13B.02.02.08

.08 Maintenance of Authority to Operate.

A. An approval granted by the Secretary or the Commission remains in effect in accordance with its terms unless the Secretary or the Commission has limited the approval for a certain period of time in the approval action.

B. Upon the expiration of an approval issued by the Commission, the Secretary may renew or reaffirm an in-State institution's approval if the Secretary is satisfied that the institution is in continued compliance with relevant approval criteria.

C. The Secretary shall monitor the continued compliance of approved in-State institutions in accordance with the requirements of this chapter.

D. To maintain the authority to operate, for-profit in-State institutions, and non-accredited in-State institutions, both for-profit and non-profit, shall annually submit documents to the Commission relevant to the financial and academic health of the institution on a schedule and in a form specified by the Secretary that shall include, but are not limited to, the following:

(1) Audited financial statements for the past fiscal year;

(2) Financial ratios indicating the relationship of annual expenditures to annual revenues to include a primary reserve ratio, an equity ratio, and a net income ratio;

(3) Advertising budget as a percentage of total expenditures;

(4) Instructional expenses as a percentage of total expenditures;

(5) Reinvestment of gross revenues to support educational purposes and programs;

(6) Student recruitment and enrollment trends;

(7) An academic profile of entering students;

(8) Retention and graduation rates;

(9) Student loan default rates and agreements with private lenders;

(10) Faculty salaries and benefits;

(11) Faculty longevity and turnover data;

(12) Curriculum vitae of faculty and administrative staff members;

(13) Changes in accreditation status; and

(14) Litigation status including any adverse administrative actions.

E. If the Secretary has reason to believe an approved in-State institution is not in compliance with the minimum requirements of this chapter, the Secretary shall inform the institution and request a written response.

F. The Secretary may appoint an advisory evaluation team in accordance with Regulation .06J(2) of this chapter to make an on-site visit to the in-State institution to determine compliance with the minimum requirements of this chapter.

G. The advisory evaluation team shall submit an advisory team report to the Secretary on the compliance of the in-State institution with the requirements of this chapter. The Secretary shall provide the institution with a copy of the report. If deficiencies are found, the team report may recommend actions to be taken by the institution being evaluated to correct the deficiencies. Upon receiving the team report, the institution has 20 days to submit to the Secretary a response to the report.

H. After receiving the team report and the institution's response, the Secretary shall prepare an evaluation report based on all the information available to the Secretary on the compliance of the in-State institution with the requirements of this chapter.

I. If the Secretary is satisfied that the in-State institution is in compliance with the requirements of this chapter, the Secretary shall reaffirm the institution's approval.

J. If the Secretary is not satisfied that the in-State institution is in compliance with the requirements of this chapter, the Secretary shall issue a notice of deficiencies in accordance with Regulation .09 of this chapter.

K. Hearing.

(1) If the Secretary has issued neither a reaffirmation nor a notice of deficiencies within 6 months of the Secretary's receipt of the last required written submission from the in-State institution, the institution may request a hearing before the Commission to determine whether a reaffirmation should be given.

(2) The request shall be made within 20 days of the expiration of the 6-month period.

(3) The hearing shall be conducted in accordance with the Administrative Procedure Act, State Government Article, Title 10, Subtitle 2, Annotated Code of Maryland, and COMAR 13B.04.01.

L. Accreditation.

(1) Within 4 years of an in-State institution receiving approval to operate within the State, the institution shall apply for accreditation with an organization recognized as an accrediting agency by the U.S. Department of Education to grant institutional accreditation.

(2) Within 8 years of an institution granting baccalaureate or higher degrees or within 6 years of an associate degree-granting institution receiving approval to operate within the State, the institution shall become accredited by an organization recognized as an accrediting agency by the U.S. Department of Education to grant institutional accreditation.

(3) Non-accredited in-State institutions approved by the State prior to January 1, 2007, shall apply by December 31, 2012, for accreditation by an organization recognized as an accrediting agency by the U. S. Department of Education to grant institutional accreditation, and shall become accredited by December 31, 2015.

(4) Except as provided in §L(5) of this regulation, the Secretary shall withdraw an institution's authority to operate in Maryland if the institution fails to become accredited by an organization recognized as an accrediting agency by the U. S. Department of Education to grant institutional accreditation within the time periods required by §L(1), (2), and (3) of this regulation.

(5) The Secretary may extend for a specified period the time required for an institution to obtain accreditation under §L of this regulation.

(6) If an institution’s accreditation is terminated, the institution’s authority to operate in Maryland shall cease effective the date that accreditation is terminated, unless the institution continues to be accredited by an organization recognized as an accrediting agency by the U.S. Department of Education to grant institutional accreditation.

M. Effect of the removal of recognition of an accrediting agency by the U.S. Department of Education (USDOE).

(1) If an institution ceases to be accredited by an organization recognized as an accrediting agency by the USDOE because the USDOE terminates its recognition of the accrediting agency, the institution shall inform the Commission of its accreditation status in writing within 7 calendar days of the accrediting agency’s loss of recognition.

(2) Except as provided in §M(3) of this regulation, if an institution ceases to be accredited by an organization recognized as an accrediting agency by the USDOE because the USDOE terminates its recognition of the accrediting agency, the institution’s authority to operate in Maryland shall cease effective the date that the USDOE terminates its recognition of the accrediting agency, unless the institution continues to be accredited by an organization recognized as an accrediting agency by the USDOE to grant institutional accreditation.

(3) If an institution ceases to be accredited by an organization recognized as an accrediting agency by the USDOE because the USDOE terminates its recognition of the accrediting agency, and the institution is not accredited by another organization recognized as an accrediting agency by the USDOE to grant institutional accreditation, the Secretary may grant the institution a temporary approval to operate, and impose terms and conditions as the Secretary deems appropriate, provided that:

(a) Within 60 days of the accreditation agency’s loss of recognition or the effective date of this regulation, whichever occurs later, the institution shall apply for accreditation from an organization recognized as an accrediting agency by the USDOE, and shall inform the Commission of the new accrediting agency and the institution’s application status; and

(b) Within 4 years of the accreditation agency’s loss of recognition, the institution shall become accredited by an organization recognized as an accrediting agency by the USDOE to grant institutional accreditation.

(4) Withdrawal of Approval.

(a) Except as provided in §M(4)(b) of this regulation, the Secretary shall withdraw an institution’s authority to operate in Maryland if the institution fails to meet the time periods required by §M(3) of this regulation.

(b) The Secretary may, upon conditions that the Secretary deems appropriate, extend for a specified period the time requirements under §M(3) of this regulation.

(5) The provisions of §M of this regulation apply to a decision by the USDOE, effective on or after July 1, 2016, to withdraw an accrediting agency’s recognition.