Independent Colleges in KY. may Face New Fees, Stricter Reviews

Independent colleges operating and seeking to operate in Kentucky would have to begin paying licensing fees and have their programs undergo more comprehensive reviews under a revised regulation that will be voted on Thursday by the Kentucky Council on Postsecondary Education.

The regulation also calls for private colleges — both non-profit and for-profit — already licensed to operate in Kentucky to pay an annual maintenance fee based on their enrollment, and the length of time they have been licensed in the state. The proposed fee ranges between $500 and $8,000.

The colleges also would be assessed a $300 fee for each new program and a $200 fee for a new instructional site.

In addition, new in-state colleges seeking an operating license would pay a $1,000 application fee, while those from outside Kentucky would pay $5,000. They also would pay fees for each program offered.

Council officials said Wednesday the policy revision is necessary to address the growing number of institutions, particularly out-of-state institutions coming to Kentucky, accommodate online learning and align licensing standards and procedures.

They noted that “degree mills, diploma mills and counterfeit operations target states with lax enforcement,” and that technology and the internationalization of postsecondary education have increased the risk of fraud.

“We do feel the need to be much more extensive in our review,” said Dennis Taulbee, the council’s general counsel . “There are a lot more schools, and there are a lot more complaints. … There also is a lot of money involved in this. There are a lot of federal grants and a lot of federal loans.”

If the council approves the regulation revision Friday, the proposal would then get a public hearing scheduled for Oct. 27, said Sarah Levy, the council’s senior associate for academic affairs.

Since 1997, the number of licensed independent colleges doing business in Kentucky has grown from 40 to 60, with 23 from out of state, council officials said.

The 60 licensed private colleges offer approximately 1,800 licensed programs, some at multiple instruction sites. According to state financial aid reports from 2006-07, 35 percent of Kentucky’s $64 million in financial aid goes to licensed colleges.

Some of those institutions are non-profits like Bellarmine or Spalding universities. Others are considered for-profit like Sullivan University or National College of Business & Technology.

The council has licensing authority over all private, for-private colleges offering a bachelor’s degree or above; all private, nonprofit colleges; and religious colleges and out-of-state private and public colleges which operate in Kentucky.

For-profit schools that offer only associate degrees or certificates are licensed by the Kentucky State Board of Proprietary Education.

Failing to comply with the council’s licensing regulation can result in an institution being denied a license, having an existing license suspended or revoked.

Gary Cox, president of the Association of Independent Kentucky Colleges and Universities, said fundamentally the association agrees with the proposed policy, although it hopes to discuss the new fees with the council.

“On balance, we’re positive about the approach,” Cox said. “Nobody likes to pay fees, of course. But we think it is positive that the council is looking at these regulations. I think their concerned about basic quality.”

Cox, whose organization represents 20 nonprofit Kentucky colleges who all are accredited by the Southern Association of Colleges and Schools, said it is important for the state to enact regulations that ensure students receive “the same level of quality and service” at institutions, and also extended campuses that many of the colleges also operate.

Council officials said 85 percent of other states — 39 of 46 states — charge similar licensing fees to independent colleges.

Sarah Levy, the council’s senior associate for academic affairs, said the increase in institutions and online programs impacts the effectiveness and timeliness of the license review process. She said the fees will generate about $272,000, which would be used to hire additional staff to review colleges and programs, and collect and manage enrollment and degree-granting data from the institutions.

The new regulation allows for announced and unannounced site visits.

It also calls for out-of-state colleges licensed by the council for which accreditation by the Southern Association of Colleges and Schools is not an option to be reviewed by the council based on criteria that mirrors the association criteria in order to qualify as an eligible college in which a student may enroll and receive a Kentucky tuition grant.


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