Minutes of the New York State Proprietary School Advisory ... - acces

Minutes of the New York State Proprietary School Advisory Council Meeting
June 23, 2011
Focus Personal Training Institute
115 West 27 Street
New York, NY
Submitted by: Monica Borden
Present:
Mike Hatten, Chair
Vincent Ferrara, Member
James Devaney, Member
Anthony Civitano, Member
Alan Goldberg, Member
Carole Yates (BPSS), Ex-officio Member
Jorge Montalvo for Lisa Harris (CBP), Ex-officio Member
Absent:
Rabbi Yerachmiel Barash, Member
Anthony Casale, Member
Lisa Timoney, (DOB), Ex-officio Member
Gene Brenenson (OSC), Ex-officio Member
Norene Grose (HESC), Ex-officio Member
Guest:
Kevin Smith, Deputy Commissioner - Adult Career and Continuing Education Services (ACCES)
Call to Order:
Mike Hatten called the meeting to order at 10:45 a.m.
Introductions & Meeting Protocol:
The Advisory Council members introduced themselves – five out of seven voting members were
present, so the Council was able to vote on recommendations.
Mike Hatten covered the protocol for discussions between Counsel members and the audience.
Mike also introduced the host school and staff: Focus Personal Training Institute was represented by
its owners – Gabriel Valencia and Joseph Masiello, and its director – Angela Corcoran. Focus is a new
school, which recently graduated its first class. The owners and director expressed hope that their
program, which is one of only a few regulated personal training programs, will grow and be successful.
Mike then thanked New York Film Academy for filming the meeting and editing the final product. He
reminded people to speak into the microphones, so that comments could be recorded.
1

Overview of Meeting Agenda:
Mike reviewed the mission of the Council, which is documented in Section 5010 of the Education
Law. He stated that the Council’s mission is to be an independent voice and to report to the Board of
Regents, Commissioner, Legislature, and Governor concerning non-degree schools. Only full
members have voting rights; ex-officio members do not – nor do they have control of the Council
agenda.
Approval of Minutes:
Allan Goldberg made motion to approve the minutes as written, with Vincent Ferrara as second. The
minutes passed with all in favor.
Comments From Kevin Smith:
Mike then introduced Deputy Commissioner Smith.
Deputy Commissioner Smith stated that he understands the value and importance of the Advisory
Council to the proprietary school sector. He came from the adult literacy sector and has first-hand
knowledge of the value of vocational training, as a parent of a disabled child. He admitted that the
proprietary school industry was new to him, but he studied this area before accepting his new position.
He had no idea of the size and scope of this sector until he began working closely with BPSS. With
500+ licensed schools, there are more than twice as many non-degree schools as degree-granting
schools in NYS, which surprised him.
Kevin stated that it is a huge responsibility for everyone to get the word out about the value of this
sector. He also stated that one of SED’s goals is to increase the attention that BPSS and the schools
receive, with increased communication between the schools, BPSS, the public, and the legislature. It is
important to emphasize the career skills and economic opportunities build a stronger base for industry.
He stated that the office of ACCES was designed specifically for the adult population – this office
serves youth as emerging adults and supports adults with their career goals – while working cohesively
with other offices within SED and other agencies.
He’s aware that in the past, SED has not given enough attention to this sector, and BPSS has not been
given the tools needed to due its job to the best of its abilities. This has already changed in concept
and structure, but will also change through action.
BPSS takes its responsibility very seriously. The first ACCES BPSS goal is to license better schools at
the very beginning, starting with upgrades to the licensing process. BPSS will also engage other
agencies that offer services that support its mission. It is his hope that complaints and educational
violations will diminish as more attention is focused on schools’ abilities to operate in compliance.
Mike asked the Council if there were any questions or comments.
James Devaney stated that the proprietary sector has always been held accountable and while BPSS
has worked for many years to improve schools, it’s interesting to watch the degree sector being held
accountable, as well.
2

BPSS Update and Status Report:
Carole Yates gave the BPSS update –
� Dr. John King has been appointed Commissioner of Education.
� A new Deputy Commissioner has been appointed to the Office of Higher Education, since Joe
Frey’s retirement.
� A new Deputy Commissioner has been appointed to the Office of the Professions.
� Valerie Grey has been appointed Executive Deputy Commissioner.
� BPSS is enjoying renewed/increased support from upper management in SED. Commissioner
Dr. John King has been involved with the proprietary school press, speaking on BPSS’ behalf,
and of BPSS activities – The Bureau and schools are no longer under the radar, and are moving
to the front and center.
� Kevin Smith schedules regular manager meetings, and BPSS has been given more assistance
getting resources, such as the computer system. One example of this is the recent approval for
travel for two all-staff meetings – one in March in Albany and one in June in NYC.
� Internally, BPSS teams (Investigations, Education, and Licensing) are meeting more often –
because BPSS is made up of some dynamic individuals, many issues are getting on the table.
� Valerie Grey wanted to see the current BPSS data system in use, so Monica put together a
demo of BPSS’ 1987 COBOL system for SED executive managers, including Valerie Grey,
Kevin Smith and IT management. She went through all of the processes that staff must use to
get through their work, and when one particular screen was brought up, there were audible
gasps of dismay because it was such a difficult screen to navigate. The demo made it clear how
archaic the system is and why BPSS has a right to complain. The current system is simply an
index, which lists records in BPSS’ possession, but does not give any history – paper files are
used daily. She expects to get the OK to move forward with an internal build.
� Layoffs – tomorrow pink slips will go out to those immediately targeted. Carole is more
concerned about ‘bumping’ than about targeted layoffs, since bumping results in targeted
senior staff reverting to previously held positions. Least senior staff, and staff in lower gradelevel
positions end up being the people who actually lose their jobs.
o Tentative agreement reached between Governor and CSEA (largest NYS union): 5 year
contract, 9 days of furloughs, increased health insurance, no pay increases for three
years, and 2% increases for the final two years
o Next step is that PEF will meet with the governor
o Finally, members of both unions will have to vote on the tentative contracts
� Work is continuing on the NY Paralegal School closure – still no final numbers on refunds
required. Students tend to want their certificates in lieu of refunds.
� More investigative activity outside of NYC. Matthew Couch is a new investigator located in
the Albany office, and has been conducting more investigations upstate, in the Hudson Valley,
the Capital District and the western part of the State.
� Congratulations to Hunter Business School and Jay Fund for obtaining approval to teach
Licensed Practical Nursing, after working with Office of the Professions.
� Carole and Thomas Reimer have been working with Department of Health on Home Health
Aide issues. BPSS is dealing with another school, which is causing major concerns. BPSS has
disapproved their license for renewal and is working on their closure. Recently BPSS
3

o When DOH finds these issues in agencies, the program is shut down and the agency
must prove that the program is valid
o BPSS does not shut a program down until violations are proven, which leads to more
harm to the public and more fraudulent activities
o DOH suggested that one of the solutions could be that proprietary schools may no
longer be allowed to offer this course
� BPSS bill – It looked like the bill would pass, but there have been a few roadblocks. John
Frederick is the SED legislative lead and has helped push this cause, as has Valerie Grey and
Kevin Smith.
o Significant opposition from the Coalition
o Significant opposition from one lobbyist, representing a single school
o Efforts being redoubled and the Commissioner will help get this through in the next
session.
� Consultants – A recent application was received for a new school and all documents submitted
were identical to a recently licensed school, including all figures on the pending school’s
balance sheet. The balance sheet was attested to by the owner, stating that the information was
true and correct. The consultant is a notorious previous school owner, whose school was
closed as a result of fraudulent activities, yet he is touting himself as an expert in this area, is a
friend to the Bureau well, and knows what BPSS wants to see. He actually showed up at the
NYC office and Betty threw him out. Monica followed up with a strong letter to the school,
advising them that following this sort of advice is casting a shadow on their application and
will cause them major problems in the future. The licensing process is a learning experience,
which requires an owner to understand what needs to be done and why. Simply buying a
package from a consultant is asking for trouble.
Mike Hatten commented on this subject – this is fraud, but even worse is the fact there are consultants
that do a very good job and actually assist schools in learning the process. When there are fraudulent
consultants that pollute the process, it is harmful to everyone. Mike suggested that SED have some
ability to ‘certify’ good consultants, and require owners to disclose information on consultants used.
James Devaney stated that proprietary schools do a great job and is not condoning bad actors but he
believes that the number of good schools far outweigh the bad.
Anthony Civitano agrees that requiring full disclosure on the use of consultants should be instituted.
He also stated that the bill addresses a lot of the issues that feed this problem: Candidacy, financial
viability, etc. He stated that he has learned a lot about the challenges the sector has to overcome when
schools operate poorly. When a school operates poorly, it reflects on all the institutions as a whole.
He also reinforced the fact that the NYS Beauty School Association supports the bill, always has, and
will continue to do so. He called on Terry Zaleski and the ‘other’ lobbyist to really read the bill, and
focus on what the bill’s real purpose is. While there is a higher price tag, the purpose of the bill is to
hold schools to standards required to educate their students, and the $250 application fee allows
anyone to apply and use BPSS’ resources when they may not ever have a chance to succeed. The
$5000 application fee requires owners to have a plan and to give serious consideration before they take
on this challenge. Schools should be held to higher standards than the average small business –
4

professions and educators are two totally different things. He called on the dissenters to stop being
obstructionists – to read the bill and support it.
Vincent Ferrara told Kevin that newcomers to the industry need training up front, not to wait until they
submit a new school application. Kudos to Betty for helping him understand some of the finer points
of the application process.
Kevin thanked them all for comments and understands their concerns. He stated that BPSS is such a
small unit and is doing a tremendous amount of work, but does not have the current resources to allow
staff to do this. The intent is there to be transparent but the resources are not there at this time.
At this time, Mike Hatten introduced Jorge Montalvo, from the Consumer Protection Division of the
New York State Department of State.
Carole Yates announced that the previous Consumer Protection Board has been added to the
Department of State, under the new Commissioner Cesar Perales, and is now known as the Consumer
Protection Division. The CPD and Lisa Harris have been great partners both the Advisory Council and
BPSS.
Carole also responded to Vincent’s comments on training. She discussed the Directors’ Course, and
previous attempts at putting pending school directors though it, with disastrous results. She also
discussed the three Refresher Directors’ Courses, which were extremely well-received. Schools have
requested that BPSS offer it annually, but the Bureau doesn’t have the time. Monica recently spoke to
the Director of the Massachusetts equivalent of BPSS, which offers pre-licensing training – a good
model that BPSS would like to consider: Two meetings prior to licensure and one after. However,
BPSS does meet with schools individually when schools request it, and always meets with new owners
during a transfer of ownership process.
Carole also told a story about one of the educators who went into a school approximately one year into
the school’s two year initial license and found a host of problems. If this were the two-year renewal
visit, it would have resulted in a denial. Because of this visit, BPSS has the time to offer technical
assistance before the school is up for renewal – passage of the new bill would make it possible to
implement this type of visit into the new school process. BPSS staff wants to do this, but does not
have the time to do it with the current resources and antiquated processes that are currently in
existence, due to the lack of resources. Disciplinary action is unpleasant and takes a lot of time and
energy.
Allan Goldberg wanted to make a point about the consultant and school submission. He suggests
communicating information about consultants to school owners.
Monica Borden responded to the issues of technical assistance and consultant training by reiterating
that BPSS staff wants to do more training for newcomers, that BPSS will continue to work with
consultants, and that BPSS will hold school owners responsible for their submissions. BPSS is
currently reviewing ideas that will assist schools by addressing the role of a consultant.
Anthony Civitano agreed that the Refresher Directors’ Course was valuable and asked Carole if the
Associations could consider sponsoring the Course at one of their facilities, in conjunction with a few
BPSS staff members. Carole said that it was a good idea and Anthony volunteered the NYSBSA to do
5

so. He also suggested again that BPSS ET staff also be trained on certain areas that are often confused
by different educators. Carole agreed that this is a good idea and that BPSS staff has also requested
this, and it is going to start with the educators.
Kevin Smith stated that he spent 28 years in a statewide not-for-profit organization and understands the
business owners’ side of dealing with SED. However, he was surprised at what he found when he
started in his new position – he expected to find the worst; uncaring individuals and inefficiencies in
effectiveness. He didn’t find any of that – what he found was caring and hardworking individuals, and
extensive paper permission trails. He spoke to Carole’s mention of all-staff meetings. Kevin believed
this was a no-brainer, but not so much to the NYS environment. The same thing was found with the
BPSS computer system. These have solutions, but will take a different mindset at the management
level. He believes that the new leadership is on board with this and expects that changes will happen
soon, but the legislation is key. More attention will be given to the incoming schools, and more
training will be offered.
Anthony Civitano also mentioned that this is a perfect segue to the next topic – USDE Final Rules. He
stated that if a school is accredited and taking in Title IV funding, a strong state education department
is needed. He feels that the bill will also show a strong state oversight.
Mike summarized the position of the bill, with the assistance of John Frederick: Realistically, the bill
will not move this session but will stay live until June 2012, will be reviewed again in the fall, and
probably be up for vote in January 2012. John reached out to the NYSBSA and they gave their
unequivocal support. He reached out to the Advisory Council for suggested changes and they had
none. He reached out to the Coalition, but got no response.
Mike Hatten suggested a meeting of all interested parties as soon as possible – this should be opened
up to everyone because not all schools are represented by an organization.
John Frederick stated that the chairs of both houses put forth strong commitment that the bill would be
done early in the next session.
Anthony Civitano spoke to people that are worried about the language of the bill: The regulations
have to be written and that’s the time to be specific – not in statute. Statute is a generic overview of
requirements – the regulations go into greater detail and BPSS has promised that stakeholders will be
involved in that process. He also addressed concerns that this bill gives BPSS too much teeth,
however he disagrees and reminded people that there is always legal recourse. He believes that school
owners hold the key to operating in compliance, and that is in training employees and watching
carefully to ensure that they know and understand their responsibilities.
Mike Hatten agreed with Anthony’s comments and moved on to the next topic.
USDE Federal Rules:
Mike Hatten introduced this topic and discussed the need for national accreditation and stressed that
each school should strive to reach that status.
He deferred to Ray Testa, VP of Government Relations for Empire Beauty Schools to discuss the
current status of the Title IV Federal Rules. Ray stated that:
6

� There is currently a lawsuit pending to repeal the state authorization rules, due to some
important issues. The lawsuit was brought about by APSCU and a ruling is expected prior to
July 1, since that is when the rules go into effect. Schools are expected to continue to prepare
as if they will pass. NYS is seen as a viable state oversight agency and is part of the triad (state
licensure, accreditation, and federal Title IV approval). The BPSS bill reinforces the intent of
the state oversight/authorization idea.
� Another item that faces litigation is the definition of credit hour, which can be discussed
shortly.
� As of 7/1/11, all Title IV schools are required to make changes to their promotional materials,
including catalogs, which satisfy the new rules. Ray thanked BPSS for meeting with the NYS
Beauty School Association’s legislative team, to create a process to expedite these amendments
– disclosures and satisfactory academic progress. He encouraged all schools affected to look at
their promotional materials and get their amendments to SAP and disclosure in to BPSS. BPSS
was able to turn Empire’s amendments around in less than a week – he commended BPSS, and
especially Betty Zhou, for this assistance.
� New disclosures required by 7/1 include:
o The occupations and corresponding CIP codes that apply to those occupations, along
with an active link to the USDE website, so that students can investigate the occupation
o Median loan debt of graduates from last award year on federal loans, private loans, and
institutional financing plans - by program
o Immediate prominent disclosure for costs of tuition, fees, books, and supplies
o On-time graduation rates – of those who graduated, how many did so within the normal
time to complete?
o Placement rates – until USDE prescribes a formula, schools must use one prescribed by
the school’s national accrediting agency or state licensing authority
o The rules of July 2012, which could make a program no longer eligible, have been
modified a bit, including:
� repayment rate set at 35%, and
� graduate’s income must be able to cover median loan debt with 12% of their
earnings, or
� can cover loan debt with 30% of discretionary income
� Failure of all three in any three years out of the four year reporting period,
results in loss of eligibility – earliest loss of eligibility is 2015.
� Metrics take effect July 2012.
Ability to Benefit Testing
Mike Hatten set up an ad-hoc meeting - open to the public- at Focus on June 29, and has invited
Wonderlic to describe the ATB process, which goes into effect on 7/1/11.
Workforce Development
Mike Hatten said the he read that Workforce is not using licensed schools to train their clients, and he
is concerned. He feels that this a topic that needs discussion – and needs to deal with it as a Council.
Vincent Ferrara doesn’t think that the AC can tackle this issue unless BPSS can help reach out to
Workforce to get someone to attend an AC meeting and discuss this with the group.
7

Council Appointments:
Mike Hatten stated that there are still two vacancies available on the Council: One from the Speaker of
the Assembly and one from the Governor – a student advocate.
Mike has nominated the student advocate, has forwarded his information to the Governor’s
appointment office, and hopes to be able to make the announcement at the next meeting.
Anthony Civitano asked Mike to share the nominee with the Council and stated that he should have
done so prior to putting through his resume, especially if it was to be a Council recommendation.
Mike agreed and promises to do so, in the future.
Comments From Council:
Mike Hatten discussed the correlation between the federal gainful employment rule of publishing ontime
graduation rates and the NYC community college graduation rates. He distributed a packet of
material to all Council members, showing disturbing NYC community college on-time graduation
rates of less than 3%. He is offended on behalf of the minority students of NYC that this is allowed to
continue. When NYC public schools are allowed to graduate less then 20% of their students ready to
take on college-level work, they are bound to fail.
Mike stated that if NYS continues to perpetuate this failure, and to funnel students through this system,
it is doing a severe disservice to the students of NY. There must be a way that quality non-degree
schools can step in to fill the needs of students that may not be ready for college-level work – as an
educational ladder of success. Proprietary schools must be considered a link between high school
education and the next step in a young adult’s life.
He attempted to reach out to NYC Chancellor Wolcott a couple of months ago, but has received no
response. He will continue to push this effort in the future.
Comments from Audience:
Barbara Dick – NY Language Center:
A lot of information discussed at the Advisory Council Meetings is not pertinent to ESL schools.
Mike Hatten thanked Barbara for her thoughts and asked the ESL schools to bring their issues to the
Council’s attention.
Barbara stated that they do not want to miss meetings, in case issues pertaining to their schools are
discussed.
Terry Zaleski, Executive Director Coalition of New York State Career Schools:
� Terry distributed copies of June 5, 2011 editorial found in the New York Times, entitled
“Stopping Fraud at Trade Schools.” He was very upset about the way in which the schools
were presented and made the point that many of the issues used as basis contained errors of
fact. He contacted the Times and received a correction regarding the source of BPSS funding,
and his response letter was printed.
8

� He agreed that the BPSS bill has been pending for many years, but doesn’t think it’s at point to
be passed. The Coalition has no problem with additional resources being given to BPSS;
however the Board does not believe that the funding will be used in the way that it is promised,
due to previous administration’s promises of creating a dedicated unlicensed school unit. He
states that the Coalition has no problem with the legislation and when he is called, he tells
people that, however he has a problem with the process - namely BPSS’ lack of response –
which he states he can verify by dozens of attempted contacts that were never returned.
� In February, the Coalition attended a meeting with BPSS in Albany and provided additional
documentation post-meeting, yet never heard anything from BPSS.
� Terry told the legislative staff the Coalition is willing to work with BPSS in good faith and deal
with current issues, such as Workforce money – which should be included in the law.
� He discussed the Coalition’s Memorandum of Opposition, which states that they respect BPSS,
but current issues must be addressed, especially issues that affect the non-accredited schools
that are having financial difficulties.
� The Coalition has no problem with increased fees but is not convinced the proposed fees are
appropriate. They want BPSS to do well, and try to balance the different interests.
Next Meeting:
The next meeting will be scheduled in September 2011, in NYC.
With no further business, the meeting ended at 1:05 pm.
9