31 October, 2019
Bill protects students, establishes new reporting guidelines for public higher education system
BOSTON — In the wake of a series of high-profile closures of small colleges throughout the Commonwealth, the Massachusetts State Senate unanimously advanced legislation Wednesday that will establish new requirements relative to higher education financial reporting and oversight in an effort to support both students and the institutions of higher education themselves.
The legislation establishes new accountability measures, including the development of student-focused contingency plans if that public college or university is expected to close. In addition, it requires the development of a training program for school board of trustee members to promote better oversight of public colleges and universities.
“No student’s degree aspirations or financial resources should ever be put in limbo due to the sudden closure of their school,” said Senate President Karen E. Spilka (D-Ashland). “I am proud that this legislation passed by the Senate will bring stability and transparency to our higher education system.”
“The Senate has continually placed an emphasis on education and making sure that students are afforded every opportunity possible,” said Senator Anne Gobi (D-Spencer), Senate Chair of the Joint Committee on Higher Education. “This bill adds necessary protections to make sure that students, faculty, and staff are protected from abrupt school closings and provides greater transparency and accountability relative to the financial stability of all institutions of higher learning.”
Among its provisions, the legislation seeks to address issues surrounding the closure of higher education institutions by requiring annual financial reports from public colleges and universities. Under the bill, the Board of Higher Education (BHE) is tasked with creating an assessment system to examine whether an institution is at risk of imminent closure; if so, the institution is required to prepare a contingency plan for closure.
Higher education institutions are also required to notify the BHE of any known financial circumstances that may result in closure or the inability to fulfill obligations. Failure to comply with the requirements of the legislation may result in penalties from BHE.
To help ensure that college and university trustees understand their legal, fiduciary and ethical obligations under the law, the legislation requires the Department of Higher Education to develop a training program on topics critical to the proper oversight of a public institution of higher education. Relevant topics may include fraud prevention, fiduciary responsibilities, ethical procurement and state finance law. Trustees would be required to complete the training every four years.
“Hardworking students and families should have confidence in the level of transparency and accountability at their college or university,” said Senator Michael O. Moore (D-Millbury), who formerly served as Senate Chair of the Joint Committee on Higher Education. “It’s important that the stewards of our public higher education institutions are equipped with the appropriate tools and training needed to carry out their duties in a responsible manner, and to share information about their institution’s financial stability.”
“Given the hardships and disruption in the lives of students and their families from an unexpected college closure, we need to ensure responsible financial oversight that gives state government a role that protects student interests while preventing harm to the institutions as well,” said Senate Minority Leader Bruce Tarr (R- Gloucester). “This legislation strikes that balance, and puts us on a path to rebuild confidence and establish an effective safety valve to prevent a crisis.”
The Massachusetts House of Representatives passed similar legislation in early October. Action in both branches follows several recent instances of school closures, most notably last year’s sudden closure of Mount Ida College in Newton, as well as disclosures of other fiscal issues at other public higher education institutions.
An Act to support improved financial stability in higher education now returns to the House for further consideration.
