Policy Guidance on Voluntary School Closures

Number: 
42-1117
Date Issued: 
11/17/2017

New York State Education Law § 5001(1) provides that “No private school which charges tuition or fees related to instruction and which is not exempted hereunder shall be operated by any person or persons, firm, corporation, or private organization for the purpose of teaching or giving instruction in any subject or subjects, unless it is licensed by the department.”

A school owner may choose for business reasons to close a licensed school. However, under New York State Education Law § 5001(8), “No licensed school shall discontinue operation or surrender its license unless thirty days written notice of its intention to do so and a plan for maintenance of safe keeping of the records of the school is provided to the commissioner.”

The closure of a school severs the relationship between the New York State Education Department and that business (former school). The closure changes the legal identity of the entity from a school to a closed business which may have worth equal to its available assets. The closed entity may not be sold as a school, because it is no longer a school. The Director of the Bureau of Proprietary School Supervision (BPSS) is the authorizing officer for school closures. The school closure shall be recorded by the head of the Licensing Unit of BPSS.

In addition to written notice and the plan for the maintenance of records, under Education Law § 5006, the closing school may submit a teachout plan to ensure the educational continuity for currently enrolled students:

A teachout plan shall consist of a contract between a licensed private career school, with another school, hereinafter called the teachout school, so that in the event that the licensed private career school ceases instruction, the teachout school will provide the necessary instruction specified in a student's original enrollment agreement with the school ceasing instruction.

There are specific requirements for closing a school:

  • Written notice by the lawful owner 30 days prior to the date of closure indicating the owner’s desire to surrender the school license.
    • Given the considerations required when a school closes, BPSS cannot back date or accept closure documentation having a date before the date of the documentation’s presentation to BPSS for review and the school’s meeting all closure requirements.
    • The submission of closure documentation may only be made by the lawful owner of the school or the school director, who must be the signatory on the closure request.
  • A written plan by the legal owner for the maintenance and safe keeping of records, including the twenty-year preservation of student records.
  • The written statement by the owner or school director of whether a teachout plan is offered and the substance of that plan.
  • If no teachout plan is offered or implemented, either by the closing school or by BPSS in agreement with another licensed private career school, students may be eligible for a refund of the tuition subject to the enrollment agreement and/or the provisions of Education Law § 5007.
  • Additionally, upon the submission of the closure documentation by a school, all prior assessments, special assessments, fines, fees, and penalties currently pending against the school shall become immediately due for final payment by the owner.  Voluntary school closure does not eliminate or erase past due fees or penalties.
    • Payment of all outstanding assessments, special assessments, fines, fees, or penalties due on the date of closure shall be made by certified or cashier’s check(s) payable to the “New York State Education Department” and shall not be deposited until the date of school closure. The check shall be delivered by first-class, U.S. postal mail to:

New York State Education Department
Bureau of Proprietary School Supervision
116 West 32nd Street, 5th Floor
New York, NY 10001
Attention: Legal Unit

The resolution of all outstanding monies due to the State of New York, as outlined above, and the acceptance of the closure documents, including the resolution of any outstanding teachout, tuition refund, or records retention shall constitute an end of the BPSS / school relationship.  After the school has closed, the owner of the closed business is free to dispose of its assets in any manner authorized by law.

Questions should be directed to the Licensing Unit at BPSSLicensing@nysed.gov.