Sec. 132.061. REFUND POLICY. (a) Except as provided by Subsection (g), as a condition for granting certification each career school or college must maintain a cancellation and settlement policy that must provide a full refund of all monies paid by a student if:

(1) the student cancels the enrollment agreement or contract within 72 hours (until midnight of the third day excluding Saturdays, Sundays, and legal holidays) after the enrollment contract is signed by the prospective student; or

(2) the enrollment of the student was procured as the result of any misrepresentation in advertising, promotional materials of the school or college, or representations by the owner or representatives of the school or college.

(b) Except as provided by Subsection (g), as a condition for granting certification each career school or college must maintain a policy for the refund of the unused portion of tuition, fees, and other charges in the event the student, after expiration of the 72-hour cancellation privilege, fails to enter a program in which the student is enrolled or withdraws or is discontinued from the program at any time prior to completion, and such policy must provide:

(1) refunds for resident programs and synchronous distance education courses or programs will be based on the period of enrollment computed on the basis of course or program time;

(2) the effective date of termination for refund purposes in residence programs and synchronous distance education courses or programs will be the earliest of the following:

(A) the last date of attendance, if the student is terminated by the school or college;

(B) the date of receipt of written notice of withdrawal from the student; or

(C) 10 school days following the last date of attendance;

(3) if tuition and fees are collected in advance of entrance, and if, after expiration of the 72-hour cancellation privilege, the student does not enter the residence career school or college, not more than $100 shall be retained by the school or college;

(4) for the student who enters a residence program or a synchronous distance education course and who withdraws or is otherwise terminated, the school or college may retain not more than $100 of any administrative fees charged and the minimum refund of the remaining tuition and fees will be the pro rata portion of tuition, fees, and other charges that the number of hours remaining in the portion of the course or program for which the student has been charged after the effective date of termination bears to the total number of hours in the portion of the course or program for which the student has been charged, except that a student may not collect a refund if the student has completed 75 percent or more of the total number of hours in the portion of the program for which the student has been charged on the effective date of termination;

(5) refunds of items of extra expense to the student, such as instructional supplies, books, student activities, laboratory fees, service charges, rentals, deposits, and all other such ancillary miscellaneous charges, where these items are separately stated and shown in the data furnished the student before enrollment, will be made in a reasonable manner acceptable to the commission;

(6) refunds based on enrollment in residence and synchronous distance education courses or programs will be totally consummated within 60 days after the effective date of termination;

(7) refunds for asynchronous distance education courses or programs will be computed on the basis of the number of lessons in the course or program;

(8) the effective date of termination for refund purposes in asynchronous distance education courses or programs will be the earliest of the following:

(A) the date of notification to the student if the student is terminated;

(B) the date of receipt of written notice of withdrawal from the student; or

(C) the end of the third calendar month following the month in which the student's last lesson assignment was received unless notification has been received from the student that the student wishes to remain enrolled;

(9) if tuition and fees are collected before any courses for a program have been completed, and if, after expiration of the 72-hour cancellation privilege, the student fails to begin the program, not more than $50 shall be retained by the school or college;

(10) in cases of termination or withdrawal after the student has begun the asynchronous distance education course or program, the school or college may retain $50 of tuition and fees, and the minimum refund policy must provide that the student will be refunded the pro rata portion of the remaining tuition, fees, and other charges that the number of courses completed and serviced by the school or college bears to the total number of courses in the program; and

(11) refunds based on enrollment in asynchronous distance education schools or colleges will be totally consummated within 60 days after the effective date of termination.

(c) In lieu of the refund policy herein set forth, for programs of instruction not regularly offered to the public, the commission may, for good cause shown, amend, modify, or substitute the terms of a career school's or college's policy due to the specialized nature and objective of the school's or college's program of instruction.

(d) If a program of instruction is discontinued by the career school or college and this prevents the student from completing the program, all tuition and fees paid are then due and refundable.

(e) If a refund is not made within the period required by this section, the career school or college shall pay a penalty. If the refund is made to a lending institution, the penalty shall also be paid to that institution and applied against the student's loan. The commission annually shall establish the level of the penalty at a level sufficient to provide a deterrent to the retention of student funds. The commission may exempt a school or college from the payment of the penalty if the school or college makes a good faith effort to refund the tuition, fees, and other charges but is unable to locate the student. The school or college shall provide to the commission on request documentation of the effort to locate the student.

(f) A career school or college shall record a grade of "incomplete" for a student who withdraws during the portion of a course or program for which the student is not eligible to collect a refund under Subsection (b)(4) if the student requests the grade at the time the student withdraws and the student withdraws for an appropriate reason unrelated to the student's academic status. A student who receives a grade of incomplete may re-enroll in the course or program during the 12-month period following the date the student withdraws and complete those incomplete subjects without payment of additional tuition for that portion of the course or program.

(g) A program that is 40 hours or less of course time, or a seminar or workshop, is exempt from the 72-hour rule provided by Subsection (a). The career school or college shall maintain a policy for the refund of the unused portion of tuition, fees, and other charges in the event the student fails to enter the program or withdraws or is discontinued from the program at any time before completion of the program as provided by this section. The policy must provide that:

(1) refunds are based on the period of enrollment computed on the basis of course or program time;

(2) the effective date of termination for refund purposes is the earlier of:

(A) the last date of attendance; or

(B) the date the school or college receives written notice from the student that the student is withdrawing from the class; and

(3) the student will be refunded the pro rata portion of tuition, fees, and other charges that the number of hours remaining in the portion of the program for which the student has been charged after the effective date of termination bears to the total number of hours in the portion of the program for which the student has been charged.

(h) A closing career school or college shall, subject to Section 132.242, make a full refund to each student of the school or college who is owed a refund under this section.

(i) Each owner of a closing career school or college to which a certificate of approval has not been issued under this chapter is personally liable for the amount of any refund owed to a student under Subsection (h).

(j) The commission may adopt rules governing records necessary to make refunds authorized by this chapter.

Added by Acts 1971, 62nd Leg., p. 2013, ch. 620, Sec. 1, eff. June 4, 1971. Amended by Acts 1973, 63rd Leg., p. 1266, ch. 463, Sec. 5, eff. June 14, 1973; Acts 1983, 68th Leg., p. 1972, ch. 359, Sec. 3, eff. Sept. 1, 1983; Acts 1989, 71st Leg., ch. 813, Sec. 4.12, eff. Sept. 1, 1989; Acts 1993, 73rd Leg., ch. 1010, Sec. 4, eff. Aug. 30, 1993. Redesignated from Education Code Sec. 32.39 and amended by Acts 1995, 74th Leg., ch. 260, Sec. 2, eff. May 30, 1995. Amended by Acts 1995, 74th Leg., ch. 655, Sec. 11.43, eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 1064, Sec. 5, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 364, Sec. 1.06, eff. Sept. 1, 2003; Acts 2003, 78th Leg., ch. 817, Sec. 8.06, eff. Sept. 1, 2003.

Amended by:

Acts 2005, 79th Leg., Ch. 747 (H.B. 2806), Sec. 6, eff. September 1, 2005.

Acts 2011, 82nd Leg., R.S., Ch. 1029 (H.B. 2784), Sec. 1, eff. September 1, 2011.