TRENTON, N.J. — The New Jersey Senate has passed a bill that would create a state fund to reimburse students at private career schools that shut down abruptly and cannot meet their obligations to students, according to the Senate Democratic Office.
The measure, S-2216, is sponsored by Senate Majority Leader M. Teresa Ruiz, D-Essex/Hudson.
The bill would set up the “Proprietary Institutions Student Tuition Protection Fund” inside the state Department of Labor and Workforce Development. The fund would be restricted, nonlapsing and revolving, and private career schools would pay into it under requirements set by the labor commissioner.
If a school undergoes what the bill calls a disorderly closure, eligible students could apply to the department to recover tuition the school had not already refunded.
Some private career schools would also have to post a performance bond payable to the labor commissioner. The commissioner would set the bond amount based on risk factors such as enrollment, possible reimbursement costs and the likelihood of a disorderly closure. Bond proceeds could be used to pay approved refunds or to replenish the fund.
“The disorderly closure of a private career school can be extremely disruptive to students on a path to building a stable career. The loss of time and tuition can set students back both in their educational journey and financially,” Ruiz said in a statement.
“Improving our safety net for students attending these schools and establishing a tuition and fee protection fund will help safeguard students’ finances and keep them on track to completing their education,” she said.
According to the Senate Democrats, 12 states already operate similar tuition recovery funds and require performance bonds from schools considered at higher risk of closing.
This report is based on a press release from the New Jersey Senate Democrats.
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