Higher Education and Professional Practice

Background Information

          In January 2006, the Board of Regents Higher Education and Professional Practice Committee requested that the Department come back to the committee with a comprehensive report on the process by which proprietary colleges are approved and regulated in New York State.  This request was precipitated by the recent accounts of poor academic practices and in some cases, misconduct, on the part of a select group of proprietary institutions in New York and in other states. While the majority of proprietary schools provide a quality education to students who may not otherwise have access to higher education, the Board of Regents has asked that no new requests to operate any new higher education institutions in New York State be brought before the Board until a review of the current process has occurred. 

Recommendations

In addition to the requested review of the approval process, five actions have been proposed for Regents consideration and further discussion with the field that would expand the new Risk Analysis approach to ensuring high standards of academic quality in the proprietary sector.

1.     Require a transition period before new higher education institutions in New York State are given final authority to award degrees to ensure that standards of quality are upheld and students are appropriately served at proprietary colleges during periods of transition. This recommendation would also limit any expansion during the provisional period.

2.     Require that the sale of degree-granting proprietary institutions in New York State be approved by the Education Department prior to purchase and that the new owners demonstrate capacity to meet the education and fiscal standards to operate the institution before ownership is established. Regents approval of the transfer of degree authority to the new institution and/or owner will still be required.

3.     Endorse the Department’s legislative strategy to enhance the capacity to monitor the proprietary sector to ensure high standards of educational quality, protect the public’s investment, and to take action in cases where institutions are out of compliance and students could be at risk.

4.     Clearly define and differentiate remedial and developmental coursework from credit-bearing college coursework to ensure that students are appropriately prepared to succeed and to graduate.

5.     Strengthen admissions policies. Ensure prospective college students, especially those without a high school diploma or GED, have accurate information  on the college, job placement, and/or transfer opportunities necessary to make educated enrollment decisions.

Timetable for Implementation

To be determined.

PROPRIETARY COLLEGES IN NEW YORK STATE

          The for-profit sector of higher education has grown significantly in recent years. Enrollments in proprietary colleges in New York State have tripled over the last thirty years.  An increasing number of students are looking at proprietary colleges as potential providers of programs and degree options that offer flexibility, applied education, and the knowledge and skills they need to be successful in the workforce. However, while the majority of proprietary colleges provide a quality education to students, instances of poor academic practices have recently been identified and in other cases fraud has been uncovered in a number of proprietary institutions in New York and other states. In these cases, some students have left college with considerable debt, no degree, and little hope of being successful in the job market.  Though largely isolated to a select number of institutions, the unfortunate effects of this misconduct has hurt the proprietary sector and been felt across the larger higher education community.

          In response to these incidents, in January 2006, the New York State Board of Regents requested information on the proprietary sector in New York State, including a report on the process for evaluating:

§       proposals to establish new proprietary colleges in the State,

§       proposals to transform non-degree proprietary schools into degree-granting colleges, and

§       requests from out-of-state proprietary degree-granting institutions seeking to establish campuses in New York.

         The Office of Higher Education’s Quality Assurance Office responded to the Regents request with a three -pronged plan of action.

1. A comprehensive evaluation of our existing process for reviewing, approving, and overseeing the proprietary sector was conducted;
2. A survey was administered to other states to identify their approaches to oversight of the proprietary sector; and
3. The Regents Advisory Council on Institutional Accreditation, the 42 proprietary colleges in New York State, the leadership of the New York State Association of Proprietary Colleges, State government leaders, and others were solicited for their comments and input.

          Based upon this analysis and with input from the field, the Department has developed recommendations for the Board of Regents consideration and for further discussion with the field that would strengthen the Education Department’s system of ensuring high standards of academic quality at proprietary colleges and help to ensure that all students receive the information and academic preparation they need to succeed and to graduate from college. 

history and growth patterns of the proprietary sector

          The first six proprietary or for-profit colleges in New York State were authorized by the Board of Regents in 1971.  Today, 42 of New York’s 271 higher education institutions are proprietary colleges.  Some are family-owned; others are operated by publicly traded corporations.  Some are single-campus colleges; others are part of national institutions.  They operate on 53 main and branch campuses.  All but 14 are two-year colleges.  Seven offer baccalaureate programs; four offer both baccalaureate and graduate programs.  Three offer only graduate programs.  Three agencies accredit three-quarters of the proprietary colleges: the Middle States Association, the Accrediting Council for Independent Colleges and Schools, and the Board of Regents.  In 2003-04, proprietary college students received $136.4 million from the Tuition Assistance Program (TAP), $133.4 million in Pell grants, and $291.9 million in guaranteed student loans. 

          In the fall of 1975, proprietary colleges enrolled 16,118 students (1.6 percent of all college students in the State).  Over the next 30 years, enrollment tripled, reaching 48,883 in the fall of 2005 -- 4.3 percent of all students, statewide.

Source: NYSED, Higher Education Data System, 2006.

      Source: NYSED, Higher Education Data System, 2006.

          Most proprietary colleges have relatively small student bodies; while proprietary colleges make up 15.5 percent of all New York colleges and universities.  In the fall of 2005, they ranged in size from 6,070 students, to two with fewer than 100 students.  The average enrollment was 1,192; however, less than 30 percent of the then 41 colleges had greater than average numbers. In the fall of 2005, 97.3 percent of students at proprietary colleges were undergraduates and 2.7 percent were graduate students.  Nearly 87 percent were full-time students.  In comparison, 80.2 percent of all students that fall, statewide, were undergraduates, 17.1 percent were graduate students, and 2.7 percent were first-professional-degree students.  Seventy percent were full-time students.

          Appendix A provides additional information on proprietary colleges in New York State including details on students accepted and enrolled, admissions practices, degrees conferred, and accreditation.

PROCESS FOR REGULATING PROPRIETARY COLLEGES IN NEW YORK STATE

Before a new proprietary, or any college in New York State is given degree-granting authority, how do we know they have measures in place to ensure quality and student success?

          In New York State, establishing a college or university requires authorization from the Board of Regents to confer degrees (see Appendix B for pertinent rules and regulations).  The Board of Regents confers degree-granting authority to colleges based on a recommendation from the State Education Department. The Department’s recommendation is based on comprehensive academic, fiscal, and planning reviews of the institution that are conducted with peer reviewers (around the State and the nation).  The Department’s Office of Higher Education is responsible for reviewing new colleges. Within the Office of Higher Education, the Office of Quality Assurance has primary responsibility. These extensive reviews help the Department and the Regents to determine whether or not an institution and its proposed programs meet the standards of quality for colleges set forth in Education Law, the Rules of the Board of Regents, and the Regulations of the Commissioner of Education and whether the proposed institution and its programs respond to demonstrated need and to the priorities of the Regents Statewide Plan for Higher Education.

How are proposals for new proprietary colleges evaluated?

          To begin the process for establishing a new college^[1], institutions must submit an application to the State Education Department that includes the results of a comprehensive self study.  When the self-study is received and reviewed, the State Education Department staff and external reviewers, begin the extensive review process.  The Department’s Office of Audit Services conducts an analysis of the financial resources of the institution.  The Department’s Office of Quality Assurance oversees the academic and planning evaluation activities.

Academic Evaluation

          The Office of Quality Assurance team begins the academic review of the institution with an analysis of documentation.  Subsequently, a select group of external reviewers are identified to conduct a site visit at the institution.  The peer review team typically consists of chief executive or chief academic officer, registrar, librarian, student services personnel, and faculty in the disciplines to be offered, together with an Office of Quality Assurance staff member.  The peer reviewers are drawn from a pool of experienced reviewers at New York public, independent, and proprietary colleges and universities.  The team evaluates the extent to which the institution is in overall compliance with established standards.  They also evaluate the extent to which individual program proposals meet the standards for evaluation. A proposed new college must meet a number of conditions before it can be recommended to the Regents for degree authority.  External peer reviewers extensively evaluate the institution to determine whether or not it meets the standards in five key areas:

1.     Faculty:  The institution must have appropriately credentialed and experienced core faculty to develop curricula, academic structures, and policies, and to teach courses in the proposed program(s).

2.     Curricula: Curricula must be appropriate in design, content, and student learning expectations for the field of study and the degree level proposed. 

3.     Administration:  The institution must have appropriate key administrators in place.  Also, policies must be established to ensure that faculty and academic officers are responsible for the implementation of overall education policy and other policies related to institutional operations and oversight (including academic freedom, faculty-related policies), and student-related policies (including admissions).

4.     Library:  The institution must have a qualified librarian who, working with the core faculty, has developed a plan of library acquisitions that are appropriate for the proposed program(s). It must have current and planned library budget allocations that assure that library staffing, services, and systems meet standards and that the collection is sufficient to support the institution’s mission and each registered program. 

5.     Resources:  The institution must demonstrate through its audited financial records and other documentation that it has sufficient financial resources to accomplish its mission and the purposes of its registered programs, ensure satisfactory conduct of its degree programs, to achieve its educational goals, and enable students to be successful.

Following the site visit, the peer review team submits a formal report that is shared with the institution for their review.  The institution then has an opportunity to submit a response to the report with any comments or corrections of fact.

Planning and potential impact evaluation

          A planning evaluation is also conducted to determine the extent of the need for the proposed institution or campus and its potential effect on existing New York higher education institutions.  This evaluation considers:

§       What population does the institution plan to serve?

§       In what Regents Higher Education Region would the institution operate?

§       Is the need for the institution and/or program(s) justified by the demand by potential students, employer demand, or need of society?

§       What overall impact will the new institution have on the area?

As part of the planning evaluation, colleges and universities in the region are canvassed for their comments on the proposed college and its programs. Institutions that raise concerns or objections about the proposed college to the Office of Quality Assurance are provided an opportunity to discuss their concerns.  These institutions may request a public hearing, which is chaired by a member of the Board of Regents.

Review of historical information on the institution

          In addition to the academic, planning, and financial evaluations, currently the Department also reviews and evaluates historical information about the institution and its key administrators, including:

§       A written affidavit ensuring that any outstanding or pending litigation has been fully disclosed.

§       A written statement that administrators have no record of felony convictions that could be related to their proposed functions or institution.

§       Verified default rates on Title IV loans, if applicable.

§       Verification from the Office of Higher Education’s Bureau of Proprietary School Supervision, Higher Education Services Corporation, U.S. Department of Education, Office of the State Comptroller, accrediting groups, and other agencies, as appropriate, that there are no outstanding concerns between that agency and the institution.

Upon what basis does the Board of Regents make the final decision as to whether or not a college is authorized to confer degrees in New York State?

          When the entire review and evaluation process described previously is completed, the Commissioner receives a summary of the proposal and an analysis of the academic and planning evaluations, with a recommendation regarding degree-conferring authorization.  The Commissioner forwards the recommendation to the Board of Regents.

          For the Department to recommend that an institution be granted authority to confer degrees, the institution must have met all conditions of the extensive review process as well as standards of quality for colleges set forth in Education Law, the Rules of the Board of Regents, and the Regulations of the Commissioner of Education.  A negative finding about any of the evaluation criteria could result in rejection or in a delay of a proposal.  Proposed new college program(s) must also meet all registration standards in Commissioner’s Regulations.  And finally, new proprietary colleges must submit a request for the Commissioner’s consent to an amendment of a certificate of incorporation to be filed with the New York State Department of State^[2].

How do we ensure quality is maintained in proprietary colleges that have been granted degree-granting authority?

          After the Board of Regents authorizes a proprietary college to grant degrees,  the Office of Quality Assurance team meets with the leadership of the institution to discuss a number of issues related to next steps, including, for example:

§       The institution’s plans for developing a student financial aid standard of progress.

§       Obligations that the institution needs to meet.  For example, the institution must prepare and submit annual fiscal reports.  Additionally, the institution is required to submit a report on progress to the State Education Department at the end of their first year. 

          These institutions are not permitted to undertake any major initiatives within the first two years of receiving degree authority.  This means that the institution should not  propose to the Department any new programs, new degrees, new degree levels, or off-campus initiatives during this time.  Within two years of the first offering of the registered program(s), the Office of Quality Assurance makes a follow-up visit to the institution to determine whether or not the college is meeting the standards.

New Risk Analysis Approach to Ensure High Standards of Quality

          Consistent with the priorities in the Regents Statewide Plan developed to help “maximize success for all higher education students,” over the past two years, the Office of Higher Education has put in place a Risk Analysis approach to review institutions that may be in jeopardy of not fully accomplishing their educational mission. This performance driven strategy allows us to focus in on those schools where students could potentially be at risk.  Indicators that the quality of education at an institution could be compromised include things like rapid changes in enrollment, graduation, and/or persistence rates; student complaints; sudden unanticipated changes in the proportion of students receiving State and federal aid, the proportion of students admitted through an ability-to-benefit provision, and the indexing of tuition to the amount of State and federal aid available.  Trend data on all colleges and universities, available through the Higher Education Data System, is also used to assist the Department in determining whether or not there is a need to do an overall review of an institution.

          If, based upon the new Risk Analysis, follow-up is needed the Department will then initiate a visit to the institution for a peer review. The review team is typically made up of a representative of the Department’s Quality Assurance team and educators from institutions with comparable programs. After the site visit, the team provides a report with information on the extent to which an institution is in compliance with Part 52 of Commissioner’s regulations which define those academic standards for operating a college in New York State. If, based on the Risk Assessment, the Department finds that the institution is seriously out of compliance, the Department will take action.  First, the institution is given an opportunity to make corrective actions in a timely manner.  If, however, after a subsequent field visit, the institution is still not in compliance and serious concerns continue to exist, the Commissioner may move to de-register the college’s programs.

STRENGTHENING THE EXISTING RISK ANALYSIS APPROACH

          As stated, the for-profit sector of higher education continues to grow in New York State.  Many colleges in this sector reach students who might not otherwise attend college. The vast majority of proprietary schools are providing students with a quality education. As a result of our new risk assessment approach to quality assurance, over the last few years, the Office of Higher Education has uncovered a number of institutions with serious educational deficiencies, calling into question whether the students attending these select institutions are receiving a college-level education.  In other instances, we have uncovered instances of sub-standard admissions practices and, in a limited number of cases, fraudulent practices in enrolling students or certifying them for student financial aid. In nearly 45 percent of our reports of visits to proprietary colleges since July 1, 2002, peer review teams have recommended actions related to  the need to provide better advisement to students for institutions to be in compliance with the registration standards in the Commissioner’s Regulations.  Unfortunately, in many cases, those students at risk are those students who are the most vulnerable.  Undergraduates in proprietary colleges are more likely to be persons of color and from lower-income levels who need additional academic and support services to succeed in college.

          In those cases of non-compliance, it appears that there is tension, or in some instances, a conflict of interest, between a proprietary college’s obligations to its owners and/or shareholders and committing the appropriate resources and support necessary for ensuring that those students who are enrolled have the appropriate knowledge and skills to be successful in a higher education program.  One recent ad of a proprietary institution under corrective action seeking an admissions representative is illustrative of this dichotomy:

            Are you driven, competitive, energetic, organized, and unfulfilled in your job? If          so, we want you. This position is available for sales professionals. The position            offers opportunity to help others achieve their goals and change their lives     through education. Previous sales experience a must.

PUBLIC INVESTMENT IN FOR-PROFIT SECTOR

          To a significant extent, a number of proprietary colleges’ profits are generated through public funds from students’ State and federal student financial aid.  Consequently, it is critically important to ensure that students are getting what they pay for -- a college education and an opportunity to find a job and to succeed in the workplace.  It is equally important that State and federal student financial aid be spent appropriately to ensure that its intended purpose is fulfilled -- to further the educational needs of students who may not otherwise be able to afford a college education.

RECOMMENDATIONS AND NEXT STEPS

          To develop relevant recommendations to strengthen oversight of educational quality at proprietary colleges, to ensure that students are well served at these institutions, and to protect the public’s investment, we surveyed other states to identify their approach to oversight of the proprietary sector and reached out to stakeholders for their ideas and input.

          To gather information about the policies and procedures of other states with regard to authority to open and operate proprietary colleges, the Department conducted a survey through the State Higher Education Executive Officers Association (SHEEO).  Representatives from 15 states responded.  The responses and policies identified varied from no oversight to approval processes similar to those in New York State.  For example:

·       One-third of the 15 responding states require a surety bond as part of the approval process and charge fees and/or reasonable costs of the approval process to the applicant. New York does not require a bond for degree-granting institutions or charge fees or costs of the process, except for the costs of travel to out-of-state institutions seeking authorization.

·       Most of the responding states require an institution to achieve accreditation by an agency recognized by United States Department of Education or to be progressing toward accreditation.  Nothing in the current Education Law, the Rules of the Board of Regents, or the Regulations of the Commissioner of Education requires degree-granting institutions to achieve institutional accreditation in order to operate.  Arkansas provides for a two-year “planning and development” stage to allow an institution to become fully operational within this period, including seeking accreditation.

          Additionally, In January, the Department discussed the existing process for evaluating applications for degree powers with the Regents Advisory Council on Institutional Accreditation made up of representatives from each higher education sector.  In addition, we invited each of the 42 proprietary colleges in New York to provide us with input and direction on recommendations.  We received very helpful written comments from Berkeley College, Bryant & Stratton College (on behalf of its four colleges), The College of Westchester, ITT Technical Institute (Liverpool) (on behalf of all three ITT colleges), Katharine Gibbs (New York City), Laboratory Institute of Merchandising, the Mandl School, Monroe College, and Plaza College. We also reached out to the leadership of the association representing proprietary colleges in New York State, State government leaders, and others.

Recommended actions for additional discussion, feedback from the field, and consideration

          Based on a preliminary assessment over the last three months, the Department  proposes the following recommendations.

1.               Require a transition period before new higher education institutions in New York State are given final authority to award degrees to ensure that standards of quality are upheld and students are appropriately served at proprietary colleges during periods of transition. This recommendation would also limit any expansion during the provisional period.

               Newly approved institutions of higher education sometimes face challenges related to organization, culture, and academic transitions in their first few years.  Often, an extended period of education and technical assistance from the State Education Department is necessary to ensure that these new institutions develop quality college-level programs. Therefore, on a case-by-case basis based on our assessment, the Department recommends that the Board of Regents authorize new proprietary colleges’ initial degree granting powers provisionally^[3]. This is consistent with the policy for private/not-for-profit colleges in which the Board of Regents grants these institutions provisional charters, which may expire at the end of a set period (usually five years), if the institution does not meet the conditions for an absolute charter (Education Law, §217).

               During the provisional period (e.g., five years), the new college would receive technical assistance from the State Education Department. To provide the time and support necessary to establish a solid academic foundation and a cohesive college community, these institutions would not be granted the authority to add new programs or establish branches or extension centers.  Additionally, the Department and peer reviewers would make routine visits to the institutions to determine if, at the end of the provisional period, the Board of Regents should consider approval of degree-granting status extending the provisional period, or terminating the institution’s authority to award degrees.

               Two proprietary college respondents suggested similar approaches and at least two other states use time-limited initial periods of approval.

               Though the precise terms of this recommendation are still under development, it is proposed that a waiver be available to those institutions that do not require a transition period^[4].  This is similar to the limited cases in which the Board of Regents has granted a new independent college an absolute charter in the first instance.

2.               Require that the sale of degree-granting proprietary institutions in New York State be approved by the Education Department prior to purchase and that the new owners demonstrate capacity to meet the education and fiscal standards to operate the institution before ownership is established. Regents approval of the transfer of degree authority to the new institution and/or owner will still be required.

               Unlike public or independent colleges, proprietary colleges may be bought and sold, either as an institution or through the transfer of sufficient stock of a corporation to cause a change in control of the institution.  While the transfer of control of proprietary colleges had very positive results for many institutions’ educational standards and practices, in other instances, however, weak educational practices, standards, and outcomes have persisted and sometimes have worsened.  When proprietary colleges are sold, the institutional culture -- including institutional investments, organization, and staffing -- academic standards can change under new ownership. These sometimes rapid institutional changes can have a substantial and serious impact on student learning and success.  It is also important to ensure that standards and expectations of proprietary institutions that are already established in another State, but new to New York, are consistent with this State’s standards.

               The Department recommends an amendment to the Rules of the Board Regents be considered that would require any proposed sale or transfer of degree-granting authority to be approved by the Education Department prior to a change in ownership or control to ensure that institutions meet New York State standards before such transfer occurs and before any extension of registration is granted.

3.               Endorse the Department’s legislative strategy to enhance the capacity to monitor the proprietary sector to ensure high standards of educational quality, protect the public’s investment, and to take action in cases where institutions are out of compliance and students could be at risk.

               The Department is seeking support of a legislative strategy that would expand our capacity to oversee proprietary colleges - focusing primarily on those institutions that are out of compliance and putting students at risk. It would also provide the resources needed to support other quality focused recommendations, (i.e., providing a provisional transitional period for new proprietary colleges).  A number of proprietary colleges in the State agree that greater enforcement of out-of-compliance institutions is needed.  

               To provide resources necessary for the expanded oversight, the Department is seeking statutory authority to charge for-profit colleges a small assessment (i.e., approximately one tenth of one percent) on the half a billion dollars in revenue they receive annually from government financial assistance including TAP, Pell, and federal student loan programs.

               At the recommendation of the professional association’s leadership, the Department is also seeking statutory authority to charge proprietary colleges that are out of compliance for all expenses related to corrective actions including the cost of conducting field visits to these institutions. 

               The terms of the proposed bill(s) are under discussion with the New York State legislature and interested parties including the professional association representing the proprietary sector.

4.               Clearly define and differentiate remedial and developmental coursework from credit-bearing college coursework to ensure all students are appropriately prepared to succeed and to graduate.

               Proprietary colleges in New York State serve a significant proportion of students in need of additional academic and support services to succeed in college.  Many of these students, therefore, are enrolled in remedial and developmental courses. The Department and peer reviewers have found, that in a number of cases, remedial and developmental courses, which are not considered credit bearing in New York, are offered to students for credit.  Sometimes, this occurs when administrators and faculty do not fully understand the State's requirements for credit-bearing programs.  In these cases, courses are offered for college credit that are not always credit worthy.  It is important that all institutions and students clearly understand what New York State requires for credit, as compared to remedial or developmental course work.

               To help clarify this issue, the Department recommends that remedial and developmental courses be clearly defined in regulations using the definitions common to the State’s opportunity programs^[5] and require that an entry-level college credit-bearing course in a field in which New York State Learning Standards for K-12 exist be defined as one that exceeds the Standards’ commencement level as defined in §100.1(t) of Commissioner’s Regulations.

5.               Strengthen admissions policies. Ensure prospective college students, especially those without a high school diploma or GED, have accurate information on the college, job placement, and/or transfer opportunities necessary to make educated enrollment decisions.

               Recent media accounts of abuse, nationwide, on the part of a select number of proprietary institutions that recruited and enrolled students without first evaluating them for admission highlight the need for strengthened admissions policies and practices. In New York State, according to §52.2(d)(2) of Commissioner’s Regulations, institutions’ admissions practices must  take into account the capacity of the student to undertake a course of study and the capacity of the institution to provide the instructional and other support the student needs to complete the program. Many proprietary colleges admit a large number of applicants for undergraduate study who do not have a high school diploma or GED. These students historically have the most difficulty successfully completing a postsecondary program and require additional support.  It is critical that students be provided with complete, factual, and realistic information about the college before they are admitted and enrolled.  Additionally, it is equally important that prospective students’ strengths, weaknesses, and readiness for college-level work be analyzed and compared to the college’s ability to meet the applicant’s needs in the early stages of the admissions process.

               Potential opportunities for strengthening admissions policies in the future include:

§       Requiring that institutions’ admissions processes are separate and distinct from their recruitment processes and do not rely solely on the recruiter to make admissions decisions. 

§       Ensuring that admissions representatives are appropriately prepared for their jobs.  Consider minimum education (e.g., a bachelor’s degree) and experience requirements for paid admissions representatives. In more than 55 percent of the Department’s visits made to New York proprietary colleges since July 1, 2002, peer review teams recommended professional development for admissions staff. 

§       Requiring institutions have external agencies evaluate transcripts of applicants educated outside the United States for translation, authenticity, and level of education.

§       Requiring that prospective students are provided in writing with all assertions made during the recruitment and admissions processes concerning career services, job placement, and transferability of the college’s credits and degrees. This will help to ensure that applicants are better prepared to make informed enrollment decisions.

§       Requiring financial aid advisors to provide TAP-eligible students with information on the limited number of semesters TAP funds may be awarded before students enroll.

§       Requiring institutions that accept students who do not have a high school diploma or a GED, demonstrate that before accepting these students, they successfully pass an Ability to Benefit (ATB) examination that is appropriate for college-level programs offered at the institution.  Because the same ATB examinations approved by the Department of Education for use by proprietary colleges are also approved for students to receive federal student financial aid in non-degree proprietary schools, the tests are not necessarily adequate indicators of a student’s capacity to undertake a collegiate program of study.  Also, consider arranging for the test to be administered by an independent organization. Additionally, intensive academic support should be available to these students commensurate with the number of ATB students enrolled at the college.

              The recommendation relating to the definition of remedial/developmental coursework and the recommendation relating to admission practices are relevant for all sectors of higher education. With the endorsement from the Board of Regents, the Department will begin to review those recommendations with all sectors of higher education.

Appendix A

The Proprietary Sector of Higher Education in New York State

The Board of Regents authorized the first six proprietary colleges in 1971:

Table 1

Source: NYSED, Office of College and University Evaluation, 2006.

A.  Institutions in the Proprietary Sector.  Education Law, §214 provides that The University of the State of New York “shall include all . . . higher educational institutions . . . .”  Today, 42 of New York’s 271 higher education institutions (15.5 percent) are proprietary (see Table 2).  (Approximately 400 licensed non-degree business, trade, and certified ESL schools, most of them proprietary, are not included in this category.)  Some of them have always been family-owned businesses.  Others are operated by publicly traded corporations, including such multi-state proprietary systems as Career Education Corporation, Corinthian Colleges, and Education Management Corporation.  They operate on 53 main and branch campuses.

Table 2

Source: NYSED, Office of College and University Evaluation, 2006.

The Board of Regents first authorized degree powers for 15 of the 42 current proprietary colleges (35.7 percent) in either 1971 or 1972.  Between 1995 and 2000, the Board authorized degree powers for an additional 16 proprietary colleges (38.1 percent).  (During this period, the Board also authorized other proprietary colleges that no longer offer degree programs.)

Education Law, §224 and §3.29 of the Regents Rules regulate the ability of institutions to call themselves colleges.  Section 3.29 provides that a proprietary college may use the word “college” in its name upon achieving full accreditation by one of the six regional accrediting commissions (e.g., the Middle States Association).  A few proprietary colleges, such as Jamestown Business College, have used the word in their name since the 19^th Century, predating §224’s provisions.  Finally, the Regents have authorized some proprietary colleges, such as Pacific College of Oriental Medicine and Tri-State College of Acupuncture, to use “college” in their name without regional accreditation; these single-purpose institutions were accredited by the appropriate specialized accrediting agency.

Two-thirds of the proprietary colleges (28 of 42) are two-year institutions.  They offer Associate in Science (A.S.), Associate in Applied Science (A.A.S.), or Associate in Occupational Studies (A.O.S.) degree programs, primarily in the discipline areas of Business, the Health Professions, and the Physical Sciences; some also offer programs in Education, Engineering, the Fine Arts, and the Social Sciences.  Nearly 65 percent of them award only A.O.S. degrees, which do not require a minimum amount of work in the liberal arts and sciences.

Seven proprietary colleges offer baccalaureate programs; four offer baccalaureate and graduate programs.  They offer associate, baccalaureate, master’s, and (in one case) doctoral degree programs in the discipline areas of Education, Engineering, the Fine Arts, the Health Professions, the Humanities, the Physical Sciences, the Social Sciences, and especially Business.

Three proprietary colleges offer only graduate programs.  They offer programs in the discipline areas of Business, the Fine Arts, the Health Professions, and the Physical Sciences leading to the Master of Arts (M.A.), Master of Science (M.S.), or Master of Business Administration (M.B.A.) degrees. Three of the proprietary colleges offer only licensure-related programs.

In 2003-04, proprietary colleges had eight branch campuses, three approved extension centers, and 12 other off-campus locations.  As Table 3 shows, they were 1.2 percent of all off-campus locations operated by colleges and universities that year.

Table 3

Source: NYSED-8, Directory of Off-Campus Instructional Locations, and Inventory of Registered Programs.

In the fall of 2003, proprietary colleges had 1,878 faculty members (4.3 percent of the 44,106 faculty statewide), of whom 27.6 percent were full-time and 72.4 percent were part-time.  Table 4 shows the proportion of faculty who were full-time in each sector that fall.

Table 4

Source: NYSED, Higher Education Data System, 2006.

B. Students.

Enrollments. Table 5 shows the changes in proprietary sector enrollments since 1975.  In the fall of 1975, proprietary colleges enrolled 16,118 students, 1.6 percent of all college students in the State.  Over the next 30 years, enrollment tripled, reaching 48,883 in the fall of 2005 (4.3 percent of all students, statewide).

Table 5

Source: NYSED, Higher Education Data System, 2006.

Most proprietary colleges have relatively small student bodies; while they constitute 15.5 percent of all New York colleges and universities, they enroll only 4.3 percent of all college and university students.  In the fall of 2005, they ranged in size from 6,070 students, to two with fewer than 100 students.  The average enrollment was 1,192; however, less than 30 percent of the then 41 colleges had greater than average numbers.

In the fall of 2005, 97.3 percent of students at proprietary colleges were undergraduates and 2.7 percent were graduate students.  Nearly 87 percent were full-time students.  In comparison, 80.2 percent of all students that fall, statewide, were undergraduates, 17.1 percent were graduate students, and 2.7 percent were first-professional-degree students.  Only 70 percent were full-time students.

Undergraduates at proprietary colleges are more likely to be persons of color, from lower-income levels, and less academically prepared for college than students statewide, as the data on Tables 6, 8, and 13 indicate.  Table 6 compares the racial/ethnic distribution of all students at proprietary colleges and statewide.

Table 6

Source: NYSED, Higher Education Data System, 2006.

At proprietary colleges, 53.7 percent of all full-time undergraduates in the fall of 2002 were Black, Hispanic, or Native American, compared to 23.4 percent statewide.  At the graduate level, 10.1 percent of full-time students at proprietary colleges, and 12.5 percent of part-time students, were Black, Hispanic, or Native American, compared to 11.4 percent of full-time and 17.0 percent of the part-time students statewide.

In 2002, 879 proprietary college students reported having disabilities (1.9 percent of all proprietary college students that fall).  Statewide, 3.5 percent of students across all sectors reported having disabilities that year (37,793 students).

Admissions.  Table 7 shows the percent of applicants accepted for undergraduate admission, and the percent of accepted applicants who enrolled as full-time students, by sector and level of institution for 2002, 2003, and 2004.

Table 7

Note: Data for four-year institutions includes students admitted to certificate, associate degree, and baccalaureate programs; data for two-year institutions includes students admitted to certificate and associate degree programs.  In 2002, CUNY’s admission procedure let applicants choose several senior and community colleges in rank order and allocated students to colleges; since some applicants to senior colleges were admitted to community colleges, the proportion of applicants accepted to CUNY two-year colleges exceeded 100 percent.

Source: NYSED, Higher Education Data System, 2006.

Among four-year colleges and universities, the highest rate of acceptance for fall 2004 admission was in the proprietary sector, followed by the independent sector, SUNY, and CUNY.  Among two-year colleges, the highest rates were at SUNY and CUNY, where community colleges operate under full opportunity or open admission policies that accept all resident high school graduates, followed by proprietary colleges and independent colleges.

Enrollment rates show that, among four-year colleges, the highest yield of proportion of admitted applicants enrolling was in the proprietary sector, followed by CUNY, the independent sector, and SUNY.  For the two-year colleges, the highest yield was in the independent sector, followed by the proprietary sector, CUNY, and SUNY.

Table 8 shows the proportion of fall 2004 first-time, full-time students in each sector with a known high school grade-point average, a GED certificate, or for whom the high school grade point average was unknown.  The proportion of entering full-time students for whom a high school grade point average was unknown was highest in the proprietary sector for both four-year and two-year colleges.

Table 8

Source: NYSED, Higher Education Data System, 2006.

For the same institutional categories, Table 9 shows the persistence of first-time undergraduates entering in the fall of 2003 who returned for the fall of 2004.

Table 9

Source: NCES, IPEDS-EF Survey, 2006.

Statewide, 80.0 percent of full-time, first-time students at four-year institutions persisted to the following fall.  Persistence of full-time, first-time students exceeded that rate at independent four-year institutions and matched it at SUNY four-year campuses.  Persistence of full-time, first-time students was lower than the statewide rate at CUNY four-year colleges, followed by proprietary four-year colleges.

The statewide rate of persistence of full-time, first-time students to the next fall was nearly 20 percentage points lower at 60.6 percent than at four-year colleges and universities. CUNY two-year colleges, followed by SUNY two-year colleges, were above the statewide rate.  Proprietary two-year colleges, followed by independent two-year colleges, were below the statewide rate. 

C.  Degrees Conferred.  Table 10 shows degrees awarded by proprietary colleges between 1982-83 and 2001-02.  In 2001-02, the 10,040 undergraduate and graduate degrees were 4.6 percent of all degrees in the State.  They comprised 14.9 percent of all associate degrees, 1.8 percent of all baccalaureate degrees, and 0.6 percent of all master’s degrees.

Table 10

*Includes associate degrees awarded by four-year colleges.

Source: NYSED, Higher Education Data System, 2006.

D.  Student Expenses and Financial Aid.  Table 11 shows average tuition and fees.

Table 11

N.b.  Rates for SUNY and CUNY are for resident students.

Source: NYSED, Higher Education Data System, 2006.

Between 1999-00 and 2004-05, average four-year proprietary college undergraduate tuition and fees increased by 54.6 percent ($5,505).  The increase was 29.9 percent ($4,594) in the independent sector, 29.1 percent ($969) at CUNY, and 28.3 percent ($1,253) at SUNY.  At two-year proprietary colleges, average tuition and fees increased by 31.5 percent ($2,823).  The increase was 9.7 percent ($745) in the independent sector, 17 percent ($442) at CUNY, and 16.8 percent ($428) at SUNY.

In 2003-04, proprietary college students received $561.8 million in State and federal student aid, including $136.4 million (24.3 percent of the total) from the Tuition Assistance Program (TAP), $133.4 million (23.7 percent) in federal Pell grants, and $291.9 million (52.0 percent) in federally guaranteed student loans.  At four-year proprietary colleges, 50.3 percent of the undergraduates received TAP; 56.1 percent received Pell grants.  At two-year proprietary colleges, 61.3 percent received TAP; 81.4 percent received Pell.  Two-year and four-year proprietary colleges also spent $27.6 million of their own unrestricted funds as grants to students that year.  Table 12 shows the proportions of undergraduates receiving TAP and Pell in 2003-04.

Table 12

Source: NYSED, Higher Education Data System, 2006.

E.  Institutional Accreditation.  Of the 42, colleges 32 are accredited by three agencies: 13 (31.0 percent) have Middle States accreditation, 13 (31.0 percent) are accredited by the Accrediting Council for Independent Colleges and Schools, five (11.9 percent) are accredited by the Board of Regents, and one has both Regents and Middle States accreditation.  Nine of the remaining ten are accredited by six accrediting agencies.  One proprietary college has no institutional accreditation.  Some proprietary colleges also have accreditation of specific programs from specialized accrediting agencies. 

Appendix B

Pertinent Rules and Regulations Context for Evaluating

New Proprietary Colleges in New York State

   A.  Regulatory Context for the Evaluations

·   The Rules of the Board of Regents, §3.47 and §3.50, contain requirements for earned degrees and list the degrees authorized for use in New York State.

·   Part 52 of the Regulations of the Commissioner of Education sets forth the standards for review of a college or non-degree professional school and its programs in the areas of: financial resources; facilities, equipment and library/information resources; faculty competence and credentials and adequacy to support programs; faculty evaluation, professional development, and involvement in institutional governance and other faculty responsibilities; the level of the curriculum and the integrity of credit; the coherence of the curriculum; admissions procedures and practices; academic support services; and the structure, responsibilities and policies of the institution’s administration.  In addition, §50 defines key terms, Part 53 regulated the provision of information to students and prospective students, and Part 54 regulates off-campus instruction.

·   In the case of for-profit institutions, the Education Law and the Business Corporation Law contain requirements for the Board of Regents approval and the Commissioner’s consent to the filing of incorporation papers with the Department of State. 

·   The Statewide Plan for Higher Education identifies the elements of a highly effective higher education system and New York’s priorities for its higher education system.