HF 3495

as introduced - 86th Legislature (2009 - 2010) Posted on 03/08/2010 10:05am

A bill for an act
relating to higher education; authorizing data matching; modifying institution
eligibility; establishing award procedures; establishing scholarship priorities;
establishing powers and duties; providing for refunds; defining terms; making
technical corrections; amending Minnesota Statutes 2008, sections 136A.101,
subdivision 10; 136A.126, subdivision 1, by adding a subdivision; 136A.127,
subdivision 6, by adding subdivisions; 136A.15, subdivision 6; 136A.16,
subdivision 14; 136A.62, subdivision 3; 136A.645; 136A.646; 136A.65, by
adding a subdivision; 141.25, subdivisions 7, 13, by adding a subdivision;
141.251, subdivision 2; 141.28, subdivision 2; Minnesota Statutes 2009
Supplement, sections 136A.01, subdivision 2; 136A.101, subdivision 4;
136A.127, subdivisions 2, 4, 9; 299A.45, subdivision 1; proposing coding for
new law in Minnesota Statutes, chapter 136A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2009 Supplement, section 136A.01, subdivision 2,
is amended to read:

Subd. 2.

Responsibilities.

new text begin (a) new text end The Minnesota Office of Higher Education is
responsible for:

(1) necessary state level administration of financial aid programs, including
accounting, auditing, and disbursing state and federal financial aid funds, and reporting on
financial aid programs to the governor and the legislature;

(2) approval, registration, licensing, and financial aid eligibility of private collegiate
and career schools, under sections 136A.61 to 136A.71 and chapter 141;

(3) negotiating and administering reciprocity agreements;

(4) publishing and distributing financial aid information and materials, and other
information and materials under section 136A.87, to students and parents;

(5) collecting and maintaining student enrollment and financial aid data and
reporting data on students and postsecondary institutions to develop and implement a
process to measure and report on the effectiveness of postsecondary institutions;

(6) administering the federal programs that affect students and institutions on a
statewide basis; and

(7) prescribing policies, procedures, and rules under chapter 14 necessary to
administer the programs under its supervision.

new text begin (b) The office is authorized to match individual student data from the student record
enrollment database with individual student financial aid data collected and maintained
by the office in order to audit or evaluate federal or state supported education programs
as permitted by United States Code, title 20, section 1232g(b)(3), and Code of Federal
Regulations, title 34, section 99.35. The office shall conduct the study in a manner that
does not permit personal identification of parents or students by individuals other than
representatives of the office.
new text end

Sec. 2.

Minnesota Statutes 2009 Supplement, section 136A.101, subdivision 4, is
amended to read:

Subd. 4.

Eligible institution.

"Eligible institution" means deleted text begin a postsecondary
educational institution located in this state or in a state with which the office has entered
into a higher education reciprocity agreement on state student aid programs that (1) is
operated by this state or the Board of Regents of the University of Minnesota, or (2)
is operated privately and, as determined by the office, meets all of the following: (i)
maintains academic standards substantially equivalent to those of comparable institutions
operated in this state; (ii) is licensed or registered as a postsecondary institution by the
office or another state agency; and (iii) by July 1, 2013, is participating in the federal Pell
Grant program under Title IV of the Higher Education Act of 1965, as amended. deleted text end new text begin an
institution that meets the eligibility requirements under section 136A.103.
new text end

Sec. 3.

Minnesota Statutes 2008, section 136A.101, subdivision 10, is amended to read:

Subd. 10.

Satisfactory academic progress.

"Satisfactory academic progress"
means deleted text begin that: deleted text end new text begin the student is meeting satisfactory academic progress requirements used for
federal student financial aid programs, as defined under Code of Federal Regulations, title
34, sections 668.16(e), 668.32(f), and 668.34.
new text end

deleted text begin (1) by the end of a student's second academic year of attendance at an institution, the
student has at least a cumulative grade point average of C or its equivalent, or academic
standing consistent with the institution's graduation requirements; and
deleted text end

deleted text begin (2) by the end of the first term of the third and fourth academic year of attendance,
the student has a cumulative grade point average of at least a C or its equivalent.
deleted text end

Sec. 4.

new text begin [136A.103] INSTITUTION ELIGIBILITY REQUIREMENTS.
new text end

new text begin (a) An institution is eligible for purposes of state student aid if the institution is a
postsecondary educational institution located in this state or in a state with which the
office has entered into a higher education reciprocity agreement on state student aid
programs that:
new text end

new text begin (1) is operated by this state or the Board of Regents of the University of Minnesota;
or
new text end

new text begin (2) is operated privately and, as determined by the office, meets the requirements of
paragraph (b).
new text end

new text begin (b) A private institution must:
new text end

new text begin (1) maintain academic standards substantially equivalent to those of comparable
institutions operated in this state;
new text end

new text begin (2) be licensed or registered as a postsecondary institution by the office; and
new text end

new text begin (3)(i) by July 1, 2010, participate in the federal Pell Grant program under Title IV of
the Higher Education Act of 1965, as amended; or
new text end

new text begin (ii) if an institution was participating in state student aid programs as of June 30,
2010, and the institution does not participate in the federal Pell Grant program by June
30, 2010, the institution must require every student who enrolls to sign a disclosure form,
provided by the office, stating that the institution is not participating in the federal Pell
Grant program.
new text end

new text begin (c) An institution that offers only graduate-level degrees or graduate-level nondegree
programs, or that offers only degrees or programs that do not meet the required minimum
program length to participate in the federal Pell Grant program, is an eligible institution if
the institution is licensed or registered as a postsecondary institution by the office.
new text end

new text begin (d) An eligible institution under paragraph (b), clause (3), item (ii), that changes
ownership as defined in section 136A.63, subdivision 2, must participate in the federal
Pell Grant program within three calendar years of the ownership change to continue
eligibility. An institution may appeal for a one-year extension of eligibility if it has begun
but not completed the process of being eligible to participate in the Pell Grant program
within the required three years. The institution must appeal to the office, documenting
the reasons for the delay.
new text end

new text begin (e) An institution that loses its eligibility for the federal Pell Grant program is not an
eligible institution.
new text end

Sec. 5.

Minnesota Statutes 2008, section 136A.126, subdivision 1, is amended to read:

Subdivision 1.

Student eligibility.

The director of the Office of Higher Education
shall establish procedures for the distribution of scholarships to a Minnesota resident
student new text begin as defined under section 136A.101, subdivision 8, new text end who:

(1) is of one-fourth or more Indian ancestry;

(2) has applied for other existing state and federal scholarship and grant programs;

(3) new text begin is meeting satisfactory academic progress as defined under section 136A.101,
subdivision 10;
new text end

new text begin (4) is not in default, as defined by the office, of a federal or state student educational
loan;
new text end

new text begin (5) new text end if enrolled in an undergraduate program, is eligible or would be eligible to
receive a federal Pell Grant or a state grant based on the federal needs analysis and is
enrolled for nine semester credits per term or more, or the equivalent;

deleted text begin (4) deleted text end new text begin (6) new text end if enrolled in a graduate program, demonstrates a remaining financial need in
the award amount calculation and is enrolled, per term, on a half-time basis or more as
defined by the postsecondary institution; and

deleted text begin (5) deleted text end new text begin (7) new text end in the opinion of the director of the Office of Higher Education, based upon
postsecondary institution recommendations, has the capabilities to benefit from further
education.

Sec. 6.

Minnesota Statutes 2008, section 136A.126, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Awarding procedure. new text end

new text begin (a) Complete applications are ranked in order of
completion date. If there are multiple applications with identical completion dates, those
applications are further sorted by application receipt date.
new text end

new text begin (b) Awards are made to eligible students until the appropriation is expended.
new text end

new text begin (c) Once funds are committed, remaining applicants are placed on a waiting list
in order of application completion date.
new text end

Sec. 7.

Minnesota Statutes 2009 Supplement, section 136A.127, subdivision 2, is
amended to read:

Subd. 2.

Definition; qualifying program.

For the purposes of this section, a
"qualifying program" means a rigorous secondary school program of study defined by deleted text begin the
Department of Education under agreement with the Secretary of Education for the purposes
of determining eligibility for the federal Academic Competitiveness Grant Program under
Title IV of the Higher Education Act of 1965, as amended deleted text end new text begin the office with consultation
from the Department of Education and others, as needed new text end . If a qualifying program includes
a foreign language requirement, the foreign language requirement is waived for a student
whose first language is not English and who attains English language proficiency.

Sec. 8.

Minnesota Statutes 2009 Supplement, section 136A.127, subdivision 4, is
amended to read:

Subd. 4.

Student eligibility.

To be eligible to receive a scholarship under this
section, in addition to the requirements listed under section 136A.121, a student must:

(1) submit a Free Application for Federal Student Aid (FAFSA);

(2) complete a qualifying program in a high school or in a home-school setting
under section 120A.22, graduate from a Minnesota high school, and graduate with an
unweighted grade point average of 2.5 or higher;

(3) qualify for a federal Pell Grant or state grant under section 136A.121;

(4) be a United States citizen or eligible noncitizen, as defined in section 484 of the
Higher Education Act, United States Code, title 20, sections 1091 et seq., as amended,
and Code of Federal Regulations, title 34, section 668.33;

(5) new text begin meet satisfactory academic progress as defined under section 136A.101,
subdivision 10;
new text end

new text begin (6) new text end be a Minnesota resident, as defined in section 136A.101, subdivision 8; and

deleted text begin (6) deleted text end new text begin (7) new text end enroll full-time in a degree, diploma, or certificate program during the
academic year immediately following high school graduation at an eligible institution as
defined under section 136A.101, subdivision 4.

Sec. 9.

Minnesota Statutes 2008, section 136A.127, subdivision 6, is amended to read:

Subd. 6.

Application.

A student must complete and submit deleted text begin an deleted text end new text begin a complete new text end
application for the achieve scholarship. new text begin An institution may submit a complete application
for the achieve scholarship on behalf of a student enrolled at its institution using
procedures developed by the office. new text end

Sec. 10.

Minnesota Statutes 2008, section 136A.127, is amended by adding a
subdivision to read:

new text begin Subd. 6a. new text end

new text begin Complete application. new text end

new text begin A complete application for the achieve
scholarship includes:
new text end

new text begin (1) an achieve scholarship application; and
new text end

new text begin (2) documentation of the qualifying program.
new text end

Sec. 11.

Minnesota Statutes 2009 Supplement, section 136A.127, subdivision 9,
is amended to read:

Subd. 9.

Scholarship awards.

The amount of the scholarship is equal to the
maximum assigned student responsibility for a four-year program, as defined in section
136A.121, subdivision 5, minus the assigned family responsibility as defined in section
136A.101, subdivision 5a, multiplied by 0.50. The minimum scholarship is $1,200 per
academic year based on the institution's academic calendar and the student's continued
eligibility new text begin and available appropriations new text end . new text begin Awards are subject to student priority under
subdivision 9d. new text end The scholarship may be used to pay for qualifying expenses at eligible
institutions.

Sec. 12.

Minnesota Statutes 2008, section 136A.127, is amended by adding a
subdivision to read:

new text begin Subd. 9c. new text end

new text begin Insufficient appropriation. new text end

new text begin If the amount appropriated is determined by
the office to be insufficient to make full awards to applicants under subdivision 9, awards
may be reduced by one or more of the following:
new text end

new text begin (1) a percentage reduction in the maximum award;
new text end

new text begin (2) a dollar amount reduction in the minimum award; or
new text end

new text begin (3) adding a surcharge to the applicant's assigned family responsibility, as defined in
section 136A.101, subdivision 5a.
new text end

Sec. 13.

Minnesota Statutes 2008, section 136A.127, is amended by adding a
subdivision to read:

new text begin Subd. 9d. new text end

new text begin Student priority. new text end

new text begin Achieve scholarship awards must be made to students
with complete applications received as of August 31 of each respective fiscal year.
new text end

Sec. 14.

Minnesota Statutes 2008, section 136A.15, subdivision 6, is amended to read:

Subd. 6.

Eligible institution.

"Eligible institution" means deleted text begin a postsecondary
educational institution that (1) is operated or regulated by this state or the Board of Regents
of the University of Minnesota; (2) is operated publicly or privately in another state, is
approved by the United States Secretary of Education, and, as determined by the office,
maintains academic standards substantially equal to those of comparable institutions
operated in this state; (3) is licensed or registered as a postsecondary institution by the
office or another state agency; and (4) by July 1, 2011, is participating in the federal Pell
Grant program under Title IV of the Higher Education Act of 1965, as amended. It also
includes any institution chartered in a province. deleted text end new text begin an institution that meets the eligibility
requirements under section 136A.155.
new text end

Sec. 15.

new text begin [136A.155] ADDITIONAL INSTITUTION ELIGIBILITY
REQUIREMENTS.
new text end

new text begin An institution is eligible for purposes of sections 136A.15 to 136A.1702, if the
institution is a postsecondary educational institution that:
new text end

new text begin (1) meets the eligibility requirements under section 136A.103; or
new text end

new text begin (2) is operated publicly or privately in another state, is approved by the United States
Secretary of Education, and, as determined by the office, maintains academic standards
substantially equal to those of comparable institutions operated in this state.
new text end

Sec. 16.

Minnesota Statutes 2008, section 136A.16, subdivision 14, is amended to read:

Subd. 14.

Notes.

The office may sell at public or private sale, at the price or prices
determined by the office, any note or other instrument or obligation evidencing or securing
a loan made by the office or its predecessor, new text begin including new text end the Minnesota Higher Education
Coordinating Board new text begin and the Minnesota Higher Education Services Office new text end .

Sec. 17.

Minnesota Statutes 2008, section 136A.62, subdivision 3, is amended to read:

Subd. 3.

School.

"School" means:

(1) any partnership, company, firm, society, trust, association, corporation, or any
combination thereof, which (i) is, owns, or operates a private, nonprofit postsecondary
education institution; (ii) is, owns, or operates a private, for-profit postsecondary education
institution; or (iii) provides a postsecondary instructional program or course leading to a
degree whether or not for profit;

(2) any public new text begin or private new text end postsecondary educational institution located in another
state or country which offers or makes available to a Minnesota resident any course,
program or educational activity which does not require the leaving of the state for its
completion; or

(3) any individual, entity, or postsecondary institution located in another state
that contracts with any school located within the state of Minnesota for the purpose of
providing educational programs, training programs, or awarding postsecondary credits
or continuing education credits to Minnesota residents that may be applied to a degree
program.

Sec. 18.

Minnesota Statutes 2008, section 136A.645, is amended to read:

136A.645 SCHOOL CLOSURE.

new text begin (a) new text end When a school decides to cease postsecondary education operations, it must
cooperate with the office in assisting students to find alternative means to complete their
studies with a minimum of disruption, and inform the office of the following:

(1) the planned date for termination of postsecondary education operations;

(2) the planned date for the transfer of the student records;

(3) confirmation of the name and address of the organization to receive and hold
the student records; and

(4) the official at the organization receiving the student records who is designated to
provide official copies of records or transcripts upon request.

new text begin (b) new text end Upon notice from a school of its intention to cease operations, the office shall
notify the school of the date on which it must cease the enrollment of students and all
postsecondary educational operations.

new text begin (c) For the purposes of this section, a school is considered closed when the school:
new text end

new text begin (1) has an unscheduled nonemergency closure or cancellation of classes for more
than 24 hours without prior notice to the office;
new text end

new text begin (2) announces it is closed or closing; or
new text end

new text begin (3) files for bankruptcy.
new text end

Sec. 19.

Minnesota Statutes 2008, section 136A.646, is amended to read:

136A.646 ADDITIONAL SECURITY.

new text begin (a) new text end In the event any registered institution is notified by the United States Department
of Education that it has fallen below minimum financial standards and that its continued
participation in Title IV will be conditioned upon its satisfying either the Zone Alternative,
Code of Federal Regulations, title 34, section 668.175, paragraph (f), or a Letter of Credit
Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (c), the
institution shall provide a surety bond conditioned upon the faithful performance of all
contracts and agreements with students in a sum equal to the "letter of credit" required by
the United States Department of Education in the Letter of Credit Alternative, but in no
event shall such bond be less than $10,000 nor more than $250,000.

new text begin (b) In lieu of a bond, the applicant may deposit with the commissioner of finance:
new text end

new text begin (1) a sum equal to the amount of the required surety bond in cash; or
new text end

new text begin (2) securities, as may be legally purchased by savings banks or for trust funds, in an
aggregate market value equal to the amount of the required surety bond.
new text end

Sec. 20.

Minnesota Statutes 2008, section 136A.65, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Powers and duties. new text end

new text begin (a) The office has the following powers and duties:
new text end

new text begin (1) to negotiate and enter into interstate reciprocity agreements with similar agencies
in other states, if in the judgment of the office an agreement is or will be helpful in
effectuating the purposes of the Minnesota Private and Out-of-State Public Postsecondary
Education Act; and
new text end

new text begin (2) to grant conditional or provisional registration for periods of less than one year,
if in the judgment of the office correctable deficiencies exist at the time of application and
when refusal to register a school would adversely affect currently enrolled students.
new text end

new text begin (b) The office may, upon its own motion, and must, upon the verified complaint
in writing of any person setting forth fact which, if proved, would constitute grounds
for refusal or revocation of private institution registration, investigate the actions
of any applicant or any person or persons holding or claiming to be registered as a
private institution. However, before proceeding to a hearing on the question of whether
registration shall be refused, revoked, or suspended for any cause enumerated herein, the
office shall grant a reasonable time to the registered institution to correct the situation.
If within such time the situation is corrected and the school is in compliance with the
provisions of this private institution registration, no further action leading to refusal,
revocation, or suspension shall be taken.
new text end

Sec. 21.

Minnesota Statutes 2008, section 141.25, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Refunds. new text end

new text begin If a contract is deemed unenforceable under subdivision 2, a
school must refund tuition, fees, and other charges received from a student or on behalf
of a student within 30 days of receiving written notification and demand for refund from
the Minnesota Office of Higher Education.
new text end

Sec. 22.

Minnesota Statutes 2008, section 141.25, subdivision 7, is amended to read:

Subd. 7.

Minimum standards.

A license shall be issued if the office first
determines:

(1) that the applicant has a sound financial condition with sufficient resources
available to:

(i) meet the school's financial obligations;

(ii) refund all tuition and other charges, within a reasonable period of time, in the
event of dissolution of the school or in the event of any justifiable claims for refund against
the school by the student body;

(iii) provide adequate service to its students and prospective students; and

(iv) maintain and support the school;

(2) that the applicant has satisfactory facilities with sufficient tools and equipment
and the necessary number of work stations to prepare adequately the students currently
enrolled, and those proposed to be enrolled;

(3) that the applicant employs a sufficient number of qualified teaching personnel to
provide the educational programs contemplated;

(4) that the school has an organizational framework with administrative and
instructional personnel to provide the programs and services it intends to offer;

(5) that the premises and conditions under which the students work and study are
sanitary, healthful, and safe deleted text begin , according to modern standards deleted text end ;

(6) that the quality and content of each occupational course or program of study
provides education and adequate preparation to enrolled students for entry level positions
in the occupation for which prepared;

(7) that the living quarters which are owned, maintained, recommended, or approved
by the applicant for students are sanitary and safe;

(8) that the contract or enrollment agreement used by the school complies with
the provisions in section 141.265;

(9) that contracts and agreements do not contain a wage assignment provision or a
confession of judgment clause; and

(10) that there has been no adjudication of fraud or misrepresentation in any
criminal, civil, or administrative proceeding in any jurisdiction against the school or its
owner, officers, agents, or sponsoring organization.

Sec. 23.

Minnesota Statutes 2008, section 141.25, subdivision 13, is amended to read:

Subd. 13.

Schools licensed by another state agency or board.

A school required
to obtain a private career school license due to the use of "academy," "institute," "college,"
or "university" in its name new text begin or licensed for the purpose of participating in state financial aid
under chapter 136A, new text end and which is also licensed by another state agency or board shall be
required to satisfy only the requirements of subdivisions 3, clauses (1), (2), (3), (5), (7),
and (10); 4; 5, paragraph (b), clause (2); 7, clauses (1) and (10); 8; 9, clause (13); and 12.

Sec. 24.

Minnesota Statutes 2008, section 141.251, subdivision 2, is amended to read:

Subd. 2.

Conditions.

The office shall adopt rules establishing the conditions for
renewal of a license. The conditions shall permit two levels of renewal based on the record
of the school. A school that has demonstrated the quality of its program and operation
through longevity and performance in the state may renew its license based on a relaxed
standard of scrutiny. A school that has been in operation in Minnesota for a limited period
of time or that has not performed adequately on performance indicators shall renew its
license based on a strict standard of scrutiny. The office shall specify minimum longevity
standards and performance indicators that must be met before a school may be permitted
to operate under the relaxed standard of scrutiny. The performance indicators used in this
determination shall include, but not be limited to: deleted text begin degree granting status, deleted text end regional or
national accreditation, loan default rates, placement rate of graduates, student withdrawal
rates, audit results, student complaints, and school status with the United States
Department of Education. Schools that meet the requirements established in rule shall be
required to submit a full relicensure report once every four years, and in the interim years
will be exempt from the requirements of section 141.25, subdivision 3, clauses (4), (5),
and (8), and Minnesota Rules, parts 4880.1700, subpart 6; and 4880.2100, subpart 4.

Sec. 25.

Minnesota Statutes 2008, section 141.28, subdivision 2, is amended to read:

Subd. 2.

Unlawful designation.

No school organized after November 15, 1969,
shall apply to itself either as a part of its name or in any other manner the designation of
"college" or "university" deleted text begin unless such school applies for and receives certification from the
office that it meets appropriate standards and is entitled to such designation deleted text end . Operating
schools now using such designation may continue use thereof.

Sec. 26.

Minnesota Statutes 2009 Supplement, section 299A.45, subdivision 1, is
amended to read:

Subdivision 1.

Eligibility.

A person is eligible to receive educational benefits under
this section if the person:

(1) is certified under section 299A.44 and in compliance with this section and rules
of the commissioner of public safety and the Minnesota Office of Higher Education;

(2) is enrolled in an undergraduate degree or certificate program after June 30, 1990,
at an eligible Minnesota institution as provided in section 136A.101, subdivision 4;

(3) has not received a baccalaureate degree or been enrolled full time for deleted text begin nine deleted text end new text begin ten new text end
semesters or the equivalent, except that a student who withdraws from enrollment for
active military service is entitled to an additional semester or the equivalent of eligibility;
and

(4) is related in one of the following ways to a public safety officer killed in the
line of duty on or after January 1, 1973:

(i) as a dependent child less than 23 years of age;

(ii) as a surviving spouse; or

(iii) as a dependent child less than 30 years of age who has served on active military
duty 181 consecutive days or more and has been honorably discharged or released to the
dependent child's reserve or National Guard unit.