Occupational Schools
Chapters 75C, 75D and 93 of the Massachusetts General Laws require the Office of the State Auditor (OSA) and the Department of Education to annually evaluate the financial and academic qualifications of applicants for licensure or registration as private business, trade, or correspondence schools. Schools conducted by employers to train their own employees, or schools or colleges chartered or otherwise authorized by the Commonwealth, are exempt from the mandate of the statutes. These consumer protection statutes were enacted to ensure that private occupational schools are both financially and academically qualified to operate in Massachusetts.
Prior to licensure by the Department of Education, all such non-degree granting business trade, and correspondence schools are required to submit financial statements to the OSA. This information is evaluated to determine the solvency of each applicant. Those schools determined to be financially qualified for licensure or registration must then secure tuition protection in the amount recommended by the OSA.
The OSA is required to annually determine each school's appropriate protection level, which may take the form of a surety bond, an irrevocable letter of credit, or a term deposit account payable to the Commonwealth. This consumer protection is intended to cover potential tuition refunds to students resulting from fraud, deceptive student recruitment practices, or a breach of contract by the school.
As
of June 30, 2007, there were 195 private occupational schools on the OSA
Proprietary School Active File, consisting of 138 private business
schools, 49 private trade schools, seven private correspondence schools,
and one registered school. At
fiscal year-end, the financial certification process was ongoing for
nineteen renewal applicants, while the process was completed for 176
schools that were found to be financially eligible to apply for
occupational school licensure during the year.
The 176 approvals by the OSA during fiscal year 2007 represented 24
original applications and 152 renewals.