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Senate advances measure to require bonds and oversight for proprietary schools after closures left students out of pocket
Summary
Senate Bill 80 would require proprietary (for-profit) postsecondary schools seeking initial certification to provide specified information and a bond to protect advanced tuition; the measure passed to third reading after debate about whether the Board of Regents or an independent agency should administer oversight.
Senate Bill 80, a proposed amendment to the postsecondary proprietary-school certification process, passed the Senate on Jan. 19, 2000 to third reading after floor debate about program administration and consumer protections.
Sponsor explained the bill was a response to publicized failures of private proprietary schools that closed and left students unable to recover prepaid tuition. The measure requires initial applicants to submit specified information and post a bond to guarantee advanced tuition and certain fees. The sponsor said the Board of Regents had agreed to administer the certification and bond program; Senator Nielsen expressed concern about "playing on the other person's home team" and said he preferred a neutral, independent agency to avoid perceived conflicts. The sponsor replied that creating a new bureaucracy would be costly and that the Board of Regents already had working relationships with many of the schools.
The Senate voted to move SB 80 to third reading (announced as "24 aye votes, 1 nay, 4 being absent"); members said they would try to refine language before final passage, including specifying how bonds would be determined and whether bond amounts should equal advanced tuition or be scaled. Sponsor noted exemptions for already-qualified institutions such as the University of Phoenix.
The transcript records sponsor descriptions of bond mechanics and debate over administrative responsibility but does not include final certification language or bond schedules. The next step is further amendment and final Senate action before House consideration.
