7. a. An independent institution of higher education and a proprietary institution licensed to offer academic degrees shall immediately notify the secretary of any known financial liabilities or risks that are reasonably likely to result in the imminent closure of the institution or otherwise negatively affect the institution’s ability to fulfill its obligations to current and admitted students.

b. All independent institutions and proprietary institutions licensed to offer academic degrees shall submit an annual fiscal monitoring report to the secretary according to a schedule established by the secretary and in a format developed by the secretary.

c. The secretary shall establish a process to annually assess each independent institution’s and proprietary institution’s financial information to identify whether an institution is at risk of imminent closure. The assessment shall be based on a review of information received through the annual fiscal monitoring report. In addition to the annual report, the secretary may also conduct additional assessments at the secretary’s discretion to identify whether an institution is at risk of imminent closure.

d. If the secretary determines there is a risk of imminent closure, the determination and a summary of the basis for the determination shall be provided to the institution. Upon receipt of the determination and summary the institution shall immediately:

(1) notify the secretary of any known liabilities, risks, or financial issues;

(2) provide to the secretary any information necessary to accurately and fairly determine the institution’s financial status and likelihood of imminent closure and to monitor its condition;

(3) prepare and submit to the secretary a contingency plan for closure, which shall include:

(a) a process to notify relevant stakeholders, as determined by the secretary including, but not limited to, enrolled students, candidates who have submitted applications, recent graduates, faculty, staff, and host communities;

(b) arrangements for the continued education of currently enrolled students via teach-out agreement or other practical solution;

(c) a plan for the transfer to and long-term maintenance of records, particularly student academic records, by a third-party if the institution closes;

(d) information about the rights and responsibilities of student loan borrowers;

(e) information about the institution’s financial condition, accreditation status, and any outstanding compliance issues regarding federal and State student aid programs; and

(f) confirmation that the institution has obtained either a surety bond or letter of credit to refund student enrollment deposits and for the cost to maintain student records by a third-party.

e. Upon a finding by the secretary that an institution has failed to comply with the requirements of this section, the secretary shall have the authority to order:

(1) a fine not to exceed $1,000 per day of non-compliance with the requirements of this section;

(2) the suspension of any State funding designated for the institution; and

(3) the suspension or revocation of any degree-granting authority previously conferred on the institution.

f. Any information submitted to, or developed by, the secretary in furtherance of this section shall not be a public record and shall be exempt from disclosure under provisions of P.L.1963, c.73 (C. 47:1A-1 et seq.), commonly known as the open public records act.

L.2021, c.27, s.7.