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House File 644 - ReprintedA Bill ForAn Act 1relating to the registration of postsecondary schools
2with the college student aid commission, and to the
3postsecondary registration fund under the control of the
4commission.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 261B.8, subsection 3, Code 2021, is
2amended to read as follows:
33. A postsecondary registration fund is created in the state
4treasury under the control of the commission. Fees collected
5under this section and any other moneys approved by the
6commission shall be deposited in the postsecondary registration
7fund. Moneys in the fund are appropriated to the commission
8and shall be used by the commission to administer this
9chapter and chapter 261G for any of the purposes set forth in
10subsection 4. Notwithstanding section 8.33, moneys in the fund
11shall not revert to the general fund of the state at the end
12of a fiscal year. Notwithstanding section 12C.7, interest or
13earnings on moneys in the fund shall be credited to the fund.
14 Sec. 2. Section 261B.8, Code 2021, is amended by adding the
15following new subsection:
16 NEW SUBSECTION. 4. Moneys in the fund may be used for any
17of the following purposes:
18a. To administer this chapter and chapter 261G.
19b. To procure, evaluate, and store school records needed to
20establish the validity of claims against a school for failure
21to faithfully perform all contracts and agreements.
22c. To pay institutional charges on behalf of Iowans who
23enrolled at the school.
24d. To support an arrangement in which the school provides
25its current students with the opportunity to complete the
26students’ courses of study when the school closes, including
27any activities designed to facilitate the transition of such
28students to another postsecondary educational institution.
29e. To pay private educational loan debt incurred by Iowans
30for attendance at the school.
31f. To reimburse Iowans who enrolled at the school for other
32financial loss, as determined by the commission.
33g. For other purposes prescribed by rule by the commission.
34 Sec. 3. Section 714.18, subsection 1, unnumbered paragraph
351, Code 2021, is amended to read as follows:
-1- 1Except as otherwise provided in subsection 2 or 3, every
2 Every person, firm, association, or corporation maintaining
3or conducting in Iowa any educational course by classroom
4instruction or by correspondence or by other delivery method,
5or soliciting in Iowa the sale of such course, shall file with
6the college student aid commission, in a format prescribed by
7the commission, all of the following:
8 Sec. 4. Section 714.18, subsection 1, paragraph a, Code
92021, is amended to read as follows:
10a. A continuous corporate surety bond to the state of
11Iowa in the sum of fifty thousand dollars or ten percent
12of the total annual tuition determined in accordance with
13subsection 2, whichever is less, conditioned on the faithful
14performance of all contracts and agreements with students made
15by such person, firm, association, or corporation, or their
16salespersons; but the. The aggregate liability of the surety
17for all breaches of the conditions of the bond shall not exceed
18the sum of the bond. The surety on the bond may cancel the bond
19upon giving thirty days’ written notice to the college student
20aid commission and thereafter shall be relieved of liability
21for any breach of condition occurring after the effective date
22of the cancellation.
23 Sec. 5. Section 714.18, subsections 2, 3, 4, and 5, Code
242021, are amended to read as follows:
252. A school licensed under the provisions of section 157.8
26 or 158.7 shall file that files with the college student aid
27commission the following:
28a. (1) A a continuous corporate surety bond to the state
29of Iowa in the a sum of less than fifty thousand dollars or ten
30percent of the total annual tuition collected, whichever is
31less, conditioned on the faithful performance of all contracts
32and agreements with students made by such school. A school
33desiring to file a surety bond based on a percentage of annual
34tuition shall provide to the college student aid commission,
35in the form format prescribed by the commission, a notarized
-2-1statement attesting to the total amount of tuition collected
2 the school charged to students in the immediately preceding
3twelve-month period fiscal year. The commission shall
4determine the sufficiency of the statement and the amount of
5the bond or, as permitted under subsection 3, letter of credit.
6Tuition information submitted pursuant to this subparagraph
7 subsection shall be kept confidential.
8(2) If the school has filed a performance bond with an
9agency of the United States government pursuant to federal
10law, the college student aid commission shall reduce the bond
11required by this paragraph “a” by an amount equal to the amount
12of the federal bond.
13(3) The aggregate liability of the surety for all breaches
14of the conditions of the bond shall not exceed the sum of
15the bond. The surety on the bond may cancel the bond upon
16giving thirty days’ written notice to the college student aid
17commission and thereafter shall be relieved of liability for
18any breach of condition occurring after the effective date of
19the cancellation.
20(4) 3. a. The college student aid commission may accept a
21letter of credit issued by a state or federally chartered bank
22or credit union in lieu of and for the amount of the corporate
23surety bond required by subparagraphs (1) through (3), as
24applicable under subsection 2.
25b. The statement required in subsection 1, paragraph “b”.
26 For purposes of this chapter and chapter 261B, a letter of
27credit must meet all of the following conditions:
28(1) Be payable to the commission.
29(2) Be valid for a period of at least one year from the
30date of issuance and subject to renewal as required by the
31commission.
32(3) Allow the commission to draw one or multiple
33installments of the total letter of credit amount upon making
34the required presentations to the issuer.
35c. The materials required in subsection 1, paragraph “c” For
-3-1purposes of this section, “letter of credit” means a financial
2instrument subject to the provisions of chapter 554, article 5,
3with irrevocable terms and conditions that cannot be modified
4or canceled after issuance without the consent of all of the
5parties.
64. If a letter of credit accepted by the college student
7aid commission under subsection 3 is canceled, revoked, not
8renewed, or otherwise fails to be of full force and effect, the
9school shall comply with the provisions of subsection 2.
103. 5. This section shall not apply to the provision of
11an educational course of flight instruction under regulations
12promulgated by the federal aviation administration for which
13students do not pay tuition in advance of instruction and
14which students may cancel at any time with no further monetary
15obligation.
16 Sec. 6. Section 714.19, subsections 1, 2, 3, 4, and 6, Code
172021, are amended to read as follows:
181. Colleges or universities authorized by the laws of
19Iowa or any other state or foreign country to grant degrees
20 A community college established under chapter 260C or an
21institution of higher learning under the control of the state
22board of regents.
232. Schools of nursing accredited by the board of nursing or
24an equivalent public board of another state or foreign country
25 A public college or university created or authorized by the
26laws of any other state to grant degrees, in which state the
27college or university maintains its principal domicile and
28from which the college or university receives public funds to
29support the operating costs of the college or university.
303. Public schools A school district described in chapter
31274.
324. Private and nonprofit elementary or secondary schools
33recognized by the department of education or a local the board
34of directors of a school board district for the purpose of
35complying with chapter 299 and employing certified teachers
-4- 1licensed under chapter 272.
26. Schools and educational programs conducted by firms,
3corporations, or persons for which no fee is charged to any
4student or any other party who assumes the cost of education
5on the student’s behalf.
6 Sec. 7. Section 714.19, subsection 8, Code 2021, is amended
7by striking the subsection.
8 Sec. 8. Section 714.23, Code 2021, is amended to read as
9follows:
10714.23 Refund policies — penalty.
111. a. For the purposes of this section and section 714.25,
12“postsecondary educational program”:
13a. “Payment period” means the same as set forth in 34 C.F.R.
14§668.4.
15b. “Postsecondary educational program”means a series of
16postsecondary educational courses that lead to a recognized
17educational credential such as including but not limited to an
18academic or professional degree, diploma, or license, or other
19certification or designation, regardless of whether the school
20awards the credential.
21b. For the purposes of this section, “school period”
22c. “Proprietary school” means a person offering a
23postsecondary educational program, for profit.
24d. “School period”means the course, term, payment period,
25postsecondary educational program, or other period for which
26the school assessed tuition charges to the student. A school
27that assesses tuition charges to the student at the beginning
28of each course, term, payment period, or other period that is
29shorter than the postsecondary educational program’s length
30shall base its tuition refund on the amount of tuition costs
31the school charged for the course, term, or other period in
32which the student terminated. A school shall not base its
33tuition refund calculation on any portion of a postsecondary
34educational program that remains after a student terminates
35unless the student was charged for that remaining portion of
-5-1the postsecondary educational program before the student’s
2termination and the student began attendance in the school term
3or course.
42. a. A proprietary school shall refund all tuition charges
5to a student who withdraws within the first two calendar weeks
6of instruction.
7b. A person offering at least one postsecondary educational
8program, for profit, that is more than four months in length
9and leads to a recognized educational credential, proprietary
10school shall make a pro rata refund of tuition charges to an
11Iowa resident a student who terminates from any of the school’s
12postsecondary educational programs or courses after the first
13two calendar weeks in an amount that is not less than ninety
14 ninety-five percent of the amount of tuition charged to the
15student multiplied by the ratio of the number of calendar days
16remaining in the school period until the date equivalent to
17the completion of sixty percent of the calendar days in the
18school period to the total number of calendar days in the
19school period until the date equivalent to the completion of
20sixty percent of the calendar days in the school period. If
21a terminating student has completed sixty percent or more
22of a school period, the school offering the postsecondary
23educational program is not required to refund tuition charges
24to the student.
25c. (1) A proprietary school as provided in subparagraph (2)
26shall provide to a student who terminates after the first two
27calendar weeks a refund of tuition charges in an amount that
28is not less than ninety-five percent of the amount of tuition
29charged to the student multiplied by the ratio of the remaining
30number of calendar days in the school period to the total
31number of calendar days in the school period.
32(2) This paragraph “c” applies to a proprietary school
33whose cohort default rate for students under the Stafford
34loan program as reported by the United States department of
35education for the most recent federal fiscal year is more than
-6-1one hundred ten percent of the national average cohort default
2rate of all schools for the same federal fiscal year or six
3percent, whichever is higher.
43. Notwithstanding the provisions of subsection 2, the
5following tuition refund policy shall apply:
6a. If a terminating student has completed sixty percent or
7more of a school period, the person offering the postsecondary
8educational program is not required to refund tuition charges
9to the student. However, if, at any time, a student terminates
10a postsecondary educational program due to the student’s
11physical incapacity or, for a program that requires classroom
12instruction, due to the transfer of the student’s spouse’s
13employment to another city, the terminating student shall
14receive a refund of tuition charges in an amount that equals
15the amount of tuition charged to the student multiplied by the
16ratio of the remaining number of calendar days in the school
17period to the total number of calendar days in the school
18period.
19b. A school shall provide to a terminating student a
20refund of tuition charges in an amount that is not less than
21ninety percent of the amount of tuition charged to the student
22multiplied by the ratio of the remaining number of calendar
23days in the school period to the total number of calendar
24days in the school period. This paragraph “b” applies to
25those persons offering at least one postsecondary educational
26program of more than four months in length, for profit,
27whose cohort default rate for students under the Stafford
28loan program as reported by the United States department of
29education for the most recent federal fiscal year is more
30than one hundred ten percent of the national average cohort
31default rate of all schools for the same federal fiscal year
32or six percent, whichever is higher. A proprietary school
33that assesses tuition charges to the student at the beginning
34of each course, term, payment period, or other period that is
35shorter than the postsecondary educational program’s length
-7-1shall base its tuition refund on the amount of tuition costs
2the school charged for the course, term, or other period in
3which the student terminated. A school shall not base its
4tuition refund calculation on any portion of a postsecondary
5educational program that remains after a student terminates
6unless the student was charged for that remaining portion of
7the postsecondary educational program before the student’s
8termination and the student began attendance in the school term
9or course.
104. Notwithstanding the provisions of subsection 2,
11paragraphs “b” and “c”, if, at any time, a student terminates
12a postsecondary educational program after the first two
13calendar weeks due to the student’s physical incapacity or,
14for a program that requires classroom instruction, due to the
15transfer of the student’s spouse’s employment to another city,
16the terminating student shall receive a refund of the tuition
17charges in an amount that equals the amount of tuition charged
18to the student multiplied by the ratio of the remaining number
19of calendar days in the school period to the total number of
20calendar days in the school period.
215. In the case of a program in which student progress is
22measured only in clock hours, all occurrences of “calendar
23days” in subsections 2 and 3 4 shall be replaced with
24“scheduled clock hours”.
255. a. 6. A student who does not receive a tuition refund
26up to the full refund of tuition charges due to the effect
27of an interstate reciprocity agreement under section 261G.4,
28subsection 1, may apply to the attorney general for a refund
29in a sum that represents the difference between any tuition
30refund received from the school and the full refund of tuition
31charges. For purposes of this subsection, “full refund of
32tuition charges” means the monetary sum of the refund for which
33the student would be eligible pursuant to the application of
34this section.
35b. 7. A tuition refund fund is created as a separate fund
-8-1in the office of the treasurer of state under the control
2of the attorney general. Moneys credited to the fund shall
3include amounts appropriated by the general assembly and moneys
4received as a result of a court order, judgment, or settlement
5which specifically directs that moneys be used for the purpose
6of providing student tuition refunds, or which authorizes the
7attorney general to use moneys for any other purpose at the
8discretion of the attorney general. All moneys credited to
9the fund are appropriated and made available to the attorney
10general for such purposes. For each fiscal year, the attorney
11general may expend all moneys in the fund to provide tuition
12refunds to eligible students. Notwithstanding section 8.33,
13any balance in the fund on June 30 of each fiscal year shall not
14revert to the general fund of the state, but shall be available
15for purposes of this subsection in subsequent fiscal years.
16Notwithstanding section 12C.7, interest or earnings on the
17moneys in the fund shall be credited to the fund.
186. 8. A refund of tuition charges shall be provided to
19the student within forty-five days following the date of the
20school’s determination that a student has terminated from a
21postsecondary educational program.
227. 9. A student who terminates a postsecondary educational
23program shall not be charged any fee or other monetary penalty
24for terminating the postsecondary educational program, other
25than a reduction in tuition refund as specified in this
26section.
2710. A proprietary school shall apply the refund policy
28it adopts in accordance with this section to all students
29who attend on-campus classes or at instructional sites
30in Iowa and to all Iowa resident students who attend the
31school’s distance education programs. A proprietary school
32offering instructional programs or courses under an interstate
33reciprocity agreement entered into or recognized by the
34commission under chapter 261G shall apply the policy it adopts
35under this section to Iowa resident and nonresident students
-9-1who attend distance education programs the school offers under
2the interstate reciprocity agreement.
311. This section does not apply to any of the following:
4a. Personal vehicle driving education schools.
5b. Postsecondary vocational schools that offer solely
6discrete continuing education courses.
7c. A for-profit school that offers solely programs for which
8the sum of tuition, fees, instructional materials, technology,
9and other items required for program completion is less than
10three thousand dollars.
118. 12. A violation of this section is a simple misdemeanor.
12 Sec. 9. Section 714.24, subsections 2, 5, and 7, Code 2021,
13are amended to read as follows:
142. An entity that claims an exemption under section
15714.19 must file an exemption claim with the commission. The
16commission may approve or deny the exemption claim. Except
17for a school that claims an exemption under section 714.19,
18subsection 1, 2, 3, or 10, a filing of a claim for an exemption
19pursuant to section 714.19 must be completed at least once
20every two years.
215. The commission may, at its discretion, require a A
22 proprietary school that must comply with section sections
23 714.23 to and 714.25 shall submit its tuition refund policy
24 documentation of compliance with sections 714.23 and 714.25
25 to the commission for its review and approval as part of the
26evidence of financial responsibility filed pursuant to section
27714.18.
287. Except as provided in section 714.18, subsection 2,
29paragraph “a”, the information submitted under sections 714.18,
30714.19, 714.23, and 714.25 are public records under chapter 22.
31 Sec. 10. Section 714.25, Code 2021, is amended to read as
32follows:
33714.25 Disclosure.
341. For purposes of this section, “proprietary school” means
35a person offering a postsecondary educational program, for
-10-1profit, that is more than four months in length and leads to
2a recognized educational credential, such as an academic or
3professional degree, diploma, or license the same as defined in
4section 714.23, subsection 1.
52. A proprietary school shall, prior to the time a student
6is obligated for payment of any moneys, inform the student, and
7 the college student aid commission, and in the case of a school
8licensed under section 157.8, the board of cosmetology arts
9and sciences or in the case of a school licensed under section
10158.7, the board of barbering, of all of the following:
11a. The current total cost of the postsecondary educational
12program as charged by the proprietary school.
13b. An estimate of any fees which that may be charged to the
14student by others which would be required if the student is to
15successfully complete the postsecondary educational program
16and in order to obtain a recognized educational credential,
17including but not limited to fees for examination or licensure.
18c. The percentage of students who successfully complete
19the postsecondary educational program, and the percentage who
20terminate prior to completing the postsecondary educational
21program, and the period of time upon which the proprietary
22school has based these percentages. The reporting period shall
23not be less than one year in length and shall not extend more
24than five years into the past in accordance with paragraph “e”.
25d. If claims are made by the proprietary school as to
26successful placement of students in jobs upon completion of the
27proprietary school’s postsecondary educational programs, the
28proprietary school shall, in accordance with paragraph “e”,
29 provide the student with all of the following:
30(1) The percentage of graduating students who were placed
31in jobs in fields related to the postsecondary educational
32programs.
33(2) The percentage of graduating students who went on to
34further education immediately upon graduation.
35(3) The percentage of students who, ninety days after
-11-1graduation, were without a job and had not gone on to further
2education.
3(4) The period of time upon which the reports required
4by paragraphs “a” through “c” were based. The reporting
5period shall not be less than one year in length and shall not
6extend more than five years into the past method by which the
7proprietary school collected and verified the validity of data
8provided in accordance with this paragraph “d”.
9e. Information provided by the proprietary school in
10accordance with paragraph “c” and, if applicable, paragraph “d”,
11shall include all of the following additional data:
12(1) The applicable program name and the normal length of
13time required to complete the program.
14(2) The total number of students in the cohort for which
15data is reported and the year in which the students began the
16program.
17(3) The percentages of students that met the conditions
18described in paragraph “c” and, if applicable, paragraph “d”, by
19the most recent ending date for program completion in each of
20the school’s programs.
21f. If claims are made by the proprietary school as to income
22levels of students who have graduated and are working in fields
23related to the proprietary school’s postsecondary educational
24programs, the proprietary school shall inform the student of
25the method used to derive such information.
263. The requirements of subsection 2 A proprietary school
27that is initiating operation for the first time is exempt from
28data reporting under subsection 2, paragraphs “c” and “d”, until
29the school’s first biennial renewal application under section
30714.24, subsection 5.
314. This sectionshall not apply to a any of the following:
32a. Aproprietary school that is eligible for federal student
33financial aid under Tit.IV of the federal Higher Education Act
34of 1965, as amended.
35b. A person described in section 714.23, subsection 11.
-12-kh/jh/md
2with the college student aid commission, and to the
3postsecondary registration fund under the control of the
4commission.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 261B.8, subsection 3, Code 2021, is
2amended to read as follows:
33. A postsecondary registration fund is created in the state
4treasury under the control of the commission. Fees collected
5under this section and any other moneys approved by the
6commission shall be deposited in the postsecondary registration
7fund. Moneys in the fund are appropriated to the commission
8and shall be used by the commission to administer this
9chapter and chapter 261G for any of the purposes set forth in
10subsection 4. Notwithstanding section 8.33, moneys in the fund
11shall not revert to the general fund of the state at the end
12of a fiscal year. Notwithstanding section 12C.7, interest or
13earnings on moneys in the fund shall be credited to the fund.
14 Sec. 2. Section 261B.8, Code 2021, is amended by adding the
15following new subsection:
16 NEW SUBSECTION. 4. Moneys in the fund may be used for any
17of the following purposes:
18a. To administer this chapter and chapter 261G.
19b. To procure, evaluate, and store school records needed to
20establish the validity of claims against a school for failure
21to faithfully perform all contracts and agreements.
22c. To pay institutional charges on behalf of Iowans who
23enrolled at the school.
24d. To support an arrangement in which the school provides
25its current students with the opportunity to complete the
26students’ courses of study when the school closes, including
27any activities designed to facilitate the transition of such
28students to another postsecondary educational institution.
29e. To pay private educational loan debt incurred by Iowans
30for attendance at the school.
31f. To reimburse Iowans who enrolled at the school for other
32financial loss, as determined by the commission.
33g. For other purposes prescribed by rule by the commission.
34 Sec. 3. Section 714.18, subsection 1, unnumbered paragraph
351, Code 2021, is amended to read as follows:
-1- 1Except as otherwise provided in subsection 2 or 3, every
2 Every person, firm, association, or corporation maintaining
3or conducting in Iowa any educational course by classroom
4instruction or by correspondence or by other delivery method,
5or soliciting in Iowa the sale of such course, shall file with
6the college student aid commission, in a format prescribed by
7the commission, all of the following:
8 Sec. 4. Section 714.18, subsection 1, paragraph a, Code
92021, is amended to read as follows:
10a. A continuous corporate surety bond to the state of
11Iowa in the sum of fifty thousand dollars or ten percent
12of the total annual tuition determined in accordance with
13subsection 2, whichever is less, conditioned on the faithful
14performance of all contracts and agreements with students made
15by such person, firm, association, or corporation, or their
16salespersons; but the. The aggregate liability of the surety
17for all breaches of the conditions of the bond shall not exceed
18the sum of the bond. The surety on the bond may cancel the bond
19upon giving thirty days’ written notice to the college student
20aid commission and thereafter shall be relieved of liability
21for any breach of condition occurring after the effective date
22of the cancellation.
23 Sec. 5. Section 714.18, subsections 2, 3, 4, and 5, Code
242021, are amended to read as follows:
252. A school licensed under the provisions of section 157.8
26 or 158.7 shall file that files with the college student aid
27commission the following:
28a. (1) A a continuous corporate surety bond to the state
29of Iowa in the a sum of less than fifty thousand dollars or ten
30percent of the total annual tuition collected, whichever is
31less, conditioned on the faithful performance of all contracts
32and agreements with students made by such school. A school
33desiring to file a surety bond based on a percentage of annual
34tuition shall provide to the college student aid commission,
35in the form format prescribed by the commission, a notarized
-2-1statement attesting to the total amount of tuition collected
2 the school charged to students in the immediately preceding
3twelve-month period fiscal year. The commission shall
4determine the sufficiency of the statement and the amount of
5the bond or, as permitted under subsection 3, letter of credit.
6Tuition information submitted pursuant to this subparagraph
7 subsection shall be kept confidential.
8(2) If the school has filed a performance bond with an
9agency of the United States government pursuant to federal
10law, the college student aid commission shall reduce the bond
11required by this paragraph “a” by an amount equal to the amount
12of the federal bond.
13(3) The aggregate liability of the surety for all breaches
14of the conditions of the bond shall not exceed the sum of
15the bond. The surety on the bond may cancel the bond upon
16giving thirty days’ written notice to the college student aid
17commission and thereafter shall be relieved of liability for
18any breach of condition occurring after the effective date of
19the cancellation.
20(4) 3. a. The college student aid commission may accept a
21letter of credit issued by a state or federally chartered bank
22or credit union in lieu of and for the amount of the corporate
23surety bond required by subparagraphs (1) through (3), as
24applicable under subsection 2.
25b. The statement required in subsection 1, paragraph “b”.
26 For purposes of this chapter and chapter 261B, a letter of
27credit must meet all of the following conditions:
28(1) Be payable to the commission.
29(2) Be valid for a period of at least one year from the
30date of issuance and subject to renewal as required by the
31commission.
32(3) Allow the commission to draw one or multiple
33installments of the total letter of credit amount upon making
34the required presentations to the issuer.
35c. The materials required in subsection 1, paragraph “c” For
-3-1purposes of this section, “letter of credit” means a financial
2instrument subject to the provisions of chapter 554, article 5,
3with irrevocable terms and conditions that cannot be modified
4or canceled after issuance without the consent of all of the
5parties.
64. If a letter of credit accepted by the college student
7aid commission under subsection 3 is canceled, revoked, not
8renewed, or otherwise fails to be of full force and effect, the
9school shall comply with the provisions of subsection 2.
103. 5. This section shall not apply to the provision of
11an educational course of flight instruction under regulations
12promulgated by the federal aviation administration for which
13students do not pay tuition in advance of instruction and
14which students may cancel at any time with no further monetary
15obligation.
16 Sec. 6. Section 714.19, subsections 1, 2, 3, 4, and 6, Code
172021, are amended to read as follows:
181. Colleges or universities authorized by the laws of
19Iowa or any other state or foreign country to grant degrees
20 A community college established under chapter 260C or an
21institution of higher learning under the control of the state
22board of regents.
232. Schools of nursing accredited by the board of nursing or
24an equivalent public board of another state or foreign country
25 A public college or university created or authorized by the
26laws of any other state to grant degrees, in which state the
27college or university maintains its principal domicile and
28from which the college or university receives public funds to
29support the operating costs of the college or university.
303. Public schools A school district described in chapter
31274.
324. Private and nonprofit elementary or secondary schools
33recognized by the department of education or a local the board
34of directors of a school board district for the purpose of
35complying with chapter 299 and employing certified teachers
-4- 1licensed under chapter 272.
26. Schools and educational programs conducted by firms,
3corporations, or persons for which no fee is charged to any
4student or any other party who assumes the cost of education
5on the student’s behalf.
6 Sec. 7. Section 714.19, subsection 8, Code 2021, is amended
7by striking the subsection.
8 Sec. 8. Section 714.23, Code 2021, is amended to read as
9follows:
10714.23 Refund policies — penalty.
111. a. For the purposes of this section and section 714.25,
12“postsecondary educational program”:
13a. “Payment period” means the same as set forth in 34 C.F.R.
14§668.4.
15b. “Postsecondary educational program”means a series of
16postsecondary educational courses that lead to a recognized
17educational credential such as including but not limited to an
18academic or professional degree, diploma, or license, or other
19certification or designation, regardless of whether the school
20awards the credential.
21b. For the purposes of this section, “school period”
22c. “Proprietary school” means a person offering a
23postsecondary educational program, for profit.
24d. “School period”means the course, term, payment period,
25postsecondary educational program, or other period for which
26the school assessed tuition charges to the student. A school
27that assesses tuition charges to the student at the beginning
28of each course, term, payment period, or other period that is
29shorter than the postsecondary educational program’s length
30shall base its tuition refund on the amount of tuition costs
31the school charged for the course, term, or other period in
32which the student terminated. A school shall not base its
33tuition refund calculation on any portion of a postsecondary
34educational program that remains after a student terminates
35unless the student was charged for that remaining portion of
-5-1the postsecondary educational program before the student’s
2termination and the student began attendance in the school term
3or course.
42. a. A proprietary school shall refund all tuition charges
5to a student who withdraws within the first two calendar weeks
6of instruction.
7b. A person offering at least one postsecondary educational
8program, for profit, that is more than four months in length
9and leads to a recognized educational credential, proprietary
10school shall make a pro rata refund of tuition charges to an
11Iowa resident a student who terminates from any of the school’s
12postsecondary educational programs or courses after the first
13two calendar weeks in an amount that is not less than ninety
14 ninety-five percent of the amount of tuition charged to the
15student multiplied by the ratio of the number of calendar days
16remaining in the school period until the date equivalent to
17the completion of sixty percent of the calendar days in the
18school period to the total number of calendar days in the
19school period until the date equivalent to the completion of
20sixty percent of the calendar days in the school period. If
21a terminating student has completed sixty percent or more
22of a school period, the school offering the postsecondary
23educational program is not required to refund tuition charges
24to the student.
25c. (1) A proprietary school as provided in subparagraph (2)
26shall provide to a student who terminates after the first two
27calendar weeks a refund of tuition charges in an amount that
28is not less than ninety-five percent of the amount of tuition
29charged to the student multiplied by the ratio of the remaining
30number of calendar days in the school period to the total
31number of calendar days in the school period.
32(2) This paragraph “c” applies to a proprietary school
33whose cohort default rate for students under the Stafford
34loan program as reported by the United States department of
35education for the most recent federal fiscal year is more than
-6-1one hundred ten percent of the national average cohort default
2rate of all schools for the same federal fiscal year or six
3percent, whichever is higher.
43. Notwithstanding the provisions of subsection 2, the
5following tuition refund policy shall apply:
6a. If a terminating student has completed sixty percent or
7more of a school period, the person offering the postsecondary
8educational program is not required to refund tuition charges
9to the student. However, if, at any time, a student terminates
10a postsecondary educational program due to the student’s
11physical incapacity or, for a program that requires classroom
12instruction, due to the transfer of the student’s spouse’s
13employment to another city, the terminating student shall
14receive a refund of tuition charges in an amount that equals
15the amount of tuition charged to the student multiplied by the
16ratio of the remaining number of calendar days in the school
17period to the total number of calendar days in the school
18period.
19b. A school shall provide to a terminating student a
20refund of tuition charges in an amount that is not less than
21ninety percent of the amount of tuition charged to the student
22multiplied by the ratio of the remaining number of calendar
23days in the school period to the total number of calendar
24days in the school period. This paragraph “b” applies to
25those persons offering at least one postsecondary educational
26program of more than four months in length, for profit,
27whose cohort default rate for students under the Stafford
28loan program as reported by the United States department of
29education for the most recent federal fiscal year is more
30than one hundred ten percent of the national average cohort
31default rate of all schools for the same federal fiscal year
32or six percent, whichever is higher. A proprietary school
33that assesses tuition charges to the student at the beginning
34of each course, term, payment period, or other period that is
35shorter than the postsecondary educational program’s length
-7-1shall base its tuition refund on the amount of tuition costs
2the school charged for the course, term, or other period in
3which the student terminated. A school shall not base its
4tuition refund calculation on any portion of a postsecondary
5educational program that remains after a student terminates
6unless the student was charged for that remaining portion of
7the postsecondary educational program before the student’s
8termination and the student began attendance in the school term
9or course.
104. Notwithstanding the provisions of subsection 2,
11paragraphs “b” and “c”, if, at any time, a student terminates
12a postsecondary educational program after the first two
13calendar weeks due to the student’s physical incapacity or,
14for a program that requires classroom instruction, due to the
15transfer of the student’s spouse’s employment to another city,
16the terminating student shall receive a refund of the tuition
17charges in an amount that equals the amount of tuition charged
18to the student multiplied by the ratio of the remaining number
19of calendar days in the school period to the total number of
20calendar days in the school period.
215. In the case of a program in which student progress is
22measured only in clock hours, all occurrences of “calendar
23days” in subsections 2 and 3 4 shall be replaced with
24“scheduled clock hours”.
255. a. 6. A student who does not receive a tuition refund
26up to the full refund of tuition charges due to the effect
27of an interstate reciprocity agreement under section 261G.4,
28subsection 1, may apply to the attorney general for a refund
29in a sum that represents the difference between any tuition
30refund received from the school and the full refund of tuition
31charges. For purposes of this subsection, “full refund of
32tuition charges” means the monetary sum of the refund for which
33the student would be eligible pursuant to the application of
34this section.
35b. 7. A tuition refund fund is created as a separate fund
-8-1in the office of the treasurer of state under the control
2of the attorney general. Moneys credited to the fund shall
3include amounts appropriated by the general assembly and moneys
4received as a result of a court order, judgment, or settlement
5which specifically directs that moneys be used for the purpose
6of providing student tuition refunds, or which authorizes the
7attorney general to use moneys for any other purpose at the
8discretion of the attorney general. All moneys credited to
9the fund are appropriated and made available to the attorney
10general for such purposes. For each fiscal year, the attorney
11general may expend all moneys in the fund to provide tuition
12refunds to eligible students. Notwithstanding section 8.33,
13any balance in the fund on June 30 of each fiscal year shall not
14revert to the general fund of the state, but shall be available
15for purposes of this subsection in subsequent fiscal years.
16Notwithstanding section 12C.7, interest or earnings on the
17moneys in the fund shall be credited to the fund.
186. 8. A refund of tuition charges shall be provided to
19the student within forty-five days following the date of the
20school’s determination that a student has terminated from a
21postsecondary educational program.
227. 9. A student who terminates a postsecondary educational
23program shall not be charged any fee or other monetary penalty
24for terminating the postsecondary educational program, other
25than a reduction in tuition refund as specified in this
26section.
2710. A proprietary school shall apply the refund policy
28it adopts in accordance with this section to all students
29who attend on-campus classes or at instructional sites
30in Iowa and to all Iowa resident students who attend the
31school’s distance education programs. A proprietary school
32offering instructional programs or courses under an interstate
33reciprocity agreement entered into or recognized by the
34commission under chapter 261G shall apply the policy it adopts
35under this section to Iowa resident and nonresident students
-9-1who attend distance education programs the school offers under
2the interstate reciprocity agreement.
311. This section does not apply to any of the following:
4a. Personal vehicle driving education schools.
5b. Postsecondary vocational schools that offer solely
6discrete continuing education courses.
7c. A for-profit school that offers solely programs for which
8the sum of tuition, fees, instructional materials, technology,
9and other items required for program completion is less than
10three thousand dollars.
118. 12. A violation of this section is a simple misdemeanor.
12 Sec. 9. Section 714.24, subsections 2, 5, and 7, Code 2021,
13are amended to read as follows:
142. An entity that claims an exemption under section
15714.19 must file an exemption claim with the commission. The
16commission may approve or deny the exemption claim. Except
17for a school that claims an exemption under section 714.19,
18subsection 1, 2, 3, or 10, a filing of a claim for an exemption
19pursuant to section 714.19 must be completed at least once
20every two years.
215. The commission may, at its discretion, require a A
22 proprietary school that must comply with section sections
23 714.23 to and 714.25 shall submit its tuition refund policy
24 documentation of compliance with sections 714.23 and 714.25
25 to the commission for its review and approval as part of the
26evidence of financial responsibility filed pursuant to section
27714.18.
287. Except as provided in section 714.18, subsection 2,
29paragraph “a”, the information submitted under sections 714.18,
30714.19, 714.23, and 714.25 are public records under chapter 22.
31 Sec. 10. Section 714.25, Code 2021, is amended to read as
32follows:
33714.25 Disclosure.
341. For purposes of this section, “proprietary school” means
35a person offering a postsecondary educational program, for
-10-1profit, that is more than four months in length and leads to
2a recognized educational credential, such as an academic or
3professional degree, diploma, or license the same as defined in
4section 714.23, subsection 1.
52. A proprietary school shall, prior to the time a student
6is obligated for payment of any moneys, inform the student, and
7 the college student aid commission, and in the case of a school
8licensed under section 157.8, the board of cosmetology arts
9and sciences or in the case of a school licensed under section
10158.7, the board of barbering, of all of the following:
11a. The current total cost of the postsecondary educational
12program as charged by the proprietary school.
13b. An estimate of any fees which that may be charged to the
14student by others which would be required if the student is to
15successfully complete the postsecondary educational program
16and in order to obtain a recognized educational credential,
17including but not limited to fees for examination or licensure.
18c. The percentage of students who successfully complete
19the postsecondary educational program, and the percentage who
20terminate prior to completing the postsecondary educational
21program, and the period of time upon which the proprietary
22school has based these percentages. The reporting period shall
23not be less than one year in length and shall not extend more
24than five years into the past in accordance with paragraph “e”.
25d. If claims are made by the proprietary school as to
26successful placement of students in jobs upon completion of the
27proprietary school’s postsecondary educational programs, the
28proprietary school shall, in accordance with paragraph “e”,
29 provide the student with all of the following:
30(1) The percentage of graduating students who were placed
31in jobs in fields related to the postsecondary educational
32programs.
33(2) The percentage of graduating students who went on to
34further education immediately upon graduation.
35(3) The percentage of students who, ninety days after
-11-1graduation, were without a job and had not gone on to further
2education.
3(4) The period of time upon which the reports required
4by paragraphs “a” through “c” were based. The reporting
5period shall not be less than one year in length and shall not
6extend more than five years into the past method by which the
7proprietary school collected and verified the validity of data
8provided in accordance with this paragraph “d”.
9e. Information provided by the proprietary school in
10accordance with paragraph “c” and, if applicable, paragraph “d”,
11shall include all of the following additional data:
12(1) The applicable program name and the normal length of
13time required to complete the program.
14(2) The total number of students in the cohort for which
15data is reported and the year in which the students began the
16program.
17(3) The percentages of students that met the conditions
18described in paragraph “c” and, if applicable, paragraph “d”, by
19the most recent ending date for program completion in each of
20the school’s programs.
21f. If claims are made by the proprietary school as to income
22levels of students who have graduated and are working in fields
23related to the proprietary school’s postsecondary educational
24programs, the proprietary school shall inform the student of
25the method used to derive such information.
263. The requirements of subsection 2 A proprietary school
27that is initiating operation for the first time is exempt from
28data reporting under subsection 2, paragraphs “c” and “d”, until
29the school’s first biennial renewal application under section
30714.24, subsection 5.
314. This sectionshall not apply to a any of the following:
32a. Aproprietary school that is eligible for federal student
33financial aid under Tit.IV of the federal Higher Education Act
34of 1965, as amended.
35b. A person described in section 714.23, subsection 11.
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