SHB 2474
In CommitteeHouse
Postsecondary closures
Concerning postsecondary education consumer protections in the event of school or program closures.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill strengthens consumer protections for students when private, licensed postsecondary schools close or discontinue programs. It requires schools to provide teach-out options or transfer agreements before closing, mandates refunds and voids student debt if closure rules are violated, and expands the use of a state-run tuition recovery fund to help students recover losses.
- Requires schools that close or discontinue programs to offer students either a teach-out (allowing completion under same conditions) or a transfer agreement with an accredited, financially stable institution that meets specific criteria.
- Mandates that schools violating closure requirements provide tuition and fee refunds to affected students and renders any outstanding student debt void.
- Expands the use of the Student Achievement Council Tuition Recovery Trust Fund to cover refunds and other relief not only for school closures but for any violation of consumer protection rules under the chapter.
- Requires schools to make cash deposits into the trust fund, with a fee structure and deposit schedule set by the council to ensure sufficient funding within five years.
- Adds new rules for how the council must notify students, process claims, and disburse funds from the trust fund, including a matrix for calculating required deposits per school.
Who is affected
- Students at private career schools and other licensed postsecondary institutions — Students enrolled in private, postsecondary institutions licensed by the state may receive refunds or transfer options if their school or program closes, and their debt may be discharged if the closure violates the law.
- Licensing authorities and private postsecondary schools — Private career schools and other institutions licensed under chapter 28B.85 RCW must comply with new closure and teach-out requirements, pay fees to the tuition recovery fund, and may face penalties for noncompliance.
- Student Achievement Council — The Student Achievement Council (SAC) gains new authority to enforce closure procedures, collect fees, manage the tuition recovery trust fund, and issue rules to implement the bill.
- Students whose programs are discontinued without proper planning — Students may be protected from owing money for incomplete programs if their school closes without following required procedures, and may receive refunds or alternative pathways to completion.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Requires schools to provide teach-out options or transfer agreements before closing, ensuring students can complete their education without financial penalty—this directly protects students from losing time, money, and academic progress due to sudden school closures.
EducationPeopleRef: Sec. 2(1)(a), (b); Sec. 2(3)Mandates tuition/fee refunds and voids outstanding student debt when schools violate closure rules—this prevents students from being trapped in debt for incomplete or disrupted education, especially critical for low-income and vulnerable students.
FinancialPeopleRef: Sec. 2(2), (3); Sec. 1(3)(a)Funds the trust via fees on schools—not taxpayer dollars—ensuring the cost of consumer protection is borne by the industry, not the public; this creates a self-sustaining safety net for students without increasing state spending.
Business & EmploymentPeopleRef: Sec. 1(1)(a), (3)(c); Sec. 1(2)(a), (b)Sets strict criteria for transfer agreements—including accreditation status, financial stability, and consumer protection history—ensuring students are placed in high-quality, reliable institutions rather than being dumped into substandard alternatives.
EducationPeopleRef: Sec. 2(1)(b)(i)–(v)Requires the Student Achievement Council to adopt formal rules for claim processing, notice, and disbursement, increasing transparency and fairness in how students access relief—reducing opportunities for arbitrary or delayed payouts.
Public SafetyPeopleRef: Sec. 1(7), (8)
Potential Concerns (5)
Mandates tuition and fee refunds and voids student debt for students affected by school violations, directly reducing revenue for schools and potentially shifting financial risk to the state-run trust fund — but the fund is financed by fees on schools, not general revenue, and refunds only apply when schools break the law, not for standard closures or financial distress.
FinancialPeopleRef: Sec. 2(2) & (3); Sec. 1(3)(a)Imposes new operational and financial burdens on private postsecondary schools—including mandatory cash deposits into the trust fund, fee-based funding schedules, and stricter transfer-agreement requirements—that may force smaller schools to close or reduce enrollment, especially those already operating on thin margins.
Business & EmploymentPeopleRef: Sec. 1(2)(a), (3), (4), (6), (7); Sec. 2(1)(b)(v)Expands the tuition recovery fund to cover *any* violation of consumer protection rules—not just closures—potentially increasing regulatory overreach and administrative burden, and creating ambiguity around what constitutes a reportable violation, which could chill legitimate business practices.
Public SafetyLean peopleRef: Sec. 1(1)(a), (3)(c)Shifts administrative responsibility for managing the trust fund and enforcing closure procedures to the Student Achievement Council, a state-level body, potentially reducing local oversight flexibility and increasing state-level administrative complexity.
Local GovernmentLean peopleRef: Sec. 1(2)(b)Liability for the trust fund ceases one year after a school loses its license, which may leave students stranded if a school closes or fails mid-semester and the fund is no longer obligated to cover claims—especially problematic for schools in financial distress but not yet formally closed.
Business & EmploymentLean peopleRef: Sec. 1(5)
Who Is Most Affected
Students at for-profit or private career schools—especially low-income, first-generation, or nontraditional learners—are the primary beneficiaries: they gain legal recourse to refunds, debt discharge, and transfer options if their school fails to follow closure procedures. This protects them from being stranded in debt with no diploma.
Small- and medium-sized private schools face increased compliance costs (e.g., cash deposits, teach-out planning, legal risk), but may benefit from reduced liability exposure if they follow the rules. Large, well-capitalized schools are less impacted, while predatory or financially unstable schools may be forced out of the market.
The Student Achievement Council gains expanded authority and funding mechanisms, increasing its role in consumer protection oversight. This strengthens its capacity but also increases its accountability burden and political exposure.
Students whose programs are discontinued without proper planning gain significant protections: refunds, debt discharge, and guaranteed transfer pathways. This is especially important for students in short-term credential programs with high debt-to-earnings ratios.