Sponsored by:
Senator M. TERESA RUIZ
District 29 (Essex and Hudson)
SYNOPSIS
Establishes tuition reimbursement program for students enrolled in certain private postsecondary educational schools.
CURRENT VERSION OF TEXT
As reported by the Senate Higher Education Committee on October 5, 2026, with amendments.
An Act concerning certain private postsecondary institutions and supplementing Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. 1[A private career school shall obtain a performance bond payable to the Commissioner of Labor and Workforce Development in an amount to be determined by the commissioner. The proceeds of the performance bond may be used to pay approved refunds or to reimburse the fund established pursuant to section 2 of this act for refunds or other payments made to or on behalf of a student]
As used in this act:
“Commissioner” means the Commissioner of Labor and Workforce Development.
“Department” means the Department of Labor and Workforce Development.
"Disorderly closure" means a closure that does not meet the requirements of sections 14 through 20 of P.L.2021, c.27 (C.34:15C-10.3 through C.34:15C-10.9).
“Eligible student” means a student enrolled in a school who has paid tuition and fees for a course or unit of instruction at that school, but is unable to complete the course or unit of instruction because of the disorderly closure of the school, or was enrolled in the school within 90 days of the disorderly closure of the school and is owed a tuition and fees refund from the school.
“Private career school” means a privately owned and privately operated postsecondary school, other than an institution of higher education or proprietary institution licensed to offer academic degrees, that furnishes or offers to furnish programs, whether or not requiring a payment of tuition or fee, for the purpose of training, retraining, or upgrading individuals for gainful employment as workers in recognized or emerging occupations.
“Tuition and fees” means the tuition and fees paid by an eligible student to a private career school and may also include the amounts paid for supplies, equipment, or other costs required for enrollment1.
2. 1a.1 A restricted, nonlapsing, revolving Private Career School Student Tuition Protection Fund, to be managed and invested by the State Treasurer, is hereby established in the Department of Labor and Workforce Development. The purpose of the fund shall be to provide for a system of equitable refunds in the event of the 1disorderly1 closure of a private career school.
1b.1 The State Treasurer shall have full statutory powers of investment of the fund, except that any interest, income, and dividends derived from the investment of the fund shall be credited to the fund. The operating expenses of the fund shall be paid out of the monies in the fund.
1c. The department may use no more than 10 percent of the fund annually for administrative costs, including claim processing, record maintenance, institutional oversight, and recovery efforts.1
3. a. 1(1)1 A private career school shall pay 1[to the State Treasurer,] an assessment determined by the commissioner in the manner set forth in this section1 to be deposited into the Private Career School 1Student1 Tuition Protection Fund 1[, an amount set by the commissioner for each student enrolled in that school, in the manner set forth below]1. This 1[charge] assessment1 shall not be considered a part of tuition 1and fees1.
1[(1) Within 90 days of the effective date of this act, a] (2) A1 private career school shall make 1[a payment] the assessment1 for each student enrolled at that school 1[as of the effective date of this act.
(2) For newly-enrolled students who start a program of instruction after the effective date of this act, payments shall be made on a quarterly basis, on the dates of January 30th, April 30th, July 30th, or October 30th, for students enrolled within a three month period ending the month immediately preceding the applicable payment dates.] following a schedule to be determined by the department.
(3) The department may require a performance bond based on a risk-based analysis of factors that include the school’s financial statement and regulatory history.1
b. When the balance in the fund reaches 1[$2,500,000] $7,500,0001, and upon notification from the commissioner, private career schools shall cease contributing to the fund. If the balance in the fund is reduced to an amount less than 1[$2,000,000] $5,000,0001 because of a school or program closure, the commissioner shall notify all private career schools, and they shall resume payment for all newly-enrolled students after the notification date, according to the schedule in paragraph (2) of subsection a. of this section until the balance in the fund is recapitalized at the amount of 1[$2,500,000] $7,500,0001.
c. 1[Notwithstanding the provisions of subsection b. of this section to the contrary, a private career school receiving an initial certificate of approval pursuant to section 13 of P.L.2005, c.354 (C.34:15C-10.1) after the effective date of this act, shall make the payments as required by this section for a period of four years.
d. As used in this act:
“Commissioner” means the Commissioner of Labor and Workforce Development.
“Department” means the Department of Labor and Workforce Development.
“Private career school” or “school” means a qualifying school as defined in section 4 of P.L.1989, c.293 (C.34:15C-1).] The department shall, through regulation, establish assessment levels, assessment periods, and the schedule for cessation of tuition bond payments based on an actuarial assessment of enrollment, potential student reimbursement expenses, and disorderly closure risks.1
4. Whenever a private career school 1[ceases to operate, becomes insolvent, or otherwise ceases all instructional activity] experiences a disorderly closure, as determined by the commissioner1, the following shall apply:
a. Any 1eligible1 student 1[enrolled in the school who has paid tuition for a course or unit of instruction at that school, but is unable to complete the course or unit of instruction because of the insolvency or cessation of operation of the school, or was enrolled in the school within 90 days of the insolvency or cessation of operation of the school and is owed a tuition refund from the school, is eligible to] may1 apply to the department for a refund of any tuition 1and fees1 which the school has not previously refunded to the student. The commissioner shall seek to notify all 1potentially eligible1 students 1[eligible for a refund]1. 1[The following payments] Payments1 shall be made from the Private Career School Student Tuition Protection Fund, to the extent monies in the fund are available.
1[(1) If an eligible student is transferring to another private career school to complete the contracted-for courses or instruction, the program expenses incurred by the receiving school shall be paid to that school on behalf of the student subject to the approval of the commissioner.
(2) If an eligible student is not transferring to another private career school, the amount of refund for which the student is eligible shall be determined by the department based on various factors, including, but need not be limited to, the percentage of contracted-for services received and the availability to the student of opportunities to complete the course or instruction at another school within a reasonable period of time. In no case shall the amount of refund paid exceed the amount of tuition paid by a student.]1
b. The department1[, in consultation with the Executive Director of the Higher Education Student Assistance Authority, shall identify all students who are pursuing a course or instruction who have paid all or part of the tuition with State grant or scholarship funds. Any refund to which the student is entitled shall be made directly to the Higher Education Assistance Authority, except that any refund amount which exceeds the amount of State grant or scholarship funds shall be distributed directly to the student.
c. The department shall pay claims approved pursuant to this section from the performance bond required pursuant to section 1 of this act whenever possible. When the bond is insufficient to pay all approved claims, the department shall direct the State Treasurer to] shall review each application for tuition and fees reimbursement made pursuant to subsection a. of this section to determine validity and the appropriate amount of reimbursement. Subsequently, the department shall1 issue a refund check drawn against the available funds in the fund. If a student is a minor, payment shall be made to the student’s parent or legal guardian. A student who receives a refund or on whose behalf a refund is paid pursuant to this section, or if the student is a minor, the parent or legal guardian of the student, shall assign all rights to the State of any action against the school or its owner for tuition 1and fee1 amounts reimbursed. Upon the assignment, the State may take appropriate action against the school or its owner in order to reimburse the fund for any expenses or claims that are paid from the fund and to reimburse any expenses the State incurs in undertaking the action.
1c. (1) A student who is denied reimbursement for tuition and fees pursuant to the provisions of this act may appeal that determination.
(2) The department shall adopt regulations that provide for a timely, equitable, and transparent appeals process.1
15. The department shall annually issue, on or before December 31st of each year, a report presenting the financial condition of the fund, assessment collections and reimbursements paid during the preceding fiscal year, recovery efforts undertaken, and the compliance of private career schools with the provisions of this act.1
16. The department shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as necessary to implement this act.1
1[5.] 7.1 This act shall take effect on the 180th day following enactment, except that the commissioner may take any anticipated administrative action in advance of that date as shall be necessary for the implementation of this act.