For more than 30 years, the Office of the State Auditor has partnered with the Department of Education in the regulation and oversight of private, non-degree-granting occupational schools in Massachusetts; as required by Chapters 75C, 75D, and 93 of the Massachusetts General Laws. The OSA is responsible for annually evaluating the ownership, organization, and financial condition of each private educational institution licensed to offer postsecondary career-oriented training programs in Massachusetts by the DESE Office of Proprietary Schools, and for subsequently establishing the level of indemnification/surety protection needed by each school to cover potential refunds to students in the event of a precipitous closure or a breach of contract by the school.

Non-degree-granting career-oriented programs of study currently offered by Massachusetts private occupational schools include automotive, aviation, and appliance repair; bartending, broadcasting, computer technology, culinary arts, dental assisting, dog grooming, electrical code & theory, fashion design, floral design, holistic health care, home health aide/nurse assistant training, HVAC /refrigeration, massage therapy, modeling, phlebotomy, professional photography, plumbing, and tractor-trailer driving.

As a result of the unprecedented growth of the proprietary school industry over the past decade, legislation has been proposed at both the state and federal levels to provide greater protection for students, employers, and taxpayers. On May 24, 2012, Governor Deval Patrick signed into law House 3625, “An Act Relative to Oversight of Private Occupational Schools.” House 3625, which incorporated the increased surety protection provisions proposed by State Auditor Suzanne M. Bump, will strengthen the laws, rules, and regulations governing private occupational schools in Massachusetts; streamline the Commonwealth’s regulatory process; transfer responsibility for private occupational school licensure from the DESE to the Division of Professional Licensure, within the Office of Consumer Affairs and Business Regulation; and provide additional financial recourse for Massachusetts students by removing the $100,000 limitation on each school’s indemnification/surety protection level.

Effective August 1, 2012, House 3625/ Chapter 106 of the Acts of 2012 will repeal Chapter 75C, Chapter 75D, and Chapter 93, Sections 20A to 21G of the General Laws and consolidate the licensure function under one statute- MGL Chapter 112. At the close of fiscal year 2012, the OSA was responsible for annually evaluating the financial viability of 205 private occupational schools operating in Massachusetts, consisting of 144 private business schools, 58 private trade schools, and 3 private correspondence schools. Of these approved educational institutions, a total of 46 schools, or approximately 22%, were required to maintain the maximum $100,000 indemnification/surety protection.