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RULE §7.8Institutions Not Accredited by a Board-Recognized Accreditor

An institution which is not accredited by a Board-recognized accreditor and which does not meet the definition of institution of higher education contained in Texas Education Code, §61.003, must follow the Certificate of Authority process in paragraphs (1) - (9) of this section in order to offer degrees or courses leading to degrees in the state of Texas. Institutions are encouraged to contact the Board staff before filing a formal application.

  (1) Certificate of Authority Eligibility.

    (A) The Board will accept applications for a Certificate of Authority only from those applicants:

      (i) proposing to offer a degree or credit courses leading to a degree; and

      (ii) which meet one of the following conditions:

        (I) has been legally operating, enrolling students, and conducting classes in Texas and has complied with state law as either a non-degree-granting institution or an exempt institution only offering degrees in religious disciplines for a minimum of two (2) years;

        (II) has been legally operating, enrolling students, and conducting classes in Texas and has complied with state law as a degree-granting institution and seeks to open a new campus;

        (III) has been legally operating as a degree-granting institution in another state for a minimum of four (4) years and can verify compliance with all applicable laws and rules in that state; or

        (IV) does not meet one of the three previous operational history conditions, but meets additional application and review requirements for its initial application, and agrees to meet additional conditions, restrictions, or reporting requirements during its first two years of operation under a Certificate of Authority. The Certificate of Authority will be issued with written, specific conditions, restrictions, or reporting requirements placed upon the institution.

        (V) The Board may not issue a Certificate of Authority for a private postsecondary institution to grant a professional degree, as defined in §7.3 of this title (relating to Definitions) or to represent that credits earned in this state are applicable toward a degree if the institution is chartered in a foreign country or has its principal office or primary educational program in a foreign country.

    (B) To be considered by the Board as operating, means to have assembled a governing board, developed policies, materials, and resources sufficient to satisfy the requirements for a Certificate of Authority, and either have enrolled students and conducted classes or accumulated sufficient financing to do so for at least one year upon certification based on reasonable estimates of projected enrollment and costs. Sufficient financing may be demonstrated by proof of an adequate surety instrument, including but not limited to, a surety bond, an assignment of a savings or escrow account, certificate of deposit, irrevocable letter of credit, or a properly executed participation contract with a private association, partnership, corporation, or other entity whose membership is comprised of postsecondary institutions, which is:

      (i) In a form and amount acceptable to the Board;

        (I) The amount of the surety instrument submitted to the Board with an application shall be equal to or greater than the cost of providing a refund, including administrative costs associated with processing claims, for the maximum prepaid, unearned tuition and fees of the school for a period or term during the applicable school year for which programs of instruction are offered, including, but not limited to, on a semester, quarter, monthly, or class basis; except that the period or term of greatest duration and expense shall be utilized for this computation where a school's year consists of one or more such periods or terms;

        (II) The applicant shall include a letter signed by an authorized representative of the institution showing in detail the calculations made pursuance to this section and explaining the method used for computing the amount of the surety instrument;

      (ii) Conditioned to provide indemnification to any student or enrollee of the school or his/her parent or guardian determined by the Board to have suffered loss of prepaid tuition or any fees as a result of violation of any minimum standard or as a result of a holder of a Certificate of Authority ceasing operation, and provides evidence satisfactory to the Board of its financial ability to provide such indemnification and lists the amount of surety liability the guaranteeing entity will assume; and

      (iii) Held in Travis County, Texas, and conditioned to allow only the Board to withdraw funds for the benefit of persons identified in clause (ii) of this subparagraph.

  (2) Certificate of Authority Application Submission and Requirements.

    (A) An applicant must submit an application to the Board to be considered for a Certificate of Authority to offer identified proposed degree(s), and courses which may be applicable toward a degree, in Texas.

      (i) Applications must be submitted as an original and a copy in an electronic format as specified by Board staff, and accompanied by the application fee described in paragraph (3) of this section.

      (ii) A single desk review of the application will be conducted to determine completeness and readiness for a site team visit.

      (iii) The desk review will be done by a reviewer who will act as the site review team leader if the application is deemed complete and ready for a site team visit.

      (iv) The desk reviewer, in consultation with Board staff, will make three possible recommendations. Board staff will make a final determination on acceptability of the application based on one of the three recommendations:

        (I) The application is determined to be foundationally incomplete in one or more Standards for Operation of Institutions as described in §7.4 of this chapter and not ready for submission. A foundationally incomplete application is one where the Standards for Operation of Institutions have not been met to such a degree that the institution is unlikely to be sustainable or operational.

        (II) The application may be resubmitted after incorporating revisions or additions suggested by the reviewer. The revisions or additions must allow the application to meet all Standards for Operation of Institutions.

        (III) The application is acceptable and ready for a site review visit.

      (v) If the application is foundationally incomplete and not ready for submission, a portion of the application fee, if not expended during the desk review, may be returned and another application may not be submitted for one year from the date of rejection of the foundationally incomplete application.

    (B) The application form for the Certificate of Authority may be found on the Board's website.

    (C) The Certificate of Authority application must include:

      (i) The name and address of the institution;

      (ii) The purpose and mission of the institution;

      (iii) Documentary evidence of compliance with paragraph (1)(A)(i)-(iii) of this section;

      (iv) Documentary evidence of either a Letter of Exemption or Certificate of Approval from the Texas Workforce Commission pursuant to Texas Education Code, Chapter 132;

      (v) Documentary evidence of articles of incorporation or other Texas-authorized organizational documents, regulations, rules, constitutions, bylaws, or other regulations established for the governance and operation of the institution;

      (vi) Identification, by name and contact information, of:

        (I) The sponsors or owners of the institution;

        (II) The designated Single Point of Contact as defined in §7.3 of this chapter (relating to Definitions);

        (III) The chief administrative officer, the principal administrators, and each member of the board of trustees or other governing board;

        (IV) Identification of faculty who will, in fact, teach in each program of study, including identification of colleges attended and copies of transcripts for every degree held by each faculty member;

      (vii) Information regarding each degree or course leading to a degree which the applicant proposes to offer, including a full description of the proposed degree or degrees to be awarded and the course or courses of study prerequisite thereto;

      (viii) A description of the facilities and equipment utilized by the applicant, including, if applicable, all equipment, software, platforms and other resources used in the provision of education via online or other distance education;

      (ix) Detailed information describing the manner in which the applicant complies with each of the Standards for Operation of Institutions contained in §7.4 of this chapter (relating to Standards for Operation of Institutions);

      (x) If applicable, institutions accredited by entities which are not recognized by the Board must submit all accrediting agency reports and any findings and institutional responses to such reports and findings for ten years immediately preceding the application for a Certificate of Authority. Accreditation by entities which are not recognized by the Board does not allow an institution to offer a degree or courses leading to a degree without a Certificate of Authority to offer such degree or courses;

      (xi) A written accreditation plan, identifying:

        (I) The Board-recognized accrediting agency with which the applicant intends to apply for institutional accreditation;

        (II) The planned timeline for application with and approval by the Board-recognized accrediting agency;

        (III) Any contacts already made with the Board-recognized accrediting agency, including supporting documents.

      (xii) Any additional information which the board may request.

    (D) An applicant that does not meet the previous operational history conditions described by §7.8(1)(A)(ii)(I)-(III) of this chapter must be able to demonstrate it is able to meet all Standards for Operation of Institutions found in §7.4 of this chapter through documentation and/or possession of adequate resources. Such demonstration includes, but is not limited to:

      (i) Executed agreements with all administration and faculty identified in the application;

      (ii) Complete curriculum, assessment, and learning tools for each proposed degree;

      (iii) Possession of all listed facilities and resources.

    (E) An applicant that does not meet the previous operational history conditions described by §7.8(1)(A)(ii)(I)-(III) of this chapter may not apply for a graduate degree or for more than one area of study as part of its initial application for a Certificate of Authority.

  (3) Fees Related to Certificates of Authority.

    (A) Each biennium the Board shall set the fees for applications for Certificates of Authority, which shall not exceed the average cost, in the preceding two fiscal years, of staff time, review and consultation with applicants, and evaluation of the applications by necessary consultants, including the cost of such consultants.

    (B) Each biennium, the Board shall also set the fees for amendments to add additional degree programs to Certificates of Authority.

    (C) The Commissioner shall request changes in the fees at a Board quarterly meeting.

  (4) Authorization Process.

    (A) Based upon the information contained in the application, the Commissioner or his/her designee shall determine whether a site review team is necessary. A site review team is always required for applications for an initial Certificate of Authority.

    (B) A site review team shall be composed of no fewer than three (3) members, all of whom have experience and knowledge in postsecondary education. The combined team experience and knowledge shall be sufficient to review all applicable standards of the agency.

    (C) An institution must demonstrate it is prepared to be fully operational as of the date of the on-site evaluation; i.e., it must have in-hand or under contract all the human, physical, administrative, and financial resources necessary to demonstrate its capability to meet the standards for nonexempt institutions.

    (D) The conditions found at the institution as of the date of the on-site evaluation review team's visit will provide the basis for the team's evaluation and report, the Certification Advisory Council's recommendation, the Commissioner's recommendation, and the Board's determination of the institution's qualifications for a Certificate of Authority.

    (E) The site review team shall conduct an on-site review of the institution and prepare a report regarding the institution's ability to meet the Standards of Operation.

    (F) The applicant shall have thirty (30) days in which to respond in writing to the report.

    (G) The Certification Advisory Council shall review the site review team's report and the applicant's response and make a recommendation regarding disposition to the Board and Commissioner.

      (i) If the applicant has no previous operational history as described by §7.8(1)(A)(ii)(I)-(III) of this chapter, the Council shall make recommendations for additional conditions, restrictions, or reporting requirements during the first two years of operation under a Certificate of Authority.


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