Bill Text: NJ A5776 | 2022-2023 | Regular Session | Introduced
Bill Title: Provides students enrolled in certain career programs with consumer protections from fraudulent and misleading claims and practices.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2023-11-30 - Introduced, Referred to Assembly Higher Education Committee [A5776 Detail]
Download: New_Jersey-2022-A5776-Introduced.html
Sponsored by:
Assemblywoman LINDA S. CARTER
District 22 (Middlesex, Somerset and Union)
Assemblywoman VERLINA REYNOLDS-JACKSON
District 15 (Hunterdon and Mercer)
Assemblywoman MILA M. JASEY
District 27 (Essex and Morris)
SYNOPSIS
Provides students enrolled in certain career programs with consumer protections from fraudulent and misleading claims and practices.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning career programs of study and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Career program of study" means a program that develops occupation-specific knowledge and technical skill proficiency that culminates in the attainment of a license or certificate for a specific occupation, or is represented by the program as preparing students for employment in a specific occupation.
"Cost of attendance" means the tuition and fees charged for a program, plus the costs for room and board while enrolled in a program, and the costs for any transportation, books, or other supplies required for participation in a program.
"Covered school" or "school" means a nonpublic postsecondary educational institution that offers one or more career programs of study or a private career school as that term is defined by section 14 of P.L.2021, c.27 (C.34:15C-10.3). Covered schools do not include public or independent institutions of higher education.
"False or misleading statement" means any false or unsubstantiated statement, misrepresentation, or knowing omission of any material fact, which has the tendency or capacity to mislead a student, prospective student, or other individual.
"Lending institution" means any private entity that itself, or through an affiliate, engages in the business of making loans to students, parents, or others, for the purpose of financing postsecondary education or training expenses, or that securitizes such loans, or any private entity, or association of entities, that guarantees such loans.
"Placement rate" means the percentage of program graduates, or of students who completed a program, who obtained employment in their field of study within an established timeframe.
"Preferred lender" means any lending institution that a school endorses, promotes, chooses, or assigns preferential status to, by posting a lending institution's name or loan product's name in information mailings or brochures or any other document provided to students, prospective students, or their parents, or arranging or otherwise facilitating the origination of loans from the lending institution.
2. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a covered school to:
a. initiate communication with a prospective student prior to enrollment on more than two occasions in a seven day period;
b. engage in misleading or deceptive advertising practices, including, but not limited to, using or causing to be used:
(1) advertisements that conceal or fail to disclose the name of the school; or
(2) advertisements, whether printed or electronic, to solicit prospective students using a false or misleading statement that causes a prospective student or other person to falsely believe that employment is being offered;
c. enroll a student in a program when the school knows, or reasonably should know, that the student will not meet the educational, training, licensure, or other requirements for employment in the industry for which the school claims to prepare students;
d. recommend specific lending institutions to prospective or current students while failing to disclose that the lending institution is:
(1) is affiliated with the school or its corporate parent or subsidiaries; or
(2) is providing to the school directly or indirectly, something of value in the form of payment or in-kind service in exchange for any advantage or consideration provided to the lending institution relating to educational loan activities;
e. discourage prospective or current students from choosing a lender solely on the basis of that lending institution not being on the school's preferred lender list;
f. permit or authorize a lending institution, in conjunction with discussing loan options with prospective or current students, to identify the lending institution's employees or agents as employees or agents of the school;
g. represent or imply in advertising or otherwise that persons employed in a given occupation will earn a stated salary or income or that persons completing a program will earn the stated salary or income unless:
(1) the stated salary or income is equal to or less than the average entry level salary of persons employed in the occupation in the State, as determined by the Department of Labor and Workforce Development;
(2) the advertisement or representation states clearly and conspicuously any limitations, conditions, or other requirements that are required to be met to qualify for the stated salary or income; and
(3) the advertisement or representation states clearly and conspicuously that no guarantee is made that a person who purchases the advertised services will obtain a job or will earn the stated salary or income, unless the guarantee is offered directly by the school; or
h. make any false or misleading statement regarding:
(1) actual or probable earnings of the school's former students in general or in any job or occupation;
(2) the accreditation of the school, a program at the school, or the number and qualifications of the faculty and staff employed by the school;
(3) placement rates or placement services;
(4) opportunities to join any job or occupation, or the likelihood of employment in any job or occupation;
(5) the requirements for successfully completing the program, grounds for termination from the program, the transferability of credits earned at other schools into the program, the transferability of credits earned at the program to other schools;
(6) limited-time admissions offers;
(7) the nature or character of classroom instruction, including disclosures over the extent to which instruction is provided by means other than in-person;
(8) the size, location, condition of school facilities or equipment, and as appropriate, their applicability to the education or training being offered;
(9) the availability, frequency, and applicability of the courses and programs to the stated employment objectives of the program;
(10) any prerequisites established for enrollment in any course or program;
(11) testimonials or endorsements by current or former students, employers or industry representatives, schools or educational entities, or others;
(12) the award of any certificate, diploma, degree, or other document upon completion of the program, and whether the document is authorized by any government, industry, or other agency;
(13) the costs of attendance, the availability of scholarships and financial assistance, the right to refuse any loan offer or other offer of financial assistance, and the refund policy of the school;
(14) the availability of any tutorial or specialized instruction, guidance, and counseling or other supplementary assistance from the school; and
(15) the education level, training, experience, or other material requirements for certification, employment or licensure in the occupation, or for acceptance to a required apprenticeship to which the program is represented to lead.
3. a. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for a covered school to fail to post on its website, and to fail to disclose to prospective students at least 72 hours prior to entering into an enrollment agreement for a program, on a form to be signed by a representative of the school and by the student, the following information:
(1) the program's cost of attendance;
(2) the average length of time to complete the program;
(3) completion rates of the previous three cohorts of students;
(4) the percentage of program completers from the last three years who have secured full-time employment in a position for which the program represents to provide education or training; and
(5) the requirements for certification, employment, or licensure in the occupation for which the program represents to provide education or training.
b. A covered school shall disclose the information required pursuant to this section at least annually to each student enrolled at the school, on a form to be signed by a representative of the school and the student.
4. It shall be an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) for any covered school to compensate an employee or contractor involved in the recruitment, enrollment, admissions, or sales of educational materials to students on the basis of commission, bonuses, and other direct forms of compensation based on success in securing enrollments.
5. The Attorney General, in consultation with the Secretary of Higher Education and the Commissioner of Labor and Workforce Development, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to implement the provisions of this act.
6. This act shall take effect on the first day of the 12th month next following the date of enactment.
STATEMENT
This bill provides students enrolled in certain career programs with consumer protections from fraudulent and misleading claims and practices. The bill's provisions apply to nonpublic postsecondary educational institutions that offer one or more career programs of study and private career schools. The bill does not apply to public or independent institutions of higher education.
Under the provisions of this bill, it would be an unlawful practice under the consumer fraud act for certain schools offering career programs of study to:
· initiate communication with a prospective student prior to enrollment on more than two occasions in a seven day period;
· engage in certain misleading or deceptive advertising practices;
· enroll a student in a program when the school knows, or reasonably should know, that the student will not meet the requirements for employment in the industry which the school claims to prepare students;
· recommend specific lending institutions to prospective or current students while failing to disclose certain relationships that benefit the institution or school;
· discourage prospective or current students from choosing a lender solely on the basis of that lending institution not being on the school's preferred lender list;
· permit or authorize a lending institution to identify the lending institution's employees or agents as employees or agents of the school;
· represent or imply in advertising or otherwise that persons employed in a given occupation will earn a stated salary or income or that persons completing a program will earn the stated salary or income; or
· make any false or misleading statement regarding school qualifications, staff, or assets, costs or financial aid awards, student outcomes, industry opportunities, or other specified areas relating to the program experience, prospects, or obligations of students.
The bill further provides that it would be an unlawful practice under the consumer fraud act for a covered school to fail to post on its website, and to fail to disclose to prospective students at least 72 hours prior to entering into an enrollment agreement for a program, on a form to be signed by a representative of the school and by the student, the following information:
· the program's cost of attendance;
· the average length of time to complete the program;
· completion rates of the previous three cohorts of students;
· the percentage of program completers from the last three years who have secured full-time employment in a position for which the program represents to provide education or training; and
· the requirements for certification, employment, or licensure in the occupation for which the program represents to provide education or training.
The bill requires a covered school to disclose this information at least annually to each student enrolled at the school, on a form to be signed by a representative of the school and the student.
Finally, the bill provides that it would be an unlawful practice under the consumer fraud act for a covered school to compensate an employee or contractor involved in the recruitment, enrollment, admissions, or sales of educational materials to students on the basis of commission, bonuses, and other direct forms of compensation based on success in securing enrollments. An unlawful practice is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, violations may result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party.
The bill directs the Attorney General, in consultation with the Secretary of Higher Education and the Commissioner of Labor and Workforce Development to develop and adopt rules and regulations necessary to implement the bill's provisions.
