In Texas, does a for-profit trade school need state higher-education approval to award associate degrees?

Texas AG Opinion JM-1002: Who Regulates For-Profit Schools That Award Applied Associate Degrees?

Plain-English summary

Texas has two different agencies that watch over schools. The Texas Education Agency runs the Proprietary School Act, which covers for-profit trade and career schools. The Texas Higher Education Coordinating Board runs a separate law, chapter 61 of the Education Code, that controls who may hand out college degrees. In the early 1980s the Coordinating Board decided that certain "applied" associate degrees, the Associate of Applied Arts and Associate of Applied Science, were "non-academic" and let jurisdiction over them slide over to the Education Agency. By 1988 the number of proprietary schools handing out those degrees had jumped from a handful to more than two dozen, and the Coordinating Board wanted the authority back. A state senator asked the Attorney General to sort out who was actually in charge.

The Attorney General's answer was that the Education Agency does not have exclusive control over these schools, and that the Coordinating Board's authority comes straight from chapter 61. The key move was to look at what the statutes actually say. The senator's questions assumed a line between "academic" and "non-academic" degrees, but the Attorney General pointed out that Texas law does not draw that line anywhere. Chapter 61 defines a "degree" to include any title using words like "associate," full stop, with no carve-out for applied or vocational versions. The academic/non-academic distinction existed only in the Coordinating Board's own 1981 administrative rules, not in the statute.

So the test is not what the degree is called but what the school is. If a for-profit school fits the definition of a "proprietary school" under chapter 32 and also fits the definition of a "private institution of higher education" under chapter 61, then chapter 61 applies to it, and section 61.304 says it may not award any degree, including an applied associate degree, until the Coordinating Board issues it a certificate of authority. The point of that requirement, the legislature said, is to prevent the public from being deceived by fraudulent or substandard college and university degrees, and the Attorney General saw no reason a school escapes that concern just because it is a proprietary school rather than a traditional college.

The Attorney General also knocked down the counterarguments. One brief pointed to section 61.070, which says the chapter does not affect duties the statutes assign to the Education Agency, but the Attorney General found no statute that actually gives the Education Agency the job of authorizing proprietary schools to grant particular degrees; the only thing that had done so was the Coordinating Board's own administrative rules, which are not "statutes." Another brief cited a 1967 Attorney General opinion (M-143) that had distinguished academic from vocational certificates, but that opinion came eight years before chapter 61 was enacted and said nothing about how to read the word "degree" under chapter 61. With the first two questions answered, the Attorney General did not need to reach the third, which had assumed the Education Agency held exclusive authority. He also made clear he was not passing on whether the 1981 rule changes, or any new rule the board might adopt, were valid.

Currency note

This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Texas higher-education and proprietary-school law has changed since 1989. The Proprietary School Act (Education Code chapter 32) was later repealed and its regulation of career schools and colleges moved to the Texas Workforce Commission under a different chapter, and the chapter 61 provisions on the Coordinating Board's certificate-of-authority process have been amended and renumbered. The Coordinating Board's administrative rules in title 19 of the Texas Administrative Code have likewise been revised. Anyone dealing with which Texas agency regulates a particular for-profit school or degree program today should consult the current Education Code, the current rules of the Coordinating Board and the Texas Workforce Commission, and a lawyer rather than the 1989 statutes and rules cited here.

Who this opinion affected (as of 1989)

Proprietary (for-profit) schools awarding applied associate degrees: The opinion told them that fitting the definition of a private institution of higher education meant they could not award those degrees without a certificate of authority from the Coordinating Board.

The Texas Higher Education Coordinating Board: The opinion confirmed its authority under chapter 61 reached applied associate-degree programs at proprietary schools, supporting its plan to reassert jurisdiction.

The Texas Education Agency: The opinion clarified that it did not have exclusive jurisdiction over these schools and that no statute assigned it the duty of authorizing them to grant degrees.

Students and the public: The opinion reinforced the degree-authorization safeguard meant to protect against fraudulent or substandard degrees.

Common questions

Does a Texas for-profit school need state approval to award an associate degree?
If the school fits the Education Code's definition of a "private institution of higher education," then under section 61.304 it may not award any degree, including an applied associate degree, without a certificate of authority from the Texas Higher Education Coordinating Board.

Does it matter whether the degree is "academic" or "non-academic"?
No. In this opinion the Attorney General concluded that Texas statutes draw no distinction between academic and non-academic degrees; chapter 61's definition of "degree" covers any designation using words like "associate," applied or not.

Which agency is in charge, the Education Agency or the Coordinating Board?
Both laws can apply. A school can be a "proprietary school" under chapter 32 and still be subject to chapter 61 if it also fits the definition of a private institution of higher education. The Coordinating Board's degree-authorization authority comes from chapter 61 itself.

Why did the Attorney General reject the argument based on section 61.070?
Section 61.070 preserves duties that statutes assign to the Education Agency, but the Attorney General found no statute assigning the Education Agency the duty of authorizing proprietary schools to grant degrees; only administrative rules had done that, and rules are not statutes.

Background and statutory framework

Chapter 32 of the Education Code, the Texas Proprietary School Act, provides that the Texas Education Agency (the Central Education Agency) shall exercise jurisdiction and control of proprietary schools (Educ. Code § 32.21). Section 32.11(1) defines a "proprietary school" as a business enterprise operated for profit or on a nonprofit basis that maintains or solicits business in Texas, is not specifically exempted, and offers a course or courses of instruction (including by correspondence) to train or prepare a person for a business, trade, technical, or industrial occupation or for avocational or personal improvement.

Subchapter G of chapter 61, enacted in 1975, provides in section 61.304 that a person may not grant or award a degree on behalf of a private institution of higher education unless the institution has been issued a certificate of authority by the Coordinating Board. Section 61.302(2) defines a "private institution of higher education" as an educational institution that is not an institution of higher education under section 61.003(7), is incorporated under or maintains a presence in Texas, and furnishes or offers courses of instruction leading to a degree or providing credits alleged to be applicable to a degree. Section 61.302(1) defines "degree" as any title, designation, mark, abbreviation, or series of letters or words, including associate, bachelor's, master's, doctor's, and their equivalents, signifying satisfactory completion of a program of study leading to such a degree. Section 61.311 authorizes the board to promulgate standards governing certificates of authority and to delegate responsibilities to the Commissioner of Education. The legislature stated its purpose in section 61.301: to regulate the use of degree designations to prevent deception of the public resulting from the conferring and use of fraudulent or substandard college and university degrees.

From 1975 until 1981 the Coordinating Board issued certificates of authority under subchapter G for applied associate degrees. In 1981 the board amended its administrative rules (narrowing the definition of "degree" in what is now 19 T.A.C. § 5.211 to academic degree-level programs, and providing in 19 T.A.C. § 5.213 that it would not accept applications for programs not generally accepted as academic degree programs), relinquishing jurisdiction over "non-academic" associate degrees to the TEA under chapter 32. The Attorney General found nothing in chapters 32 or 61 preventing the board from subjecting applied associate degrees to chapter 61 once appropriate rule changes were made, and concluded that Texas statutes make no academic/non-academic distinction: the definition of "degree" encompasses any degree using the word "associate." The Attorney General rejected the argument that section 61.070 (providing that the chapter does not affect duties assigned by statute to the central education agency, except those relating to public junior colleges) removed the board's jurisdiction, because no statute assigns the TEA the duty of authorizing proprietary schools to grant degrees; only administrative rules had done so, and rules are not "statutes" within section 61.070. The Attorney General also found that Attorney General Opinion M-143 (1967), which distinguished academic from vocational certificates under a different law and predated chapter 61 by eight years, provided no authority for drawing such distinctions under chapter 61. Accordingly, a proprietary school that also fits the definition of a private institution of higher education is subject to section 61.304, and the third question (which assumed exclusive TEA authority) was not reached.

Citations

Statutory authority:

• Education Code § 32.11 (definition of "proprietary school"); § 32.21 (TEA jurisdiction over proprietary schools)
• Education Code § 61.070 (chapter does not affect statutory duties of the central education agency); § 61.301 (purpose: prevent deception from fraudulent or substandard degrees); § 61.302 (definitions of "degree" and "private institution of higher education"); § 61.304 (certificate of authority required to award a degree); § 61.311 (board rulemaking and delegation to the commissioner)
• 19 T.A.C. § 5.211 (1981 definition of "degree"); § 5.213 (applications for academic degree programs)

Cases:

• None cited.

Related opinions:

• Attorney General Opinion M-143 (1967)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1002
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1989/jm1002.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative.

January 3, 1989

Honorable Carl A. Parker
Chairman
Senate Education Committee
Texas State Senate
P.O. Box 12068
Austin, Texas 78711

Opinion No. JM-1002

Re: Authority of the Texas Higher Education Coordinating Board over proprietary schools which confer only non-academic degrees, and related questions (RQ-1536)

Dear Senator Parker:

You ask:

1. Does the TEA have exclusive jurisdiction over proprietary schools which confer only non-academic degrees, such as AAA, AAS and Associate of Occupational Studies ("AOS") degrees?

2. Does the authority of the Coordinating Board extend beyond the scope of its authority under Chapter 61 of the Texas Education Code to proprietary schools which confer only non-academic degrees, such as AAA, AAS and AOS degrees? If so, what is the statutory basis for extending the jurisdiction of the Coordinating Board beyond institutions of higher education?

3. If the TEA does have exclusive jurisdiction over proprietary schools, can the TEA abdicate its duty to supervise and regulate proprietary schools, which has been specifically entrusted to it by the legislature, by delegating such responsibility to the Coordinating Board, an entity that has no express statutory authority for that responsibility and that is statutorily limited in its authority solely to those matters which the legislature has expressly entrusted to it?

Your request indicates that by "TEA" you mean the Texas Education Agency, or Central Education Agency, as it is referred to by statute, and by Coordinating Board you mean the Texas Higher Education Coordinating Board. The AAA and AAS degrees referred to are the Associate of Applied Arts and Associate of Applied Science degrees offered by certain private educational institutions in this state.

We understand that your request was prompted by a proposed agreement between TEA and the Coordinating Board that such degree programs would be subject to the requirements of chapter 61, subchapter G, of the Education Code, section 61.304 of which provides that:

[a] person may not grant or award a degree on behalf of a private institution of higher education unless the institution has been issued a certificate of authority to grant the degree by the [Coordinating Board] in accordance with the provisions of this subchapter.

Subchapter G of chapter 61 of the Education Code was enacted in 1975. Acts 1975, 64th Leg., ch. 587, at 1867. It appears that from the time of that enactment in 1975 until 1981, the Coordinating Board issued certificates of authority pursuant to subchapter G for such associate degrees. In 1981, the Coordinating Board amended its administrative rules to provide that such "non-academic" associate degree programs would no longer be under the jurisdiction of the Coordinating Board, leaving proprietary schools offering such degrees under the jurisdiction of the TEA under the Proprietary School Act, Education Code, chapter 32.1

[Footnote 1: Section 61.311 provides: (a) The board shall promulgate standards, rules, and regulations governing the issuance of certificates of authority. (b) The board may delegate to the commissioner such authority and responsibility conferred on the board by this subchapter as the board deems appropriate for the effective administration of this subchapter.]

The number of schools offering such associate degrees has apparently grown from three in 1981 to more than 25 in 1988. It is now proposed that the Coordinating Board take back jurisdiction over AAA and AAS programs.

Chapter 32 of the Education Code, the Texas Proprietary School Act, provides that the TEA "shall exercise jurisdiction and control" of proprietary schools. Educ. Code § 32.21. "Proprietary school" is defined in section 32.11, subdivision (1) as:

"Proprietary School," referred to as "school," means any business enterprise operated for a profit, or on a nonprofit basis, which maintains a place of business within the State of Texas, or solicits business within the State of Texas, and which is not specifically exempted by the provisions of this Chapter and;

(A) which offers or maintains a course or courses of instruction or study; or

(B) at which place of business such a course or courses of instruction or study is available through classroom instruction or by correspondence, or both, to a person or persons for the purpose of training or preparing the person for a field of endeavor in a business, trade, technical, or industrial occupation, or for avocational or personal improvement, except as hereinafter excluded.

Subchapter G of chapter 61, section 61.304 of which provides that degrees may not be awarded by a "private institution of higher education" unless the institution has obtained a certificate of authority from the coordinating board, defines "private institution of higher education" as follows, at section 61.302 subdivision (2):

"Private institution of higher education" or "institution" means an educational institution which:

(A) is not an institution of higher education as defined by Section 61.003(7) of this code;

(B) is incorporated under the laws of this state, maintains a place of business in this state, has a representative present in this state, or solicits business in this state; and

(C) furnishes or offers to furnish courses of instruction in person, by electronic media, or by correspondence leading to a degree or providing credits alleged to be applicable to a degree. (Emphasis added.)

"Degree" is defined in subdivision (1), section 61.302, as follows:

(1) "Degree" means any title or designation, mark, abbreviation, appellation, or series of letters or words, including associate, bachelor's, master's, doctor's, and their equivalents, which signifies, purports to, or is generally taken to signify satisfactory completion of the requirements of all or part of a program of study leading to an associate, bachelor's, master's, or doctor's degree or its equivalent. (Emphasis added.)

Your questions distinguish between "academic" and "non-academic" degrees, suggesting that subchapter G, chapter 61 provisions are directed at only academic degrees. The distinction between academic and non-academic degrees is not made in the Education Code or elsewhere in applicable Texas statutes. In 1981, the Coordinating Board amended its administrative rules to make such a distinction at the time it relinquished its authority over applied, or non-academic, associate degrees. The definition of "degree," now in 19 T.A.C., section 5.211, was at that time narrowed to encompass only degrees issued to signify completion of an "academic degree-level program." 6 Tex. Reg. 1600 (1981). What is now subsection (c) of 19 T.A.C., section 5.213, was amended at that time to provide that the board would not accept applications for certificates of authority pertaining to a program "not generally in use and accepted as an academic degree program." Id. These amendments were effective August 7, 1981. 6 Tex. Reg. 2644 (1981).

Presumably the rules limiting Coordinating Board authority under chapter 61 to "academic degrees" will be amended if and when the Coordinating Board reasserts its jurisdiction over non-academic associate degrees such as the AAA and AAS degrees. We find nothing in chapters 32 or 61 of the Education Code or other provisions of Texas law which would prevent the board from subjecting proprietary school non-academic associate degrees to the requirements of chapter 61, once the appropriate rule changes are made.

We note that you do not ask about and we do not address the validity of the 1981 rule changes made by the board2 or the validity of any particular rule the Coordinating Board might adopt to reassert its jurisdiction over the proprietary school associate degree programs in question.

Just as Texas statutes make no distinction between academic and non-academic degrees, no distinction is made between associates degrees which are "applied," such as the AAA and AAS degrees, or not "applied." The definition of degree in chapter 61 encompasses any "degree" having in its designation the word "associate."

The legislature evidenced its concern that the use of such a designation be regulated by the Coordinating Board "to prevent deception of the public resulting from the conferring and use of fraudulent or substandard college and university degrees." Educ. Code § 61.301. We do not think that the fact that a school is a proprietary school, which may not be a college or university in the ordinary sense, supports the conclusion that it is not the sort of institution at which chapter 61 is directed; if the school fits within the definition of a "private institution of higher education," chapter 61, on its face, makes it subject to board control vis a vis its awarding of degrees.

Your request and a brief submitted in connection with your request by a law firm representing the Texas Association of Private Schools argue that section 61.070 of the Education Code indicates that the Coordinating Board was granted no statutory jurisdiction over proprietary schools awarding applied associate degrees. Section 61.070 provides:

None of the duties or functions assigned by statute to the central education agency, except those relating to public junior colleges, are affected by this chapter.

However, we find no statute, either in the Proprietary School Act or elsewhere, which assigns the duty or function to the TEA of authorizing proprietary schools to grant particular degrees. The administrative rules discussed above might have been adopted with the intention of relinquishing such duties or functions to the TEA, but those rules are not "statutes" within the meaning of section 61.070.

[Footnote 2: But see subsection (b) of section 61.311 authorizing the board to delegate subchapter G responsibilities to the Commissioner of Education, who is executive officer of the TEA pursuant to sections 11.51 et seq. of the Education Code. The text of section 61.311 is reprinted in footnote 1 of this opinion.]

Briefs submitted in connection with your request also argue that Attorney General Opinion M-143 (1967) distinguished academic and non-academic degrees or certificates in concluding that a state law requiring students to complete American history and government courses in order to obtain a "baccalaureate" or "lesser degree or academic certificate" did not apply to "vocational or technical course certificates given for courses approved by or subject to approval of the State Board of Vocational Education." Attorney General Opinion M-143 (1967), at 7. However, we do not find in that opinion any authority for making such distinctions among "degrees" under chapter 61. The definition of "degree" in section 61.302 makes no such distinction. Notably, the provisions of chapter 61 were not enacted until eight years after the issuance of Attorney General Opinion M-143.

Accordingly, we conclude in response to your first question that the TEA does not have exclusive jurisdiction over proprietary schools which confer only non-academic degrees such as AAA, AAS, and Associate of Occupational Studies Degrees. Where a proprietary school, as defined in section 32.11 of the Education Code, also fits the definition of a "private institution of higher education" under section 61.302, we think that it is subject to the requirement of chapter 61, that it may not award degrees until it has been issued a certificate of authority by the Coordinating Board to grant such degrees, including applied associate degrees.

Your second question asks whether the Coordinating Board's authority extends beyond the scope of its authority under chapter 61 to proprietary schools which offer such degrees. We find that the Coordinating Board has such authority under chapter 61 itself pursuant to the provisions of that chapter cited and discussed above. Though such schools may fit the definition of "proprietary schools" under chapter 32, to the extent that they also fit the definition of "private institutions of higher education" under chapter 61, they are subject to the requirement of that chapter providing that they may not award degrees unless they have been issued a certificate of authority by the Coordinating Board. Educ. Code § 61.304.

Your third question assumes that the TEA has exclusive authority over proprietary schools. As we have concluded in our responses to your first two questions that the TEA does not have exclusive authority over those proprietary schools that are also "private institutions of higher education" within the meaning of chapter 61, section 61.302, we need not answer your third question.

SUMMARY

Proprietary schools which offer applied associate degrees and which otherwise meet the definition of "private institutions of higher education" under Education Code section 61.302 are subject to the requirement of section 61.304 that they may not award such degrees without having obtained a certificate of authority from the Texas Higher Education Coordinating Board.

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by William Walker
Assistant Attorney General