Chapters 75C, 75D, and 93 of the Massachusetts General Laws require the Office of the State Auditor and the Department of Elementary and Secondary Education to respectively evaluate the financial and academic qualifications of all private, post-secondary, non-degree-granting occupational schools licensed or registered to offer career training programs within the Commonwealth. 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.

Programs of study offered by licensed private occupational schools include automotive and appliance repair, bartending, broadcasting, business/secretarial skills, car audio/security system installation, computer technology, culinary arts, dental hygiene, dog grooming, electrical code and theory, fashion design, floral design, holistic health care, home health care/certified nurses’ assistant training, HVAC/industrial technology, massage therapy, modeling, phlebotomy, photography, plumbing, and tractor trailer driving.

Prior to licensure by the Department of Elementary and Secondary 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 must then secure tuition protection in the amount recommended by the OSA.

The Office of the State Auditor is further 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 provision specifically addresses the issue of potential refunds due to students as a result of fraud, deceptive recruitment practices, or breach of contract by a private occupational school.

As of June 30, 2011, a total of 203 private occupational schools were subject to annual financial certification by the OSA, consisting of 142 private business schools, 58 private trade schools, and three private correspondence schools. Forty-two Massachusetts schools now report annual tuition income of $1 million or more, including six schools that reported total revenue of between $10 million and $24 million last year, according to schools’ annual financial statements submitted to the OSA. At fiscal year-end, a total of 46 schools, or more than 22% of the entire population, were required by the OSA to maintain the statutory maximum $100,000.00 indemnification/surety protection to address potential refunds to students.