Rules & Regulations of the State of Tennessee
Title 1540 - Higher Education Commission
Chapter 1540-01-02 - Authorization and Regulation Of Regularly Authorized Postsecondary Educational Institutions
Section 1540-01-02-.07 - INSTITUTIONAL APPLICATIONS, REQUESTS, AND CERTIFICATIONS OF COMPLIANCE
Universal Citation: TN Comp Rules and Regs 1540-01-02-.07
Current through September 24, 2024
(1) Due dates, denials, withdrawals, and review:
(a) For purposes of these rules,
application refers to any application, request, or certification.
(b) When a due date is provided by Commission
staff, a complete application in the prescribed format shall be received at the
Commission by the close of business on the due date. Applications received
after the due date will be deemed late, will be reviewed after all timely filed
applications are reviewed, and may be subject to a late fee.
(c) Initial Authorization Applications and
Program Registration Requests shall be filed in the prescribed format and may
be filed at any time. All other applications shall be filed as provided for in
these rules. Applications will be reviewed when complete.
(d) When received, Commission staff shall
determine whether an application is complete and notify the applicant if the
application is incomplete. An applicant will have thirty (30) calendar days to
complete an incomplete application. Incomplete applications include
applications submitted without all applicable fees or in a format other than
the prescribed format and applications missing a required attachment. An
application that is not completed by the prescribed due date will be deemed
withdrawn.
(e) Denial or withdrawal
of an application does not prevent the applicant from submitting a new
application.
(f) When an
application is before Commission staff for consideration, Commission staff will
provide the applicant written notice of its final determination. If, upon
written notification of any action taken by Commission staff, an aggrieved
applicant desires a review by the Executive Director, the applicant shall
notify the Executive Director within ten (10) business days of the date of the
action of the Commission staff, otherwise the action of Commission staff shall
be deemed final and no further review available. Any request for review by the
Executive Director shall be in writing, signed, and provide a detailed
explanation of each alleged error with references to the Act or these rules. A
request may be denied if it is not received in a timely manner.
(g) If, upon written notification of any
action taken by the Executive Director, an aggrieved applicant desires a
hearing and review by the Commission, pursuant to T.C.A. § 49-72012, the
applicant shall notify the Commission within ten (10) business days of the date
of the action of the Executive Director, otherwise the action of the Executive
Director shall be deemed final and no further review available. Any request for
review by the Commission shall be in writing, signed, and provide a detailed
explanation of each alleged error with references to the Act or these rules. A
request may be denied if it is not received in a timely manner.
(h) Any person, agent, group or entity
aggrieved or adversely affected by any final Commission action may obtain
judicial review of the action as provided in T.C.A. § 497-2012.
(2) Initial Authorization Application:
(a) Institutions must demonstrate
through the Initial Authorization Application that the institution meets
minimum standards for authorization as provided for in the Act and these rules.
The application shall require at a minimum:
1.
A name of the institution that complies with the Act and Rule .06(5) of these
rules;
2. Evidence of a business
account with a financial institution that is federally insured in said
institution's name;
3. A
description of the ownership of the institution, including names and contact
information for owners or board of director members, percentage of ownership,
and, when applicable, a corporate flowchart or tree showing the institution's
position in relationship to all affiliated legal entities;
4. The address and general description of
facilities such that a determination can be made that the institution has
adequate space, equipment, and instructional material to provide education
consistent with the objectives of the course or program of study;
5. Evidence demonstrating that the location
meets the definition of location as provided for in these rules and that
possession of the location is stable such that the institution will be able to
use the location for a minimum of one (1) year from the date of application.
Month-to-month leases are not acceptable;
6. Qualifications for instructional staff and
administrative personnel;
7.
Designation of and contact information for an institutional director and an
affirmation from the director that the director will conduct the institution in
accordance with the Act and these rules;
8. A description of any administrative
structure above the institutional director with the signature of the official
that will notify the Commission if the director is replaced;
9. A continuous institutional surety
bond;
10. A copy of the enrollment
agreement the institution will use following receipt of
authorization;
11. A copy of the
pre-enrollment checklist the institution will use following receipt of
authorization;
12. A copy of the
institutional catalog the institution will use following receipt of
authorization;
13. A copy of the
student transfer of credit disclosure statement required by T.C.A. §
49-7-144 the institution will use
following receipt of authorization;
14. Any specific requirements as outlined
under Rule .08 of these rules;
15.
Affirmation that the institution is maintained and operated in compliance with
all pertinent ordinances and laws, including, but not limited to, rules and
regulations adopted pursuant to ordinances and laws relative to the safety and
health of all persons upon the premises;
16. If participating in Title IV federal
student financial aid programs, the institution must meet financial standards
and institutional stability deemed acceptable for eligibility in Title IV
federal student financial aid programs and provide the following:
(i) The institution's Office of Postsecondary
Education Identification (OPEID) number;
(ii) Documentation from Federal Student Aid
Office of the U.S. Department of Education listing the institution's federal
financial composite score as described in
34 C.F.R. §
668.172; and
(iii) Any correspondence issued in the past
twenty-four (24) months from the Federal Student Aid Office of the U.S.
Department of Education concerning eligibility for financial aid, including,
but not limited to, a letter of credit alternative or a provisional
certification alternative as well as any related correspondence from the
institution;
17. Provide
financial statements as follows:
(i) As to
institutions that are not currently operating a location,
(I) A year-to-date balance sheet prepared by
a certified public accountant or a bookkeeper certified by the National
Association of Certified Public Bookkeepers that demonstrates resources
adequate to fund facilities maintenance and overhead, staff and faculty
payroll, books, supplies or equipment utilized by students, and general
operating costs for a minimum of ninety (90) calendar days and
(II) Pro forma income statements prepared by
a certified public accountant or a bookkeeper certified by the National
Association of Certified Public Bookkeepers demonstrating that the location for
which authorization is being sought will within the first three (3) years
following receipt of initial authorization meet the ratios described in Rule
.14(5)(e) of these rules; or
(ii) As to institutions that are operating a
location,
(I) Current financial statement
prepared by a certified public accountant or a bookkeeper certified by the
National Association of Certified Public Bookkeepers with a balance sheet that
demonstrates resources adequate to fund facilities maintenance and overhead,
staff and faculty payroll, books, supplies or equipment utilized by students,
and general operating costs for a minimum of ninety (90) calendar days
and
(II) Pro forma income
statements prepared by a certified public accountant or a bookkeeper certified
by the National Association of Certified Public Bookkeepers demonstrating that
the location for which authorization is being sought will within the first
three (3) years following receipt of initial authorization meet the ratios
described in Rule .14(5)(e) of these rules and financial statements of all
owners; and
18. Such other information, clarification, or
training deemed necessary by Commission staff.
(b) A separate application for authorization
must be made for each location located outside of reasonable walking distance
from a previously authorized location. Commission staff may make reasonable
exceptions for narrow purpose, highly structured programs at multiple locations
where administrative requirements are limited and precise.
(c) Initial authorization may be granted for
up to four (4) years, unless otherwise determined by the Executive Director or
the Commission. Institutions with a four (4) year initial authorization term
shall submit Certifications of Compliance as provided for in these rules in
years one (1), two (2), and three (3) and a Reauthorization Application as
provided for in these rules in year four (4).
(d) Commission staff will review an Initial
Authorization Application and, upon finding that the application demonstrates
that the institution complies with all requisite standards, recommend that the
Executive Director grant the institution provisional initial authorization as
further explained at Rule .21 of these rules.
(e) The Commission is not required to
authorize an institution, if, in its judgment:
1. The institution is noncompliant with the
Act or these rules;
2. Adequate
provisions for the institution or its programs exist within the proposed
service area;
3. If there is
insufficient evidence that adequate employment opportunities exist in the
related occupations for persons successfully completing the institution's
programs; or
4. If the costs of a
program are unreasonable in relation to the reasonably expected earnings in
occupations for which the program is designed.
(f) In the event that the Initial
Authorization Application fails to demonstrate that the institution complies
with all requisite standards, Commission staff shall defer the application by
providing written notice of the deficiencies to the applicant and providing
applicant two (2) opportunities to correct the deficiencies. Following the
second failed attempt to correct deficiencies, the application will be
denied.
(3) Reauthorization Application:
(a) Institutions
with regular, or conditional authorization shall file a reauthorization
application by a due date to be established by Commission staff and posted on
the Commission's website.
(b) The
Reauthorization Application constitutes a self-study through which institutions
must demonstrate that the institution continues to meet the minimum standards
for authorization as provided for in the Act and these rules. The application
may require at a minimum:
1. Updates to
information previously submitted as part of other applications;
2. Information related to required student
enrollment documentation, such as enrollment agreements and
disclosures;
3. Financial
statements as described at Rule .14(4) of these rules;
4. A list of institutional
personnel;
5. Funding data for
students enrolled during the reporting year, including, but not limited to, the
amount of self-pay and state or federal aid program funds;
6. Student data related to licensure
examination passage rates as further explained in Rule .08(4) of these
rules;
7. Affirmation of the
requirement to submit statistical data as described in Rule . 18 of these
rules; and
8. Such other
information or clarification deemed necessary by Commission staff.
(c) Commission staff will review a
Reauthorization Application and, upon finding that the application demonstrates
that the institution complies with all requisite standards, grant
reauthorization for four (4) years, unless a shorter term is determined to be
appropriate by the Executive Director or Commission. In the event that the
Reauthorization Application fails to demonstrate that the institution complies
with all requisite standards, Commission staff shall defer the application by
providing written notice of the deficiencies to the applicant and providing
applicant two (2) opportunities to correct the deficiencies. Following the
second failed attempt to correct deficiencies, Commission staff will recommend
that the Executive Director take adverse action, including but not limited to
assessing a fine, placing the institution on conditional authorization status,
or revoking authorization.
(4) Change of Ownership Application:
(a) Authorization must be issued to the owner
or governing body of the applicant institution and is
nontransferable.
(b) A change of
ownership occurs when a transaction results in the controlling interest in the
postsecondary educational institution changing from an authorized owner to an
unauthorized owner. In the event of a change of ownership, the new owner must
submit to Commission staff within five (5) business days after the change in
ownership is finalized:
1. A Change of
Ownership Application and
2. A
request that the Executive Director grant the new owner conditional
authorization until the new owner obtains provisional initial
authorization.
(c) No
later than thirty (30) calendar days after the grant of conditional
authorization, the new owner shall submit an Initial Authorization Application
and related applications or an Optional Expedited Authorization Application as
provided for in Rule Chapter 154001-10.
(d) The Change of Ownership Application shall
require that the new owner provide the sales contract, bill of sale, deed, or
other documents necessary to transfer ownership of the institution.
(e) Commission staff will review a Change of
Ownership Application and, upon finding that the application demonstrates that
the institution complies with all requisite standards, grant the change of
ownership and recommend that the Executive Director grant conditional
authorization. In the event that the Change of Ownership Application fails to
demonstrate that the institution complies with all requisite standards,
Commission staff shall defer the application by providing written notice of the
deficiencies to the applicant and providing applicant two (2) opportunities to
correct the deficiencies. Following the second failed attempt to correct
deficiencies, the application will be denied and the closure process described
in Rule .23 of these rules may commence.
(5) Program Registration Request:
(a) In order to offer a program, an
institution must submit a Program Registration Request either along with an
Initial Authorization Application or, for previously authorized institutions,
as a stand-alone application. Program registration is required prior to
offering the program, which includes enrolling, advertising, recruiting or
soliciting. Program Registration Requests shall be filed in the prescribed
format and may be filed at any time.
(b) The Program Registration Requests may
include at a minimum:
1. General program
information, such as the program name, proposed start date, anticipated initial
enrollment, itemized tuition and other fees, delivery mode, length, number of
credits or contact hours, and accreditation status;
2. Designation of a credential that is
defined in Rule .03, such as certificate, diploma or bachelor's degree that
conforms to the requirement that no institution may offer an academic degree
program unless the institution is accredited;
3. If applicable, evidence of approval from
any subject matter expert state agency, board, or commission;
4. A program overview;
5. A job title and the associated
Classification of Institutional Programs (CIP) code applicable to the job
title;
6. The most currently
available entry level salary or wage data and job outlook projections for those
CIP codes from a Tennessee or federal website;
7. Admission criteria confirmation and, if
necessary, an explanation;
8.
Instructor qualifications;
9. A
list of training equipment, indicating whether the equipment is owned or
leased;
10. If applicable, a list
of all clinical or externships sites with which the institution has an executed
agreement;
11. If applicable, the
maximum pupil to teacher ratio for each course that does not exceed the below
acceptable ratios:
(i) Allied health labs or
clinicals with no subject matter agency oversight: 20-1;
(ii) Class A truck cab: 4:1; and
(iii) Class B truck cab: 2:1;
12. If applicable, distance
learning specific information, such as:
(i) A
mock password so that Commission staff can navigate through the online system
used for instruction and
(ii) An
explanation as to how educational goals and overall program goals are
achievable through distance learning; and
13. Such other information or clarification
deemed necessary by Commission staff.
(c) An institution revises a program when it
changes any element of a program that has been registered with the Commission,
for example, the name of the program, tuition, credit or contact hours,
mandatory other fees, length, or delivery mode, or when it changes the status
of the program, for example, inactivates or discontinues the program.
Institutions may revise programs as follows:
1. When an institution revises a registered
program, by more than twenty- five percent (25%) in the last twelve (12) months
or by changing the program delivery mode, name, or credential, then the
institution must reregister the program by submitting a Program Registration
Request at least thirty (30) calendar days prior to implementing the revision.
When calculating twenty-five percent (25%) in the last twelve (12) months, all
revisions made to quantifiable program elements in the last twelve (12) months
should be totaled. For example, if in the last twelve (12) months, the
institution raises tuition by five percent (5%) and adds ten percent (10%) to
the program length, then the institution has revised the program by a total of
fifteen percent (15%). If within twelve (12) months of these revisions, the
institution raises other fees by fifteen percent (15%), then the total of the
revisions in the last twelve (12) months is now thirty percent (30%) and the
institution must reregister the program by submitting a Program Registration
Request.
2. In all other instances,
an institution may revise a program at its discretion and report the revisions
to Commission staff when completing the annual Reauthorization Application or
Certification of Compliance.
(d) Institutions shall not arbitrarily add a
course, contact hours, or credit hours to an existing program in which a
student would incur additional time or expense beyond the catalog requirements
at the time of enrollment, unless the addition is in response to:
1. State approval agency
requirements;
2. U.S. Department of
Education recognized accreditor requirements; or
3. Professional licensure requirements.
In any event, the institution shall give adequate notice to all students affected prior to any change.
(e) Commission staff will review a Program
Registration Request and, upon finding that the registration demonstrates that
the institution complies with all requisite standards, register the program by
including it or revising it in the postsecondary program inventory. In the
event that the Program Registration Request fails to demonstrate that the
institution complies with all requisite standards, Commission staff shall defer
the registration by providing written notice of the deficiencies to the
applicant and providing applicant two (2) opportunities to correct the
deficiencies. Following the second failed attempt to correct deficiencies, the
program registration will be denied.
(6) Change of Location Application:
(a) Absent extraordinary circumstances, an
authorized institution shall submit a Change of Location Application thirty
(30) calendar days prior to moving and receive Commission Staff approval prior
to operation. An example of an extraordinary circumstance is the unexpected
loss of a lease. In the event of extraordinary circumstances, the institution
shall submit a Change of Location Application and receive Commission Staff
approval prior to providing instruction to students.
(b) The Change of Location Application shall
include at a minimum:
1. The address and
general description of facilities such that a determination can be made that
the institution has adequate space, equipment, and instructional
material;
2. Evidence demonstrating
that the location meets the definition of location as provided for in these
rules and that possession of the location is stable such that the institution
will be able to use the location for a minimum of one (1) year from the date of
application. Month-to-month leases are not acceptable;
3. Affirmation that the institution is
maintained and operated in compliance with all pertinent ordinances and laws
including, but not limited to, rules and regulations adopted pursuant to
ordinances and laws, relative to zoning and the safety and health of all
persons upon the premises; and
4.
Such other information or clarification deemed necessary by Commission
staff.
(c) Commission
staff will review a Change of Location Application and conduct an authorization
site visit, if Commission staff determines an authorization site visit is
necessary. Upon finding that the application and an authorization site visit,
if necessary, demonstrate that the institution complies with all requisite
standards, Commission staff will grant the change of location. In the event
that the Change of Location Application fails to demonstrate that the
institution complies with all requisite standards, Commission staff shall defer
the application by providing written notice of the deficiencies to the
applicant and providing applicant two (2) opportunities to correct the
deficiencies. Following the second failed attempt to correct deficiencies,
Commission staff will recommend that the Executive Director take adverse
action, including but not limited to assessing a fine, placing the institution
on conditional authorization status, or revoking authorization.
(d) If a move is beyond ten (10) miles and a
student is prevented from completing the training at the new location, a full
refund of all moneys paid and a release from all obligations will be given to
the student or loan holder.
(7) School Personnel Application:
(a) Authorized institutions must maintain
qualified faculty and staff in order to fulfill the mission of the institution
and all obligations to the students. Following initial authorization, an
institution must notify Commission staff when there is a change of
institutional director, including the appointment of an interim institutional
director, by submitting a School Personnel Application no later than five (5)
business days after the hire or appointment date.
(b) Administrative personnel are individuals
that oversee areas as outlined in operational and administrative standards.
This includes by function, but is not limited to titles of an institutional
director; financial aid administrator; director of admissions; director of
education; business officer or manager; director of student services (including
counseling and placement) and the registrar. Support and clerical staff is not
included as administrative personnel.
(c) Commission staff will review a School
Personnel Application and, upon finding that the qualifications of the
institutional director meet all requisite standards, approve the application.
In the event that the School Personnel Application fails to demonstrate that
the qualifications of institutional director meet all requisite standards,
Commission staff shall defer the application by providing written notice of the
deficiencies to the applicant and providing applicant two (2) opportunities to
correct the deficiencies. Following the second failed attempt to correct
deficiencies, the application will be denied.
(8) Institution Name Change Application:
(a) An authorized institution shall submit an
Institution Name Change Application thirty (30) calendar days prior to changing
the institution's name unless the name change is the result of a change of
ownership. In the case of a change of ownership, the authorized institution
shall submit a Change of Ownership Application.
(b) The Institution Name Change Application
shall include at a minimum:
1. Updated contact
information;
2. A proposed new name
of the institution that is compliant with these rules;
3. Updated surety bond information;
4. Affirmation that the institution following
approval and prior to using the new name will update the pre-enrollment
checklist, enrollment agreement, transfer of credit disclosure statement, and
catalog; and
5. Such other
information or clarification deemed necessary by Commission staff.
(c) Commission staff will review
Institution Name Change Application and, upon finding that the application
demonstrates that the institution complies with all requisite standards,
Commission staff will grant the change of name. In the event that the
Institution Name Change Application fails to demonstrate that the institution
complies with all requisite standards, Commission staff shall defer the
application by providing written notice of the deficiencies to the applicant
and providing applicant two (2) opportunities to correct the deficiencies.
Following the second failed attempt to correct deficiencies, the application
will be denied.
(9) Certification of Compliance:
(a) Annually
during the authorization term, institutions with regular or conditional
authorization shall file a Certification of Compliance by a due date to be
established by Commission staff and posted on the Commission's
website.
(b) The Certification of
Compliance shall require at a minimum that the institution selfcertify that it
is engaged in activities and operations in compliance with the Act and these
rules, the institution provide an updated comprehensive program list, and the
certification must be signed by the institutional director and, if other than
the institutional director, the owner, or a representative thereof. For
institutions that do not receive Title IV funds, the Certification of
Compliance may require financial statements as described at Rule .14(4) of
these rules.
(c) Commission staff
will review a Certification of Compliance and, upon finding that the
certification demonstrates that the institution complies with all requisite
standards, notify the institution of such. In the event that the Certification
of Compliance fails to demonstrate that the institution complies with all
requisite standards, Commission staff shall defer the Certification of
Compliance by providing written notice of the deficiencies to the institution
and providing the institution two (2) opportunities to correct the
deficiencies. Following the second failed attempt to correct deficiencies,
Commission staff will recommend that the Executive Director take adverse
action, including but not limited to assessing a fine, placing the institution
on conditional authorization status, or revoking authorization.
(10) Exemption Determination Request:
(a) The Exemption Determination
Request may include at a minimum:
1. Full
contact information for the requestor;
2. The statutory or rule citation justifying
exemption;
3. An argument applying
the statutory or rule citation to operations of the requestor;
4. Documentation supporting the requested
exemption such as: copies of all institutional materials; brochures;
advertising; state charter or business license; or organizational ties and/or
contracts with other educational providers; and
5. Such other information or clarification
deemed necessary by Commission staff.
(b) Commission staff will review an Exemption
Determination Request and, upon finding that the exemption as requested is
justified by statute or rule, notify the institution of such. In the event that
Commission staff requires additional information, Commission staff shall defer
the Exemption Determination Request by requesting such information and
providing the institution two (2) opportunities to correct the deficiencies.
Following the second failed attempt to correct deficiencies, the Exemption
Determination Request will be denied.
Authority: T.C.A. §§ 49-7-2005, 49-7-2006, 49-7-2007, 49-7-2008, and 49-7-2013 and 2022 Tenn. Pub. Ch. No. 1044.
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