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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 either the Certificate of Authority process or Alternative Certificate of Authority process in paragraphs (1) - (14) 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.

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

      (i) proposing to offer a degree or credit courses alleged to be applicable 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 a non-degree-granting institution 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 wishes 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) held an Alternative Certificate of Authority for one year.

        (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(35) 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 bond, assignment of 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 acceptable to the Board; and

      (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.

  (2) Application for Certificate of Authority.

    (A) Applications must be submitted with an original and four (4) copies and accompanied by the fee described in paragraph (9) of this section.

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

    (C) Documentary evidence of compliance with paragraph (1)(A)(ii) of this section must be filed with the application.

    (D) Information regarding each degree or course leading to a degree which the institution proposes to offer.

    (E) Name and contact information of the designated Single Point of Contact as defined in §7.3 of this chapter (relating to Definitions).

  (3) Authorization Process.

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

    (B) Each institution must have either a Letter of Exemption or Certificate of Approval from the Texas Workforce Commission pursuant to Texas Education Code, Chapter 132.

    (C) An institution must submit detailed information describing the manner in which the institution complies with each of the Standards of Operations of Institutions contained in §7.4 of this chapter (relating to Standards for Operations of Institutions).

    (D) 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.

    (E) Each institution must provide the required fee set by the Commissioner on a biennial basis which is necessary to cover the costs of the application review, site review team, and travel, meals, lodging and consulting fees for the review.

    (F) Based upon the information contained in the application, the Commissioner or his/her designee shall determine whether a site review team is necessary.

    (G) If a site review team is required, the Commissioner or his/her designee shall identify a site review team of no less than three individuals, all of whom have experience and knowledge in postsecondary education.

    (H) An institution must 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. The conditions found at the institution as of the date of the on-site evaluation visit will provide the basis for the visiting 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.

    (I) 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.

    (J) The institution shall have thirty (30) days in which to respond to the report.

    (K) The Certification Advisory Council shall review the report and the institution's response and make a recommendation regarding disposition to the Board and Commissioner.

    (L) Upon receipt of the Council's recommendation, the Commissioner shall make his/her recommendation regarding the application to the Board if it differs from the Council's recommendation.

    (M) After review of the Commissioner's and Council's recommendations, if the Board approves the application, the Commissioner shall immediately have prepared a Certificate of Authority containing the issue date, a list of the approved degree(s) or courses leading to degrees, and the period for which the Certificate is valid.

    (N) After review of the Commissioner's and Council's recommendations, if the Board does not approve the application, the Commissioner shall immediately notify the institution of the denial and the reasons for the denial.

    (O) Upon denial, the institution may not reapply for a period of one hundred eighty (180) days.

  (4) Terms and Limitations of a Certificate of Authority.

    (A) The Certificate of Authority to grant degrees is valid for a period of two (2) years from the date of issuance.

    (B) Certification by the State of Texas is not accreditation, but merely a protection of the public interest while the institution pursues accreditation from a recognized agency, within the time limitations expressed in subparagraph (C) of this paragraph. Therefore, the institution awarded a Certificate of Authority shall not use terms to interpret the significance of the certificate which specify, imply, or connote greater approval than simple permission to operate and grant certain specified degrees in Texas. Terms which may not be used include, but are not limited to, "accredited," "supervised," "endorsed," and "recommended" by the State of Texas or agency thereof. Specific language prescribed by the Commissioner which explains the significance of the Certificate of Authority shall be included in all publications, advertisements, and other documents where certification and the accreditation status of the institution are mentioned.

    (C) An institution may be granted consecutive Certificates of Authority for no longer than eight (8) years. Absent sufficient cause, at the end of the eight (8) years, the institution must be accredited by a Board-recognized accrediting agency.

  (5) Institutions holding a Certificate of Authority will be required to:

    (A) furnish a list of their agents to the Board;

    (B) maintain records of students enrolled, credits awarded, and degrees awarded, in a manner specified by the Board; and

    (C) report any substantive change.

  (6) Grounds for Revocation of Certificate of Authority.

    (A) The Institution no longer holds a Certificate of Approval or Letter of Exemption issued by the Texas Workforce Commission.

    (B) Institution fails to comply with substantive change notification and data reporting requirements as outlined in §7.11 of this chapter (relating to Changes of Ownership and Other Substantive Changes) and §7.13 of this chapter (relating to Data Reporting), respectively.

    (C) Institution offers degrees for which it does not have Board approval.

    (D) Institution fails to maintain the Standards of Operation as defined in §7.4 of this chapter.

    (E) Failure to comply with paragraph (3)(D) of this section.

  (7) Revocation of Certificate of Authority to Offer Degrees in Texas.

    (A) Board notifies institution of grounds for revocation as outlined in paragraph (6) of this section.

    (B) Within ten (10) days of its receipt of the Commissioner's notice, the institution must respond and offer proof of its continued qualification for the exemption, and/or submit data as required by §7.13 of this chapter.

    (C) After reviewing the evidence, the Commissioner will issue a notice of determination, which in the case of an adverse determination, shall contain information regarding the reasons for the denial, and the institution's right to a hearing.

    (D) If a determination under this section is adverse to an institution, it shall become final and binding unless, within forty-five (45) days of its receipt of the adverse determination, the institution invokes the administrative remedies contained in Chapter 1, Subchapter B of this title (relating to Dispute Resolution).

    (E) Until the Certificate of Authority is reinstated, the institution may not grant degrees, offer courses leading to degrees, or receive payments from students for courses which may be applicable toward a degree.

  (8) Reapplication After Revocation of Certificate of Authority.

    (A) The institution will not be eligible to reapply for a period of one hundred eighty (180) days.

    (B) The subsequent application must show, in addition to all other requirements described herein, correction of the deficiencies which led to the denial.

    (C) The period of time during which the institution does not hold a Certificate of Authority shall not be counted against the eight (8) year period within which the institution must achieve accreditation from a recognized accrediting agency absent sufficient cause, as described in paragraph (4)(C) of this section; the time period begins to run again upon reinstatement.

  (9) Fees Related to Certificates of Authority.

    (A) Certificates of Authority. Each biennium the Commissioner shall set the fee for initial and renewal applications for Certificates of Authority, which shall be equal to the average cost of evaluating the applications. The fee shall include the costs of travel, meals, and lodging of the visiting team and the Commissioner, or the Commissioner's designated representatives, and consulting fees for the visiting team members, if an on-site review is conducted.

    (B) Each biennium, the Commissioner shall also set the fees for amendments to Certificates of Authority.

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

  (10) Renewal of Certificate of Authority.

    (A) At least one hundred eighty (180) days, but no more than two hundred ten (210) days, prior to the expiration of the current Certificate of Authority, an institution, if it desires renewal, shall make application to the Board on forms provided upon request. Reports not previously submitted to the Board, related to the application for or renewal of accreditation by national or regional accrediting agencies shall be included. The renewal application shall be accompanied by the fee described in paragraph (9) of this section.

    (B) The application for renewal of the Certificate of Authority will be evaluated in the same manner as that prescribed for evaluation of an initial application, except that the evaluation will include the institution's record of improvement and progress toward accreditation.


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