Rules & Regulations of the State of Tennessee Title 1710 - Guaranty Fund
Tennessee Title 1710 - Guaranty Fund: Detailed Explanation
1. Overview
The Tennessee Tuition Guaranty Fund is established to protect students who enroll in certain private postsecondary educational institutions in Tennessee. If a school closes unexpectedly or fails to provide promised educational services, the fund compensates affected students for tuition or fees they have paid but did not receive educational value for.
The fund is overseen by a board appointed by the state, which collects fees from participating schools to finance the fund and processes claims from students.
2. Purpose and Function
The fund safeguards students' financial interests if an institution closes or defaults.
It promotes public confidence in Tennessee's private education institutions.
It requires schools to contribute annually based on tuition collected.
The fund reimburses students who qualify under specific circumstances (e.g., institutional closure, loss of accreditation).
3. Regulatory Framework
Institutions' Obligations: Non-exempt private postsecondary schools must pay annual assessments based on their gross tuition income.
Assessment Formula: The fee is scaled to tuition collected, with specific brackets that schools fall into for fee determination.
Claim Process: Students file claims after institutional failure, and the board reviews eligibility and disburses funds accordingly.
Reporting: The board reports annually on the fund’s status to state authorities and stakeholders.
4. Key Regulatory Provisions
Title 1710-01-02-.02: Defines the Board's responsibilities including collection, disbursement, and reporting.
Title 1710-01-02-.08: Details assessment calculations and deadlines for fee payment by institutions.
Title 1710-01-02-.09: Establishes procedures for submitting, reviewing, and paying student claims.
5. Relevant Case Law
There is limited direct case law interpreting the Tennessee Tuition Guaranty Fund itself. However, some Tennessee court cases shed light on related principles such as administrative procedure, statutory interpretation, and consumer protection that apply indirectly.
Case Example 1: US Life Title Ins. Co. v. Dept. of Commerce
Summary: This case involved a challenge to administrative rules enacted by the Tennessee Department of Commerce and Insurance. The court ruled that administrative rules must be promulgated following the state's Administrative Procedures Act (APA).
Relevance: It emphasizes that rules like those governing the Tuition Guaranty Fund must follow proper rulemaking procedures to be valid. Any deviations can result in invalid rules, impacting enforcement and fund management.
Case Example 2: Brown v. Tennessee Title Loans, Inc.
Summary: The case focused on whether individuals could sue under the Tennessee Title Pledge Act for excessive fees charged by title loan companies. The court found that the act did not explicitly create a private right of action.
Relevance: This case illustrates limits on private enforcement of regulatory statutes, which is important because student claims against the Guaranty Fund are typically handled administratively rather than through private lawsuits.
Case Example 3: General Principles in Tennessee Administrative Law
Courts often defer to administrative agencies' interpretations of statutes and rules unless arbitrary or capricious.
Agencies must follow fair procedures in assessing fees and distributing funds.
Claimants (students) usually must exhaust administrative remedies before seeking judicial review.
6. Practical Implications
Schools must maintain compliance with assessment payments to avoid penalties or loss of authorization.
Students should file claims promptly if an institution closes or fails to deliver education.
The fund acts as a safety net but may have limits on total reimbursement.
Disputes over claims or fee assessments can involve administrative hearings and potential court review.
7. Summary
The Tennessee Tuition Guaranty Fund under Title 1710 provides important financial protections for students attending private postsecondary institutions. It is governed by specific rules regarding fund collection and disbursement. While direct case law on the fund is scarce, Tennessee administrative law principles and consumer protection rulings provide a framework that ensures the fund operates fairly and lawfully.
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