| To: | Current and Former Students of Proprietary Schools |
| From: | Office of Proprietary Schools |
| Date: | September 2004 |
If your private occupational school closed and the bulletin posted on our website requests students from your school file a Claim for Restitution with the Department to obtain a refund of your tuition, please review these directions and download the Claim for Restitution form (not the complaint form). Please complete and sign the claim form and worksheet, attach the requested documents, and submit them to the Department. Please do not submit a claim unless the Department has requested students from your school to do so as additional information may be required.
Before filing a Claim for Restitution, students must use the relevant options outlined in the first bulletin for their school to resolve their debt. Additionally, students who paid this school via student loans should contact their lending agency (contact information should be on your loan documents) to discuss their loan obligation. Students who have federal loans, please also see the Federal Student Aid web-site to determine whether students may be eligible for loan discharges.
If you obtained a loan to pay for your courses and the loan was not forgiven (discharges) by the lender, you must submit loan documents with your claim for restitution and must provide the following three pieces of information: 1) loan documents that evidence the amount the loan company paid to the school on your behalf, 2) loan documents that show the name of the closed school to which the funds were paid, and 3) loan documents that show the date the funds were paid to the school. Sometimes more than one piece of loan documentation is needed to provide these three pieces of information. It is your responsibility to secure this information from your loan provider.
Who should file a claim for restitution:
- Students who paid tuition for courses or programs of study and were not able to complete them due to the school's closing. Please note that educational expenses other than tuition cannot be claimed (e.g., books, transportation, software, computers, loan fees).
Who should NOT file a claim for restitution:
- Students who did not prepay for coursework.
- Students who have obtained a discharge of student loans, a reversal of credit card payments, or who were able to stop payments on checks, and who no longer have outstanding tuition, do not need to file a claim for restitution.
- Students who completed their program of study through either the school or another school with which a teach out option was arranged. (Please refer to your school's closure bulletin for more information about the latter option).
If you are filing a Claim for Restitution, please be sure to keep copies of all documents and do not send any original attachments (e.g., loan documentation, cancelled checks, credit card statements) to the Department. Claim forms and attachments will not be returned to claimants. If students would like verification that the Department received his/her claim, students must provide a stamped, self-addressed envelope.
Processing claims for restitution takes several months, with the entire claims process taking one to two years, as all claims must be processed at the same time. The Department must review each claim, determine the eligibility of each, and request additional documentation from the claimant when necessary. Once all claims have been processed, the Department has several additional steps it must undertake. First, the Department contacts student loan guarantors or loan servicers to determine what, if any, portion of students loans have been returned to them by the school upon closing, and the Department deducts those amounts from student claims. Second, in the event the school was eligible to receive federal student loans, the Department contacts the American Student Assistance (ASA) agency, the federal student loan guarantor for Massachusetts, to determine what, if any, portion of the loan has been forgiven because of the school's closing and deducts those amounts from student claims. Students can help speed up the claim review process by undertaking the previous two steps themselves and ensuring that the documentation they provide the Department shows evidence of payment to the school during the claim period.
Once the claims have been adjusted, the Department will send a worksheet to each student with the Department's calculation of their claim amount as evidenced by the above documentation. Sometimes the claim amounts are determined to be $0. Students will have 30 days to dispute the claims with the Department and to provide additional documentation, if needed. In the event students are owed a refund, they should be aware that the total on the worksheet may ultimately be pro-rated depending upon the total number of claims against the insurance bond; this means that students may only receive a percent of their total claim. Once the claims have been recalculated, they are totaled and Department files a claim against the school's surety bond. In some instances the insurance company may request additional documentation and the Department may also be called upon to negotiate individual claims. Once the Department receives a check from the surety agent, restitution checks can be disbursed to students. The Department will notify students by mail when the claims have been settled and when checks will be issued.
Please note that surety bonds do not cover teachers. Teachers who are owed back wages should file a claim with the Attorney General's Office, Fair Labor and Business Practices Division, for back wages, or, in the event of a school's bankruptcy, they should contact the Bankruptcy Clerk of Boston, 617-565-8950, to be added to the list of creditors.
The Department will keep claimants informed by posting updated bulletins and claim statuses as each stage of the claims process is completed. Please note that each stage may take several months. If there has been no new information posted for a period of time, this simply means that this stage of the process is not yet complete. Your patience in this lengthy process is appreciated.
The Department also appreciates your help in keeping the volume of phone calls and emails it receives to a minimum by checking the bulletins and claim statuses, as it helps our small staff concentrate on completing the high volume of work experienced by this unit. We thank you for your help and patience in this matter.