Request By:
Mr. Gary S. Cox
Executive Director
Council on Higher Education
1050 U.S. 127, South
Frankfort, Kentucky 40601
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Anne E. Keating, Assistant Attorney General
In your recent letter you asked this office for an opinion interpreting the statutes on the authority of the Council of Higher Education to license nonpublic colleges and on the authority of the State Board for Proprietary Education to license proprietary schools.
The authority of the Council on Higher Education to license nonpublic colleges is set forth in KRS 164.945 to 164.947. KRS 164.945 defines "College" as
any educational facility or institution maintained or conducted by any person, association, partnership, corporation or trust and operating as an institute, junior college, college, university, or entity of whatever kind which awards a degree, diploma, or other statement of recognition purporting to indicate a level of collegiate attainment beyond secondary school graduation. The following shall be excluded from this definition as it applies to the licensing and regulation requirements of KRS 164.945 to 164.947: . . . (b) Colleges licensed or approved for establishment and operation under the statutory authority given to . . . the Kentucky State Board of Business Schools under KRS 165A.310 . . . .
You point out that the State Board of Business Schools is now known as the State Board for Proprietary Education. The statutes governing proprietary education, KRS 165A.310 to 165A.410, contain the following provision in KRS 165A.320:
KRS 165A.310 to 165A.410 shall not apply to any institution offering a four (4) year college level course recognized by the Council on Higher Education nor shall it apply to any religious or nonprofit institution exempt from taxation under the laws of this state, or which is subject to the provisions of KRS 164.945. KRS 165A.310 to 165A.410 is intended to apply to and regulate proprietary schools including but not limited to correspondence schools which are operated as or are organized for profit, whether profit is ever realized.
Recently certain proprietary schools have considered adding programs at the baccalaureate degree level. Staff from the State Board for Proprietary Education and staff from the Council on Higher Education have considered the proposals and are jointly requesting an opinion on the interpretation of KRS 165A.320 as it would apply, in the circumstances presented, to the following questions.
1. Would the licensure responsibility for all of a proprietary institution's programs be transferred from the State Board for Proprietary Education to the Council on Higher Education when a proprietary institution adds programs at the baccalaureate degree level or higher?
The purpose of the chapter on licensing of nonpublic colleges is "to promote and to enhance the opportunity for higher education in Kentucky by giving recognition and approval to bona fide colleges and universities . . . ." KRS 164.946. "College" includes any institutions encompassed by the definition in KRS 164.945, see above. The Council on Higher Education has the authority and responsibility to adopt standards and procedures for the licensing of colleges "to insure that the programs of preparation are comparable to the generally accepted standards of collegiate instruction with respect to faculty, curriculum, facilities and student cost and that there is full disclosure with respect to the philosophy and purpose of the institutions and their capacity to fulfill these objectives . . . ." KRS 164.947.
The authority of the Board of Proprietary Education is set forth in Chapter 165A of the Kentucky Revised Statutes.
No person shall conduct, operate, maintain, or establish a proprietary school as herein defined or use any words which designate or tend to designate to the public that the operator of the school is qualified to conduct, operate, and maintain the school, unless he holds a valid current license from the board.
KRS 165A.330. A "proprietary school" is defined to mean "any privately owned educational institution, establishment, agency, organization, or person offering or administering a plan, course, or program of instruction in business, trade, technical, industrial, or related areas for which a fee or tuition is charged whether conducted in person, by mail, or by any other method." KRS 165A.310.
The chapter on licensure of proprietary schools does not apply to "any institution offering a four (4) year college level course recognized by the Council on Higher Education nor shall it apply to any religious or nonprofit institution exempt from taxation under the laws of this state, or which are subject to the provisions of KRS 164.945 . . . ." [Emphasis added.] KRS 165A.320.
It is the opinion of this office that a proprietary school which decides to offer a four year college level curriculum shall no longer be under the jurisdiction of the Board of Proprietary Education but shall be under the jurisdiction of the Council on Higher Education in compliance with KRS 165A.320. Accordingly, the proprietary school must comply with the standards set by the Council on Higher Education in accordance with KRS 164.947 and shall obtain a license from the Council.
2. If a proprietary institution has both associate and baccalaureate programs, would it be possible for the State Board for Proprietary Education to retain licensure jurisdiction for programs at the associate degree level and below while the Council on Higher Education would have licensure jurisdiction for programs at the baccalaureate level or higher?
The proprietary institutions offer a "degree" which is defined, without additional particulars, to mean "associate degree." KRS 165A.310. The Proprietary Board is responsible for determining that the quality of instruction and content of the course of instruction is adequate to provide a reasonable education and training to each student. KRS 165A.370. The level of instruction required is not that of collegiate instruction as set forth under 164.947.
It is the opinion of this office that, when a proprietary institution has both associate and baccalaureate programs, the Council on Higher Education, alone, has licensure jurisdiction. It would be misleading to the public for an associate degree, as defined by KRS 165A.310 and regulated by the State Board for Proprietary Education, to be offered by the same institution that offers a baccalaureate degree as defined by KRS 164.945 and regulated by the Council on Higher Education. Ordinarily, one level of instruction may lead students to continue on to the next level. The school, therefore, needs to determine whether it wishes to remain a proprietary institution or whether it wishes to advance into the area of collegiate instruction.
3. If it is determined that the Council on Higher Education has licensing responsibilities for all the programs offered by a proprietary institution when there is at least one program offered at the bachelor's level, would it be permissible to develop a Memorandum of Agreement between the State Board for Board for Proprietary Education and the Council on Higher Education providing for the assistance and recommendation of the State Board for Proprietary Education regarding the evaluation of programs offered by proprietary institutions at the associate level or below?
Neither the statutes on licensing of nonpublic colleges nor the statutes on proprietary education prohibit the arrangement that you describe. However, the responsibility for licensure remains that of the Council on Higher Education. Therefore, the Council must ensure that the Council's standards are met.
4. If an institution licensed by the State Board for Proprietary Education intends to add one or more programs at the baccalaureate level and it is determined that all of the institution's programs are subject to licensure by the Council on Higher Education, would it be possible to develop a transition plan which would allow the license issued by the State Board of Proprietary Education to continue in effect until the Council on Higher Education licensing process can be completed?
Licensure by the Council on Higher Education should occur prior to implementation of programs at the baccalaureate level. It is the understanding of this office that the licensure process does not require that all faculty be hired at the point of licensure; nor need the entire curriculum to be offered at the baccalaureate level already be implemented. Licensure may be obtained upon assurance that the school will meet the standards of the Council on Higher Education. Therefore, the school should remain licensed by the State Board for Proprietary Education until obtaining a license to operate a program at the baccalaureate level under the Council on Higher Education. Accordingly, the proprietary school should not hold out its program as being at the baccalaureate level until the license is obtained from the Council on Higher Education under KRS 164.947.
5. If an out-of-state proprietary institution offers baccalaureate programs on the home campus, but only offers programs at the associate degree level or below in Kentucky, would the institution be subject to the licensure requirements of the State Board for Proprietary Education or the Council on Higher Education?
Both the State Board for Proprietary Education and the Council on Higher Education regulate institutions located in-state and institutions located out-of-state that do business in Kentucky. The Council on Higher Education has jurisdiction only over a program or curriculum that is offered in Kentucky; the Council has no jurisdiction to regulate bachelor's level courses located outside of the state. Therefore, in this instance, the State Board for Proprietary Education should continue to exercise supervision where out-of-state institutions only operate programs in Kentucky that are below the collegiate level.
6. If it is determined that the Council on Higher Education has complete licensing authority for proprietary institutions offering baccalaureate programs, would it be permissible to promulgate regulations relating to the licensing of proprietary institutions which are parallel, but not identical to the regulations governing the licensing of nonpublic institutions?
This office has determined that the Council on Higher Education holds complete licensing authority when a proprietary institution initiates programs at the collegiate level in the Commonwealth. "College" as defined by KRS 164.945, does not differentiate between an educational facility that offers instruction only at the collegiate level and educational facilities that offer some instruction at the collegiate level. But clearly, under KRS 165A.320, any institution offering four year college level course work that is recognized by the Council is exempt from the provisions of Chapter 165A on proprietary education.
Therefore, under KRS 164.947, the Council may promulgate regulations setting forth standards on collegiate instruction that would also cover former proprietary institutions under its jurisdiction.