A decision to close an educational program, site, branch campus, or the entire institution requires thoughtful planning and careful consultation with all affected constituencies. Every effort should be devoted to informing each constituency as fully as possible about the conditions compelling consideration of a decision of such importance, and all available information should be shared. As much as possible, the determination to close a program, site, branch campus, or the institution should be made through a consultative process and only after alternatives have been considered, but responsibility for the final decision to close rests with the institution’s governing board. Because the immediate interests of current students and faculty are most directly affected, their present and future prospects require especially sensitive and timely attention and involvement.
If an institution decides to close an educational program, site, branch campus, or the entire institution, it must consider the following options:
See Commission policy “Substantive Change for Accredited Institutions of the Commission on Colleges,” Procedure Three, for additional information on teach-out plans and agreements.
A teach out-plan is a written plan developed by an institution that provides for the equitable treatment of students if an institution, or an institutional location that provides 50 percent of at least one program, ceases to operate before all students have completed their program of study, and may include a teach-out agreement between institutions. In such cases and in accord with Federal regulation 602.24 (c), the institution is required to submit the teach-out plan to the office of the Commission on Colleges for approval prior to its implementation.
The institution may include a teach-out agreement as part of its teach-out plan. A teach-out agreement is a written agreement between institutions that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if an institution, or an institutional location that provides 50 percent of at least one program offered, ceases to operate before all enrolled students have completed their program of study. If an institution includes a teach-out agreement as part of its teach-out plan, the agreement should be submitted to the Commission office for approval prior to its implementation.
When the decision is made to close an educational program, the institution must make a good faith effort to assist affected students, faculty, administrative and support staff so that they experience a minimal amount of disruption in the pursuit of their course of study or professional careers. In all cases, individuals should be notified of the decision to close a program as soon as possible so that they can make appropriate plans. Students who have not completed their programs should be advised by faculty or professional counselors regarding suitable options including transfer to comparable programs. Arrangements should be made to reassign faculty and staff or assist them in locating other employment.
The Commission on Colleges will work with the U.S. Department of Education and the appropriate State agency, to the extent feasible, to ensure that students are given reasonable opportunities to complete their education without additional charge.
An off-campus instructional site is a location geographically apart from the main campus at which 50 percent or more of the credit for at least one program is offered. Such sites must be approved in advance by the Commission on Colleges.
As stated in the Commission’s policy “Substantive Change for Accredited Institutions of the Commission on Colleges,” a branch campus is defined as a location of an institution that is geographically apart and independent of the main campus of the institution. A location is independent of the main campus if the location is (1) permanent in nature, (2) offers courses in educational programs leading to a degree, certificate, or other recognized educational credential, (3) has its own faculty and administrative or supervisory organization, and (4) has its own budgetary and hiring authority.
After the decision has been made to close a branch campus, or an additional site that is less permanent than that of the branch campus, all affected constituencies should be notified promptly including students, faculty, administrative and support staff. The chief executive officer should notify the Commission in writing as soon as possible. Every effort should be made to assist current students to continue their education without disruption. Faculty and staff either should be reassigned or assisted in locating other employment.
A decision to close an institution requires specific plans that provide for the students, the faculty, and the administrative and support staff, and the disposition of the institution’s assets. Many considerations bear upon closing an educational institution and each situation will be unique. Nevertheless, general guidelines will be helpful to each institution considering closing.
Students who have not completed their degrees should be provided for according to their needs. Arrangements for transfer to other institutions will require complete academic records and all other related information gathered in dossiers which can be transmitted promptly to receiving institutions. Arrangements for the teach-out of programs should be in line with the requirements of the Commission’s Substantive Change policy.
Agreements made with other institutions to receive transferring students and to accept their records should be in writing and in accord with Commission policy. Where financial aid is concerned, particularly federal or state grants, arrangements should be made with the appropriate agencies to transfer the grants to the receiving institution. Where such arrangements cannot be completed, students should be informed. In cases where students have held institutional scholarships or grants, appropriate agreements should be negotiated if there are available funds which can be legally used to support students while completing degrees at other institutions.
Arrangements should be made with the state board for higher education or another appropriate agency for filing of student records. If there is no state agency which can receive records, arrangements should be made with a state university, with the state archives, or with a private organization to preserve the records. Notification should be sent to every current and past student indicating where the records are being stored and what the accessibility to those records will be. Where possible, a copy of a student’s record should also be forwarded to the individual student. The institution must notify the Commission regarding the final filing of student records.
n every possible case, the institution should arrange for continuation of those faculty and staff who will be necessary for the completion of the institution’s work pending the closing date. In those cases where faculty and staff will no longer be needed, the institution should make every effort to assist them in finding other employment. It should be understood that the institution can make no guarantees, but genuinely good faith efforts to assist in relocation and reassignment are essential.
Determinations must be made to allocate whatever financial resources and assets remain after the institution provides for the basic needs of current students, faculty, and staff. When the financial resources of the institution are inadequate to honor commitments, the board should investigate prior to its decision to close what alternatives and protection are available under applicable bankruptcy laws. If bankruptcy can be avoided but funds are insufficient to maintain normal operations through the end of the closing process, the institution should not overlook the possibility of soliciting one-time gifts and donations to assist in fulfilling its final obligations.
Every effort should be made to develop defensible policies for dividing the resources equitably among those with claims against the institution. One of the most effective ways of achieving this goal is to involve potential claimants in the process of developing the policies. Time and effort devoted to carrying the process to a judicious conclusion may considerably reduce the likelihood of lawsuits or other forms of confrontation.
It is impossible to anticipate the many claims that might be made against the remaining resources of an institution, but institutions should give attention to the following three concerns:
The final action of the institution’s governing board should be a formal vote to terminate the institution on a specified date. That date will depend on a number of factors including the decision to file or not to file for bankruptcy. Another key factor is whether or not all obligations to students will have been satisfactorily discharged.
In the case of a not-for-profit institution, the legal requirements of a state must be carefully examined with respect to the disposition of institutional assets. Arrangements for the sale of the physical plant, equipment, the library, special collections, art, or other essential holdings, and for the disposition of any endowments or special funds must be explored. In the case of wills, endowments, or special grants, the institution should discuss with the donors, grantors, executors of estates, and other providers of special funds, arrangements to accommodate their wishes. State laws regarding the disposition of funds from a non-profit institution must be meticulously followed.
All pertinent federal and state agencies need to be apprised of the institution’s situation and any obligations relating to state or federal funds cleared with the proper authorities.
An institution has the obligation to inform the Commission of its plans for closing and of its final closing date. The institution should establish a clear understanding with its creditors and all other agencies involved with its activities to assure that their claims and interests will be properly processed. Insofar as possible, the institution should assure that its final arrangements will not be subject to later legal proceedings which might jeopardize the records of its students or faculty.
Southern Association of Colleges and SchoolsCommission on Colleges1866 Southern LaneDecatur, Georgia 30033-4097
Approved: Commission on Colleges, July 1995Approved and edited for the Principles of Accreditation: February 2004 Revised: Commission on Colleges, December 2006Adopted: August 2011Reformatted: July 2014