Tenn. Comp. R. & Regs. 1540-01-02-.23 - INSTITUTION CLOSURE

(1) When an authorized postsecondary educational institution proposes to discontinue its activities or operation, including allowing authorization to expire, such institution shall notify Commission staff within seventy-two (72) hours of that decision.

(2) Commission staff will provide the institution a list of items that must be provided to Commission staff to close the institution in good-standing and a due date by which to provide the items. The list may include, but is not limited to:

(a) Anticipated date to terminate teaching activity;

(b) Ending date of present term;

(c) A listing by name of all students in all programs. Such list shall include student's social security number, unique student identification number, address, phone number, program of enrollment, and estimated completion dates;

(d) The status of all current refunds due or the amount of unearned tuition paid by each student and for which the institution is obligated;

(e) A verified agreement with one or more local institutions able to provide sound education to all students in all programs;

(f) Disposition and servicing of all academic records as required by T.C.A. § 49-7-2016;

(g) A request for conditional authorization where required;

(h) Updated statistical data;

(i) Official transcripts and certificates for all students enrolled at the institution since it was first authorized and any transcripts or certificates held by the institution that were awarded by another institution that had previously closed and deposited its records with the institution or that was purchased; and

(j) Demonstration that current educational obligations by the institution will be met on behalf of the presently enrolled students.

(3) An institution that ceases operations shall maintain sufficient and qualified faculty, staff, and equipment to teach all subjects to all currently enrolled students, regardless of the size of the class, until such time as the institution closes.

(4) Should the institution fail to make arrangements satisfactory to the Commission staff for the completion of the programs in which the currently enrolled students are enrolled and/or for the reimbursement of unearned tuition and fees, the institution shall be subject to fines. Unearned tuition is not the same as a refund calculation or return to Title IV calculation. Unearned tuition shall be calculated as provided for in Rule Chapter 1710-01-02.

(5) Institutions that close without proper notification to the Commission or that fail to comply with closure obligations given in this rule may be deemed retroactively by the Executive Director to have had the institutional authorization officially revoked. Such a revocation status shall be maintained as part of the Commission closure file on that institution and any individuals directly involved, including, but not limited to, the director, owners, and/or the board chair.

(6) Student Completion of Education ("Teachouts"):

(a) The Executive Director may approve other authorized or exempt institutions to teachout students who were currently enrolled in an institution which ceases operation. An approved teachout institution shall:

1. Offer the course of study or similar course of study as those offered at the closed institution;

2. Be in the same geographic area as that in which the closed institution existed or provide necessary transportation expenses;

3. Provide the student the opportunity to complete the program at no cost in excess of that for which the student originally contracted at the closed institution;

4. Accept any and all credits earned at the closed institution; and

5. Not reduce total course hours required for the student to complete.

(b) If the closed or closing institution fails to provide an acceptable plan to the Executive Director, Commission staff may work toward effecting teachout arrangements or transfer agreements with other authorized institutions.

(c) Teachout plans may involve other institutions or be carried out by the terminating institution as circumstances may dictate.

(7) As an alternative to the deposit of records with the Commission, the institution may propose a plan for permanent retention of the records for consideration by Commission staff.

Notes

Tenn. Comp. R. & Regs. 1540-01-02-.23

Original rule filed June 24, 1998; effective October 28, 1998. Amendment filed June 6, 2008; declared void and of no effect pursuant to Davidson County Chancery Court's October 2011 order. See also Attorney General's Opinion 11-78. Amendments filed April 1, 2013; to have been effective September 28, 2013. However, a petition for a rulemaking hearing was filed June 26, 2013. The Tennessee Higher Education Commission filed a withdrawal of the rule on July 26, 2013. Emergency rules filed August 15, 2016; effective October 3, 2016 through April 1, 2017. Repeal and new rules filed December 21, 2016; effective March 21, 2017. Emergency rules filed June 29, 2022; effective July 1, 2022 through December 28, 2022. Amendments filed September 30, 2022; effective 12/29/2022.

Authority: T.C.A. §§ 49-7-2002, 49-7-2005, and 49-7-2016.