H.F. 644 Section 1. Section 261B.8, subsection 3, Code 2021, is 1 amended to read as follows: 2 3. A postsecondary registration fund is created in the state 3 treasury under the control of the commission. Fees collected 4 under this section and any other moneys approved by the 5 commission shall be deposited in the postsecondary registration 6 fund. Moneys in the fund are appropriated to the commission 7 and shall be used by the commission to administer this 8 chapter and chapter 261G for any of the purposes set forth in 9 subsection 4 . Notwithstanding section 8.33 , moneys in the fund 10 shall not revert to the general fund of the state at the end 11 of a fiscal year. Notwithstanding section 12C.7 , interest or 12 earnings on moneys in the fund shall be credited to the fund. 13 Sec. 2. Section 261B.8, Code 2021, is amended by adding the 14 following new subsection: 15 NEW SUBSECTION . 4. Moneys in the fund may be used for any 16 of the following purposes: 17 a. To administer this chapter and chapter 261G. 18 b. To procure, evaluate, and store school records needed to 19 establish the validity of claims against a school for failure 20 to faithfully perform all contracts and agreements. 21 c. To pay institutional charges on behalf of Iowans who 22 enrolled at the school. 23 d. To support an arrangement in which the school provides 24 its current students with the opportunity to complete the 25 students’ courses of study when the school closes, including 26 any activities designed to facilitate the transition of such 27 students to another postsecondary educational institution. 28 e. To pay private educational loan debt incurred by Iowans 29 for attendance at the school. 30 f. To reimburse Iowans who enrolled at the school for other 31 financial loss, as determined by the commission. 32 g. For other purposes prescribed by rule by the commission. 33 Sec. 3. Section 714.18, subsection 1, unnumbered paragraph 34 1, Code 2021, is amended to read as follows: 35 -1- HF 644 (2) 89 kh/jh/md 1/ 12

H.F. 644 Except as otherwise provided in subsection 2 or 3 , every 1 Every person, firm, association, or corporation maintaining 2 or conducting in Iowa any educational course by classroom 3 instruction or by correspondence or by other delivery method, 4 or soliciting in Iowa the sale of such course, shall file with 5 the college student aid commission , in a format prescribed by 6 the commission, all of the following: 7 Sec. 4. Section 714.18, subsection 1, paragraph a, Code 8 2021, is amended to read as follows: 9 a. A continuous corporate surety bond to the state of 10 Iowa in the sum of fifty thousand dollars or ten percent 11 of the total annual tuition determined in accordance with 12 subsection 2, whichever is less, conditioned on the faithful 13 performance of all contracts and agreements with students made 14 by such person, firm, association, or corporation, or their 15 salespersons ; but the . The aggregate liability of the surety 16 for all breaches of the conditions of the bond shall not exceed 17 the sum of the bond. The surety on the bond may cancel the bond 18 upon giving thirty days’ written notice to the college student 19 aid commission and thereafter shall be relieved of liability 20 for any breach of condition occurring after the effective date 21 of the cancellation. 22 Sec. 5. Section 714.18, subsections 2, 3, 4, and 5, Code 23 2021, are amended to read as follows: 24 2. A school licensed under the provisions of section 157.8 25 or 158.7 shall file that files with the college student aid 26 commission the following: 27 a. (1) A a continuous corporate surety bond to the state 28 of Iowa in the a sum of less than fifty thousand dollars or ten 29 percent of the total annual tuition collected, whichever is 30 less, conditioned on the faithful performance of all contracts 31 and agreements with students made by such school. A school 32 desiring to file a surety bond based on a percentage of annual 33 tuition shall provide to the college student aid commission, 34 in the form format prescribed by the commission, a notarized 35 -2- HF 644 (2) 89 kh/jh/md 2/ 12

H.F. 644 statement attesting to the total amount of tuition collected 1 the school charged to students in the immediately preceding 2 twelve-month period fiscal year . The commission shall 3 determine the sufficiency of the statement and the amount of 4 the bond or, as permitted under subsection 3, letter of credit . 5 Tuition information submitted pursuant to this subparagraph 6 subsection shall be kept confidential. 7 (2) If the school has filed a performance bond with an 8 agency of the United States government pursuant to federal 9 law, the college student aid commission shall reduce the bond 10 required by this paragraph “a” by an amount equal to the amount 11 of the federal bond. 12 (3) The aggregate liability of the surety for all breaches 13 of the conditions of the bond shall not exceed the sum of 14 the bond. The surety on the bond may cancel the bond upon 15 giving thirty days’ written notice to the college student aid 16 commission and thereafter shall be relieved of liability for 17 any breach of condition occurring after the effective date of 18 the cancellation. 19 (4) 3. a. The college student aid commission may accept a 20 letter of credit issued by a state or federally chartered bank 21 or credit union in lieu of and for the amount of the corporate 22 surety bond required by subparagraphs (1) through (3), as 23 applicable under subsection 2 . 24 b. The statement required in subsection 1 , paragraph “b” . 25 For purposes of this chapter and chapter 261B, a letter of 26 credit must meet all of the following conditions: 27 (1) Be payable to the commission. 28 (2) Be valid for a period of at least one year from the 29 date of issuance and subject to renewal as required by the 30 commission. 31 (3) Allow the commission to draw one or multiple 32 installments of the total letter of credit amount upon making 33 the required presentations to the issuer. 34 c. The materials required in subsection 1 , paragraph “c” For 35 -3- HF 644 (2) 89 kh/jh/md 3/ 12

H.F. 644 purposes of this section, “letter of credit” means a financial 1 instrument subject to the provisions of chapter 554, article 5, 2 with irrevocable terms and conditions that cannot be modified 3 or canceled after issuance without the consent of all of the 4 parties . 5 4. If a letter of credit accepted by the college student 6 aid commission under subsection 3 is canceled, revoked, not 7 renewed, or otherwise fails to be of full force and effect, the 8 school shall comply with the provisions of subsection 2. 9 3. 5. This section shall not apply to the provision of 10 an educational course of flight instruction under regulations 11 promulgated by the federal aviation administration for which 12 students do not pay tuition in advance of instruction and 13 which students may cancel at any time with no further monetary 14 obligation. 15 Sec. 6. Section 714.19, subsections 1, 2, 3, 4, and 6, Code 16 2021, are amended to read as follows: 17 1. Colleges or universities authorized by the laws of 18 Iowa or any other state or foreign country to grant degrees 19 A community college established under chapter 260C or an 20 institution of higher learning under the control of the state 21 board of regents . 22 2. Schools of nursing accredited by the board of nursing or 23 an equivalent public board of another state or foreign country 24 A public college or university created or authorized by the 25 laws of any other state to grant degrees, in which state the 26 college or university maintains its principal domicile and 27 from which the college or university receives public funds to 28 support the operating costs of the college or university . 29 3. Public schools A school district described in chapter 30 274 . 31 4. Private and nonprofit elementary or secondary schools 32 recognized by the department of education or a local the board 33 of directors of a school board district for the purpose of 34 complying with chapter 299 and employing certified teachers 35 -4- HF 644 (2) 89 kh/jh/md 4/ 12

H.F. 644 licensed under chapter 272 . 1 6. Schools and educational programs conducted by firms, 2 corporations, or persons for which no fee is charged to any 3 student or any other party who assumes the cost of education 4 on the student’s behalf . 5 Sec. 7. Section 714.19, subsection 8, Code 2021, is amended 6 by striking the subsection. 7 Sec. 8. Section 714.23, Code 2021, is amended to read as 8 follows: 9 714.23 Refund policies —— penalty. 10 1. a. For the purposes of this section and section 714.25 , 11 “postsecondary educational program” : 12 a. “Payment period” means the same as set forth in 34 C.F.R. 13 §668.4. 14 b. “Postsecondary educational program” means a series of 15 postsecondary educational courses that lead to a recognized 16 educational credential such as including but not limited to an 17 academic or professional degree, diploma, or license , or other 18 certification or designation, regardless of whether the school 19 awards the credential . 20 b. For the purposes of this section , “school period” 21 c. “Proprietary school” means a person offering a 22 postsecondary educational program, for profit. 23 d. “School period” means the course, term, payment period, 24 postsecondary educational program, or other period for which 25 the school assessed tuition charges to the student. A school 26 that assesses tuition charges to the student at the beginning 27 of each course, term, payment period, or other period that is 28 shorter than the postsecondary educational program’s length 29 shall base its tuition refund on the amount of tuition costs 30 the school charged for the course, term, or other period in 31 which the student terminated. A school shall not base its 32 tuition refund calculation on any portion of a postsecondary 33 educational program that remains after a student terminates 34 unless the student was charged for that remaining portion of 35 -5- HF 644 (2) 89 kh/jh/md 5/ 12

H.F. 644 the postsecondary educational program before the student’s 1 termination and the student began attendance in the school term 2 or course. 3 2. a. A proprietary school shall refund all tuition charges 4 to a student who withdraws within the first two calendar weeks 5 of instruction. 6 b. A person offering at least one postsecondary educational 7 program, for profit, that is more than four months in length 8 and leads to a recognized educational credential, proprietary 9 school shall make a pro rata refund of tuition charges to an 10 Iowa resident a student who terminates from any of the school’s 11 postsecondary educational programs or courses after the first 12 two calendar weeks in an amount that is not less than ninety 13 ninety-five percent of the amount of tuition charged to the 14 student multiplied by the ratio of the number of calendar days 15 remaining in the school period until the date equivalent to 16 the completion of sixty percent of the calendar days in the 17 school period to the total number of calendar days in the 18 school period until the date equivalent to the completion of 19 sixty percent of the calendar days in the school period . If 20 a terminating student has completed sixty percent or more 21 of a school period, the school offering the postsecondary 22 educational program is not required to refund tuition charges 23 to the student. 24 c. (1) A proprietary school as provided in subparagraph (2) 25 shall provide to a student who terminates after the first two 26 calendar weeks a refund of tuition charges in an amount that 27 is not less than ninety-five percent of the amount of tuition 28 charged to the student multiplied by the ratio of the remaining 29 number of calendar days in the school period to the total 30 number of calendar days in the school period. 31 (2) This paragraph “c” applies to a proprietary school 32 whose cohort default rate for students under the Stafford 33 loan program as reported by the United States department of 34 education for the most recent federal fiscal year is more than 35 -6- HF 644 (2) 89 kh/jh/md 6/ 12

H.F. 644 one hundred ten percent of the national average cohort default 1 rate of all schools for the same federal fiscal year or six 2 percent, whichever is higher. 3 3. Notwithstanding the provisions of subsection 2 , the 4 following tuition refund policy shall apply: 5 a. If a terminating student has completed sixty percent or 6 more of a school period, the person offering the postsecondary 7 educational program is not required to refund tuition charges 8 to the student. However, if, at any time, a student terminates 9 a postsecondary educational program due to the student’s 10 physical incapacity or, for a program that requires classroom 11 instruction, due to the transfer of the student’s spouse’s 12 employment to another city, the terminating student shall 13 receive a refund of tuition charges in an amount that equals 14 the amount of tuition charged to the student multiplied by the 15 ratio of the remaining number of calendar days in the school 16 period to the total number of calendar days in the school 17 period. 18 b. A school shall provide to a terminating student a 19 refund of tuition charges in an amount that is not less than 20 ninety percent of the amount of tuition charged to the student 21 multiplied by the ratio of the remaining number of calendar 22 days in the school period to the total number of calendar 23 days in the school period. This paragraph “b” applies to 24 those persons offering at least one postsecondary educational 25 program of more than four months in length, for profit, 26 whose cohort default rate for students under the Stafford 27 loan program as reported by the United States department of 28 education for the most recent federal fiscal year is more 29 than one hundred ten percent of the national average cohort 30 default rate of all schools for the same federal fiscal year 31 or six percent, whichever is higher. A proprietary school 32 that assesses tuition charges to the student at the beginning 33 of each course, term, payment period, or other period that is 34 shorter than the postsecondary educational program’s length 35 -7- HF 644 (2) 89 kh/jh/md 7/ 12

H.F. 644 shall base its tuition refund on the amount of tuition costs 1 the school charged for the course, term, or other period in 2 which the student terminated. A school shall not base its 3 tuition refund calculation on any portion of a postsecondary 4 educational program that remains after a student terminates 5 unless the student was charged for that remaining portion of 6 the postsecondary educational program before the student’s 7 termination and the student began attendance in the school term 8 or course. 9 4. Notwithstanding the provisions of subsection 2, 10 paragraphs “b” and “c” , if, at any time, a student terminates 11 a postsecondary educational program after the first two 12 calendar weeks due to the student’s physical incapacity or, 13 for a program that requires classroom instruction, due to the 14 transfer of the student’s spouse’s employment to another city, 15 the terminating student shall receive a refund of the tuition 16 charges in an amount that equals the amount of tuition charged 17 to the student multiplied by the ratio of the remaining number 18 of calendar days in the school period to the total number of 19 calendar days in the school period. 20 5. In the case of a program in which student progress is 21 measured only in clock hours, all occurrences of “calendar 22 days” in subsections 2 and 3 4 shall be replaced with 23 “scheduled clock hours”. 24 5. a. 6. A student who does not receive a tuition refund 25 up to the full refund of tuition charges due to the effect 26 of an interstate reciprocity agreement under section 261G.4, 27 subsection 1 , may apply to the attorney general for a refund 28 in a sum that represents the difference between any tuition 29 refund received from the school and the full refund of tuition 30 charges. For purposes of this subsection , “full refund of 31 tuition charges” means the monetary sum of the refund for which 32 the student would be eligible pursuant to the application of 33 this section . 34 b. 7. A tuition refund fund is created as a separate fund 35 -8- HF 644 (2) 89 kh/jh/md 8/ 12

H.F. 644 in the office of the treasurer of state under the control 1 of the attorney general. Moneys credited to the fund shall 2 include amounts appropriated by the general assembly and moneys 3 received as a result of a court order, judgment, or settlement 4 which specifically directs that moneys be used for the purpose 5 of providing student tuition refunds, or which authorizes the 6 attorney general to use moneys for any other purpose at the 7 discretion of the attorney general. All moneys credited to 8 the fund are appropriated and made available to the attorney 9 general for such purposes. For each fiscal year, the attorney 10 general may expend all moneys in the fund to provide tuition 11 refunds to eligible students. Notwithstanding section 8.33 , 12 any balance in the fund on June 30 of each fiscal year shall not 13 revert to the general fund of the state, but shall be available 14 for purposes of this subsection in subsequent fiscal years. 15 Notwithstanding section 12C.7 , interest or earnings on the 16 moneys in the fund shall be credited to the fund. 17 6. 8. A refund of tuition charges shall be provided to 18 the student within forty-five days following the date of the 19 school’s determination that a student has terminated from a 20 postsecondary educational program. 21 7. 9. A student who terminates a postsecondary educational 22 program shall not be charged any fee or other monetary penalty 23 for terminating the postsecondary educational program, other 24 than a reduction in tuition refund as specified in this 25 section . 26 10. A proprietary school shall apply the refund policy 27 it adopts in accordance with this section to all students 28 who attend on-campus classes or at instructional sites 29 in Iowa and to all Iowa resident students who attend the 30 school’s distance education programs. A proprietary school 31 offering instructional programs or courses under an interstate 32 reciprocity agreement entered into or recognized by the 33 commission under chapter 261G shall apply the policy it adopts 34 under this section to Iowa resident and nonresident students 35 -9- HF 644 (2) 89 kh/jh/md 9/ 12

H.F. 644 who attend distance education programs the school offers under 1 the interstate reciprocity agreement. 2 11. This section does not apply to any of the following: 3 a. Personal vehicle driving education schools. 4 b. Postsecondary vocational schools that offer solely 5 discrete continuing education courses. 6 c. A for-profit school that offers solely programs for which 7 the sum of tuition, fees, instructional materials, technology, 8 and other items required for program completion is less than 9 three thousand dollars. 10 8. 12. A violation of this section is a simple misdemeanor. 11 Sec. 9. Section 714.24, subsections 2, 5, and 7, Code 2021, 12 are amended to read as follows: 13 2. An entity that claims an exemption under section 14 714.19 must file an exemption claim with the commission. The 15 commission may approve or deny the exemption claim. Except 16 for a school that claims an exemption under section 714.19, 17 subsection 1, 2, 3, or 10 , a filing of a claim for an exemption 18 pursuant to section 714.19 must be completed at least once 19 every two years. 20 5. The commission may, at its discretion, require a A 21 proprietary school that must comply with section sections 22 714.23 to and 714.25 shall submit its tuition refund policy 23 documentation of compliance with sections 714.23 and 714.25 24 to the commission for its review and approval as part of the 25 evidence of financial responsibility filed pursuant to section 26 714.18 . 27 7. Except as provided in section 714.18, subsection 2 , 28 paragraph “a” , the information submitted under sections 714.18 , 29 714.19, 714.23 , and 714.25 are public records under chapter 22 . 30 Sec. 10. Section 714.25, Code 2021, is amended to read as 31 follows: 32 714.25 Disclosure. 33 1. For purposes of this section , “proprietary school” means 34 a person offering a postsecondary educational program, for 35 -10- HF 644 (2) 89 kh/jh/md 10/ 12

H.F. 644 profit, that is more than four months in length and leads to 1 a recognized educational credential, such as an academic or 2 professional degree, diploma, or license the same as defined in 3 section 714.23, subsection 1 . 4 2. A proprietary school shall, prior to the time a student 5 is obligated for payment of any moneys, inform the student , and 6 the college student aid commission , and in the case of a school 7 licensed under section 157.8 , the board of cosmetology arts 8 and sciences or in the case of a school licensed under section 9 158.7 , the board of barbering, of all of the following: 10 a. The current total cost of the postsecondary educational 11 program as charged by the proprietary school. 12 b. An estimate of any fees which that may be charged to the 13 student by others which would be required if the student is to 14 successfully complete the postsecondary educational program 15 and in order to obtain a recognized educational credential , 16 including but not limited to fees for examination or licensure . 17 c. The percentage of students who successfully complete 18 the postsecondary educational program , and the percentage who 19 terminate prior to completing the postsecondary educational 20 program , and the period of time upon which the proprietary 21 school has based these percentages. The reporting period shall 22 not be less than one year in length and shall not extend more 23 than five years into the past in accordance with paragraph “e” . 24 d. If claims are made by the proprietary school as to 25 successful placement of students in jobs upon completion of the 26 proprietary school’s postsecondary educational programs, the 27 proprietary school shall , in accordance with paragraph “e” , 28 provide the student with all of the following: 29 (1) The percentage of graduating students who were placed 30 in jobs in fields related to the postsecondary educational 31 programs. 32 (2) The percentage of graduating students who went on to 33 further education immediately upon graduation. 34 (3) The percentage of students who, ninety days after 35 -11- HF 644 (2) 89 kh/jh/md 11/ 12

H.F. 644 graduation, were without a job and had not gone on to further 1 education. 2 (4) The period of time upon which the reports required 3 by paragraphs “a” through “c” were based. The reporting 4 period shall not be less than one year in length and shall not 5 extend more than five years into the past method by which the 6 proprietary school collected and verified the validity of data 7 provided in accordance with this paragraph “d” . 8 e. Information provided by the proprietary school in 9 accordance with paragraph “c” and, if applicable, paragraph “d” , 10 shall include all of the following additional data: 11 (1) The applicable program name and the normal length of 12 time required to complete the program. 13 (2) The total number of students in the cohort for which 14 data is reported and the year in which the students began the 15 program. 16 (3) The percentages of students that met the conditions 17 described in paragraph “c” and, if applicable, paragraph “d” , by 18 the most recent ending date for program completion in each of 19 the school’s programs. 20 f. If claims are made by the proprietary school as to income 21 levels of students who have graduated and are working in fields 22 related to the proprietary school’s postsecondary educational 23 programs, the proprietary school shall inform the student of 24 the method used to derive such information. 25 3. The requirements of subsection 2 A proprietary school 26 that is initiating operation for the first time is exempt from 27 data reporting under subsection 2, paragraphs “c” and “d” , until 28 the school’s first biennial renewal application under section 29 714.24, subsection 5. 30 4. This section shall not apply to a any of the following: 31 a. A proprietary school that is eligible for federal student 32 financial aid under Tit. IV of the federal Higher Education Act 33 of 1965, as amended. 34 b. A person described in section 714.23, subsection 11. 35 -12- HF 644 (2) 89 kh/jh/md 12/ 12