ARIZONA STATE LEGISLATURE
Senate Higher Education and House of Representatives Universities, Community Colleges and Technology Committee of Reference for the Sunset Hearing of the Arizona State Board for Private Postsecondary Education
Minutes of the Meeting
Tuesday, November 29, 2005
2:30 p.m., House Hearing Room 5
Members Present:
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Senator Linda Gray, Chairman |
Representative Laura Knaperek, Chairman |
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Senator Jake Flake |
Representative Andy Biggs |
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Senator Albert Hale |
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Senator Victor Soltero |
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Senator Thayer Verschoor |
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Members Absent:
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Representative John Allen |
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Representative David Bradley |
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Representative Ted Downing |
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Staff:
Brian Lockery, House Education Analyst
Dawn Nazary, Senate Education Analyst
Representative Knaperek called the meeting to order at 2:40 p.m. and the attendance was taken.
Presentation by the Arizona State Board for Private Postsecondary Education by Teri Candelaria, Executive Director
Teri Candelaria, Executive Director, Arizona State Board for Private Postsecondary Education, presented an overview of the Arizona State Board for Private Postsecondary Education, referring to a handout entitled “FACT SHEET – FY 6/30/05” (Attachment A).
The Board was initially established by the Legislature in 1970 to license and regulate the private institutions that offer vocational programs.
In 1985 the statutes were amended to include the private institutions that offer degree granting programs and in 1989 the Board established the Student Tuition Recovery Fund.
The mission of the Board is to protect the public health, safety and welfare by licensing and regulating private postsecondary educational institutions and providing services to their students.
The goals of the Board are to ensure legal operations, ethical practices and quality education by maintaining effective and efficient regulation of the private postsecondary educational institutions through the establishment of licensure requirements, assessing institutional compliance with federal and state regulations and the accrediting bodies, investigating and taking action on complaints, administering the Student Tuition Recovery Fund, which provides financial restitution to students who attended an institution that closed, and maintaining and providing the student educational records.
Today the Board licenses and regulates approximately 160 private institutions operating vocational and degree programs. These private universities and colleges annually serve over 200,000 students and for Fiscal Year 2004 generated over $1.8 billion in tuition revenue.
The programs offered by the institutions range from bartending to a PH degree in the fields of automotive, business, health, nursing, information technology, and many others. Also, in the last two years the Board licensed Arizona’s first private law school and a school that offers a Doctorate of Dental Medicine.
The Board has two primary programs, Licensing and Regulation and the Student Tuition Recovery Fund.
The purpose of the Licensing and Regulation Program is for the Board to act on license applications, determine compliance, investigate complaints and violations, and take disciplinary action.
The Student Tuition Recovery Fund is a fund of approximately $500,000. Through this program the Board will take possession of students’ educational records in order to provide them access to their records. The Fund will also provide financial restitution to students who are currently enrolled at the time of a school closure and are unable to transfer to another institution.
Last year the Board licensed 10 new schools, approved 154 license renewals, 113 new programs, six changes of ownership, 10 changes of location, investigated 36 student and consumer complaints, conducted 32 inspections, and serviced over 1400 student record requests.
Each license application contains 20 items that must be reviewed and approved by staff and then the full State Board. Some of these items include a CPA prepared financial statement, certificates of insurance, a surety bond, status of accreditation, in depth program information, student materials which include the enrolled agreement and a catalog with a fair and equitable refund policy, facility equipment and administration and faculty.
On average, it takes approximately three to five months to process a new application. Upon licensure, each school is required to submit for renewal annually. During this cycle each school must provide current information for review to determine ongoing compliance. Renewals are divided into four quarterly cycles and renewal fees are determined by the gross tuition revenues ranging from a minimum of $600 to a maximum of $2,300.
In regards to the Student Tuition Recovery Fund, during Fiscal Year 2003, the Board paid back $234,000 to 26 students who attended schools that closed. The Board, at this time, has recovered $134,000 from the surety bond and $100,000 is still in the due process legal system.
The Board serves approximately 1,400 student record requests. This is done in order to provide students their transcripts so they can continue their education or for employment verification.
Currently, the Board has over 7,000 boxes of student records. The records are maintained for a maximum of 25 years after the school closure, a service not provided by every state.
The Board staff is currently comprised of the Executive Director, an Investigator, a Program Project Specialist, and an Administrative Assistant. The Board also has legal representation from the Attorney General’s Office.
Representative Knaperek asked Ms. Candelaria to introduce any staff that was in attendance. Ms. Candelaria stated the Board’s Investigator, Keith Blanchard, was in attendance and she introduced him.
The Board consists of seven members, appointed by the Governor to four year terms and does require Senate confirmation. The membership is comprised of two members who represent institutions offering vocational programs, one member representing an institution offering an associate program, two members representing institutions that offer baccalaureate or higher programs, and two public members.
The Board holds at least eight meetings per year and the Finance and Complaint Subcommittees hold approximately three to four meetings per year.
The Finance Committee is responsible for the review of the financial stability of licensees and prospective licensees and may require those to submit to quarterly ongoing monitoring as well as require them to post higher surety bonds.
The Complaint Committee is responsible for reviewing staffs’ investigations and conducting an informal interview of the matter and to determine if the complaint provides reasonable grounds to indicate that the licensee violated statute rule and to take appropriate action.
The Board is a 90-10 agency, collecting their fees from the private postsecondary institutions, keeping 90% and giving 10% to the General Fund.
The Student Tuition Recovery Fund is a non-appropriated fund and has a minimum of $500,000. If the Board goes below $500,000 it will assess the institutions annually.
Through their website and public record requests, the Board will provide information to the public regarding licensed schools and programs, the meaning of accreditation and which licensed schools are accredited, student financial aid information, Student Tuition Recovery Fund claims, Grievance Procedures and how to file student complaints, locating records in other states, and how to order student records in Arizona.
The Board works in partnership with other City, State, and Federal agencies to provide consumer protection and quality education.
Throughout the country, licensing boards in each state are a member of what is called the Triad, in terms of oversight for the federal student aid programs. The other Triad members are the United States Department of Education and the accrediting agencies. All of the members of the Triad work very closely in determining and monitoring compliance of the institutions.
To participate in adult education programs related to the Workforce Investment Act, licensure by this Board is required by the Arizona Department of Education. This also holds true for the Veterans Administration.
The Board also works very closely with other state boards who share dual licensing responsibility in terms of programmatic approval.
Ms. Candelaria introduced James Dugan, President, DeVry, and Marilyn Pobiak, President, High-Tech Institute and the Bryman School, both members of the Arizona State Board for Private Postsecondary Education.
Senator Soltero asked if the Board would handle a situation where a student left or was forced to leave a school due to a problem with management and wanted their tuition back. Ms. Candelaria stated if the school is licensed with the Arizona State Board for Private Postsecondary Education the Board would handle this type of situation.
Senator Flake asked how many students, of 200,000 that attend the licensed schools, are full time equivalents. Ms. Candelaria stated she did not know the exact amount but would get that information for Senator Flake.
Senator Flake asked if the institutions were only vocational. Ms. Candelaria stated the schools are vocational and degree granting institutions.
Senator Flake stated these schools fill a great need in Arizona without costing the State anything.
Senator Soltero asked how much it costs to attend the bartending school and how long the class lasts. Ms. Candelaria stated the Board licenses two bartending schools that are 40 hour programs and cost between $399 and $499. Once the students complete the class they then must go through a training course with the State Liquor Board to become certified.
Representative Knaperek asked why it takes some schools longer to become licensed than others. Ms. Candelaria stated when an institution submits an application, staff will do a review. Based upon the deficiencies in the application it is normally returned. If the application has significant deficiencies the institution has 60 days to return the application and once it is returned Board staff will review it. If an institution is accredited or has sought a consultant they are able to go through the process more quickly than non-accredited institutions. Ms. Candelaria added if there are ongoing deficiencies with an institution’s application, Board staff does have the ability to close the application.
Senator Verschoor asked if a private school can operate in Arizona without a license. Ms. Candelaria stated if a school operates in Arizona without a license they would be in violation of the law. Once the Board is notified that an institution is operating without a license, they will send the institution the application packet. If the institution is difficult or does not believe licensure is required and the Board is able to assess that the institution is advertising or teaching students, the Board will issue a cease and desist order to cease training and taking money until licensure is received.
Senator Verschoor asked if a person needs to be licensed if they are teaching a certain trade that they are experts in. Ms. Candelaria said if the person is offering a vocational program, it doesn’t matter how many students they are teaching, the person needs to be licensed.
Senator Verschoor asked if a person needs to be licensed if they teach a course online. Ms. Candelaria stated if the person who is providing the information has the computer physically in Arizona, they need to be licensed.
Representative Knaperek stated she is interested in making sure that Arizona is friendly to the private institutions and would like to see the State do a better job in recruiting private institutions to come to Arizona.
Representative Knaperek asked if the Board knows of any private institutions that offer baccalaureate degrees are interested in applying for licensure in Arizona. Ms. Candelaria said currently there are approximately 20 private institutions in Arizona that offer baccalaureate or higher programs and many of the larger institutions that offer these programs online have come to the State.
Ms. Candelaria stated if an institution has contacted the Board they will explain the licensure process to the institution and she does not think Arizona is difficult in terms of discouraging institutions from coming to the state.
Senator Gray asked how Arizona compares to other states per population with the number of private schools. Ms. Candelaria said the numbers vary from state to state depending on the size of the population.
Senator Flake asked how Arizona compares to other states in the percentage of students that go to private institutions. Ms. Candelaria stated she did not have that information but it might be an interesting subject to research. Ms. Candelaria added a fact that is often overlooked is that 200,000 students do attend private institutions in Arizona, which is more than the three universities combined and close to the numbers that attend community colleges.
Senator Hale asked Ms. Candelaria to explain the accreditation process. Ms. Candelaria stated for the non-accredited institutions the Board will review the programs. The accredited institutions with the national accrediting agencies and the regional accrediting agencies must be recognized by the United States Department of Education. Those entities will review and have program specialists for those institutions in their particular areas. The institutions must be licensed first and then go through a review by the accrediting agency of their particular programs.
Senator Hale asked if an institution needs to be accredited before applying for licensure in Arizona. Ms. Candelaria said an institution is not required to be accredited unless they are going to be a degree granting institution. In this case, the institution needs to make reasonable and timely progress towards accreditation and will not hold a regular licensure until they have received full accreditation.
Public Testimony
Fred Lockhart, Executive Director, Arizona Private School Association, stated the Board is fair, very student focused, and the schools are doing a great job.
Mr. Lockhart added the percentage of students in degree granting institutions has been rising every year to the point where the private sector conferred 30% of the bachelor degrees awarded in the State last year.
Carol Miller, Vice President, High-Tech Institute, testified in support of the Arizona State Board for Private Postsecondary Education.
Ms. Miller stated she has worked with Ms. Candelaria and the Board for many years and has found them to be even handed, reasonable, consistent in the application of the rules and the laws, and are intolerant of schools that do not follow the rules.
Ms. Miller added there are many agencies across the country that are not as ideal to work with. There are many that are bureaucratic, mean spirited, do not like private schools, make it very difficult for entry into the state and for the schools to operate once they are in the state, and many states, such as California, do not respond to requests for years.
Ms. Miller said the Arizona Board is one of the best in the way it treats the schools and the students, protects the consumer, and makes the institutions “toe the mark.”
Representative Knaperek announced the Committee received a letter from John Mangum, representing the Arizona Private Schools Association, in support of the continuation of the Arizona State Board for Private Postsecondary Education (Attachment B).
Senator Verschoor asked how the members of the Board are appointed. Representative Knaperek stated the members are appointed by the Governor and confirmed by the Senate.
Ms. Candelaria stated there is one expired term on the Board and the Governor has not appointed a member to fill the vacancy.
Senator Gray asked Ms. Candelaria to contact the Governor’s office regarding this vacancy so it can be on the agenda for the first meeting. Ms. Candelaria said that she would contact the Governor’s office.
Senator Verschoor asked how long the members serve and if the members rotate. Ms. Candelaria stated the members serve four year terms and do rotate.
Representative Knaperek asked if the member whose term has expired wants to be reappointed. Ms. Candelaria stated he has expressed that he would like to be reappointed.
Senator Soltero offered to contact the Governor’s office regarding the vacancy on the Board.
Representative Knaperek asked Ms. Candelaria to contact the Committee if the Governor has not made an appointment by January 17, 2006, the Committee will follow up with a letter to the Governor at that time if it is needed. Ms. Candelaria said she would contact the Committee if there has not been an appointment.
Senator Gray moved that the House of Representatives Committee on Universities, Community Colleges, and Technology Committee of Reference and the Senate Committee on Higher Education Committee of Reference recommend that the State Board for Private Postsecondary Education be continued for ten years. The motion carried by voice vote.
There being no further business, Representative Knaperek adjourned the meeting at 3:20 p.m.
Respectfully submitted,
Bill Ritz
Committee Secretary
(Tapes and attachments on file in the Secretary of the Senate’s Office/Resource Center, Room 115.)
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Senate Higher Education and
House of Representatives Universities, Community Colleges,
and Technology Committee of Reference
for the Sunset Hearing of the Arizona State Board for
Private Postsecondary Education
November 29, 2005
Page 2
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