No. 42218 (Amendment): Section R152-34-8. Rules Relating to Fair and Ethical Practices Set Forth in Section 13-34-108

(Amendment)

DAR File No.: 42218
Filed: 10/16/2017 11:13:51 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change is to limit the application of the three-business-day cooling-off period as it relates to programs lasting 30 consecutive calendar days or fewer.

Summary of the rule or change:

The amended Section R152-34-8 changes the three-business-day cooling-off period by removing the requirement to have the cooling-off period end three-business-days after the day the student first visits the institution if the program lasts 30 consecutive calendar days or fewer.

Statutory or constitutional authorization for this rule:

• Subsection 13-2-5(1)

Anticipated cost or savings to:

the state budget:

The Division of Consumer Protection (Division) does not anticipate any cost or benefit to the state budget because the rule will not affect the number of schools paying fees to the Division to register, and the rule does not apply to publicly-funded institutions.

local governments:

The Division does not anticipate any affect on local governments because the rule does not apply to publically-funded institutions.

small businesses:

Some small schools which hold programs lasting fewer than 30 days will receive a benefit by not having to provide refunds to individuals who paid a down payment or signed an enrollment agreement more than three days prior to attending the school.

persons other than small businesses, businesses, or local governmental entities:

In limited circumstances, some individuals attending school at programs that last fewer than 30 days will not be entitled to refunds when they otherwise would be, resulting in a cost to that person.

Compliance costs for affected persons:

There are no foreseeable compliance costs, because this rule simply lessens the applicability of a previously existing rule, and does not impose new obligations.

Comments by the department head on the fiscal impact the rule may have on businesses:

The Section R152-34-8 amendment changes the three-business-day cooling-off period by removing the requirement of having the cooling-off period end three-business-days after the day the student visits the institution, if the program lasts 30 consecutive calendar days or fewer. The change to the rule has no negative fiscal impact to small businesses, but would have a positive fiscal impact to small businesses which will now be able to retain tuition money for classes of short duration, where the benefit of the class would be realized in a brief period of time.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Commerce
Consumer Protection
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Jacob Hart at the above address, by phone at 801-530-6636, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/01/2017

This rule may become effective on:

12/08/2017

Authorized by:

Daniel O'Bannon, Director

RULE TEXT

R152. Commerce, Consumer Protection.

R152-34. Postsecondary Proprietary School Act Rules.

R152-34-8. Rules Relating to Fair and Ethical Practices Set Forth in Section 13-34-108.

(1) An institution, as part of its assessment for enrollment, shall consider the applicant's basic skills, aptitude, and physical qualifications, as these relate to the choice of program and to anticipated employment and shall not admit a student to a program unless there is a reasonable expectation that the student will succeed, as prescribed by R152-34-4(3).

(2) Financial dealings with students shall reflect standards of ethical practice. Tuition paid to an institution, and related student loans, are consumer transactions as defined in Utah Code Title 13, Chapter 11.

(3) The institution shall adopt a fair and equitable refund policy including:

(a) A three-business-day cooling-off period during which time the student may rescind the contract and receive a refund of all money paid[,]. The cooling-off period may not end prior to midnight of the third business day after the latest of the following days:

(i) the day the student signs an enrollment agreement;

(ii) the day the student pays the institution an initial deposit or first payment toward tuition and fees; or

(iii) the day that the student first visits the institution, if the program lasts more than 30 consecutive calendar days.[commencing with the day an enrollment agreement with the applicant is signed or an initial deposit or payment toward tuition and fees of the institution is made, until midnight of the third business day following such date or from the date that the student first visits the institution, whichever is later, shall be applicable and during this time the contract may be rescinded by the student and all money paid refunded.]

(b) A student enrolled in a correspondence institution may withdraw from enrollment following the cooling -[ ]off period, prior to submission by the student of any lesson materials or prior to receipt of course materials, whichever comes first, and effective upon deposit of a written statement of withdrawal for delivery by mail or other means, and the institution shall be entitled to retain no more than $200 in tuition or fees as registration charges or an alternative amount that the institution can demonstrate to have been expended in preparation for that particular student's enrollment.

(c) A clear and unambiguous written statement of the institution's refund policy for students who desire a refund after the three-business-day cooling-off period or after a student enrolled in a correspondence institution has submitted lesson materials or been in receipt of course materials.

(d) There shall be a written enrollment agreement, to be signed by the student and a representative of the institution, that clearly describes the cooling-off period, nonrefundable registration fee, and refund policy and schedule, including the rights of both the student and the institution, with copies provided to each.

(e) There shall be complete written information on repayment obligations to all applicants for financial assistance before an applicant student assumes such responsibilities.

(f) A pay-as-you-learn payment schedule that limits a student's prospective contractual obligation(s),at any one time, to the institution for tuition and fees to four months of training, plus registration or start-up costs not to exceed $200 or an alternative amount that the institution can demonstrate to have spent in undertaking a student's instruction. This restriction applies regardless of whether a contractual obligation is paid to the institution by:

(i) the student directly; or

(ii) a lender or any other entity on behalf of the student.

(g) The payment of a refund within 30 calendar days of a request for a refund if the person requesting the refund is entitled to the refund:

(i) under any provision of:

(A) the Utah Postsecondary Proprietary School Act, Utah Code Title 13, Chapter 34;

(B) the Postsecondary Proprietary School Act Rules, R152-34; or

(C) a contract or other agreement between the institution and the person requesting the refund; or

(ii) because of the institution's failure to fulfill its obligations to the person requesting the refund.

(4) Following the satisfactory completion of his or her training and education, a student is provided with appropriate educational credentials that show the program in which he or she was enrolled, together with a transcript of courses completed and grades or other performance evaluations received.

(5) No institution shall use the designation of 'college' nor 'university' in its title nor in conjunction with its operation unless it actually confers a standard college degree as one of its credentials, unless the use of such designation had previously been approved by the Board of Regents prior to July 1, 2002.

(6) The name of the institution shall not contain any reference that could mislead potential students or the general public as to the type or nature of its educational services, affiliations or structure.

(7) Advertising standards consist of the following:

(a) The institution's chief administrative officer assumes all responsibility for the content of public statements made on behalf of the institution and shall instruct all personnel, including agents, as to this rule and other appropriate laws regarding the ethics of advertisement and recruitment;

(b) Advertising shall be clear, factual, supportable, and shall not include any false or misleading statements with respect to the institution, its personnel, its courses and programs, its services, nor the occupational opportunities for its graduates;

(c) Institutions shall disclose that they are primarily operated for educational purposes if this is not apparent from the legal name. Institutions shall not advertise educational services in conjunction with any other business or establishment, nor in "help wanted" or "employment opportunity" columns of newspapers, magazines or similar forums in such a way as to lead readers to believe that they are applying for employment rather than education and training. Any advertisement in "help wanted" or "employment opportunity" forums shall be for positions open for immediate employment only;

(d) An institution, its employees and agents, shall refrain from other forms of ambiguous or deceptive advertising, such as:

(i) claims as to endorsement by manufacturers or businesses or organizations until and unless written evidence supporting this fact is on file; and

(ii) representations that students completing a course or program may transfer either credits or credentials for acceptance by another institution, state agency, or business, unless written evidence supporting this fact is on file;

(e) An institution shall maintain a file of all promotional information and related materials for a period of three (3) years;

(f) The Division may require an institution to submit its advertising prior to its use; and

(g) An institution cannot advertise that its organization or program is endorsed by the state of Utah other than to state that the school is 'Registered under the Utah Postsecondary Proprietary School Act'.

(h) An institution shall include the following registration and disclaimer statements in its catalog, student information bulletin, and enrollment agreements:

(i) REGISTERED UNDER THE UTAH POSTSECONDARY PROPRIETARY SCHOOL ACT (Title 13, Chapter 34, Utah Code).

(ii) Registration under the Utah Postsecondary Proprietary School Act does not mean that the State of Utah supervises, recommends, nor accredits the institution. It is the student's responsibility to determine whether credits, degrees, or certificates from the institution will transfer to other institutions or meet employers' training requirements. This may be done by calling the prospective school or employer.

(iii) The institution is not accredited by a regional or national accrediting agency recognized by the United States Department of Education.

(8) Recruitment standards include the following:

(a) Recruiting efforts shall be conducted in a professional and ethical manner and free from 'high pressure' techniques; and

(b) An institution shall not use loans, scholarships, discounts, or other such enrollment inducements, where such result in unfair or discriminatory practices.

(9) An agent or sales representative may not be directly or indirectly be portrayed as 'counselor,' 'advisor,' or any other similar title to disguise his or her sales function.

(10) An agent or representative is responsible to have a clear understanding and knowledge of the programs and courses, tuition, enrollment requirements, enrollment agreement, support services, and the general operational procedures thereof.

(11) An institution shall indemnify any student from loss or other injury as a result of any fraud or other form of misrepresentation used by an agent in the recruitment process.

(12) An institution operating in Utah but domiciled outside the state shall designate a Utah resident as its registered agent for purposes of service of legal process.

(13) An institution shall provide a student with all of the student's school records, as described in R152-34-9(2), within five business days after a written or verbal request by a student for the student's school records. The institution may not charge a student more than the actual copying costs for the student's school records.

 

KEY: education, postsecondary proprietary schools, registration,[requirements,] consumer protection

Date of Enactment or Last Substantive Amendment: [November 24, 2014]2017

Notice of Continuation: May 8, 2017

Authorizing, and Implemented or Interpreted Law: 13-2-5(1)

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