program sequence and must remain in phase. If program tuition is approved, the college shall refund tuition and other instructional charges in accordance with its published refund policy.

3. If a student withdraws from the college, or if a student fails to attend classes for a period of thirty (30) days during which classes are in session, the college shall officially withdraw the student from the college and shall refund an amount reasonably related to the period for which the student is not enrolled and shall refund 100 percent of all other tuition and other fees collected by the institution for subsequent enrollment or registration periods unless the student is enrolled in a program for which program tuition is charged as specified in subparagraph 2 of this paragraph.

a. After completion of fifty (50) percent of the enrollment period, the college is not required to make refunds of tuition or other fees for that period.

b. In all other cases, including illness or accident, the college shall make a settlement which is fair and reasonable.

c. Refunds shall be made within thirty (30) days after notification of withdrawal has been received by the college.

4. Notwithstanding the provisions as set forth herein, if a college is accredited by an accrediting agency which has a specific refund policy which is more favorable to the student, then such policy shall be followed.

5. An out-of-state college shall refund in accordance with the policies indicated herein unless its policy is more favorable to the student, in which case the latter shall be followed.

Section 8. Consumer Complaint Procedure. A person with a complaint or grievance involving misrepresentation against a college licensed under these administrative regulations shall make a reasonable effort to resolve the complaint or grievance directly with the college. If a mutually satisfactory solution cannot be reached, the following procedure shall be followed:

(1) A written statement of the complaint shall be submitted to the president which contains evidence relevant to the complaint and documentation that a reasonable effort was made to resolve the complaint directly with the college.

(2) The president shall review the facts as presented and may intervene to bring the matter to a satisfactory conclusion through facilitation, but such facilitation shall not include legal action on behalf of any party.

(3) If the president determines that the college may no longer be in compliance with the provisions of this administrative regulation, the college may be required to document its continuing compliance with this administrative regulation in the form and manner determined by the president.

Section 9. Hearings and Appeals. (1) The president may, for cause, require the chief administrative officer, or other officers, of a college to appear for a hearing in order to determine the facts in the case. At such hearings, the officer, or other officers, of the college may be accompanied by counsel of their own choosing and at their expense. If the findings warrant, the president may impose the sanctions authorized in this section.

(2) Sanctions. Probation, suspension of license, or revocation of license.

(a) If it is determined, on the basis of the procedures described herein, that the public interest requires that sanctions be imposed, one (1) or more of the following steps may be taken:

1. Place the college's license in a probationary status for a designated period not to exceed one (1) year while deficiencies are being corrected;

2. Suspend the college's license for a period not to exceed one (1) year;

3. Revoke the college's license; or

4. Refer the case to other officials for appropriate action.

(b) A college which is sanctioned, whether such sanction is probation, suspension of license, or revocation of license, shall comply with the terms of such sanction.

(c) Any expense incurred in site visits, and for other purposes related to the removal of such sanctions, shall be borne by the college, notwithstanding the provisions of Section 3(4) of this administrative regulation.

(3) A college may appeal the actions of the president regarding the denial of issuance of a license or license renewal or the imposition of sanctions according to the following procedure:

(a) A college shall notify the president of the intent to appeal an action within fourteen (14) days of the receipt of the letter notifying the college of the action taken;

(b) The president shall appoint a person to serve as the appeals officer;

(c) The appeal shall be presented in writing no later than sixty (60) days following the receipt of notification of intent to appeal. The appeal shall be considered on the written record alone;

(d) The appeals officer shall review findings of fact, draw conclusions, and formulate a recommendation consistent with the facts and this administrative regulation;

(e) Within fourteen (14) days, the report of the appeals officer shall be forwarded to the college and to the Chairman of the Council on Postsecondary Education;

(f) The Council on Postsecondary Education shall act on the appeal at its next regular or special meeting; and

(g) The council shall take one (1) of the following actions:

1. Issue a license;

2. Renew the license;

3. Impose one (1) of the sanctions authorized in this section;

4. Refer the case to other officials for appropriate action. (17 Ky.R. 2552; Am. 2970; eff. 5-3-91.)