Laws, rules and regulations



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MICHIGAN

LAWS, RULES AND REGULATIONS

GOVERNING

PROPRIETARY SCHOOLS

Developed under the

State Board of Education

Michigan Department of Education (January 1999)


Administered by the Michigan Department of Career Development

(Effective January 2000)

MICHIGAN DEPARTMENT OF CAREER DEVELOPMENT

Office of Postsecondary Services, Proprietary School Unit

Victor Office Center, 4th Floor, 201 N. Washington

Lansing, Michigan 48913
Telephone: 517.373.6774

Fax: 517.373.2759

E-mail: 







10/01

January 2000
Cover Explanation to the Michigan Laws, Rules and Regulations Governing Proprietary Schools
NOTICE TO THE PUBLIC
Executive Order 1996-12 (December 19, 1996) transferred all of the State Board of Education “statutory powers, duties, functions and responsibilities as relates to the Michigan Laws, Rules and Regulations Governing Proprietary Schools to the State Superintendent of Public Instruction.” The order further stated that the “State Board of Education shall retain its’ policy making authority with regard to these statutory provisions by determining the policies, if any, on which the administration of these provisions shall be based.”
The administrative statutory powers, duties, functions and responsibilities of the Superintendent of Public Instruction are set forth in provisions of the Michigan Compiled Laws regarding the administration of postsecondary services. The administrative statutory powers, duties, functions and responsibilities include:


mmm.388.1014a regarding the deposit and maintenance of records of nonoperating educations agencies;

qqqq.395.101-102 regarding the issuance, renewal, and revocation of temporary and permanent proprietary school licenses;

rrrr.395.102a(2) regarding the receipt of reports and the collection of fees from proprietary schools;

ssss.395.102a(3) regarding the exercise of jurisdiction and control over proprietary schools

tttt.395.102b regarding the receipt of evidence of surety and indemnification from proprietary schools;

uuuu.395.123(6) regarding the authority to adjust fee schedules for solicitor permits for private schools;


Executive Order 1999-12 (October 1999) transferred those same previous State Board of Education statutory powers relating to the Michigan Laws, Rules and Regulations Governing Proprietary Schools from the Superintendent of Public Instruction to the Department of Career Development.
The attached laws, rules and regulations document developed under the authority of the State Board of Education prior to Executive Orders 1996-2 (December 19, 1996) and 1999-2 (October 1999) remains in effect. However, when reading these laws, rules and regulations, please keep in mind the following:


Any reference to the “Superintendent of Public Instruction” should be substituted with the “Director of the Department of Career Development.”

Any reference to the “Department of Education” should be substituted with the “Department of Career Development.”




NOTE: The two Executive Orders, mentioned above, do not affect the State Board of Education’s policy making authority.



TABLE OF CONTENTS

PRIVATE TRADE SCHOOLS, BUSINESS SCHOOLS, AND INSTITUTES

Act 148 of 1943
395.101 Proprietary school; license; duration; renewal; revocation; granting temporary permit or license to operate proprietary school in conjunction with another business or commercial enterprise prohibited.

395.101a Definitions

395.102 Issuance of license; conditions; temporary permit to operate proprietary school; proposal; contents; duration of temporary permit; renewal.

395.102a Inspection of proprietary schools; rules; reports; records; fees; board jurisdiction and control over proprietary schools and solicitors.

395.102b Evidence of surety; bond; amount; rules; expiration of surety; proof of renewal; failure to submit evidence of surety; applicability of section.

395.103 Violation of act as misdemeanor; penalty.


PRIVATE TRADE SCHOOLS, BUSINESS SCHOOLS,

CORRESPONDENCE SCHOOLS, AND INSTITUTES

Act 40 of 1963
395.121 Definitions.

395.122 Solicitor’s permits; requirement; application, contents.

395.123 Solicitor; permit required; rules; solicitation for specifically listed school; knowledge of student financial aid programs; knowledge and information required; representation of more than 1 school; application for permit; surety bond; withdrawal; notice; annual fee; disposition, use, and adjustment of fee; expiration of permit.

395.124 Solicitor’s permits; revocation; contracts; violation of act, misdemeanor.

395.125 Repeal.
HOME SOLICITATION SALES

Act 227 of 1971
445.111 Definitions.

445.111a Telephonic solicitation using recorded message prohibited.

445.112 Right of buyer to cancel home solicitation sale; time; notice of cancellation; restriction on right to cancel; sale subject to debtor’s right to rescind.

445.113 Written agreement or offer to purchase; contents; form; cancellation.

445.114 Tender of payments or goods to buyer; failure to tender goods; effect of noncompliance.

445.115 Demand by seller for return of goods; care and availability of goods; effect of failure to demand return of goods; compensation for services performed.

445.116 Refunds or penalties as set off or defense.

445.117 Action for collection of home solicitation sale contract.


ADMINISTRATIVE RULES
Proprietary Schools R 390.561–R 390.569

Solicitors for Private Schools R 340.471–R 340.479





PRIVATE TRADE SCHOOLS, BUSINESS SCHOOLS, AND INSTITUTES
Act 148 of 1943
AN ACT to provide for the regulation and licensing of proprietary schools in the state; to require surety; to provide for collection and disposition of fees; and to prescribe penalties for the violation of this act.
The People Of The State Of Michigan Enact
395.101 Proprietary school; license; duration; renewal; revocation; granting temporary permit or license to operate proprietary school in conjunction with another business or commercial enterprise prohibited. [M.S.A. 15.627(1) ]

Sec. 1. (1) A proprietary school shall secure from the board a license issued in the form prescribed by the board and in accordance with this act.

(2) A license issued under this act shall be valid for not more than 1 year. If the applicant continues to comply with this act and the rules promulgated under this act, the license may be renewed.

(3) The license may be revoked at any time if, in the judgment of the board, the person to whom the license is issued is not complying with provisions of the law or the rulings of the board.

(4) A person shall not be granted a temporary permit or a license to operate a proprietary school as part of, or in conjunction with, another business or commercial enterprise which utilizes or sells goods or services produced by students.

History: 1943, Act 148, Imd. Eff. Apr. 14, 1943;‑‑CL 1948, 395.101;‑‑Am. 1949, Act 258, Eff. Sept. 23, 1949;‑‑Am. 1967, Act 210, Eff. Nov. 2, 1967;‑‑Am. 1983, Act 60, Imd. Eff. May 20, 1983.
395.101a Definitions. [M.S.A. 15.627(1a) ]
Sec. 1a. As used in this act:

(a) "Board" means the state board of education.

(b) "Person" means an individual, partnership, corporation, association, organization, or other legal entity.

(c) "Proprietary school" means a school that uses a certain plan or method to teach a trade, occupation, or vocation for a consideration, reward, or promise of whatever nature. Proprietary school includes, but is not limited to, a private business, trade, or home study school. Proprietary school does not include the following:

(i) A school or college possessing authority to grant degrees.

(ii) A school licensed by law through another board of this state.

(iii) A school maintained or a program conducted, without profit, by a person for that person's employees.

History: Add. 1983, Act 60, Imd. Eff. May 20, 1983.



395.102 Issuance of license; conditions; temporary permit to operate proprietary school; proposal; contents; duration of temporary permit; renewal. [M.S.A. 15.627(2) ]

Sec. 2. (1) A license shall not be issued until the applicant has operated under a temporary permit in a manner satisfactory to the board and until the board has approved the method and content of the advertising, the standards and the methods of instruction, the personnel, and the operating and instructional practices of the school.

(2) A temporary permit to operate a proprietary school may be granted on the basis of a written proposal submitted in the manner and form prescribed by the board. The proposal shall include plans for facilities, instructional procedures, personnel, business standards, and operating and instructional practices which comply with this act and with rules promulgated under this act. A temporary permit issued under this act shall be valid for not more than 1 year. If the applicant continues to comply with this act and the rules promulgated under this act, a temporary permit may be renewed.

History: 1943, Act 148, Imd. Eff. Apr. 14, 1943;‑‑CL 1948, 395.102;‑‑Am. 1949, Act 258, Eff. Sept. 23, 1949;‑‑Am. 1983, Act 60, Imd. Eff. May 20, 1983.

395.102a Inspection of proprietary schools; rules; reports; records; fees; board jurisdiction and control over proprietary schools and solicitors. [M.S.A. 15.627(2a) ]

Sec. 2a. (1) The board shall provide for adequate inspection of all proprietary schools. The board shall promulgate rules pursuant to the administrative procedures act of 1969, Act No. 306 of the Public Acts of 1969, being sections 24.201 to 24.315 of the Michigan Compiled Laws, and employ the personnel necessary to carry out this act. A proprietary school shall submit reports required by the board and shall make available to authorized representatives of the board all records pertaining to the instructional program of the school or to any individual student or enrollee.

(2) The board shall set and collect fees for licenses, temporary permits, and renewals issued under this act. The fees shall be used solely for administrative expenses incurred under this act.

(3) The board shall exercise jurisdiction and control over proprietary schools and solicitors for proprietary schools consistent with this act and Act No. 40 0f the Public Acts of 1963, being sections 395.121 to 395.125 of the Michigan Compiled Laws.



History: Add. 1949, Act 258, Eff. Sept. 6, 1949;‑‑Am. 1983, Act 60, Imd. Eff. May 20, 1983.

395.102b Evidence of surety; bond; amount; rules; expiration of surety; proof of renewal; failure to submit evidence of surety; applicability of section. [M.S.A. 15.627(2b) ]

Sec. 2b. A proprietary school shall provide the board with evidence of surety conditioned to provide indemnification to a student suffering loss because of inability to complete an approved course or program of study due to the closing of the proprietary school. A surety may consist of a bond, the amount of which shall be determined according to rules promulgated by the board. Surety shall expire on June 30 following the date of issuance and proof of renewal shall be submitted to the board prior to the date of expiration. Failure to submit evidence of surety shall invalidate a license to operate a proprietary school. This section does not apply to a proprietary school with a license issued by the board prior to November 2, 1967.



History: Add. 1967, Act 210, Eff. Nov. 2, 1967;‑‑Am. 1983, Act 60, Imd. Eff. May 20, 1983.

Compilers Notes: Former § 395.102b, pertaining to solicitor's permit for private trade schools and institutes, was repealed by Act 40 of 1963.

Administrative Rule: R 390.671 of the Michigan Administrative Code.

395.103 Violation of act as misdemeanor; penalty. [M.S.A. 15.627(3) ]

Sec. 3. A person who violates this act shall be guilty of a misdemeanor, punishable by a fine not to exceed $1,000.00, or imprisonment for a period not to exceed 90 days, or both.



History: 1943, Act 148, Imd. Eff. Apr. 14, 1943;‑‑CL 1948, 395.103;‑‑Am. 1983, Act 60, Imd. Eff.

May 20, 1983.




PRIVATE TRADE SCHOOLS, BUSINESS SCHOOLS, CORRESPONDENCE SCHOOLS, AND INSTITUTES
Act 40 of 1963

AN ACT to authorize private trade schools, business schools, correspondence schools and institutes to solicit students in this state; to provide for the issuance of permits to solicitors; to prescribe the powers and duties of the superintendent of public instruction; to provide penalties for violations of this act; and to repeal certain acts and parts of acts.


The People Of The State Of Michigan Enact
395.121 Definitions. [M.S.A. 15.633(1) ]
Sec. 1. As used in this act:

(a) "Superintendent" means the superintendent of public instruction.

(b) "School domiciled in this state" means a private trade school, business school, correspondence school or institute licensed under Act No. 148 of the Public Acts of 1943, as amended, being sections 395.101 to 395.103 of the Compiled Laws of 1948, or incorporated under Act No. 327 of the Public Acts of 1931, as amended, being sections 450.1 to 450.192 of the Compiled Laws of 1948.

(c) "School domiciled outside of this state" means a private trade school, business school, correspondence school or institute located outside of this state and organized to give instruction in any form or manner in any trade, occupation or vocation for a consideration, reward or promise of whatever nature, but not a school possessing authority to grant baccalaureate degrees.

(d) "Solicitor" means a person or agent 18 years of age or over representing a school located within or outside of this state who personally attempts to procure students, enrollees or subscribers at a place or places other than the office or place of business of the school.

History: 1963, Act 40, Eff. Sept. 6, 1963;‑‑Am. 1972, Act 35, Imd. Eff. Feb. 19, 1972.

395.122 Solicitor's permits; requirement; application, contents. [M.S.A. 15.633(2) ]

Sec. 2. Solicitor's permits are required for solicitors representing schools domiciled in this state, or schools domiciled outside of this state which have been authorized by the superintendent to solicit students in this state. The authorization may be granted a foreign school upon the submission of an application form provided for this purpose by the superintendent which shall contain such information to enable the superintendent to evaluate the instructional program and practices of the school as well as its promotional and sales policies.



History: 1963, Act 40, Eff. Sept. 6, 1963.
395.123 Solicitor; permit required; rules; solicitation for specifically listed school; knowledge of student financial aid programs; knowledge and information required; representation of more than 1 school; application for permit; surety bond; withdrawal; notice; annual fee; disposition, use, and adjustment of fee; expiration of permit. [M.S.A. 15.633(3) ]

Sec. 3. (1) A solicitor shall not personally solicit a prospective student to enroll in any school unless he or she applies for and obtains a permit from the superintendent, issued under rules promulgated by the superintendent in accordance with the administrative procedures act of 1969, Act No. 306 of the Public Acts of 1969, being sections 24.201 to 24.328 of the Michigan Compiled Laws.

(2) A solicitor shall not solicit a prospective student to enroll in a school other than a school specifically listed in the application and the permit.

(3) A solicitor shall possess knowledge regarding available state and federal student financial aid programs and shall inform prospective students of their obligations under student financial aid programs including, but not limited to, loan repayment obligations under federally guaranteed student loan programs.

(4) A solicitor who represents more than 1 school shall obtain a permit for each school he or she represents.

(5) Each application for a solicitor's permit shall be accompanied by a surety bond in the amount of $5,000.00. The bond may be continuing and shall be conditioned to provide indemnification to a student suffering loss as a result of fraud or misrepresentation used in procuring the student's enrollment. The bond shall be supplied by the school as an individual or a blanket bond covering each of its representatives in the penal sum of $5,000.00. The liability to be incurred under an individual or blanket surety bond shall not exceed $5,000.00 in the case of any 1 solicitor. The surety may relieve itself of liability thereafter and withdraw from the bond upon giving 30 days' notice in writing to the superintendent.

(6) An annual fee shall be charged for each solicitor's permit. The fee shall be $125.00 for a solicitor representing a school domiciled in this state or $225.00 for a solicitor representing a school domiciled outside of this state. The fee shall be deposited in the state treasury and credited to the department of education to be used solely for administrative expenses of this act and Act No. 148 of the Public Acts of 1943, being sections 395.101 to 395.103 of the Michigan Compiled Laws. The fee amounts established in this subsection may be adjusted by the state board of education. An adjustment of a fee established under this section shall be the same as the percentage of adjustment made for costs associated with the licensing provisions of a proprietary school under Act No. 148 of the Public Acts of 1943, as determined annually by the legislature.

(7) Each solicitor's permit shall expire 1 year from the date of issuance.



History: 1963, Act 40, Eff. Sept. 6, 1963;‑‑Am. 1983, Act 59, Imd. Eff. May 20, 1983;‑‑Am. 1988, Act 244, Imd. Eff. July 11, 1988.

395.124 Solicitor's permits; revocation; contracts; violation of act, misdemeanor. [M.S.A. 15.633(4) ]

Sec. 4. (a) Any solicitor's permit may be revoked by the superintendent upon 10 days' notice and after a hearing, if the holder of the permit solicits or enrolls students through fraud or misrepresentation.

(b) All contracts entered into in this state by schools or their solicitors and all promissory notes or other evidences of indebtedness taken in lieu of cash payments by such schools or solicitors shall be null and void unless the schools are duly licensed, approved or authorized to solicit prospective students and unless the solicitors have secured permits as required by this act.

(c) Any person violating any of the provisions of this act is guilty of a misdemeanor.



History: 1963, Act 40, Eff. Sept. 6, 1963.


395.125 Repeal. [M.S.A. 15.633(5) ]

Sec. 5. Section 2b of Act No. 148 of the Public Acts of 1943, as added by Act No. 21 of the Public Acts of 1957, being section 395.102b of the Compiled Laws of 1948, is hereby repealed.



History: 1963, Act 40, Eff. Sept. 6, 1963.


HOME SOLICITATION SALES
Act 227 of 1971
AN ACT to prescribe the rights and duties of parties to home solicitation sales.
The People Of The State Of Michigan Enact
445.111 Definitions.
Sec. 1. As used in this act:

(a) "Home solicitation sale" means a sale of goods or services of more than $25.00 in which the seller or a person acting for the seller engages in a personal, written, or telephonic solicitation of the sale, the solicitation is received by the buyer at a residence of the buyer, and the buyer's agreement or offer to purchase is there given to the seller or a person acting for the seller. Home solicitation sale includes a sale arising from a postcard or other written notice delivered to a buyer's residence that requests that the buyer contact the seller or seller's agent by telephone to inquire about a good or service, unless a postcard or other written notice concerns a previous purchase or order or specifies the price of the good or service and accurately describes the good or service. Home solicitation sale does not include a sale made pursuant to a preexisting revolving charge account, a sale made pursuant to prior negotiations between the parties at a business establishment at a fixed location where goods or services are offered or exhibited for sale, a sale of insurance by an insurance agent licensed by the commissioner of insurance, a sale made pursuant to a printed advertisement in a publication of general circulation, or a sale of services by a real estate broker or salesperson licensed by the department of consumer and industry services. Home solicitation sale does not include a sale of agricultural or horticultural equipment and machinery that is demonstrated to the consumer by the vendor at the request of either or both of the parties.

(b) "Fixed location" means a place of business where the seller or an agent, servant, employee, or solicitor of that seller primarily engages in the sale of goods or services of the same kind as would be sold at the residence of a buyer.

(c) "Business day" means Monday through Friday and does not include Saturday, Sunday or the following business holidays: New Year's day, Martin Luther King's birthday, Washington's birthday, Memorial day, Independence day, Labor day, Columbus day, Veterans' day, Thanksgiving day, and Christmas day.



History: 1971, Act 227, Imd. Eff. Jan. 3, 1972;‑‑Am. 1978, Act 152, Imd. Eff. May 18, 1978;‑‑Am. 1980, Act 108, Imd. Eff. May 10, 1980;‑‑Am. 1998, Act 126, Imd. Eff. June 10, 1998.

445.111a Telephonic solicitation using recorded message prohibited. [M.S.A. 19.416(201a) ]

Sec. 1a. A home solicitation sale shall not be made by telephonic solicitation using in whole or in part a recorded message.



History: Add. 1978, Act 152, Imd. Eff. May 18, 1978.
445.112 Right of buyer to cancel home solicitation sale; time; notice of cancellation; restriction on right to cancel; sale subject to debtor's right to rescind. [M.S.A. 19.416(202) ]

Sec. 2. (1) Except as provided in subsection (5) , in addition to any right otherwise to revoke an offer, a buyer has the right to cancel a home solicitation sale until midnight of the third business day after the day on which the buyer signs an agreement or offer to purchase which complies with this act.

(2) Cancellation occurs when the buyer mails or delivers the notice of cancellation provided for in section 3(2) or any other written notice, or sends a telegram, to the seller at the address stated in the notice of cancellation.

(3) A notice of cancellation or other written notice, if mailed to the seller, is given when it is deposited in a mailbox properly addressed and postage prepaid.

(4) A written notice or telegram given by the buyer other than the notice of cancellation need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the buyer not to be bound by the home solicitation sale.

(5) A buyer may not cancel a home solicitation sale if the buyer requests the seller to provide goods or services without delay because of an emergency, and (a) the seller in good faith makes a substantial beginning of performance of the contract before the buyer gives notice of cancellation, (b) the buyer furnishes the seller with a separate dated and signed personal statement in the buyer's handwriting describing the situation requiring immediate remedy and expressly acknowledging and waiving the right to cancel the sale within 3 business days, and (c) in the case of goods, the goods cannot be returned to the seller in substantially as good condition as when received by the buyer.

(6) If a home solicitation sale is also subject to the debtor's right to rescind certain transactions, the buyer may proceed either under those provisions or under this section.



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