49-7-2004 - Exempt institutions.
49-7-2004. Exempt institutions.
(a) The following education and educational institutions are exempted from this part:
(1) Institutions exclusively offering instruction at any or all levels from preschool through the twelfth grade;
(2) Education sponsored by a bona fide trade, business, professional or fraternal organization, so recognized by the commission, solely for that organization's membership or offered on a no-fee basis;
(3) Education solely avocational or recreational in nature, as determined by the commission, and institutions offering such education exclusively;
(4) Education offered by eleemosynary institutions, organizations or agencies, so recognized by the commission; provided, that the education is not advertised or promoted as leading toward educational credentials;
(5) Postsecondary educational institutions established, operated and governed by this state or its political subdivisions, including the state technology centers established under authority of chapter 11, parts 3-5 of this title, which shall continue under the exclusive control and jurisdiction of the state board for vocational education. The board may contract with a local board of education for the operation of a state technology center, but the contract shall be reviewed each year to ensure the maintenance of a quality educational program; and upon cancellation of the contract, the operation of the center shall revert to the state board for vocational education;
(6) Postsecondary educational institutions:
(A) With its primary campus domiciled in this state for at least ten (10) consecutive years;
(B) That have been accredited by an accrediting agency recognized by the United States department of education for at least ten (10) consecutive years;
(C) That have been chartered in this state as a not-for-profit entity for at least ten (10) consecutive years; and
(D) That meet and maintain financial standards established by the commission or maintain financial standards as established by the Commission on Colleges of the Southern Association of Colleges and Schools (SACS);
(7) Institutions operated solely as barber schools, schools of cosmetology or schools of electrology;
(8) Institutions operated solely as schools for the study of law and subject to the approval of the board of law examiners for this state; and
(9) Educational programs conducted by state-licensed health care institutions.
(b) Any postsecondary educational institution exempt from this part by virtue of subdivision (a)(6) shall lose the exemption upon the occurrence of one (1) of the following events, subject to appeal to the commission as provided at § 49-7-2010:
(1) Loss or failure to meet any of the listed criteria for exemption;
(2) Loss of Title IV federal student aid funding; or
(3) A federal financial aid cohort default rate of twenty percent (20%) or higher for three (3) consecutive years or any single year over thirty-five percent (35%) as reported by the United States department of education, office of postsecondary educational institutional data system.
(c) Notwithstanding anything in this section to the contrary, an institution that has lost its exemption due to the occurrence of one (1) of the conditions listed in subdivisions (b)(1)-(3) will not be required to reestablish the ten (10) consecutive year standards in order to regain its exempt status. Instead, the commission shall have the authority to reinstate the exemption once the condition that caused the loss of exemption has, in the opinion of the commission, been remedied.
[Acts 1961, ch. 112, § 4; 1974, ch. 781, § 4; 1976, ch. 543, § 1; 1976, ch. 802, § 1; 1978, ch. 609, § 1; 1980, ch. 541, § 1; 1983, ch. 398, § 3; T.C.A., § 49-3904; Acts 1989, ch. 425, § 4; 1993, ch. 113, § 1; 1994, ch. 685, § 3; 1998, ch. 695, §§ 5-7.]