The UNC Policy Manual
400.4.1.3[R]
Adopted 04/05/18
Technical Correction 03/08/19
I.
Purpose. The purpose of this regulation is to set forth
the procedures the University of North Carolina System Office (UNC System
Office) will implement regarding the application for licensure, review of
licensure, and modification and revocation of licensure of institutions
conducting postsecondary degree activity in North Carolina pursuant on N.C.
Gen. Stat. § 116-15 (hereinafter G.S.).
II.
Definitions. This regulation incorporates those
definitions found in G.S. 116-15 and in Section 400.4.1 of the UNC Policy
Manual.
III.
General Provisions
A.
Except as provided in
subsection B., of this section, before a private institution or its agent
undertakes postsecondary degree activity in North Carolina, the institution or
its agent must be licensed in accordance with this policy or declared exempt
from licensure in accordance with G.S. 116-15(c), (d), or (e).
B.
An institution may advertise
postsecondary degree activity that is not yet licensed if all of the following
conditions are met:
1. An application for licensure made in accordance with this
regulation for the postsecondary degree activity has been received by the UNC
System Office, and the UNC System Office has acknowledged receipt of that
application.
2. The
advertisement contains a disclaimer stating that the institution has an
application for licensure of the postsecondary degree activity pending before
the University of North Carolina Board of Governors and that licensure is
required prior to the start date of the postsecondary degree activity.
3. Such
other conditions as the UNC System Office may for good cause require, including
the prohibition of advertising prior to licensure.
Except
as provided herein, an institution may not advertise postsecondary degree
activity that is not licensed or declared exempt from licensure.
C.
An institution may not
receive funds that are not fully refundable from students or prospective
students for enrollment in an unlicensed postsecondary degree activity. If the postsecondary degree activity is not
licensed by the projected start date, funds received from students or
prospective students for enrollment in the postsecondary degree activity must
be refunded within ten business days of the projected start date. If the institution withdraws its application
for licensure, funds received from students or prospective students for
enrollment in the postsecondary degree activity must be refunded within ten
business days of that withdrawal.
D.
Licensure authorizes an
institution to conduct postsecondary degree activity only as specified by the
Board of Governors.
IV.
Interim Permit. An institution wishing to conduct one or more
postsecondary degree activities in North Carolina which meet the standards for
licensure set out in Section 400.4.1 of the UNC Policy Manual (except for the
requirement regarding the length of time the institution has been in operation),
may be granted an interim permit to conduct the postsecondary degree activity
if the institution can demonstrate a quality of stability, experience,
reputation, and performance which two years of operation would normally denote.
An interim permit expires two years
after it is issued by the Board. Before expiration
of the interim permit, the postsecondary degree activity will be re-evaluated
to determine if it qualifies for a license.
An interim permit may be issued contingent upon those conditions that
the Board imposes. Except as set forth
in this subsection, the procedures for issuing, modifying, and revoking an interim
permit are the same as those set out in section V., below, of this regulation.
V.
Procedures for Licensure. Institutions applying for licensure to conduct
a postsecondary degree activity or activities shall follow the following steps:
A.
Preliminary Conference. The institution seeking licensure shall
contact the UNC System Office and arrange for a preliminary conference to
discuss the standards and procedures for applying for licensure. The
preliminary conference shall occur in a time, place, and manner prescribed by
the University of North Carolina System.
B.
Application for Licensure. Following the preliminary conference, the
institution shall submit a formal application that demonstrates the proposed
postsecondary degree activity will be in compliance with each standard
enumerated in G.S. 116-15(f) and Section 400.4.1. The application must also
contain a letter stating the intent of the institution to apply for licensure.
This letter must describe the mission of the institution, the proposed
postsecondary degree activity submitted for approval, and projected enrollment.
The application shall be made in the manner prescribed by the UNC System Office.
Fees for applications will be set by the
UNC System Office.
C.
Site Visit
1. If the application indicates that the proposed
postsecondary activity is reasonably likely to meet the standards enumerated in
G.S. 116-15(f) and Section 400.4.1 of the UNC Policy Manual, and if appropriate
in accordance with this subsection, the UNC System Office may arrange with the
institution for a visit by a team of examiners to the campus and, if needed,
other sites hosting the proposed postsecondary degree activity. The purpose of
the visit is to confirm documentation submitted by the institution evidencing compliance
with standards of good quality education and to confirm whether the institution
meets the other requirements established by the Board. The team of examiners shall be composed of at
least one officer of the UNC System Office, faculty members with the
appropriate levels and fields of education, and other persons necessary for a
sound examination. The team of examiners
shall be appointed by the president of the University of North Carolina, or the
president’s designee, and selected based on their expertise in specific fields
related to the licensure proposal. One
member of the examining committee shall be appointed chair, with responsibility
for leading the examination and preparing the team’s report and
recommendations.
2. Applications for licensure to conduct postsecondary
activity submitted by institutions which have not been previously licensed to
conduct postsecondary activity require a site visit. Applications for licensure to conduct
postsecondary activity submitted by institutions which have been previously
licensed to conduct other postsecondary activity will ordinarily require a site
visit when the field of study is a significant departure from previously
licensed activity; when the proposed postsecondary activity is a different degree
level than was previously licensed; when the proposed postsecondary degree
activity relies on labs or other physical facilities which have not been
previously reviewed or which will now be used in a substantively different way;
and in accordance with 400.1.1[R] of the UNC Policy Manual, governing new sites
and campuses in North Carolina. The UNC
System Office may for good cause require a site visit for any proposed
postsecondary activity. When the UNC
System Office does not require a site visit, the proposed postsecondary
activity will ordinarily be reviewed by a team of examiners remotely. Costs and honoraria for a site visits and
other reviews of proposed postsecondary activity are borne by the
institution. Such costs and honoraria
will be set by the UNC System Office.
D.
Report of Team of Examiners,
Staff Report, Institutional Response, and Board Action
1. Following the site visit or other review of the proposed
postsecondary activity, the team of examiners shall prepare a report and a statement
of recommendations (“the team report”). The
team of examiners shall submit the report and statement of recommendations to
the president of the University of North Carolina or the president’s designee
within thirty days, or as soon as possible after completion of the
examination. All recommendations are
advisory to the UNC System Office. The
statement of recommendations accompanying the team of examiners’ report should
contain one of the following as concluding advice:
a. That
the institution be issued a license;
b. That
the institution be issued a license subject to specified conditions; or
c. That the institution be denied a
license.
Prior to any action by the Board, the institution
shall be provided the report and have the opportunity to respond to it in
writing (the institutional response).
2. The UNC System Office shall review the team report and
any institutional response and submit a report to the president or the
president’s designee (the staff report).
After reviewing the team report, the institutional response, and the
staff report, and after making any revisions to the staff report, the president
or designee shall place the application for licensure on the Board’s agenda and
inform the institution of the date on which the application will be considered
by the Board. The staff report will be
included in the Board’s materials for that meeting.
3. At the request of the institution, the team report and the
institutional response shall be provided to the Board for consideration prior
to the Board taking action on the application.
An institution requesting that the team report and the institutional response
be provided to the Board shall make such request to the UNC System Office in
writing not less than 30 days prior to the date on which the Board will
consider the application.
4. The Board’s action is the final administrative action
with respect to an application for licensure.
E.
Procedure for Modification
and Revocation of Licensure
1.
The Board may modify or revoke a license or interim permit as provided
herein. Modification of a license or
interim permit may include imposing conditions on the license or interim permit
or imposing an expiration date on a license or interim permit.
2. Modification
or revocation of a license or interim permit may be based on a failure on the
institution’s part to maintain one or more of the standards enumerated in G.S.
116-15(f) and Section 400.4.1 of the UNC Policy Manual, or on the institution
or any of its agents making a material misrepresentation to the Board, UNC
System Office, or to students or prospective students.
3. When
the president or designee determines that an institution has failed to maintain
one or more of the standards or has made a material misrepresentation as
described herein, the president or designee shall prepare a report for the
Board detailing the basis for the revocation or modification and recommending
the action to be taken (the violation report).
The violation report will be served on the institution by United States
mail to the address last provided by the institution on its annual report. The institution shall have 33 days from the
mailing of the violation report to respond in writing, which time may be
extended by the president or designee for good cause shown.
4. The
violation report and the institution’s response, if any, shall be provided to
the Board for action, if the Board deems action appropriate. Notwithstanding the existence of a violation,
the Board may allow an institution to remain licensed if the institution is deemed
by the Board to be making substantial and expeditious progress towards
remedying its licensure deficiencies.
The
Board’s action, if any, is the final administrative action with respect to
modifications and revocations of licensure.
VI.
Annual Reports and Review of
Licensure
A.
Licensure of any licensed
postsecondary degree activity shall be subject at any time to review by the
Board to determine whether the postsecondary degree activity continues to meet
standards for licensure. In the
discretion of the Board, review of licensure may necessitate use of a team of examiners.
Costs and honoraria of teams of
examiners conducting reviews is borne by the institution and set by the UNC
System Office.
B.
Review of licensure of all of
an institution’s postsecondary degree activity conducted in North Carolina
shall occur when:
1. Two
years have elapsed since the Board first licensed the institution to conduct
any postsecondary degree activity (the two-year review).
2. Subsequent
to the two-year review, six years have elapsed, and again every six years
subsequently, if the institution is accredited by an accreditor recognized by
the Council for Higher Education Accreditation
If the institution is not so accredited, then review of licensure shall
occur every two years.
3. The institution is legally reconstituted.
4. Ownership
of a preponderance of all the assets of the institution changes pursuant to a
single transaction or agreement or a recognizable sequence of transactions or
agreements.
5. The
institution proposes to open a new campus or site, except that the UNC System
Office may in its discretion elect to review only the postsecondary degree
activity which the institution proposes to offer at the new campus or site.
C.
Institutions offering
licensed postsecondary degree activity shall file annual reports with the UNC
System Office in a form and manner prescribed by the UNC System Office. Annual reports shall provide evidence of the
institution’s continued compliance with the standards set forth in G.S.
116-15(f) and Policy 400.4.1. Annual
fees for postsecondary degree activity shall be set by the UNC System Office.
VII.
Notifications from Licensed Institutions.
Institutions which are licensed to
conduct postsecondary activity shall provide notice to the UNC System Office in
the form prescribed by the UNC System Office upon the occurrence of any of the
following:
A. If
the institution or any of its programs are accredited, any change in status to
any such accreditation, including being placed on warning or probation;
B. If
the institution or any of its programs are accredited, upon notification that
any such accreditation is being reviewed, including regularly scheduled
reviews;
C. The
filing of any petition or application by the institution to become accredited
by an accrediting body;
D. If
the institution participates in Federal Student Aid (FSA) funding pursuant to
Title IV of the Higher Education Act of 1965, as amended (Title IV), upon:
1. Notification
that FSA is seeking to limit, suspend, terminate, or fine the institution,
pursuant to 34 C.F.R. 668 Subpart G;
2. Notification
that FSA is seeking an emergency action against the institution;
3. Notification
that the Department of Education’s Office of the Inspector General is auditing
the institution;
4. Any
change in the status or terms of the institution’s Program Participation
Agreement (PPA), including the PPA’s expiration or the issuance of a
provisional PPA;
5. The
institution applying for recertification of its PPA and the Department of
Education’s determination whether the institution will be recertified or not;
6. If
the institution is required to report to the Department of Education the
proportion of its revenue which is derived from sources authorized by Title IV,
upon a determination made by the institution or by the Department of Education,
or any of its offices or components, that the institution has derived more than
90 percent of its revenue from sources authorized by Title IV for any year;
7. The
institution posting a letter of credit or increasing an existing letter of
credit, or the Department of Education demanding that the institution does so;
8. The
institution being placed on any heightened cash-monitoring method of payment
from FSA; or
9. A
determination made by the institution or by the Department of Education, or any
of its offices or components, that the institution’s financial responsibility
composite score is 1.5 or below.
E. The
institution or its corporate parent learning that a governmental entity has
begun a criminal, civil, or administrative investigation of the institution or
any person or entity with an ownership interest in the institution;
F. In
any audit conducted on the institution or corporate parent, including without
limitation a yearly audit conducted to meet FSA requirements, the opinion
expressed by the auditor is adverse, qualified, or disclaimed, or the auditor
expresses doubt about the continued existence of the institution or corporate
parent as a going concern;
G. The
filing of any lawsuit, including a counterclaim or cross claim, against the
institution, including any petition for bankruptcy of the institution or
corporate parent;
H. Any
loss of authorization to operate in another state, or a postsecondary education
licensor of another state putting the institution on probation, warning, or a
similar status;
I. Any
substantive change in a licensed program.
If the institution is accredited and the institution’s accreditor has a
substantive change policy, the term “substantive change” as used herein shall
include all circumstances considered by the institution’s accreditor to be a
substantive change. “Substantive change”
as used herein shall also include a change in the delivery method of more than
one-fourth of the courses constituting a licensed program; or
J. The
institution undergoes a change in ownership, as described in Section 400.4.2[R]
of the UNC Policy Manual. Notification
of a change in ownership should be made not less than 90 days prior to the
projected closing date of the change in ownership.
VIII.
Delegation to the President. If the staff report is complete pursuant to
section V.D.2., above, an institution which seeks to begin postsecondary degree
activity prior to the next regularly scheduled meeting of the Board may be
issued a license by the president or designee.
The issuance of such a license is committed to the discretion of the president
or designee and should ordinarily only occur upon a showing of hardship to the
institution, students, or prospective students.
In order for such a license to remain in effect past the next regularly
scheduled meeting of the Board, the Board must ratify the issuance of the
license at its next regularly scheduled meeting.
IX.
End of Licensure
A.
A license issued under this regulation
continues in effect except as provided in this subsection.
B.
A license or interim permit
to conduct postsecondary activity ends when:
A. It
is revoked as provided herein; or
B. The
licensed or permitted postsecondary degree activity ceases to have any students
enrolled, except that the license or interim permit may be continued in the
discretion of the president or the president’s designee for good cause shown;
or
C. The
institution fails to file a complete annual report in the form and manner
prescribed by UNC System Office, or pay its assessed annual fee, by December 31st
of a given year, except that the license or interim permit may be continued in
the discretion of the president or the president’s designee for good cause
shown; or
D. If
the institution was issued a license or interim permit subject to specified
conditions, or its license was modified pursuant to section V.E., above, to
include specified conditions (which conditions may include an expiration date),
when the Board determines that the institution has failed to meet those
conditions or that expiration date is reached; or
E. The
Board fails to ratify the president’s issuing of a license or interim permit at
the next regularly scheduled meeting of the Board occurring after the president
issues a license pursuant to section VIII., above, of this regulation.
X. Other Matters
A.
Effective Date. The
requirements of this regulation shall be effective on the date of adoption of
this regulation by the president.
B.
Relation to Federal and State
Laws and Policies. The foregoing regulation is meant to supplement, and
does not purport to supplant or modify, those statutory enactments,
regulations, and policies which may govern or relate to the subject matter of
this regulation.