Measure aims at tuition woes

A bill coming before the 2005 Legislature may help prevent the kind of tuition problems being suffered by some students of the Academy of Nursing in Salt Lake City.

"They were collecting thousands of dollars in advance and just unable to keep providing the services," said Sen. Dan Eastman, R-Bountiful.

Eastman's bill, SB18, would modify the Utah Postsecondary Proprietary School Act, giving the State Department of Commerce more regulatory control over businesses like the academy.

According to an October 2004 citation from the Utah Division of Consumer Protection, the academy, a tutoring service for nursing hopefuls, collected too much money from students in advance of providing its services.

State law allows private, postsecondary institutions to collect advance tuition and fees for up to six months of training. The academy had collected monies in advance from students for one full year of training, which is in violation of the "pay-as-you-learn" schedule established by the state.

Public documents show that 92 Utah students were awarded loans from KeyBank to pay for services through the academy. The academy was ordered by the state to pay $2,000 of a $92,000 fine and to repay students the money they had prepaid over what the law allows.

The remaining $90,000 was suspended, provided the academy owners were able to pay $100,000 per month toward about $1 million in debt owed to students. According to division director Francine Giani, the academy has not made payments for the past few months.

The academy owners, brothers Mark and Aaron Hansen, were unavailable Thursday for comment. A hearing was held Thursday in U.S. District Court over an ongoing copyright infringement case that pits the Academy of Nursing against a similarly named Utah corporation.

The Hansens were supposed to provide Giani with a "viable" plan by the end of this week to determine whether the academy could stay in business or if the full impact of the settlement agreement would need to be imposed.

Giani said she is hopeful Eastman's bill will put the state in a better position to protect consumers. The financial status of someone proposing to offer postsecondary services, for example, could soon face closer scrutiny by Giani's office.

"I think that a school that's taking the kinds of money we're seeing being taken needs to prove financial viability," she said. "We have to balance consumer and business interests."

Giani's goal is to not deter the flow of new businesses coming into Utah, but when one comes in and drains money from people, "that hurts," she said.

It's why Eastman has been watching closely the developments at the academy.

"It puts a lot of consumers at risk when they pay tuition in advance," Eastman said.

Passage of SB18 would mean more audits, criminal background checks, marketing oversight and overall tighter authority by the Division of Consumer Protection.

According to a Web site, the academy claims to offer online study tools to help nursing students pass a test administered by New York-based Excelsior College. The academy boasts on the site to have the "best nursing tutorial program available in the nation."

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E-mail: sspeckman@desnews.com