SB 1192: Private postsecondary education: California Private Postsecondary Education Act of 2009.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2016-09-24
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act exempts an institution from its provisions if any of a list of specific criteria are met.
This bill would recast and revise various provisions of the act. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would require an out-of-state private postsecondary educational institution, as defined, to comply with specified requirements, including providing the bureau evidence of the institutions accreditation. The bill would authorize the bureau to adopt, by regulation, a process that allows an institution with approval to operate to request and receive inactive status. The bill would require an institution with approval to operate that knows that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified. The bill would adjust annual fees charged to an institution with approval to operate, as specified.
This bill would establish an Office of Student Assistance and Relief to advance and promote the rights of private postsecondary educational institution students, as specified. The bill would require the office to report quarterly by posting on the bureaus Internet Web site, through September 1, 2018, specified information related to assistance it provides to these students. The bill would require the office to submit a report to the Legislature, the department, and the bureau summarizing that information by January 1, 2019.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation.
Existing law repeals the act on January 1, 2017.
This bill would instead repeal the act on January 1, 2021, thus extending the operation of the act by 4 years. By extending operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.
Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act exempts an institution from its provisions if any of a list of specific criteria are met.
This bill would recast and revise various provisions of the act. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would require an out-of-state private postsecondary educational institution, as defined, to comply with specified requirements, including providing the bureau evidence of the institutions accreditation. The bill would authorize the bureau to adopt, by regulation, a process that allows an institution with approval to operate to request and receive inactive status. The bill would require an institution with approval to operate that knows that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified. The bill would adjust annual fees charged to an institution with approval to operate, as specified.
This bill would establish an Office of Student Assistance and Relief to advance and promote the rights of private postsecondary educational institution students, as specified. The bill would require the office to report quarterly by posting on the bureaus Internet Web site, through September 1, 2018, specified information related to assistance it provides to these students. The bill would require the office to submit a report to the Legislature, the department, and the bureau summarizing that information by January 1, 2019.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation.
Existing law repeals the act on January 1, 2017.
This bill would instead repeal the act on January 1, 2021, thus extending the operation of the act by 4 years. By extending operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.
Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act exempts an institution from its provisions if any of a list of specific criteria are met.
This bill would recast and revise various provisions of the act. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would require an out-of-state private postsecondary educational institutions, as defined, to comply with specified requirements, including providing the bureau evidence of the institutions accreditation. The bill would authorize the bureau to adopt, by regulation, a process that allows an institution with approval to operate to request and receive inactive status. The bill would require an institution with approval to operate that knows or reasonably should know that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified. The bill would adjust annual fees charged to an institution with approval to operate, as specified.
This bill would establish an Office of Student Assistance and Relief to advance and promote the rights of private postsecondary educational institution students, as specified. The bill would require the office to report quarterly by posting on the bureaus Internet Web site, through September 1, 2018, specified information related to assistance it provides to these students. The bill would require the office to submit a report to the Legislature, the department, and the bureau summarizing that information by January 1, 2019.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation.
Existing law repeals the act on January 1, 2017.
This bill would instead repeal the act on January 1, 2021, thus extending the operation of the act by 4 years. By extending operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.
Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act exempts an institution from its provisions if any of a list of specific criteria are met. Existing law repeals the act on January 1, 2017.
This bill would recast and revise various provisions of the act. The bill would require the Director of Consumer Affairs to appoint an enforcement monitor, no later than March 1, 2017, to, among other duties, monitor and evaluate the bureaus enforcement of the act and submit written reports to the department and the Legislature on his or her findings and conclusions, as specified. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would, to the extent authorized by federal law, would require a private postsecondary institution that does not maintain a physical presence in California and offers distance education to California students an out-of-state private postsecondary educational institutions, as defined, to comply with specified requirements, including register with the bureau. providing the bureau evidence of the institutions accreditation. The bill would authorize the bureau to adopt, by regulation, a process that allows an institution with approval to operate to request and receive inactive status. The bill would require an institution with approval to operate that knows or reasonably should know that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified. The bill would adjust annual fees charged to an institution with approval to operate, as specified.
This bill would establish an Office of Student Assistance and Relief within the department to advance and promote the rights of private postsecondary educational institution students, as specified. The bill would require the office to report quarterly by posting on the bureaus Internet Web site, through September 1, 2018, specified information related to assistance it provides to these students. The bill would require the office to submit a report to the Legislature, the department, and the bureau summarizing that information by January 1, 2019.
This bill would appropriate the sum of $1,300,000 from the Student Tuition Recovery Fund to the office for providing grants to eligible nonprofit community service organizations to assist eligible students affected by the closure of Corinthian Colleges, Inc., as defined, with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. The bill would require the office to solicit grant applications from eligible nonprofit community service organizations and select one or more of these organizations deemed to be qualified. The bill would require the grantee to submit specified information to the office on a quarterly basis and would require the office to make these reports available to the Legislature and the department upon request. The bill would require the office to provide the Legislature and the department a final report summarizing all the information submitted to it by grantees, promptly following the time when all funds are expended by the grantees, or by January 1, 2020, whichever is earlier.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation.
Existing law repeals the act on January 1, 2017.
This bill would instead repeal the act on January 1, 2021, thus extending the operation of the act by 4 years. By extending operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.
Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act exempts an institution from its provisions if any of a list of specific criteria are met. Existing law repeals the act on January 1, 2017.
This bill would recast and revise various provisions of the act. The bill would authorize bureau staff who, during an inspection of an institution, detect a violation of the act, or regulations adopted pursuant to the act, to issue the institution a citation before leaving the institution, as specified. The bill would require the Director of Consumer Affairs to appoint an enforcement monitor, no later than March 1, 2017, to, among other duties, monitor and evaluate the bureaus enforcement of the act and submit written reports to the department and the Legislature on his or her findings and conclusions, as specified. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would, to the extent authorized by federal law, require a private postsecondary institution that does not maintain a physical presence in California and offers distance education to California students to register with the bureau and file a surety bond, as specified. comply with specified requirements, including register with the bureau. The bill would require an institution with approval to operate that knows or reasonably should know that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified.
This bill would establish an Office of Student Assistance and Relief within the department to advance and promote the rights of private postsecondary educational institution students, as specified.
This bill would appropriate the sum of $1,300,000 from the Student Tuition Recovery Fund to the office for providing grants to eligible nonprofit community service organizations to assist eligible students affected by the closure of Corinthian Colleges, Inc., as defined, with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. The bill would require the office to solicit grant applications from eligible nonprofit community service organizations and select one or more of these organizations deemed to be qualified. The bill would require the grantee to submit specified information to the office on a quarterly basis and would require the office to make these reports available to the Legislature and the department upon request. The bill would require the office to provide the Legislature and the department a final report summarizing all the information submitted to it by grantees, promptly following the time when all funds are expended by the grantees, or by January 1, 2020, whichever is earlier.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation. The bill would establish the Office of Student Assistance and Relief, which would, among other duties, administer the fund, serve as a point of contact to address the needs of private postsecondary students, establish an Internet Web site that contains specified information for the benefit of these students, and work, in consultation with specified state and federal agencies, to determine the extent of resources available for these students and what actions state agencies need to take to ensure the protection of the public from the closure of private postsecondary educational institutions.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act requires, except as provided, institutions covered by the act that offer a degree to receive accreditation by an accreditation agency recognized by the United States Department of Education or have an accreditation plan, approved by the bureau, for the institution to become fully accredited within 5 years of the bureaus issuance of a provisional approval to operate to the institution, as specified. The act exempts an institution from its provisions if any of a list of specific criteria are met. Existing law repeals the act on January 1, 2017.
This bill would recast and revise various provisions of the act. The bill would authorize bureau staff who, during an inspection of an institution, detect a violation of the act, or regulations adopted pursuant to the act, to issue the institution a citation before leaving the institution, as specified. The bill would require the Director of Consumer Affairs to appoint an enforcement monitor, no later than March 1, 2017, to, among other duties, monitor and evaluate the bureaus enforcement of the act and submit written reports to the department and the Legislature on his or her findings and conclusions, as specified. The bill would increase the amount of a fine that may be issued to a person for operating an institution without proper approval to operate from $50,000 to $100,000. The bill would, to the extent authorized by federal law, require a private postsecondary institution that does not maintain a physical presence in California and offers distance education to California students to register with the bureau and file a surety bond, as specified.
The act establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian Colleges, Inc., institution, who meets all of the other eligibility requirements, eligible for recovery from the fund. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation. The bill would establish the Office of Student Assistance and Relief, which would, among other duties, administer the fund, serve as a point of contact to address the needs of private postsecondary students, establish an Internet Web site that contains specified information for the benefit of these students, and work, in consultation with specified state and federal agencies, to determine the extent of resources available for these students and what actions state agencies need to take to ensure the protection of the public from the closure of private postsecondary educational institutions.
This bill would correct an inaccurate cross-reference in that provision relating to accreditation and would make other technical nonsubstantive changes.
Existing law, the California Private Postsecondary Education Act of 2009, provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act requires, except as provided, institutions covered by the act that offer a degree to receive accreditation by an accreditation agency recognized by the United States Department of Education or have an accreditation plan, approved by the bureau, for the institution to become fully accredited within 5 years of the bureaus issuance of a provisional approval to operate to the institution, as specified.
This bill would correct an inaccurate cross-reference in that provision relating to accreditation and would make other technical nonsubstantive changes.
It shall be the duty of the director to receive complaints from consumers concerning (a) unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in the conduct of any trade or commerce; (b) the production, distribution, sale, and lease of any goods and services undertaken by any person which may endanger the public health, safety, or welfare; (c) violations of provisions of this code relating to businesses and professions licensed by any agency of the department, and regulations promulgated pursuant thereto; (d) student concerns related to the Bureau for Private Postsecondary Educations performance of its responsibilities, including concerns that arise related to the Bureau for Private Postsecondary Educations handling of a complaint or its administration of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code; and (e) other matters consistent with the purposes of this chapter, whenever appropriate.
SEC. 2.Section 94801.5 is added to the Education Code, to read:94801.5.(a)Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee pursuant to Section 94930.5, and comply with all of the following:
(1)The institution shall provide the bureau with all of the following information:
(A)Evidence of accreditation.
(B)Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location.
(C)The agent for service of process consistent with Section 94943.5.
(D)A copy of the institutions catalog and sample enrollment agreement.
(2)The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(3)The institution shall provide disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(b)This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.
(c)An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.
(d)A registration with the bureau pursuant to this section shall be valid for two years.
(e)The bureau shall develop, through emergency regulations, a registration form. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
SEC. 3.Section 94809 of the Education Code is amended to read:94809.(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, and filed an application to operate by August 2, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 4.Section 94850.5 is added to the Education Code, to read:94850.5.Out-of-state private postsecondary educational institution means a private entity without a physical presence in this state that offers distance education to California students for an institutional charge, regardless of whether the institution has affiliated institutions or institutional locations in California.
SEC. 5.Section 94874 of the Education Code is amended to read:94874.Except as provided in Sections 94874.2 and 94874.7, the following are exempt from this chapter:
(a)An institution that offers solely avocational or recreational educational programs.
(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organizations membership.
(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d)An institution offering either of the following:
(1)Test preparation for examinations required for admission to a postsecondary educational institution.
(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C)A bona fide trade, business, or professional organization.
(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B)The diploma or degree is limited to evidence of completion of that education.
(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3)An institution operating under this subdivision shall not award degrees in any area of physical science.
(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degrees subject area.
(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as associate of religious studies, bachelor of religious studies, master of divinity, or doctor of divinity.
(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h)A nonprofit public benefit corporation that satisfies all of the following criteria:
(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2)Is organized specifically to provide workforce development or rehabilitation services.
(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i)An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
SEC. 6.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, shall not be exempt from this chapter.
SEC. 7.Section 94874.5 of the Education Code is amended to read:94874.5.An institution that is otherwise exempt from this chapter shall comply with the requirements of Section 94927.5.
SEC. 8.Section 94874.7 of the Education Code is amended to read:94874.7.The bureau shall establish, by regulation, a process pursuant to which an institution that is exempt from this chapter may request, and obtain, from the bureau verification that the institution is exempt. The verification shall be valid for a period of up to two years, as long as the institution maintains full compliance with the requirements of the exemption. The bureau shall establish a reasonable fee to reimburse the bureaus costs associated with the implementation of this section.
SEC. 9.Section 94874.8 of the Education Code is amended to read:94874.8.(a)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 may apply to the bureau for an approval to operate pursuant to this section, but only subject to all of the following provisions:
(1)The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2)Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3)Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4)(A)With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B)An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institutions Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
SEC. 10.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 11.Section 94879 of the Education Code is repealed.SEC. 12.Section 94880 of the Education Code is amended to read:94880.(a)There is within the bureau a 12-member advisory committee. The members of the committee shall be appointed as follows:
(1)Three members, who shall have a demonstrated record of advocacy on behalf of consumers, of which the director, the Senate Committee on Rules, and the Speaker of the Assembly shall each appoint one member.
(2)Two members, who shall be current or past students of institutions, appointed by the director.
(3)Three members, who shall be representatives of institutions, appointed by the director.
(4)One public member appointed by the Senate Committee on Rules.
(5)One public member appointed by the Speaker of the Assembly.
(6)Two nonvoting, ex officio members as follows:
(A)The chair of a policy committee of the Assembly with jurisdiction over legislation relating to the bureau appointed by the Speaker of the Assembly. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(B)The chair of a policy committee of the Senate with jurisdiction over legislation relating to the bureau appointed by the Senate Committee on Rules. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(b)(1)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, either at the time of his or her appointment or during his or her tenure in office, have any financial interest in any organization currently or previously subject to regulation by the bureau, be a close family member of an employee, officer, or the director of any institution subject to regulation by the bureau, or currently have, or previously have had, a business relationship, in the five years preceding his or her appointment, with any institution subject to regulation by the bureau.
(2)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, within the five years immediately preceding his or her appointment, have engaged in pursuits on behalf of an institution or institutional accreditor or have provided representation to the postsecondary educational industry or a profession regulated by the bureau, if he or she is employed in the industry or a member of the profession, respectively, and he or she shall not engage in those pursuits or provide that representation during his or her term of office.
(c)The advisory committee shall examine the oversight functions and operational policies of the bureau and advise the bureau with respect to matters relating to private postsecondary education and the administration of this chapter, including annually reviewing the fee schedule and the equity of the schedule relative to the way institutions are structured, and the licensing and enforcement provisions of this chapter. The advisory committee shall make recommendations with respect to policies, practices, and regulations relating to private postsecondary education, and shall provide any assistance as may be requested by the bureau.
(d)The bureau shall actively seek input from, and consult with, the advisory committee regarding the development of regulations to implement this chapter prior to the adoption, amendment, or repeal of its regulations, and provide the advisory committee with sufficient time to review and comment on those regulations. The bureau shall take into consideration and respond to all feedback provided by members of the advisory committee.
(e)The bureau chief shall attend all advisory committee meetings and shall designate staff to provide ongoing administrative support to the advisory committee.
(f)Until January 1, 2017, the director shall personally attend, and testify and answer questions at, each meeting of the advisory committee.
(g)The Chief of the Office of Student Assistance and Relief established in Article 20.6 (commencing with Section 94949.7) shall attend, and testify and answer questions at, each meeting of the advisory committee.
(h)The advisory committee shall have the same access to records within the Department of Consumer Affairs related to the operation and administration of this chapter as do members of constituent boards of the department in regard to records related to their functions.
(i)Advisory committee meetings shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). Advisory committee meeting materials shall be posted on the Internet. A majority of the appointed members of the committee shall constitute a quorum for the committees meetings.
(j)The advisory committee shall meet at least quarterly and shall appoint a member of the committee to represent the committee for purposes of communicating with the Legislature.
(k)The Department of Consumer Affairs shall review, and revise if necessary, the departments conflicts of interest regulations to ensure that each advisory committee member is required to disclose conflicts of interest to the public.
SEC. 13.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 14.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required to provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(g)This section shall remain in effect until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 15.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why preaccreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 16.Section 94889 of the Education Code is amended to read:94889.(a)Except as provided in subdivision (b) of Section 94890 and subdivision (b) of this section, an approval to operate shall be for a term of five years.
(b)The bureau may adopt, by regulation, a process by which an institution with an approval to operate may request, and be approved by the bureau for, an inactive status. To regain an active approval status with the bureau, the institution shall apply for an approval to operate in accordance with this chapter.
SEC. 17.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure established by the state, including any applicable course requirements established by the state. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, the institution shall disclose this information, including a list of those courses that are not required for state licensure. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, unless the students stated objective is other than licensure.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
(c)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, shall provide its students seeking to enroll in those programs with a written copy of the requirements for that voluntary licensure.
SEC. 18.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 19.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)(1)The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.
(2)The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(A)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(B)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.
(C)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(D)Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(E)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(F)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(G)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(H)Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with his or her Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g)As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as paid in full to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.
(h)Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
(i)Any student whose loan is revived by a loan holder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.
SEC. 20.Section 94930.5 of the Education Code is amended to read:94930.5.Subject to Section 94930, an institution shall remit to the bureau for deposit in the Private Postsecondary Education Administration Fund the following fees, in accordance with the following schedule:
(a)The following fees shall be remitted by an institution submitting an application for an approval to operate, if applicable:
(1)Application fee for an approval to operate: five thousand dollars ($5,000).
(2)Application fee for the approval to operate a new branch of the institution: three thousand dollars ($3,000).
(3)Application fee for an approval to operate by means of accreditation: seven hundred fifty dollars ($750).
(b)The following fees shall be remitted by an institution seeking a renewal of its approval to operate, if applicable:
(1)Renewal fee for the main campus of the institution: three thousand five hundred dollars ($3,500).
(2)Renewal fee for a branch of the institution: three thousand dollars ($3,000).
(3)Renewal fee for an institution that is approved to operate by means of accreditation: five hundred dollars ($500).
(c)The following fees shall apply to an institution seeking authorization of a substantive change to its approval to operate, if applicable:
(1)Processing fee for authorization of a substantive change to an approval to operate: five hundred dollars ($500).
(2)Processing fee in connection with a substantive change to an approval to operate by means of accreditation: two hundred fifty dollars ($250).
(d)(1)In addition to any fees paid to the bureau pursuant to subdivisions (a) to (c), inclusive, each institution that is approved to operate pursuant to this chapter shall remit both of the following:
(A)An annual fee for each campus designated by the institution as a main campus location in California, in an amount equal to 0.45 percent of the campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(B)An annual campus fee for each branch of the institution in an amount equal to 0.45 percent of the branchs total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(2)The amount of the annual fees pursuant to paragraph (1) shall be proportional to the bureaus cost of regulating institutions under this chapter, but shall not exceed seven hundred fifty thousand dollars ($750,000) for any institution.
(e)The bureau may assess both of the following fees, if applicable:
(1)An out-of-state institution registration fee in an amount of one thousand five hundred dollars ($1,500).
(2)A request for inactive status fee in an amount of five hundred dollars ($500).
(f)It is the intent of the Legislature that the fees established pursuant to this section be evaluated during the 201718 state budget process and, if necessary, adjusted by subsequent legislation based upon information provided to the Legislature by the department and the bureau.
(g)Notwithstanding subdivision (d), effective July 1, 2018, the annual fee for each campus described in subparagraphs (A) and (B) of paragraph (1) of subdivision (d) shall be in an amount equal to 0.55 percent of that campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000) for each campus.
SEC. 21.Section 94932 of the Education Code is amended to read:94932.The bureau shall determine an institutions compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institutions sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing a compliance inspection or investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.
SEC. 22.Section 94934.5 is added to the Education Code, to read:94934.5.(a)An institution with an approval to operate that knows that it is being investigated by an oversight entity other than the bureau shall report that investigation, including the nature of that investigation, to the bureau within 30 days of the institutions first knowledge of the investigation. An institution with an approval to operate that is the subject of a judgment by, a regulatory action by, increased oversight or monitoring by, or a settlement with, any oversight entity other than the bureau shall report it to the bureau within 30 days. Failure to comply with this section may subject the institution to an administrative citation pursuant to Section 94936.
(b)For the purposes of this section, investigation means any inquiry into possible violations of any applicable laws or accreditation standards.
(c)For the purposes of this section, oversight entity means all of the following:
(1)Any federal or state entity that provides financial aid to students of the institution or approves the institution for participation in a financial aid program.
(2)Any state or federal attorney generals office or department of justice.
(3)Any regulator that approves the operation of the institution.
(4)The federal Consumer Financial Protection Bureau or the federal Securities and Exchange Commission.
(5)Any accrediting agency.
(6)Any state professional licensing entity that exercises any programmatic or institutional approval over the institution.
SEC. 23.Section 94936 of the Education Code is amended to read:94936.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
(b)The citation may contain any of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(3)An order to compensate students for harm, including a refund of moneys paid to the institution by or on behalf of the student, as determined by the bureau.
(c)(1)The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 24.Section 94937 of the Education Code is amended to read:94937.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institutions approval to operate for:
(1)Obtaining an approval to operate by fraud.
(2)A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, material violation includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
(b)The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
(c)The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
(d)An institution shall not be required to pay the cost of investigation to more than one agency.
SEC. 25.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 26.Section 94948 of the Education Code is amended to read:94948.In addition to any other reporting requirements under this chapter, the director shall provide written updates to the Legislature every six months and shall participate in all oversight hearings conducted by the appropriate policy committees and budget subcommittees of the Senate and Assembly. The updates shall describe the bureaus progress in protecting consumers and enforcing the provisions of this chapter and shall include, but not be limited to, all of the following information received pursuant to Section 325 of the Business and Professions Code:
(a)The total number of student complaints received.
(b)The general nature of these complaints.
(c)The outcome of these student complaints.
SEC. 27.Article 20.6 (commencing with Section 94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.6.Office of Student Assistance and Relief94949.7.There is hereby established an Office of Student Assistance and Relief for the purpose of advancing and promoting the rights of prospective students, current students, or past students of private postsecondary educational institutions.
94949.71.(a)The duties of the office shall be vested in a chief, who shall be appointed by the director. The chief, and each staff employee of the office, shall have experience and expertise, commensurate with his or her position, advocating on behalf of students and consumers and shall have knowledge in the state and federal laws governing student protection, student financial aid and loan programs, and the policies and practices of private postsecondary educational institutions.
(b)For purposes of this article, office means the Office of Student Assistance and Relief.
94949.72.Duties of the office shall include all of the following:
(a)Conducting outreach and providing information and assistance to students who have been affected by the unlawful activities or closure of an institution regarding their rights under state and federal law, including information about how and where to file a complaint, and to ensure that those students successfully access available state and federal relief programs. No later than July 1, 2017, the office shall prioritize and immediately conduct the activities outlined in Section 94949.73.
(b)Serving as a primary point of contact to address the needs of private postsecondary education students and working in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education.
(c)The office may also conduct both of the following activities:
(1)Provide outreach to students and prospective students to provide them with, among other information, information on making informed decisions in selecting postsecondary educational institutions, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources.
(2)Conduct data and information research concerning industry trends and enforcement actions from various sources, including, but not limited to, annual reports provided to the bureau pursuant to Section 94934, the United States Department of Education, accrediting agencies, and the California Department of Veterans Affairs to help determine the trends and potential violations of the act. The office shall advise the director and bureau chief of its findings.
(d)The office shall provide, pursuant to Section 9795 of the Government Code, to the Legislature an annual written update regarding the offices progress in protecting students and conducting the duties of the office.
94949.73.(a)The office shall provide individualized assistance to students to relieve or mitigate the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc., institution or other eligible institution.
(b)Specific services provided by the office shall include all of the following:
(1)Outreach and education to students regarding the assistance available from the office.
(2)Screening requests for assistance received by the office and providing individualized assistance to help students determine their relief eligibility, identify and obtain necessary documents, complete and submit applications, and provide additional services as necessary.
(c)For purposes of this section, other eligible institution means an institution identified by the office whose unlawful activities or closure has resulted in its students being eligible for repayment from the Student Tuition Recovery Fund, debt relief from the United States Department of Education, or other student financial aid relief.
(d)(1)The office shall quarterly report by posting on the bureaus Internet Web site, through September 1, 2018, on all of the following:
(A)A summary of the outreach and education activities conducted by the office pursuant to the requirements of paragraph (1) of subdivision (b) and the number of students served from Corinthian Colleges, Inc., institutions and every other eligible institution.
(B)A detailed summary of services provided to those students, as follows:
(i)The number of students assisted with submitting Student Tuition Recovery Fund claims to the bureau by the office, and of the claims submitted, the number that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the amount of student loans canceled, the total of student loans paid off, the total amount of cash reimbursed to students, and the total amount of educational credit granted.
(ii)The number of students assisted with submitting federal loan forgiveness claims, and of the claims submitted, the number of those claims that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the estimated total in student loans canceled and the total amount of funds refunded to students.
(iii)The number of students assisted with private student loan relief, other than through Student Tuition Recovery Fund claims, and a summary of assistance provided and relief outcomes obtained.
(iv)The number of students whom the office helped to obtain income-dependent repayment plans on their federal loans, and of those students, the number of students helped out of default on the federal loans through consolidation or rehabilitation.
(2)The office shall provide, pursuant to Section 9795 of the Government Code, the Legislature, the department, and the bureau a final report summarizing the information submitted pursuant to paragraph (1) by January 1, 2019.
SEC. 28.Section 94950 of the Education Code is amended to read:94950.This chapter shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 29.The Legislature finds and declares that the reimbursement of legal fees, as provided in subparagraph (H) of paragraph (2) of subdivision (b) of Section 94923 of the Education Code, is intended to encourage and support the efforts of nonprofit legal service organizations and pro bono attorneys to secure student debt cancellation. Complicated student loan cases often require extensive time and resources. The reimbursement provided is not intended to reflect the work associated with successful student debt cancellation.
SEC. 30.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
It shall be the duty of the director to receive complaints from consumers concerning (a) unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in the conduct of any trade or commerce; (b) the production, distribution, sale, and lease of any goods and services undertaken by any person which may endanger the public health, safety, or welfare; (c) violations of provisions of this code relating to businesses and professions licensed by any agency of the department, and regulations promulgated pursuant thereto; (d) student concerns related to the Bureau for Private Postsecondary Educations performance of its responsibilities, including concerns that arise related to the Bureau for Private Postsecondary Educations handling of a complaint or its administration of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code; and (e) other matters consistent with the purposes of this chapter, whenever appropriate.
SEC. 2.Section 94801.5 is added to the Education Code, to read:94801.5.(a)Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee pursuant to Section 94930.5, and comply with all of the following:
(1)The institution shall provide the bureau with all of the following information:
(A)Evidence of accreditation.
(B)Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location.
(C)The agent for service of process consistent with Section 94943.5.
(D)A copy of the institutions catalog and sample enrollment agreement.
(2)The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(3)The institution shall provide disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.
(b)This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.
(c)An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.
(d)A registration with the bureau pursuant to this section shall be valid for two years.
(e)The bureau shall develop, through emergency regulations, a registration form. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
SEC. 3.Section 94809 of the Education Code is amended to read:94809.(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, and filed an application to operate by August 2, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 4.Section 94850.5 is added to the Education Code, to read:94850.5.Out-of-state private postsecondary educational institution means a private entity without a physical presence in this state that offers distance education to California students for an institutional charge, regardless of whether the institution has affiliated institutions or institutional locations in California.
SEC. 5.Section 94874 of the Education Code is amended to read:94874.Except as provided in Sections 94874.2 and 94874.7, the following are exempt from this chapter:
(a)An institution that offers solely avocational or recreational educational programs.
(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organizations membership.
(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d)An institution offering either of the following:
(1)Test preparation for examinations required for admission to a postsecondary educational institution.
(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C)A bona fide trade, business, or professional organization.
(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B)The diploma or degree is limited to evidence of completion of that education.
(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3)An institution operating under this subdivision shall not award degrees in any area of physical science.
(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degrees subject area.
(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as associate of religious studies, bachelor of religious studies, master of divinity, or doctor of divinity.
(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h)A nonprofit public benefit corporation that satisfies all of the following criteria:
(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2)Is organized specifically to provide workforce development or rehabilitation services.
(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i)An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
SEC. 6.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, shall not be exempt from this chapter.
SEC. 7.Section 94874.5 of the Education Code is amended to read:94874.5.An institution that is otherwise exempt from this chapter shall comply with the requirements of Section 94927.5.
SEC. 8.Section 94874.7 of the Education Code is amended to read:94874.7.The bureau shall establish, by regulation, a process pursuant to which an institution that is exempt from this chapter may request, and obtain, from the bureau verification that the institution is exempt. The verification shall be valid for a period of up to two years, as long as the institution maintains full compliance with the requirements of the exemption. The bureau shall establish a reasonable fee to reimburse the bureaus costs associated with the implementation of this section.
SEC. 9.Section 94874.8 of the Education Code is amended to read:94874.8.(a)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 may apply to the bureau for an approval to operate pursuant to this section, but only subject to all of the following provisions:
(1)The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2)Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3)Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4)(A)With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B)An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institutions Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
SEC. 10.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 11.Section 94879 of the Education Code is repealed.SEC. 12.Section 94880 of the Education Code is amended to read:94880.(a)There is within the bureau a 12-member advisory committee. The members of the committee shall be appointed as follows:
(1)Three members, who shall have a demonstrated record of advocacy on behalf of consumers, of which the director, the Senate Committee on Rules, and the Speaker of the Assembly shall each appoint one member.
(2)Two members, who shall be current or past students of institutions, appointed by the director.
(3)Three members, who shall be representatives of institutions, appointed by the director.
(4)One public member appointed by the Senate Committee on Rules.
(5)One public member appointed by the Speaker of the Assembly.
(6)Two nonvoting, ex officio members as follows:
(A)The chair of a policy committee of the Assembly with jurisdiction over legislation relating to the bureau appointed by the Speaker of the Assembly. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(B)The chair of a policy committee of the Senate with jurisdiction over legislation relating to the bureau appointed by the Senate Committee on Rules. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(b)(1)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, either at the time of his or her appointment or during his or her tenure in office, have any financial interest in any organization currently or previously subject to regulation by the bureau, be a close family member of an employee, officer, or the director of any institution subject to regulation by the bureau, or currently have, or previously have had, a business relationship, in the five years preceding his or her appointment, with any institution subject to regulation by the bureau.
(2)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, within the five years immediately preceding his or her appointment, have engaged in pursuits on behalf of an institution or institutional accreditor or have provided representation to the postsecondary educational industry or a profession regulated by the bureau, if he or she is employed in the industry or a member of the profession, respectively, and he or she shall not engage in those pursuits or provide that representation during his or her term of office.
(c)The advisory committee shall examine the oversight functions and operational policies of the bureau and advise the bureau with respect to matters relating to private postsecondary education and the administration of this chapter, including annually reviewing the fee schedule and the equity of the schedule relative to the way institutions are structured, and the licensing and enforcement provisions of this chapter. The advisory committee shall make recommendations with respect to policies, practices, and regulations relating to private postsecondary education, and shall provide any assistance as may be requested by the bureau.
(d)The bureau shall actively seek input from, and consult with, the advisory committee regarding the development of regulations to implement this chapter prior to the adoption, amendment, or repeal of its regulations, and provide the advisory committee with sufficient time to review and comment on those regulations. The bureau shall take into consideration and respond to all feedback provided by members of the advisory committee.
(e)The bureau chief shall attend all advisory committee meetings and shall designate staff to provide ongoing administrative support to the advisory committee.
(f)Until January 1, 2017, the director shall personally attend, and testify and answer questions at, each meeting of the advisory committee.
(g)The Chief of the Office of Student Assistance and Relief established in Article 20.6 (commencing with Section 94949.7) shall attend, and testify and answer questions at, each meeting of the advisory committee.
(h)The advisory committee shall have the same access to records within the Department of Consumer Affairs related to the operation and administration of this chapter as do members of constituent boards of the department in regard to records related to their functions.
(i)Advisory committee meetings shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). Advisory committee meeting materials shall be posted on the Internet. A majority of the appointed members of the committee shall constitute a quorum for the committees meetings.
(j)The advisory committee shall meet at least quarterly and shall appoint a member of the committee to represent the committee for purposes of communicating with the Legislature.
(k)The Department of Consumer Affairs shall review, and revise if necessary, the departments conflicts of interest regulations to ensure that each advisory committee member is required to disclose conflicts of interest to the public.
SEC. 13.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 14.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required to provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(g)This section shall remain in effect until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 15.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why preaccreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 16.Section 94889 of the Education Code is amended to read:94889.(a)Except as provided in subdivision (b) of Section 94890 and subdivision (b) of this section, an approval to operate shall be for a term of five years.
(b)The bureau may adopt, by regulation, a process by which an institution with an approval to operate may request, and be approved by the bureau for, an inactive status. To regain an active approval status with the bureau, the institution shall apply for an approval to operate in accordance with this chapter.
SEC. 17.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure established by the state, including any applicable course requirements established by the state. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, the institution shall disclose this information, including a list of those courses that are not required for state licensure. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, unless the students stated objective is other than licensure.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
(c)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, shall provide its students seeking to enroll in those programs with a written copy of the requirements for that voluntary licensure.
SEC. 18.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 19.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)(1)The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.
(2)The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(A)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(B)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.
(C)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(D)Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(E)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(F)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(G)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(H)Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with his or her Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g)As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as paid in full to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.
(h)Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
(i)Any student whose loan is revived by a loan holder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.
SEC. 20.Section 94930.5 of the Education Code is amended to read:94930.5.Subject to Section 94930, an institution shall remit to the bureau for deposit in the Private Postsecondary Education Administration Fund the following fees, in accordance with the following schedule:
(a)The following fees shall be remitted by an institution submitting an application for an approval to operate, if applicable:
(1)Application fee for an approval to operate: five thousand dollars ($5,000).
(2)Application fee for the approval to operate a new branch of the institution: three thousand dollars ($3,000).
(3)Application fee for an approval to operate by means of accreditation: seven hundred fifty dollars ($750).
(b)The following fees shall be remitted by an institution seeking a renewal of its approval to operate, if applicable:
(1)Renewal fee for the main campus of the institution: three thousand five hundred dollars ($3,500).
(2)Renewal fee for a branch of the institution: three thousand dollars ($3,000).
(3)Renewal fee for an institution that is approved to operate by means of accreditation: five hundred dollars ($500).
(c)The following fees shall apply to an institution seeking authorization of a substantive change to its approval to operate, if applicable:
(1)Processing fee for authorization of a substantive change to an approval to operate: five hundred dollars ($500).
(2)Processing fee in connection with a substantive change to an approval to operate by means of accreditation: two hundred fifty dollars ($250).
(d)(1)In addition to any fees paid to the bureau pursuant to subdivisions (a) to (c), inclusive, each institution that is approved to operate pursuant to this chapter shall remit both of the following:
(A)An annual fee for each campus designated by the institution as a main campus location in California, in an amount equal to 0.45 percent of the campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(B)An annual campus fee for each branch of the institution in an amount equal to 0.45 percent of the branchs total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(2)The amount of the annual fees pursuant to paragraph (1) shall be proportional to the bureaus cost of regulating institutions under this chapter, but shall not exceed seven hundred fifty thousand dollars ($750,000) for any institution.
(e)The bureau may assess both of the following fees, if applicable:
(1)An out-of-state institution registration fee in an amount of one thousand five hundred dollars ($1,500).
(2)A request for inactive status fee in an amount of five hundred dollars ($500).
(f)It is the intent of the Legislature that the fees established pursuant to this section be evaluated during the 201718 state budget process and, if necessary, adjusted by subsequent legislation based upon information provided to the Legislature by the department and the bureau.
(g)Notwithstanding subdivision (d), effective July 1, 2018, the annual fee for each campus described in subparagraphs (A) and (B) of paragraph (1) of subdivision (d) shall be in an amount equal to 0.55 percent of that campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000) for each campus.
SEC. 21.Section 94932 of the Education Code is amended to read:94932.The bureau shall determine an institutions compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institutions sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing a compliance inspection or investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.
SEC. 22.Section 94934.5 is added to the Education Code, to read:94934.5.(a)An institution with an approval to operate that knows that it is being investigated by an oversight entity other than the bureau shall report that investigation, including the nature of that investigation, to the bureau within 30 days of the institutions first knowledge of the investigation. An institution with an approval to operate that is the subject of a judgment by, a regulatory action by, increased oversight or monitoring by, or a settlement with, any oversight entity other than the bureau shall report it to the bureau within 30 days. Failure to comply with this section may subject the institution to an administrative citation pursuant to Section 94936.
(b)For the purposes of this section, investigation means any inquiry into possible violations of any applicable laws or accreditation standards.
(c)For the purposes of this section, oversight entity means all of the following:
(1)Any federal or state entity that provides financial aid to students of the institution or approves the institution for participation in a financial aid program.
(2)Any state or federal attorney generals office or department of justice.
(3)Any regulator that approves the operation of the institution.
(4)The federal Consumer Financial Protection Bureau or the federal Securities and Exchange Commission.
(5)Any accrediting agency.
(6)Any state professional licensing entity that exercises any programmatic or institutional approval over the institution.
SEC. 23.Section 94936 of the Education Code is amended to read:94936.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
(b)The citation may contain any of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(3)An order to compensate students for harm, including a refund of moneys paid to the institution by or on behalf of the student, as determined by the bureau.
(c)(1)The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 24.Section 94937 of the Education Code is amended to read:94937.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institutions approval to operate for:
(1)Obtaining an approval to operate by fraud.
(2)A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, material violation includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
(b)The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
(c)The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
(d)An institution shall not be required to pay the cost of investigation to more than one agency.
SEC. 25.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 26.Section 94948 of the Education Code is amended to read:94948.In addition to any other reporting requirements under this chapter, the director shall provide written updates to the Legislature every six months and shall participate in all oversight hearings conducted by the appropriate policy committees and budget subcommittees of the Senate and Assembly. The updates shall describe the bureaus progress in protecting consumers and enforcing the provisions of this chapter and shall include, but not be limited to, all of the following information received pursuant to Section 325 of the Business and Professions Code:
(a)The total number of student complaints received.
(b)The general nature of these complaints.
(c)The outcome of these student complaints.
SEC. 27.Article 20.6 (commencing with Section 94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.6.Office of Student Assistance and Relief94949.7.There is hereby established an Office of Student Assistance and Relief for the purpose of advancing and promoting the rights of prospective students, current students, or past students of private postsecondary educational institutions.
94949.71.(a)The duties of the office shall be vested in a chief, who shall be appointed by the director. The chief, and each staff employee of the office, shall have experience and expertise, commensurate with his or her position, advocating on behalf of students and consumers and shall have knowledge in the state and federal laws governing student protection, student financial aid and loan programs, and the policies and practices of private postsecondary educational institutions.
(b)For purposes of this article, office means the Office of Student Assistance and Relief.
94949.72.Duties of the office shall include all of the following:
(a)Conducting outreach and providing information and assistance to students who have been affected by the unlawful activities or closure of an institution regarding their rights under state and federal law, including information about how and where to file a complaint, and to ensure that those students successfully access available state and federal relief programs. No later than July 1, 2017, the office shall prioritize and immediately conduct the activities outlined in Section 94949.73.
(b)Serving as a primary point of contact to address the needs of private postsecondary education students and working in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education.
(c)The office may also conduct both of the following activities:
(1)Provide outreach to students and prospective students to provide them with, among other information, information on making informed decisions in selecting postsecondary educational institutions, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources.
(2)Conduct data and information research concerning industry trends and enforcement actions from various sources, including, but not limited to, annual reports provided to the bureau pursuant to Section 94934, the United States Department of Education, accrediting agencies, and the California Department of Veterans Affairs to help determine the trends and potential violations of the act. The office shall advise the director and bureau chief of its findings.
(d)The office shall provide, pursuant to Section 9795 of the Government Code, to the Legislature an annual written update regarding the offices progress in protecting students and conducting the duties of the office.
94949.73.(a)The office shall provide individualized assistance to students to relieve or mitigate the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc., institution or other eligible institution.
(b)Specific services provided by the office shall include all of the following:
(1)Outreach and education to students regarding the assistance available from the office.
(2)Screening requests for assistance received by the office and providing individualized assistance to help students determine their relief eligibility, identify and obtain necessary documents, complete and submit applications, and provide additional services as necessary.
(c)For purposes of this section, other eligible institution means an institution identified by the office whose unlawful activities or closure has resulted in its students being eligible for repayment from the Student Tuition Recovery Fund, debt relief from the United States Department of Education, or other student financial aid relief.
(d)(1)The office shall quarterly report by posting on the bureaus Internet Web site, through September 1, 2018, on all of the following:
(A)A summary of the outreach and education activities conducted by the office pursuant to the requirements of paragraph (1) of subdivision (b) and the number of students served from Corinthian Colleges, Inc., institutions and every other eligible institution.
(B)A detailed summary of services provided to those students, as follows:
(i)The number of students assisted with submitting Student Tuition Recovery Fund claims to the bureau by the office, and of the claims submitted, the number that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the amount of student loans canceled, the total of student loans paid off, the total amount of cash reimbursed to students, and the total amount of educational credit granted.
(ii)The number of students assisted with submitting federal loan forgiveness claims, and of the claims submitted, the number of those claims that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the estimated total in student loans canceled and the total amount of funds refunded to students.
(iii)The number of students assisted with private student loan relief, other than through Student Tuition Recovery Fund claims, and a summary of assistance provided and relief outcomes obtained.
(iv)The number of students whom the office helped to obtain income-dependent repayment plans on their federal loans, and of those students, the number of students helped out of default on the federal loans through consolidation or rehabilitation.
(2)The office shall provide, pursuant to Section 9795 of the Government Code, the Legislature, the department, and the bureau a final report summarizing the information submitted pursuant to paragraph (1) by January 1, 2019.
SEC. 28.Section 94950 of the Education Code is amended to read:94950.This chapter shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 29.The Legislature finds and declares that the reimbursement of legal fees, as provided in subparagraph (H) of paragraph (2) of subdivision (b) of Section 94923 of the Education Code, is intended to encourage and support the efforts of nonprofit legal service organizations and pro bono attorneys to secure student debt cancellation. Complicated student loan cases often require extensive time and resources. The reimbursement provided is not intended to reflect the work associated with successful student debt cancellation.
SEC. 30.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
It shall be the duty of the director to receive complaints from consumers concerning (a) unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in the conduct of any trade or commerce; (b) the production, distribution, sale, and lease of any goods and services undertaken by any person which may endanger the public health, safety, or welfare; (c) violations of provisions of this code relating to businesses and professions licensed by any agency of the department, and regulations promulgated pursuant thereto; and (d) student concerns related to the Bureau for Private Postsecondary Educations performance of its responsibilities, including concerns that arise related to the Bureau for Private Postsecondary Educations handling of a complaint or its administration of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code; and (e) other matters consistent with the purposes of this chapter, whenever appropriate.
SECTION 1.SEC. 2.Section 94801.5 is added to the Education Code, to read:94801.5.(a)Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee in an amount commensurate with the cost of registration, as determined by the bureau, pursuant to Section 94930.5, and comply with all of the following:
(1)The institution shall provide the bureau with all of the following information:
(A)Evidence of accreditation.
(B)Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location.
(C)The agent for service of process consistent with Section 94943.5.
(D)A copy of the institutions catalog and sample enrollment agreement.
(2)The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and implementing regulations adopted by the bureau related to the fund, for its students residing in California.
(3)The institution shall provide disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and implementing regulations adopted by the bureau related to the fund, for its students residing in California.
(b)This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.
(c)An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.
(d)A registration with the bureau pursuant to this section shall be valid for two years.
(d)
(e)The bureau shall adopt emergency regulations for purposes of implementing this section. develop, through emergency regulations, a registration form. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
SEC. 2.SEC. 3.Section 94809 of the Education Code is amended to read:94809.(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, and filed an application to operate by August 2, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 3.SEC. 4.Section 94850.5 is added to the Education Code, to read:94850.5.Out-of-state private postsecondary educational institution means a private entity without a physical presence in this state that offers distance education to California students for an institutional charge. charge, regardless of whether the institution has affiliated institutions or institutional locations in California.
SEC. 4.SEC. 5.Section 94874 of the Education Code is amended to read:94874.Except as provided in Sections 94874.2 and 94874.7, the following are exempt from this chapter:
(a)An institution that offers solely avocational or recreational educational programs.
(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organizations membership.
(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d)An institution offering either of the following:
(1)Test preparation for examinations required for admission to a postsecondary educational institution.
(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C)A bona fide trade, business, or professional organization.
(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B)The diploma or degree is limited to evidence of completion of that education.
(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3)An institution operating under this subdivision shall not award degrees in any area of physical science.
(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degrees subject area.
(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as associate of religious studies, bachelor of religious studies, master of divinity, or doctor of divinity.
(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h)A nonprofit public benefit corporation that satisfies all of the following criteria:
(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2)Is organized specifically to provide workforce development or rehabilitation services.
(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i)An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
SEC. 5.SEC. 6.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, shall not be exempt from this chapter.
SEC. 6.SEC. 7.Section 94874.5 of the Education Code is amended to read:94874.5.An institution that is otherwise exempt from this chapter shall comply with the requirements of Section 94927.5.
SEC. 7.SEC. 8.Section 94874.7 of the Education Code is amended to read:94874.7.The bureau shall establish, by regulation, a process pursuant to which an institution that is exempt from this chapter may request, and obtain, from the bureau verification that the institution is exempt. The verification shall be valid for a period of up to two years, as long as the institution maintains full compliance with the requirements of the exemption. The bureau shall establish a reasonable fee to reimburse the bureaus costs associated with the implementation of this section.
SEC. 8.SEC. 9.Section 94874.8 of the Education Code is amended to read:94874.8.(a)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 may apply to the bureau for an approval to operate pursuant to this section, but only subject to all of the following provisions:
(1)The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2)Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3)Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4)(A)With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B)An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institutions Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
SEC. 9.SEC. 10.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 10.SEC. 11.Section 94879 of the Education Code is repealed.SEC. 11.SEC. 12.Section 94880 of the Education Code is amended to read:94880.(a)There is within the bureau a 12-member advisory committee. The members of the committee shall be appointed as follows:
(1)Three members, who shall have a demonstrated record of advocacy on behalf of consumers, of which the director, the Senate Committee on Rules, and the Speaker of the Assembly shall each appoint one member.
(2)Two members, who shall be current or past students of institutions, appointed by the director.
(3)Three members, who shall be representatives of institutions, appointed by the director.
(4)One public member appointed by the Senate Committee on Rules.
(5)One public member appointed by the Speaker of the Assembly.
(6)Two nonvoting, ex officio members as follows:
(A)The chair of a policy committee of the Assembly with jurisdiction over legislation relating to the bureau appointed by the Speaker of the Assembly. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(B)The chair of a policy committee of the Senate with jurisdiction over legislation relating to the bureau appointed by the Senate Committee on Rules. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(b)(1)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, either at the time of his or her appointment or during his or her tenure in office, have any financial interest in any organization currently or previously subject to regulation by the bureau, be a close family member of an employee, officer, or the director of any institution subject to regulation by the bureau, or currently have, or previously have had, a business relationship, in the five years preceding his or her appointment, with any institution subject to regulation by the bureau.
(2)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, within the five years immediately preceding his or her appointment, have engaged in pursuits on behalf of an institution or institutional accreditor or have provided representation to the postsecondary educational industry or a profession regulated by the bureau, if he or she is employed in the industry or a member of the profession, respectively, and he or she shall not engage in those pursuits or provide that representation during his or her term of office.
(c)The advisory committee shall examine the oversight functions and operational policies of the bureau and advise the bureau with respect to matters relating to private postsecondary education and the administration of this chapter, including annually reviewing the fee schedule and the equity of the schedule relative to the way institutions are structured, and the licensing and enforcement provisions of this chapter. The advisory committee shall make recommendations with respect to policies, practices, and regulations relating to private postsecondary education, and shall provide any assistance as may be requested by the bureau.
(d)The bureau shall actively seek input from, and consult with, the advisory committee regarding the development of regulations to implement this chapter prior to the adoption, amendment, or repeal of its regulations, and provide the advisory committee with sufficient time to review and comment on those regulations. The bureau shall take into consideration and respond to all feedback provided by members of the advisory committee.
(e)The bureau chief shall attend all advisory committee meetings and shall designate staff to provide ongoing administrative support to the advisory committee.
(f)Until January 1, 2017, the director shall personally attend, and testify and answer questions at, each meeting of the advisory committee.
(g)The chief of the Office of Student Assistance and Relief established in Article 20.6 (commencing with Section 94949.7) shall attend, and testify and answer questions at, each meeting of the advisory committee.
(h)The advisory committee shall have the same access to records within the Department of Consumer Affairs related to the operation and administration of this chapter as do members of constituent boards of the department in regard to records related to their functions.
(i)Advisory committee meetings shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). Advisory committee meeting materials shall be posted on the Internet. A majority of the appointed members of the committee shall constitute a quorum for the committees meetings.
(j)The advisory committee shall meet at least quarterly and shall appoint a member of the committee to represent the committee for purposes of communicating with the Legislature.
(k)The Department of Consumer Affairs shall review, and revise if necessary, the departments conflicts of interest regulations to ensure that each advisory committee member is required to disclose conflicts of interest to the public.
SEC. 12.SEC. 13.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 13.SEC. 14.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required to provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(g)This section shall remain in effect until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 14.SEC. 15.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why preaccreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 15.SEC. 16.Section 94889 of the Education Code is amended to read:94889.(a)Except as provided in subdivision (b) of Section 94890 and subdivision (b) of this section, an approval to operate shall be for a term of five years.
(b)The bureau may adopt, by regulation, a process by which an institution with an approval to operate may request, and be approved by the bureau for, an inactive status. The process shall ensure that the institution, upon reinstatement of its active approval to operate, satisfies the requirements of this chapter. To regain an active approval status with the bureau, the institution shall apply for an approval to operate in accordance with this chapter.
SEC. 16.SEC. 17.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure established by the state, including any applicable course requirements established by the state. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, the institution shall disclose this information, including a list of those courses that are not required for state licensure. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, unless the students stated objective is other than licensure.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
(c)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, shall provide its students seeking to enroll in those programs with a written copy of the requirements for that voluntary licensure.
SEC. 17.SEC. 18.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 18.SEC. 19.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)(1)The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.
(2)The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(A)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(B)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.
(C)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(D)Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(E)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(F)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(G)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(H)Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with his or her Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g)As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as paid in full to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.
(h)Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
(i)Any student whose loan is revived by a loan holder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.
SEC. 19.SEC. 20.Section 94930.5 of the Education Code is amended to read:94930.5.Subject to Section 94930, an institution shall remit to the bureau for deposit in the Private Postsecondary Education Administration Fund the following fees, in accordance with the following schedule:
(a)The following fees shall be remitted by an institution submitting an application for an approval to operate, if applicable:
(1)Application fee for an approval to operate: five thousand dollars ($5,000).
(2)Application fee for the approval to operate a new branch of the institution: three thousand dollars ($3,000).
(3)Application fee for an approval to operate by means of accreditation: seven hundred fifty dollars ($750).
(b)The following fees shall be remitted by an institution seeking a renewal of its approval to operate, if applicable:
(1)Renewal fee for the main campus of the institution: three thousand five hundred dollars ($3,500).
(2)Renewal fee for a branch of the institution: three thousand dollars ($3,000).
(3)Renewal fee for an institution that is approved to operate by means of accreditation: five hundred dollars ($500).
(c)The following fees shall apply to an institution seeking authorization of a substantive change to its approval to operate, if applicable:
(1)Processing fee for authorization of a substantive change to an approval to operate: five hundred dollars ($500).
(2)Processing fee in connection with a substantive change to an approval to operate by means of accreditation: two hundred fifty dollars ($250).
(d)(1)In addition to any fees paid to the bureau pursuant to subdivisions (a) to (c), inclusive, each institution that is approved to operate pursuant to this chapter shall remit both of the following:
(A)An annual fee for each campus designated by the institution as a main campus location in California, in an amount equal to 0.55 0.45 percent of the campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(B)An annual campus fee for each branch of the institution in an amount equal to 0.55 0.45 percent of the branchs total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(2)The amount of the annual fees pursuant to paragraph (1) shall be proportional to the bureaus cost of regulating institutions under this chapter, but shall not exceed seven hundred fifty thousand dollars ($750,000) for an y any institution.
(e)The bureau may assess both of the following fees, if applicable:
(1)An out-of-state institution registration fee in an amount of one thousand five hundred dollars ($1,500).
(2)A request for inactive status fee in an amount of five hundred dollars ($500).
(f)It is the intent of the Legislature that the fees established pursuant to this section be evaluated during the 201718 state budget process and, if necessary, adjusted by subsequent legislation based upon information provided to the Legislature by the department and the bureau.
(g)Notwithstanding subdivision (d), effective July 1, 2018, the annual fee for each campus described in subparagraphs (A) and (B) of paragraph (1) of subdivision (d) shall be in an amount equal to 0.55 percent of that campus total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000) for each campus.
SEC. 20.SEC. 21.Section 94932 of the Education Code is amended to read:94932.The bureau shall determine an institutions compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institutions sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing a compliance inspection or investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.
SEC. 21.SEC. 22.Section 94934.5 is added to the Education Code, to read:94934.5.(a)An institution with an approval to operate that knows or reasonably should know that it is being investigated by an oversight entity other than the bureau shall report that investigation, including the nature of that investigation, to the bureau within 30 days of the institutions first knowledge of the investigation. An institution with an approval to operate that is the subject of a judgment by, a regulatory action by, increased oversight or monitoring by, or a settlement with, any oversight entity other than the bureau shall report it to the bureau within 30 days. Failure to comply with this section may subject the institution to an administrative citation pursuant to Section 94936.
(b)For the purposes of this section, investigation means any inquiry into possible violations of any applicable laws or accreditation standards.
(c)For the purposes of this section, oversight entity means all of the following:
(1)Any federal or state entity that provides financial aid to students of an the institution or approves an the institution for participation in a financial aid program.
(2)Any state or federal attorney generals office or department of justice.
(3)Any regulator that approves the operation of the institution.
(4)The federal Consumer Financial Protection Bureau or the federal Securities and Exchange Commission.
(5)Any accrediting agency.
(6)Any state professional licensing entity that exercises any programmatic or institutional approval over an the institution.
SEC. 22.SEC. 23.Section 94936 of the Education Code is amended to read:94936.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
(b)The citation may contain any of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(3)An order to compensate students for harm, including a refund of moneys paid to the institution by or on behalf of the student, as determined by the bureau.
(c)(1)The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 23.SEC. 24.Section 94937 of the Education Code is amended to read:94937.(a)As a consequence of an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institutions approval to operate for:
(1)Obtaining an approval to operate by fraud.
(2)A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, material violation includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
(b)The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
(c)The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
(d)An institution shall not be required to pay the cost of investigation to more than one agency.
SEC. 24.SEC. 25.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 26.Section 94948 of the Education Code is amended to read:94948.In addition to any other reporting requirements under this chapter, the director shall provide written updates to the Legislature every six months and shall participate in all oversight hearings conducted by the appropriate policy committees and budget subcommittees of the Senate and Assembly. The updates shall describe the bureaus progress in protecting consumers and enforcing the provisions of this chapter. chapter and shall include, but not be limited to, all of the following information received pursuant to Section 325 of the Business and Professions Code:
(a)The total number of student complaints received.
(b)The general nature of these complaints.
(c)The outcome of these student complaints.
SEC. 25.SEC. 27.Article 20.6 (commencing with Section 94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.6.Office of Student Assistance and Relief94949.7.There is hereby established an Office of Student Assistance and Relief for the purpose of advancing and promoting the rights of prospective students, current students, or past students of private postsecondary educational institutions.
94949.71.(a)The duties of the office shall be vested in a chief, who shall be appointed by the director. The chief, and each staff employee of the office, shall have experience and expertise, commensurate with his or her position, advocating on behalf of students and consumers and shall have knowledge in the state and federal laws governing student protection, student financial aid and loan programs, and the policies and practices of private postsecondary educational institutions.
(b)For purposes of this article, office means the Office of Student Assistance and Relief.
94949.72.Duties of the office shall include all of the following:
(a)Conducting outreach and providing information and assistance to students who have been affected by the unlawful activities or closure of an institution regarding their rights under state and federal law law, including information about how and where to file a complaint, and to ensure that those students successfully access available state and federal relief programs. With existing resources provided to the bureau and department, No later than July 1, 2017, the office shall prioritize and immediately conduct the activities outlined in Section 94949.73.
(b)Coordinating with the bureau and the department to facilitate resolution of student concerns related to the bureaus performance of its responsibilities, including concerns that arise related to the bureaus handling of a complaint or its administration of the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923).
(c)
(b)Serving as a primary point of contact to address the needs of private postsecondary education students and working in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education.
(d)
(c)The office may also conduct both of the following activities:
(1)Provide outreach to students and prospective students to provide them with, among other information, information on making informed decisions in selecting postsecondary educational institutions, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources.
(2)Conduct data and information research concerning industry trends and enforcement actions from various sources, including, but not limited to, annual reports provided to the bureau pursuant to Section 94934, the United States Department of Education, accrediting agencies, and the California Department of Veterans Affairs to identify potential violations of the act. to help determine the trends and potential violations of the act. The office shall advise the director and bureau chief of its findings.
(e)
(d)The office shall provide, pursuant to Section 9795 of the Government Code, to the Legislature an annual written update regarding the offices progress in protecting students and conducting the duties of the office.
94949.73.(a)The office shall provide individualized assistance to students to relieve or mitigate the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc., institution or other eligible institution.
(b)Specific services provided by the office shall include all of the following:
(1)Outreach and education to students regarding the assistance available from the office.
(2)Screening requests for assistance received by the office and providing individualized assistance to help students determine their relief eligibility, identify and obtain necessary documents, complete and submit applications, and provide additional services as necessary.
(c)For purposes of this section, other eligible institution means an institution identified by the office whose unlawful activities or closure has resulted in its students being eligible for repayment from the Student Tuition Recovery Fund, debt relief from the United States Department of Education, or other student financial aid relief.
(d)(1)The office shall quarterly report by posting on the bureaus Internet Web site, through September 1, 2018, on all of the following:
(A)A summary of the outreach and education activities conducted by the office pursuant to the requirements of paragraph (1) of subdivision (b) and the number of students served from Corinthian Colleges, Inc., institutions and every other eligible institution.
(B)A detailed summary of services provided to those students, as follows:
(i)The number of students assisted with submitting Student Tuition Recovery Fund claims to the bureau by the office, and of the claims submitted, the number that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the amount of student loans canceled, the total of student loans paid off, the total amount of cash reimbursed to students, and the total amount of educational credit granted.
(ii)The number of students assisted with submitting federal loan forgiveness claims, and of the claims submitted, the number of those claims that are pending, on appeal, or have been approved or denied. For the claims that have been approved, the office shall report the estimated total in student loans canceled and the total amount of funds refunded to students.
(iii)The number of students assisted with private student loan relief, other than through Student Tuition Recovery Fund claims, and a summary of assistance provided and relief outcomes obtained.
(iv)The number of students whom the office helped to obtain income-dependent repayment plans on their federal loans, and of those students, the number of students helped out of default on the federal loans through consolidation or rehabilitation.
(2)The office shall provide, pursuant to Section 9795 of the Government Code, the Legislature, the department, and the bureau a final report summarizing the information submitted pursuant to paragraph (1) by January 1, 2019.
SEC. 26.SEC. 28.Section 94950 of the Education Code is amended to read:94950.This chapter shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 27.SEC. 29.The Legislature finds and declares that the reimbursement of legal fees, as provided in subparagraph (H) of paragraph (2) of subdivision (b) of Section 94923 of the Education Code, is intended to encourage and support the efforts of nonprofit legal service organizations and pro bono attorneys to secure student debt cancellation. Complicated student loan cases often require extensive time and resources. The reimbursement provided is not intended to reflect the work associated with successful student debt cancellation.
SEC. 28.SEC. 30.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Effective July 1, 2017, a private entity with no physical presence in this state that provides postsecondary education to California students for an institutional charge shall an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee in an amount commensurate with the cost of registration, as determined by the bureau, and comply with all of the following:
(1)The institution shall register with the bureau and provide information required by the bureau. The bureau shall adopt, by regulation, a process and procedure whereby the institution may apply for and obtain registration. provide the bureau with all of the following information:
(2)The institution shall be accredited.
(A)Evidence of accreditation.
(3)The institution shall be
(B)Evidence that the institution is approved to operate in the state where the institution is incorporated. maintains its main administrative location.
(C)The agent for service of process consistent with Section 94943.5.
(D)A copy of the institutions catalog and sample enrollment agreement.
(4)
(2)The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and implementing regulations adopted by the bureau related to the fund, for its California students. students residing in California.
(5)
(3)The institution shall provide a disclosure, approved by the bureau, to its California students on their rights and obligations under the Student Tuition Recovery Fund. disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and implementing regulations adopted by the bureau related to the fund, for its students residing in California.
(b)This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.(c)An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.(d)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
(d)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
SEC. 2.Section 94809 of the Education Code is amended to read:94809.(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, and filed an application to operate by August 2, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 3.Section 94850.5 is added to the Education Code, to read:94850.5.Out-of-state private postsecondary educational institution means a private entity without a physical presence in this state that offers distance education to California students for an institutional charge.
SEC. 3.SEC. 4.Section 94874 of the Education Code is amended to read:94874.Except as provided in Sections 94874.2 and 94874.7, the following are exempt from this chapter:
(a)An institution that offers solely avocational or recreational educational programs.
(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organizations membership.
(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d)An institution offering either of the following:
(1)Test preparation for examinations required for admission to a postsecondary educational institution.
(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C)A bona fide trade, business, or professional organization.
(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B)The diploma or degree is limited to evidence of completion of that education.
(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3)An institution operating under this subdivision shall not award degrees in any area of physical science.
(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degrees subject area.
(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as associate of religious studies, bachelor of religious studies, master of divinity, or doctor of divinity.
(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h)A nonprofit public benefit corporation that satisfies all of the following criteria:
(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2)Is organized specifically to provide workforce development or rehabilitation services.
(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i)An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
SEC. 4.SEC. 5.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, shall not be exempt from this chapter.
SEC. 5.SEC. 6.Section 94874.5 of the Education Code is amended to read:94874.5.An institution that is otherwise exempt from this chapter shall comply with the requirements of Section 94927.5.
SEC. 6.SEC. 7.Section 94874.7 of the Education Code is amended to read:94874.7.The bureau shall establish, by regulation, a process pursuant to which an institution that is exempt from this chapter may request, and obtain, from the bureau verification that the institution is exempt. The verification shall be valid for a period of up to two years, as long as the institution maintains full compliance with the requirements of the exemption. The bureau shall establish a reasonable fee to reimburse the bureaus costs associated with the implementation of this section.
SEC. 7.SEC. 8.Section 94874.8 of the Education Code is amended to read:94874.8.(a)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 may apply to the bureau for an approval to operate pursuant to this section, but only subject to all of the following provisions:
(1)The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2)Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3)Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4)(A)With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B)An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institutions Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b)An institution exempt from all or part of this chapter pursuant to subdivision (i) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
SEC. 8.SEC. 9.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 9.SEC. 10.Section 94879 of the Education Code is repealed.SEC. 10.SEC. 11.Section 94880 of the Education Code is amended to read:94880.(a)There is within the bureau a 12-member advisory committee. The members of the committee shall be appointed as follows:
(1)Three members, who shall have a demonstrated record of advocacy on behalf of consumers, of which the director, the Senate Committee on Rules, and the Speaker of the Assembly shall each appoint one member.
(2)Two members, who shall be current or past students of institutions, appointed by the director.
(3)Three members, who shall be representatives of institutions, appointed by the director.
(4)One public member appointed by the Senate Committee on Rules.
(5)One public member appointed by the Speaker of the Assembly.
(6)Two nonvoting, ex officio members as follows:
(A)The chair of a policy committee of the Assembly with jurisdiction over legislation relating to the bureau appointed by the Speaker of the Assembly. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(B)The chair of a policy committee of the Senate with jurisdiction over legislation relating to the bureau appointed by the Senate Committee on Rules. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(b)(1)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, either at the time of his or her appointment or during his or her tenure in office, have any financial interest in any organization currently or previously subject to regulation by the bureau, be a close family member of an employee, officer, or the director of any institution subject to regulation by the bureau, or currently have, or previously have had, a business relationship, in the five years preceding his or her appointment, with any institution subject to regulation by the bureau.
(2)A member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, within the five years immediately preceding his or her appointment, have engaged in pursuits on behalf of an institution or institutional accreditor or have provided representation to the postsecondary educational industry or a profession regulated by the bureau, if he or she is employed in the industry or a member of the profession, respectively, and he or she shall not engage in those pursuits or provide that representation during his or her term of office.
(c)The advisory committee shall examine the oversight functions and operational policies of the bureau and advise the bureau with respect to matters relating to private postsecondary education and the administration of this chapter, including annually reviewing the fee schedule and the equity of the schedule relative to the way institutions are structured, and the licensing and enforcement provisions of this chapter. The advisory committee shall make recommendations with respect to policies, practices, and regulations relating to private postsecondary education, and shall provide any assistance as may be requested by the bureau.
(d)The bureau shall actively seek input from, and consult with, the advisory committee regarding the development of regulations to implement this chapter prior to the adoption, amendment, or repeal of its regulations, and provide the advisory committee with sufficient time to review and comment on those regulations. The bureau shall take into consideration and respond to all feedback provided by members of the advisory committee.
(e)The bureau chief shall attend all advisory committee meetings and shall designate staff to provide ongoing administrative support to the advisory committee.
(f)Until January 1, 2017, the director shall personally attend, and testify and answer questions at, each meeting of the advisory committee.
(g)The ombudsperson chief of the Office of Student Assistance and Relief established in Article 20.6 (commencing with Section 94949.7), appointed pursuant to Section 94949.71, 94949.7) shall attend, and testify and answer questions at, each meeting of the advisory committee.
(h)The advisory committee shall have the same access to records within the Department of Consumer Affairs related to the operation and administration of this chapter as do members of constituent boards of the department in regard to records related to their functions.
(i)Advisory committee meetings shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). Advisory committee meeting materials shall be posted on the Internet. A majority of the voting appointed members of the committee shall constitute a quorum for the committees meetings.
(j)The advisory committee shall meet at least quarterly and shall appoint a member of the committee to represent the committee for purposes of communicating with the Legislature.
(k)The Department of Consumer Affairs shall review, and revise if necessary, the departments conflicts of interest regulations to ensure that each advisory committee member is required to disclose conflicts of interest to the public.
SEC. 11.SEC. 12.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 12.SEC. 13.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required to provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(g)This section shall remain in effect until January 1, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2023, deletes or extends that date.
SEC. 13.SEC. 14.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)(1)The bureau shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why preaccreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 15.Section 94889 of the Education Code is amended to read:94889.(a)Except as provided in subdivision (b) of Section 94890, 94890 and subdivision (b) of this section, an approval to operate shall be for a term of five years.
(b)The bureau may adopt, by regulation, a process by which an institution with an approval to operate may request, and be approved by the bureau for, an inactive status. The process shall ensure that the institution, upon reinstatement of its active approval to operate, satisfies the requirements of this chapter.
SEC. 14.SEC. 16.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure established by the state, including any applicable course requirements established by the state. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, the institution shall disclose this information, including a list of those courses that are not required for state licensure. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, unless the students stated objective is other than licensure.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
(c)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, shall provide its students seeking to enroll in those programs with a written copy of the requirements for that voluntary licensure.
SEC. 15.SEC. 17.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 16.SEC. 18.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)(1)The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.
(2)The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(A)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(B)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.
(C)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(D)A Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(E)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(F)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(G)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(H)Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with his or her Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g)Any representation or agreement by a person or entity not to collect a student loan obligation does not reduce a students eligibility for recovery from the Student Tuition Recovery Fund or reduce the students economic loss, unless the student loan obligation is forgiven, discharged, or canceled.
(g)As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as paid in full to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.
(h)The Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
(i)Any student whose loan is revived by a loan holder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.
SEC. 19.Section 94930.5 of the Education Code is amended to read:94930.5.Subject to Section 94930, an institution shall remit to the bureau for deposit in the Private Postsecondary Education Administration Fund the following fees, in accordance with the following schedule:
(a)The following fees shall be remitted by an institution submitting an application for an approval to operate, if applicable:
(1)Application fee for an approval to operate: five thousand dollars ($5,000).
(2)Application fee for the approval to operate a new branch of the institution: three thousand dollars ($3,000).
(3)Application fee for an approval to operate by means of accreditation: seven hundred fifty dollars ($750).
(b)The following fees shall be remitted by an institution seeking a renewal of its approval to operate, if applicable:
(1)Renewal fee for the main campus of the institution: three thousand five hundred dollars ($3,500).
(2)Renewal fee for a branch of the institution: three thousand dollars ($3,000).
(3)Renewal fee for an institution that is approved to operate by means of accreditation: five hundred dollars ($500).
(c)The following fees shall apply to an institution seeking authorization of a substantive change to its approval to operate, if applicable:
(1)Processing fee for authorization of a substantive change to an approval to operate: five hundred dollars ($500).
(2)Processing fee in connection with a substantive change to an approval to operate by means of accreditation: two hundred fifty dollars ($250).
(d)(1)In addition to any fees paid to the bureau pursuant to subdivisions (a) to (c), inclusive, each institution that is approved to operate pursuant to this chapter shall remit both of the following:
(A)An annual institutional fee, fee for each campus designated by the institution as a main campus location in California, in an amount equal to three-quarters of 1 0.55 percent of the campus total gross revenue derived from students in California, but not exceeding a total of twenty-five thousand dollars ($25,000) annually. to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(B)An annual branch campus fee of one thousand dollars ($1,000) for each branch or campus of the institution operating in California. in an amount equal to 0.55 percent of the branchs total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).
(2)The amount of the annual fees pursuant to paragraph (1) shall be proportional to the bureaus cost of regulating the institution institutions under this chapter. chapter, but shall not exceed seven hundred fifty thousand dollars ($750,000) for an y institution.
SEC. 17.SEC. 20.Section 94932 of the Education Code is amended to read:94932.The bureau shall determine an institutions compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institutions sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing a compliance inspection or investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.
SEC. 18.SEC. 21.Section 94934.5 is added to the Education Code, to read:94934.5.(a)An institution with an approval to operate that knows or reasonably should know that it is being investigated by an oversight entity other than the bureau shall report that investigation, including the nature of that investigation, to the bureau within 30 days of the institutions first knowledge of the investigation. An institution with an approval to operate that is the subject of a judgment by, a regulatory action by, increased oversight or monitoring by, or a settlement with, any oversight entity other than the bureau shall report it to the bureau within 30 days. Failure to comply with this section may subject the institution to an administrative citation pursuant to Section 94936.
(b)For the purposes of this section, investigation means any inquiry into possible violations of any applicable laws or accreditation standards.
(c)For the purposes of this section, oversight entity means any federal government agency, government agency of any state, or any accrediting agency. all of the following:
(1)Any federal or state entity that provides financial aid to students of an institution or approves an institution for participation in a financial aid program.
(2)Any state or federal attorney generals office or department of justice.
(3)Any regulator that approves the operation of the institution.
(4)The federal Consumer Financial Protection Bureau or the federal Securities and Exchange Commission.
(5)Any accrediting agency.
(6)Any state professional licensing entity that exercises any programmatic or institutional approval over an institution.
SEC. 19.SEC. 22.Section 94936 of the Education Code is amended to read:94936.(a)As a consequence of a compliance inspection or an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
(b)The citation may contain any of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(3)An order to compensate students for harm, including a refund of moneys paid to the institution by or on behalf of the student, as determined by the bureau.
(c)(1)The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 20.SEC. 23.Section 94937 of the Education Code is amended to read:94937.(a)As a consequence of a compliance inspection or an investigation, which may incorporate any materials obtained or produced in connection with a compliance inspection, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institutions approval to operate for:
(1)Obtaining an approval to operate by fraud.
(2)A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, material violation includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
(b)The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
(c)The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
(d)An institution shall not be required to pay the cost of investigation to more than one agency.
SEC. 21.SEC. 24.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 22.Article 20.5 (commencing with Section 94949.5) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.5.Enforcement Monitor94949.5.(a)(1)The director shall appoint an enforcement monitor no later than March 1, 2017. The director may retain a person for this position by a personal services contract. In this connection, the Legislature finds, pursuant to Section 19130 of the Government Code, that this is a new state function.
(2)The director shall supervise the enforcement monitor and may terminate or dismiss him or her from this position. If the monitor is terminated or dismissed, the director shall appoint a replacement monitor within two months.
(3)The monitoring duty of the enforcement monitor shall be on a continuing basis for a period of no more than two years from the date of the initial enforcement monitors appointment.
(b)The enforcement monitor shall monitor and evaluate the bureaus enforcement efforts, with specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints, and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
(c)The enforcement monitor shall exercise no authority over the bureaus management or staff; however, the bureau and its staff shall cooperate with the monitor and shall provide data, information, and files as requested by the monitor to perform all of his or her duties.
(d)The director shall assist the enforcement monitor in the performance of his or her duties, and the monitor shall have the same investigative authority as the director.
(e)The director shall specify additional duties of the enforcement monitor.
(f)(1)The enforcement monitor shall submit to the department and the Legislature, in compliance with Section 9795 of the Government Code, an initial written report of his or her findings and conclusions no later than July 1, 2018, and a subsequent written report no later than November 1, 2018. The enforcement monitor shall be available to make oral reports to the department or the Legislature if requested to do so. The monitor may also provide additional information to either the department or the Legislature at his or her discretion or at the request of either the department or the Legislature. The monitor shall make his or her reports available to the public or the media. The monitor shall make every effort to provide the bureau with an opportunity to reply to any facts, findings, issues, or conclusions made in his or her reports to the department or the Legislature with which the bureau may disagree.
(2)The enforcement monitor shall issue a final written report before January 1, 2019. The final report shall include final findings and conclusions on the topics addressed in the initial report submitted by the monitor pursuant to paragraph (1).
(g)The bureau shall pay for all of the costs associated with the employment of the enforcement monitor.
94949.6.This article shall remain in effect only until March 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before March 1, 2019, deletes or extends that date.
SEC. 23.SEC. 25.Article 20.6 (commencing with Section 94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.6.Office of Student Assistance and Relief94949.7.There is hereby established within the department an Office of Student Assistance and Relief for the purpose of advancing and promoting the rights of prospective students, current students, or past students of private postsecondary educational institutions.
94949.71.(a)The duties of the office shall be vested in an ombudsperson, a chief, who shall be appointed by, and report to, by the director. The ombudsperson chief, and each staff employee of the office, shall have experience and expertise expertise, commensurate with his or her position, advocating on behalf of students and consumers and shall have knowledge in the state and federal laws governing student protection, student financial aid and loan programs, and the policies and practices of private postsecondary educational institutions.
(b)For purposes of this article, the following terms have the following meanings:
(1)Department means the Department of Consumer Affairs.
(2)Office means the Office of Student Assistance and Relief.
(b)For purposes of this article, office means the Office of Student Assistance and Relief.
94949.72.Duties of the office shall include, but are not limited to, include all of the following:
(a)Conducting outreach to students and prospective students to provide them with, among other information, information on making an informed decision regarding the selection of a postsecondary educational institution, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources. and providing information and assistance to students who have been affected by the unlawful activities or closure of an institution regarding their rights under state and federal law and to ensure that those students successfully access available state and federal relief programs. With existing resources provided to the bureau and department, the office shall prioritize and immediately conduct the activities outlined in Section 94949.73.
(b)Coordinating with the bureau and facilitating and the department to facilitate resolution of student concerns related to the bureaus performance of its responsibilities, including concerns that arise related to the bureaus handling of a complaint or its administration of the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923).
(c)Coordinating with the department, including the bureau, regarding an Internet Web site that provides information to students about the rights and protections available to them. The Internet Web site shall include information about relevant services available from other governmental organizations and local nonprofit community service organizations.
(d)
(c)Serving as a primary point of contact to address the needs of private postsecondary education students and working in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education.
(e)Providing outreach and coordinating services for students following the unlawful closure of an institution that was approved to operate by the bureau.
(d)The office may also conduct both of the following activities:
(1)Provide outreach to students and prospective students to provide them with, among other information, information on making informed decisions in selecting postsecondary educational institutions, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources.
(2)Conduct data and information research from various sources, including, but not limited to, annual reports provided to the bureau pursuant to Section 94934, the United States Department of Education, accrediting agencies, and the California Department of Veterans Affairs to identify potential violations of the act. The office shall advise the director and bureau chief of its findings.
(e)The office shall provide, pursuant to Section 9795 of the Government Code, to the Legislature an annual written update regarding the offices progress in protecting students and conducting the duties of the office.
94949.73.(a)A pilot program is hereby created to provide grant funds in accordance with this section to eligible nonprofit community service organizations to assist eligible students by relieving or mitigating the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc. institution.
(b)(1)The terms and conditions of the grant agreements shall ensure that grant funds are used for the exclusive purpose of providing outreach and assistance to eligible students with federal and private loan discharges, recovery through the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923), and other financial aid relief.
(2)Services provided by eligible nonprofit community service organizations shall include, but are not to be limited to, outreach and education, screening requests for assistance, referring students for additional assistance through pro bono referral programs, referring students to the bureau, as appropriate, and other services related to obtaining financial aid relief for students.
(3)This subdivision is not intended to prohibit a nonprofit community service organization from using grant funds to screen student requests for assistance in order to determine if a student meets assistance eligibility requirements.
94949.73.(a)The office shall provide individualized assistance to students to relieve or mitigate the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc., institution or other eligible institution.
(b)Specific services provided by the office shall include all of the following:
(1)Outreach and education to students regarding the assistance available from the office.
(2)Screening requests for assistance received by the office and providing individualized assistance to help students determine their relief eligibility, identify and obtain necessary documents, complete and submit applications, and provide additional services as necessary.
(c)For purposes of this section, an eligible nonprofit community service organization is an organization that satisfies all of the following conditions:
(1)The organization is a 501(c)(3) tax-exempt organization in good standing with the federal Internal Revenue Service and in compliance with all applicable laws and requirements.
(2)The organization demonstrates expertise in providing outreach and assisting students with, and currently provides free direct services to students for, student loan discharge and forgiveness, and student tuition recovery-related matters.
(3)The organization does not charge students for any services, including services provided pursuant to this section.
(d)
(c)For purposes of this section, an eligible student is a student who was enrolled at a California campus of, or a California student who was enrolled in an online campus of, a Corinthian Colleges, Inc. institution, and who has been screened by the nonprofit community service organization and determined to be eligible for debt relief from the United States Department of Education or other student financial aid relief. other eligible institution means an institution identified by the office whose unlawful activities or closure has resulted in its students being eligible for repayment from the Student Tuition Recovery Fund, debt relief from the United States Department of Education, or other student financial aid relief.
(e)(1)By March 1, 2017, the office shall solicit grant applications from eligible nonprofit community service organizations, select one or more of these organizations from among the applicants who are deemed to be qualified, set additional terms and conditions of the grants as necessary to fulfill the requirements of this section, and notify the recipient organization or organizations of the selection and the share of grant funds available that the organization shall receive.
(2)The office shall award the full amount of authorized grant funds, unless it does not receive a sufficient number of applications from eligible nonprofit community service organizations or it has good cause to determine that an expenditure of the full amount authorized is not necessary. If the office determines expenditure of the full amount is not necessary, it shall provide a detailed explanation of its determination to the Legislature.
(3)In selecting the grantees and awarding funds to each grantee, the office shall ensure geographical distribution according to the location of eligible students, as best can be determined.
(f)(1)Within 30 days of selection, an eligible nonprofit community service organization that receives funds pursuant to this section shall enter into a grant agreement with the office and shall use grant funds exclusively for the purposes set forth in this section and in accordance with the agreement.
(2)Any unused funds by the grantees shall be returned to the office, except that, upon the approval of the office, an eligible nonprofit community service organization may expend funds to provide assistance to students who attended an institution that closed unlawfully and was approved to operate by the bureau.
(3)The office may terminate the grant agreement for material breach, and may require repayment of funds provided to the nonprofit community service organization during the time that the agreement was being materially breached. However, the office shall provide the grantee with written notice of the breach and a reasonable opportunity of not less than 30 days to resolve the breach.
(g)An eligible nonprofit community service organization that receives a grant shall give priority to students who were enrolled in Corinthian Colleges, Inc., and are eligible for a federal closed school loan discharge or relief under the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923), if demand exceeds available grant funds. The organization may give priority to low-income students or may provide assistance regardless of student income level.
(h)(1)An eligible nonprofit community service organization that receives a grant shall report to the office quarterly through the grant period on all of the following:
(d)(1)The office shall quarterly report by posting on the bureaus Internet Web site, through September 1, 2018, on all of the following:
(A)The number of eligible students served pursuant to the grant agreement. (A)A summary of the outreach and education activities conducted by the office pursuant to the requirements of paragraph (1) of subdivision (b) and the number of students served from Corinthian Colleges, Inc., institutions and every other eligible institution.
(B)A detailed summary of services provided to those students, as follows:
(i)The number of students assisted with submitting Student Tuition Recovery Fund claims referred or submitted to the bureau by the organization. To the degree the organization has access to the following information, the report shall include, office, and of the claims submitted, the number that are pending, on appeal, or have been approved or denied; for the claims that have been approved or denied, denied. For the claims that have been approved, the office shall report the amount of student loans canceled, the total of student loans paid off, the total amount of cash reimbursed to students, and the total amount of educational credit granted.
(ii)The number of students assisted with submitting federal loan forgiveness claims submitted. Of claims, and of the claims submitted, the number of those claims that are pending, on appeal, or have been approved or denied. For the claims submitted by the organization on behalf of the student, the organization shall also report that have been approved, the office shall report the estimated total in student loans canceled and the total amount of funds refunded to students.
(iii)The number of students helped assisted with private student loans, loan relief, other than through Student Tuition Recovery Fund claims, and a summary of assistance provided. provided and relief outcomes obtained.
(iv)The number of students whom the organization helped office helped to obtain income-dependent repayment plans on their federal loans, and of those students, the number of students helped out of default on the federal loans through consolidation or rehabilitation.
(v)The number of students screened by the nonprofit community service organization who were determined ineligible for assistance with debt relief pursuant to subdivision (d), a summary of reasons for ineligibility, and a summary of any services or referral information provided to those students.
(vi)Any other information that is deemed reasonably necessary.
(2)The office shall make the reports submitted pursuant to paragraph (1) available to the Legislature and the department upon request.
(3)
(2)The office shall provide the Legislature and the department provide, pursuant to Section 9795 of the Government Code, the Legislature, the department, and the bureau a final report summarizing the information submitted pursuant to paragraph (1) promptly following the time when all funds are expended by the grantees or by January 1, 2020, whichever is earlier. 2019.
(j)Funds shall be distributed to preapproved nonprofit community service organizations as follows:
(1)Fifty percent shall be distributed to the grantee within 30 days of the grantee entering into a grant agreement.
(2)Twenty-five percent shall be distributed to the grantee upon the submission of the grantees second quarterly report.
(3)Twenty-five percent shall be distributed to the grantee upon the submission of the grantees third quarterly report.
(k)The adoption of any regulation pursuant to this section shall be deemed to be an emergency and necessary for the immediate preservation of the public health and safety, or general welfare.
(l)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 26.Section 94950 of the Education Code is amended to read:94950.This chapter shall remain in effect only until January 1, 2017, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2017, 2021, deletes or extends that date.
SEC. 24.The sum of one million three hundred thousand dollars ($1,300,000) is appropriated from the Student Tuition Recovery Fund to the Office of Student Assistance and Relief, as established in Section 94949.7 of the Education Code, for the purposes of providing grants pursuant to the pilot program established in Section 94949.73 of the Education Code.
SEC. 27.The Legislature finds and declares that the reimbursement of legal fees, as provided in subparagraph (H) of paragraph (2) of subdivision (b) of Section 94923 of the Education Code, is intended to encourage and support the efforts of nonprofit legal service organizations and pro bono attorneys to secure student debt cancellation. Complicated student loan cases often require extensive time and resources. The reimbursement provided is not intended to reflect the work associated with successful student debt cancellation.
SEC. 28.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Effective July 1, 2017, a private entity with no physical presence in this state that provides postsecondary education to California students for an institutional charge shall comply with all of the following:
(1)The institution shall register with the bureau and provide information required by the bureau. The bureau shall adopt, by regulation, a process and procedure whereby the institution may apply for and obtain registration.
(2)The institution shall be accredited.
(3)The institution shall be approved to operate in the state where the institution is incorporated.
(4)The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), for its California students.
(5)The institution shall provide a disclosure, approved by the bureau, to its California students on their rights and obligations under the Student Tuition Recovery Fund.
(b)This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.
(c)An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.
(d)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.
SECTION 1.SEC. 2.Section 94809 of the Education Code is amended to read:94809.(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, and filed an application to operate by August 2, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 2.Section 94848 of the Education Code is amended to read:94848.Licensure includes any license, certificate, permit, or similar credential that a person must hold to lawfully engage in a profession, occupation, trade, or career field. Licensure shall also include required certification or registration that a person must hold to lawfully engage in a profession, occupation, trade, or career field.
SEC. 3.Section 94874 of the Education Code is amended to read:94874.Except as provided in Section 94874.2, Sections 94874.2 and 94874.7, the following are exempt from this chapter:
(a)An institution that offers solely avocational or recreational educational programs.
(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organizations membership.
(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:
(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Investment Board but has met the requirements for placement on the list.
(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Investment Board and meets the requirements for continued listing.
(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Investment Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.
(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.
(d)An institution offering either of the following:
(1)Test preparation for examinations required for admission to a postsecondary educational institution.
(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:
(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.
(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.
(C)A bona fide trade, business, or professional organization.
(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:
(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of Business and Professions Code.
(B)The diploma or degree is limited to evidence of completion of that education.
(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.
(3)An institution operating under this subdivision shall not award degrees in any area of physical science.
(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degrees subject area.
(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as associate of religious studies, bachelor of religious studies, master of divinity, or doctor of divinity.
(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its Internet Web site, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.
(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.
(h)A nonprofit public benefit corporation that satisfies all of the following criteria:
(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(2)Is organized specifically to provide workforce development or rehabilitation services.
(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.
(i)An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.
(j)An institution that satisfies all of the following criteria:
(1)The institution has been accredited, for at least 10 years, by an accrediting agency that is recognized by the United States Department of Education.
(2)The institution has operated continuously in this state for at least 25 years.
(3)During its existence, the institution has not filed for bankruptcy protection pursuant to Title 11 of the United States Code.
(4)The institutions cohort default rate on guaranteed student loans does not exceed 10 percent for the most recent three years, as published by the United States Department of Education.
(5)The institution maintains a composite score of 1.5 or greater on its equity, primary reserve, and net income ratios, as provided under Section 668.172 of Title 34 of the Code of Federal Regulations.
(6)The institution provides a pro rata refund of unearned institutional charges to students who complete 75 percent or less of the period of attendance.
(7)The institution provides to all students the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the second class session, or the 14th day after enrollment, whichever is later.
(8)The institution submits to the bureau copies of its most recent IRS Form 990, the institutions Integrated Postsecondary Education Data System Report of the United States Department of Education, and its accumulated default rate.
(9)The institution is incorporated and lawfully operates as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code and is not managed or administered by an entity for profit.
(k)
(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:
(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.
(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).
SEC. 3.SEC. 4.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, shall not be exempt from this chapter.
SEC. 5.Section 94874.5 of the Education Code is amended to read:94874.5.Notwithstanding Sections 94874 and 94874.1, an An institution that is otherwise exempt from this chapter shall comply with the requirements of Section 94927.5.
SEC. 6.Section 94874.7 of the Education Code is amended to read:94874.7.The bureau shall establish, by regulation, a process pursuant to which an institution that is exempt from this chapter may request, and obtain, from the bureau verification that the institution is exempt. The verification shall be valid for a period of up to two years, as long as the institution maintains full compliance with the requirements of the exemption. The bureau shall establish a reasonable fee to reimburse the bureaus costs associated with the implementation of this section.
SEC. 7.Section 94874.8 of the Education Code is amended to read:94874.8.(a)An institution exempt from all or part of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1 may apply to the bureau for an approval to operate pursuant to this section, but only subject to all of the following provisions:
(1)The bureau may approve the operation of an institution that is exempt from all or part of this chapter as specified above in accordance with the authority granted pursuant to Article 6 (commencing with Section 94885). Upon issuing an approval to operate to an institution pursuant to this section, the bureau is authorized to regulate that institution through the full set of powers granted, and duties imposed, by this chapter, as those powers and duties would apply to an institution that is not exempt from this chapter.
(2)Notwithstanding any other law, upon issuance of an approval to operate pursuant to this section, the institution is no longer eligible for exemption, from the provisions of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1, unless authorized by subsequent legislation.
(3)Upon issuance of an approval to operate pursuant to this section, an institution is subject to all provisions of this chapter, and any regulations adopted pursuant to this chapter, that apply to an institution subject to this chapter, except as expressly provided in paragraph (4).
(4)(A)With respect to the placement and salary or wage data required to be collected, calculated, and reported by Article 16 (commencing with Section 94928), an institution issued an approval to operate pursuant to this section is not required to report on its first School Performance Fact Sheet any data from the period prior to the date of the issuance of the approval to operate that the institution was not required to collect and does not have available to it. An institution shall, however, report available data collected and calculated in accordance with this chapter and applicable regulations, regardless of the purpose for which the data was collected. If the required data is unavailable, the institution shall also disclose the unavailability of the data on all documents required by this chapter and regulations adopted pursuant to this chapter. Upon receiving an approval to operate pursuant to this section, an institution shall commence to collect and calculate all information necessary to comply with Article 16 (commencing with Section 94928).
(B)An institution receiving an approval to operate pursuant to this section shall provide to prospective students the School Performance Fact Sheet, file that fact sheet with the bureau, and post it on the institutions Internet Web site no later than the first August 1 after the institution is approved to operate and no later than August 1 of each year thereafter. These School Performance Fact Sheets shall report data for the previous two calendar years based upon the number of students who began the program or the number of graduates for each reported calendar year. If two calendar years have not passed since the issuance of the approval to operate by the August 1 deadline for the School Performance Fact Sheet, unless data for two years is available, the institution shall report the required data for the period subsequent to the date of the issuance of the notice of approval.
(b)An institution exempt from all or part of this chapter pursuant to subdivision (i) or (j) of Section 94874 or Section 94874.1 that was approved to operate by the bureau before the effective date of this section shall be deemed to have been approved pursuant to this section.
SEC. 4.SEC. 8.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 5.Section 94879 of the Education Code is amended to read:94879.The bureau shall conduct an outreach program to secondary school students as well as prospective and current private postsecondary students, to provide them with information on how to best select a private postsecondary institution, how to enter into enrollment agreements, how to make informed decisions in the private postsecondary education marketplace, and how to contact the bureau for assistance. The bureau may accomplish the purposes of this section in cooperation with other federal, state, or local entities, or any combination of these entities.
SEC. 9.Section 94879 of the Education Code is repealed.94879.The bureau shall conduct an outreach program to secondary school pupils as well as prospective and current private postsecondary students, to provide them with information on how to best select a private postsecondary institution, how to enter into enrollment agreements, how to make informed decisions in the private postsecondary education marketplace, and how to contact the bureau for assistance. The bureau may accomplish the purposes of this section in cooperation with other federal, state, or local entities, or any combination of these entities.
SEC. 10.Section 94880 of the Education Code is amended to read:94880.(a)There is within the bureau a 14-member 12-member advisory committee. On or before July 1, 2015, the The members of the committee shall be appointed as follows:
(1)Three members, who shall have a demonstrated record of advocacy on behalf of consumers, of which the director, the Senate Committee on Rules, and the Speaker of the Assembly shall each appoint one member.
(2)Two members, who shall be current or past students of institutions, appointed by the director.
(3)Three members, who shall be representatives of institutions, appointed by the director.
(4)Two members, who shall be employers who hire students, appointed by the director.
(5)
(4)One public member appointed by the Senate Committee on Rules.
(6)
(5)One public member appointed by the Speaker of the Assembly.
(7)
(6)Two nonvoting, ex officio members as follows:
(A)The chair of the a policy committee of the Assembly with jurisdiction over legislation relating to the bureau or designee appointed by the Speaker of the Assembly. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(B)The chair of the a policy committee of the Senate with jurisdiction over legislation relating to the bureau or designee appointed by the Senate Committee on Rules. The chair may designate a representative for any meeting or meetings he or she is unable to attend.
(b)(1)A public member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, either at the time of his or her appointment or during his or her tenure in office, have any financial interest in any organization currently or previously subject to regulation by the bureau, be a close family member of an employee, officer, or the director of any institution subject to regulation by the bureau, or currently have, or previously have had, a business relationship, in the five years preceding his or her appointment, with any institution subject to regulation by the bureau.
(2)A public member appointed pursuant to paragraph (2), (4), or (5) of subdivision (a) shall not, within the five years immediately preceding his or her appointment, have engaged in pursuits on behalf of an institution or institutional accreditor or have provided representation to the postsecondary educational industry or a profession regulated by the bureau, if he or she is employed in the industry or a member of the profession, respectively, and he or she shall not engage in those pursuits or provide that representation during his or her term of office.
(c)The advisory committee shall examine the oversight functions and operational policies of the bureau and advise the bureau with respect to matters relating to private postsecondary education and the administration of this chapter, including annually reviewing the fee schedule and the equity of the schedule relative to the way institutions are structured, and the licensing and enforcement provisions of this chapter. The advisory committee shall make recommendations with respect to policies, practices, and regulations relating to private postsecondary education, and shall provide any assistance as may be requested by the bureau.
(d)The bureau shall actively seek input from, and consult with, the advisory committee regarding the development of regulations to implement this chapter prior to the adoption, amendment, or repeal of its regulations, and provide the advisory committee with sufficient time to review and comment on those regulations. The bureau shall take into consideration and respond to all feedback provided by members of the advisory committee.
(e)The bureau chief shall attend all advisory committee meetings and shall designate staff to provide ongoing administrative support to the advisory committee.
(f)Until January 1, 2017, the director shall personally attend, and testify and answer questions at, each meeting of the advisory committee.
(g)The ombudsperson of the Office of Student Assistance and Relief established in Article 20.6 (commencing with Section 94949.7), appointed pursuant to Section 94949.71, shall attend, and testify and answer questions at, each meeting of the advisory committee.
(g)
(h)The advisory committee shall have the same access to records within the Department of Consumer Affairs related to the operation and administration of this chapter as do members of constituent boards of the department in regard to records related to their functions.
(h)
(i)Advisory committee meetings shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). Advisory committee meeting materials shall be posted on the Internet. A majority of the voting members of the committee shall constitute a quorum for the committees meetings.
(i)
(j)The advisory committee shall meet at least quarterly and shall appoint a member of the committee to represent the committee for purposes of communicating with the Legislature.
(j)
(k)The Department of Consumer Affairs shall review, and revise if necessary, the departments conflicts of interest regulations to ensure that each advisory committee member is required to disclose conflicts of interest to the public.
SEC. 6.SEC. 11.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 7.SEC. 12.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau may, shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to obtain pre-accreditation, accreditation candidacy, or accreditation. meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to achieve pre-accreditation, accreditation candidacy, or accreditation. meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(g) This section shall remain in effect until January 1, 2021, 2023, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, 2023, deletes or extends that date.
SEC. 8.SEC. 13.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)(1)The bureau may shall, upon the timely submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to obtain pre-accreditation, accreditation candidacy, or accreditation pursuant to the requirements outlined in subdivision (d) of Section 94885.1. meet the requirements of this section.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan adequately identifying why preaccreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, active steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions likely ability to meet the requirements of this section.
(3)The bureau may establish policies and procedures to comply with the requirements in this subdivision. Establishment of these policies and procedures are exempt from Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 9.Section 94899 of the Education Code is amended to read:94899.If an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure, including required certification or registration, in this state, the institution shall have an educational program approval from the appropriate licensing, certifying, or registration agency to conduct that educational program in order that a student who completes the educational program, except as provided in Section 94905, is eligible to sit for any required licensure examination or meet the requirements for certification or registration.
SEC. 10.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure, including required certification or registration, in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure, including required certification or registration, in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure, including required certification or registration, established by the state, including any applicable course requirements established by the state. An institution shall provide all students enrolled in these educational programs with information about voluntary certification or registration being the preferred industry practice. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, as defined in Section 94848, the institution shall disclose this information, including a list of those courses that are not required for state licensure, as defined in Section 94848. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, as defined in Section 94848, unless the students stated objective is other than licensure, as defined in Section 94848.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
SEC. 14.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure established by the state, including any applicable course requirements established by the state. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, the institution shall disclose this information, including a list of those courses that are not required for state licensure. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, unless the students stated objective is other than licensure.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
(c)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, shall provide its students seeking to enroll in those programs with a written copy of the requirements for that voluntary licensure.
SEC. 11.SEC. 15.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 12.The heading of Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code is amended to read:14.Office of Student Assistance and ReliefSEC. 13.Section 94922.5 is added, immediately preceding Section 94923, to the Education Code, to read:94922.5.(a)The Office of Student Assistance and Relief is hereby established in order to promote the success of students attending private postsecondary educational institutions.
(b)Duties of the office include, but are not limited to, providing assistance to private postsecondary students, conducting proactive outreach to these students, administering the Student Tuition Recovery Fund, and overseeing the registration of institutions pursuant to Section 94952. The office shall serve as a primary point of contact to address the needs of private postsecondary education students.
(c)The office shall establish and maintain an Internet Web site to provide information to private postsecondary students about their rights and protections available to them. The office shall provide information on its Internet Web site about free services available to private postsecondary students offered by local nonprofit community service organizations with demonstrated experience in assisting students in areas including, but not limited to, legal services and student loan matters. Each local nonprofit community service organization shall be a 501(c)(3) tax-exempt organization in good standing with the Internal Revenue Service and in compliance with all applicable laws and requirements.
(d)The office shall work, in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education, to determine the extent of options and resources available to private postsecondary students and criteria that indicates what additional steps state agencies need to take to ensure the protection of the public from the closure of a private postsecondary educational institution.
SEC. 14.SEC. 16.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)(1)The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund Fund. The fund shall be used to provide awards to students who suffer economic loss.
The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(2)The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(1)
(A)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(2)
(B)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued, if the bureau determines there was a significant decline in the quality or value of that educational program during that time period. discontinued.
(3)
(C)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(4)
(D)A student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(5)
(E)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(6)
(F)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(7)
(G)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g)Any representation or agreement by a person or entity not to collect a student loan obligation does not reduce a students eligibility for recovery from the Student Tuition Recovery Fund or reduce the students economic loss, unless the student loan obligation is forgiven, discharged, or canceled.
(h)The bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
SEC. 15.Section 94923.5 is added to the Education Code, to read:94923.5.It is the intent of the Legislature to require, to the extent authorized by federal law, a private postsecondary educational institution that does not maintain a physical presence in California and offers distance education to California students to file a surety bond for the benefit of its California students who suffer economic loss.
SEC. 16.Section 94935.5 is added to the Education Code, to read:94935.5.(a)Bureau staff who, during an inspection of an institution, detect a violation of this chapter, or regulations adopted pursuant to this chapter, that is not a minor violation, may issue the institution a citation before leaving the institution.
(b)The citation may contain either or both of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter, or regulations adopted pursuant to this chapter, will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. Assessment of the administrative fine shall be based on all of the following considerations:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(c)(1) The citation shall be in writing and describe the nature of the violation and the specific provision of this chapter, or regulation adopted pursuant to this chapter, that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request, in writing, a hearing within 30 days of the issuance of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 17.Section 94932 of the Education Code is amended to read:94932.The bureau shall determine an institutions compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institutions sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing an a compliance inspection or investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.
SEC. 18.Section 94934.5 is added to the Education Code, to read:94934.5.(a)An institution with an approval to operate that knows or reasonably should know that it is being investigated by an oversight entity other than the bureau shall report that investigation, including the nature of that investigation, to the bureau within 30 days of the institutions first knowledge of the investigation. An institution with an approval to operate that is the subject of a judgment by, a regulatory action by, increased oversight or monitoring by, or a settlement with, any oversight entity other than the bureau shall report it to the bureau within 30 days. Failure to comply with this section may subject the institution to an administrative citation pursuant to Section 94936.
(b)For the purposes of this section, investigation means any inquiry into possible violations of any applicable laws or accreditation standards.
(c)For the purposes of this section, oversight entity means any federal government agency, government agency of any state, or any accrediting agency.
SEC. 19.Section 94936 of the Education Code is amended to read:94936.(a)As a consequence of an a compliance inspection or investigation, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
(b)The citation may contain either or both any of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(3)An order to compensate students for harm, including a refund of moneys paid to the institution by or on behalf of the student, as determined by the bureau.
(c)(1)The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 20.Section 94937 of the Education Code is amended to read:94937.(a)As a consequence of an a compliance inspection or investigation, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institutions approval to operate for:
(1)Obtaining an approval to operate by fraud.
(2)A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, material violation includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
(b)The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
(c)The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
(d)An institution shall not be required to pay the cost of investigation to more than one agency.
SEC. 17.SEC. 21.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 18.SEC. 22.Article 20.5 (commencing with Section 94949.5) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.5.Enforcement Monitor94949.5.(a)(1)The director shall appoint an enforcement monitor no later than March 1, 2017. The director may retain a person for this position by a personal services contract. In this connection, the Legislature finds, pursuant to Section 19130 of the Government Code, that this is a new state function.
(2)The director shall supervise the enforcement monitor and may terminate or dismiss him or her from this position. If the monitor is terminated or dismissed, the director shall appoint a replacement monitor within two months.
(3)The monitoring duty of the enforcement monitor shall be on a continuing basis for a period of no more than two years from the date of the initial enforcement monitors appointment.
(b)The enforcement monitor shall monitor and evaluate the bureaus enforcement efforts, with specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints, and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
(c)The enforcement monitor shall exercise no authority over the bureaus management or staff; however, the bureau and its staff shall cooperate with the monitor and shall provide data, information, and files as requested by the monitor to perform all of his or her duties.
(d)The director shall assist the enforcement monitor in the performance of his or her duties, and the monitor shall have the same investigative authority as the director.
(e)The director shall specify additional duties of the enforcement monitor.
(f)(1)The enforcement monitor shall submit to the department and the Legislature, in compliance with Section 9795 of the Government Code, an initial written report of his or her findings and conclusions no later than July 1, 2018, and a subsequent written report no later than November 1, 2018. The enforcement monitor shall be available to make oral reports to the department or the Legislature if requested to do so. The monitor may also provide additional information to either the department or the Legislature at his or her discretion or at the request of either the department or the Legislature. The monitor shall make his or her reports available to the public or the media. The monitor shall make every effort to provide the bureau with an opportunity to reply to any facts, findings, issues, or conclusions made in his or her reports to the department or the Legislature with which the bureau may disagree.
(2)The enforcement monitor shall issue a final written report before January 1, 2019. The final report shall include final findings and conclusions on the topics addressed in the initial report submitted by the monitor pursuant to paragraph (1).
(g)The bureau shall pay for all of the costs associated with the employment of the enforcement monitor.
94949.6.This article shall remain in effect only until March 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before March 1, 2019, deletes or extends that date.
SEC. 23.Article 20.6 (commencing with Section 94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.6.Office of Student Assistance and Relief94949.7.There is hereby established within the department an Office of Student Assistance and Relief for the purpose of advancing and promoting the rights of prospective students, current students, or past students of private postsecondary educational institutions.
94949.71.(a)The duties of the office shall be vested in an ombudsperson, who shall be appointed by, and report to, the director. The ombudsperson shall have experience and expertise advocating on behalf of students and consumers and shall have knowledge in the state and federal laws governing student protection, student financial aid and loan programs, and the policies and practices of private postsecondary educational institutions.
(b)For purposes of this article, the following terms have the following meanings:
(1)Department means the Department of Consumer Affairs.
(2)Office means the Office of Student Assistance and Relief.
94949.72.Duties of the office shall include, but are not limited to, all of the following:
(a)Conducting outreach to students and prospective students to provide them with, among other information, information on making an informed decision regarding the selection of a postsecondary educational institution, student rights regarding school performance disclosures, enrollment agreements, and cancellation and refund policies, how to contact the office and the bureau for assistance, student loan rights and assistance, and free nonprofit community based resources.
(b)Coordinating with the bureau and facilitating resolution of student concerns related to the bureaus performance of its responsibilities, including concerns that arise related to the bureaus handling of a complaint or its administration of the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923).
(c)Coordinating with the department, including the bureau, regarding an Internet Web site that provides information to students about the rights and protections available to them. The Internet Web site shall include information about relevant services available from other governmental organizations and local nonprofit community service organizations.
(d)Serving as a primary point of contact to address the needs of private postsecondary education students and working in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education.
(e)Providing outreach and coordinating services for students following the unlawful closure of an institution that was approved to operate by the bureau.
94949.73.(a)A pilot program is hereby created to provide grant funds in accordance with this section to eligible nonprofit community service organizations to assist eligible students by relieving or mitigating the economic and educational opportunity loss incurred by those students who attended a Corinthian Colleges, Inc. institution.
(b)(1)The terms and conditions of the grant agreements shall ensure that grant funds are used for the exclusive purpose of providing outreach and assistance to eligible students with federal and private loan discharges, recovery through the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923), and other financial aid relief.
(2)Services provided by eligible nonprofit community service organizations shall include, but are not to be limited to, outreach and education, screening requests for assistance, referring students for additional assistance through pro bono referral programs, referring students to the bureau, as appropriate, and other services related to obtaining financial aid relief for students.
(3)This subdivision is not intended to prohibit a nonprofit community service organization from using grant funds to screen student requests for assistance in order to determine if a student meets assistance eligibility requirements.
(c)For purposes of this section, an eligible nonprofit community service organization is an organization that satisfies all of the following conditions:
(1)The organization is a 501(c)(3) tax-exempt organization in good standing with the federal Internal Revenue Service and in compliance with all applicable laws and requirements.
(2)The organization demonstrates expertise in providing outreach and assisting students with, and currently provides free direct services to students for, student loan discharge and forgiveness, and student tuition recovery-related matters.
(3)The organization does not charge students for any services, including services provided pursuant to this section.
(d)For purposes of this section, an eligible student is a student who was enrolled at a California campus of, or a California student who was enrolled in an online campus of, a Corinthian Colleges, Inc. institution, and who has been screened by the nonprofit community service organization and determined to be eligible for debt relief from the United States Department of Education or other student financial aid relief.
(e)(1)By March 1, 2017, the office shall solicit grant applications from eligible nonprofit community service organizations, select one or more of these organizations from among the applicants who are deemed to be qualified, set additional terms and conditions of the grants as necessary to fulfill the requirements of this section, and notify the recipient organization or organizations of the selection and the share of grant funds available that the organization shall receive.
(2)The office shall award the full amount of authorized grant funds, unless it does not receive a sufficient number of applications from eligible nonprofit community service organizations or it has good cause to determine that an expenditure of the full amount authorized is not necessary. If the office determines expenditure of the full amount is not necessary, it shall provide a detailed explanation of its determination to the Legislature.
(3)In selecting the grantees and awarding funds to each grantee, the office shall ensure geographical distribution according to the location of eligible students, as best can be determined.
(f)(1)Within 30 days of selection, an eligible nonprofit community service organization that receives funds pursuant to this section shall enter into a grant agreement with the office and shall use grant funds exclusively for the purposes set forth in this section and in accordance with the agreement.
(2)Any unused funds by the grantees shall be returned to the office, except that, upon the approval of the office, an eligible nonprofit community service organization may expend funds to provide assistance to students who attended an institution that closed unlawfully and was approved to operate by the bureau.
(3)The office may terminate the grant agreement for material breach, and may require repayment of funds provided to the nonprofit community service organization during the time that the agreement was being materially breached. However, the office shall provide the grantee with written notice of the breach and a reasonable opportunity of not less than 30 days to resolve the breach.
(g)An eligible nonprofit community service organization that receives a grant shall give priority to students who were enrolled in Corinthian Colleges, Inc., and are eligible for a federal closed school loan discharge or relief under the Student Tuition Recovery Fund established in Article 14 (commencing with Section 94923), if demand exceeds available grant funds. The organization may give priority to low-income students or may provide assistance regardless of student income level.
(h)(1) An eligible nonprofit community service organization that receives a grant shall report to the office quarterly through the grant period on all of the following:
(A)The number of eligible students served pursuant to the grant agreement.
(B)A detailed summary of services provided to those students, as follows:
(i)The number of Student Tuition Recovery Fund claims referred or submitted to the bureau by the organization. To the degree the organization has access to the following information, the report shall include, of the claims submitted, the number that are pending, on appeal, or have been approved or denied; for the claims that have been approved or denied, the amount of student loans canceled, the total of student loans paid off, the total amount of cash reimbursed to students, and the total amount of educational credit granted.
(ii)The number of federal loan forgiveness claims submitted. Of the claims submitted, the number of those claims that are pending, on appeal, or have been approved or denied. For claims submitted by the organization on behalf of the student, the organization shall also report the estimated total in student loans canceled and the total amount of funds refunded to students.
(iii)The number of students helped with private student loans, other than through Student Tuition Recovery Fund claims, and a summary of assistance provided.
(iv)The number of students whom the organization helped obtain income-dependent repayment plans on their federal loans, and of those students, the number of students helped out of default on the federal loans through consolidation or rehabilitation.
(v)The number of students screened by the nonprofit community service organization who were determined ineligible for assistance with debt relief pursuant to subdivision (d), a summary of reasons for ineligibility, and a summary of any services or referral information provided to those students.
(vi)Any other information that is deemed reasonably necessary.
(2)The office shall make the reports submitted pursuant to paragraph (1) available to the Legislature and the department upon request.
(3)The office shall provide the Legislature and the department a final report summarizing the information submitted pursuant to paragraph (1) promptly following the time when all funds are expended by the grantees or by January 1, 2020, whichever is earlier.
(j)Funds shall be distributed to preapproved nonprofit community service organizations as follows:
(1)Fifty percent shall be distributed to the grantee within 30 days of the grantee entering into a grant agreement.
(2)Twenty-five percent shall be distributed to the grantee upon the submission of the grantees second quarterly report.
(3)Twenty-five percent shall be distributed to the grantee upon the submission of the grantees third quarterly report.
(k)The adoption of any regulation pursuant to this section shall be deemed to be an emergency and necessary for the immediate preservation of the public health and safety, or general welfare.
(l)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 24.The sum of one million three hundred thousand dollars ($1,300,000) is appropriated from the Student Tuition Recovery Fund to the Office of Student Assistance and Relief, as established in Section 94949.7 of the Education Code, for the purposes of providing grants pursuant to the pilot program established in Section 94949.73 of the Education Code.
SEC. 19.Chapter 8.1 (commencing with Section 94952) is added to Part 59 of Division 10 of Title 3 of the Education Code, to read:8.1.Private Postsecondary Education Offered Through Distance Learning94952.To the extent authorized by federal law, a private postsecondary educational institution that does not maintain a physical presence in California and offers distance education to California students shall register with the bureau and file a surety bond in compliance with Section 94923.5.
(a)An institution that had an application for an approval to operate pending with the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, may continue to operate until a decision is made in regard to the institution regarding the application for approval to operate, but shall comply with, and is subject to, this chapter.
(b)An institution that did not have a valid approval to operate issued by, and did not have an application for approval to operate pending with, the former Bureau for Private Postsecondary and Vocational Education on June 30, 2007, that began operations between July 1, 2007, and January 1, 2010, may continue to operate unless a denial of approval to operate has been issued and has become final, but shall comply with, and is subject to, this chapter.
(c)Students seeking to enroll in institutions operating under subdivisions (a) and (b) shall be notified by the institution, in writing and prior to executing an enrollment agreement, that the institutions application for approval to operate has not been reviewed by the bureau.
(d)(1)An institution that is denied an approval to operate pursuant to subdivision (a) or (b) may file an appeal pursuant to the procedures established in Section 94888.
(2)An institution that has filed an appeal pursuant to paragraph (1) may continue to operate during the appeal process but must disclose in a written statement approved by the bureau, to all current and prospective students, that the institutions application for approval to operate was denied by the bureau because the bureau determined the application did not satisfy the requirements to operate in California, that the institution is appealing the bureaus decision, and that the loss of the appeal may result in the institutions closure.
(3)If the bureau determines that the continued operation of an institution poses a significant risk of harm to students, the bureau shall make an emergency decision pursuant to Section 94938.
SEC. 2.Section 94848 of the Education Code is amended to read:94848.Licensure includes any license, certificate, permit, or similar credential that a person must hold to lawfully engage in a profession, occupation, trade, or career field. Licensure shall also include required certification or registration that a person must hold to lawfully engage in a profession, occupation, trade, or career field.
SEC. 3.Section 94874.2 of the Education Code is amended to read:94874.2.Beginning January 1, 2016, an institution that is approved to participate in veterans financial aid programs pursuant to Section 21.4253 of Title 38 of the Code of Federal Regulations that is not an independent institution of higher education, as defined in subdivision (b) of Section 66010, may not claim an exemption from this chapter. shall not be exempt from this chapter.
SEC. 4.Section 94878 of the Education Code is amended to read:94878.(a)The bureau shall establish an Internet Web site that includes at least all of the following information:
(1)An explanation of the bureaus scope of authority.
(2)(A)A directory of approved institutions, and a link, if feasible, to the Internet Web site of each institution.
(B)For each institution, the directory shall be developed in a manner that allows the user to search by institution and shall include all of the following information:
(i)The status of the institutions approval to operate.
(ii)The information provided by the institutions, including, but not limited to, the annual report, as required by Section 94934, including the school catalog and the School Performance Fact Sheet. The School Performance Fact Sheet shall be maintained on the directory for at least five years after the date of its submission to the bureau.
(iii)If a law school satisfies the requirements of this chapter regarding a School Performance Fact Sheet by complying with the requirements of Section 94910.5, the bureau shall include the information provided by the institution pursuant to Section 94910.5 on its Internet Web site and shall maintain the information in the same manner as required by clause (ii).
(iv)The disciplinary history of the institution, which shall include, but shall not be limited to, all of the following:
(I)Pending formal accusations filed by the bureau.
(II)Suspensions, revocations, citations, fines, infractions, probations, pending litigation filed by the bureau, and final judgments resulting from litigation filed by the bureau.
(III)Pending or final civil or criminal cases filed by the Attorney General, a city attorney, or a district attorney in this state, or filed in any state by an attorney general or a federal regulatory or prosecutorial agency if the case would be actionable under California or federal law, of which the bureau has received notice.
(IV)Final administrative actions by the United States Department of Education, including orders requiring restitution to students.
(V)All disciplinary actions ordered by an accreditation agency, including any order to show cause, of which the bureau has received notice pursuant to Section 94934 or other information otherwise publicly available of which the bureau has received notice.
(b)The bureau shall maintain the Internet Web site described in subdivision (a). The bureau shall ensure that the information specified in subdivision (a) is kept current. The bureau shall update the Internet Web site at least annually, to coincide with the submission of annual reports by the institutions pursuant to Section 94934.
(c)(1)The bureau shall post on its Internet Web site a list of all institutions that were denied approval to operate, after the denial is final, and describe in clear and conspicuous language the reason the institution was denied approval. The bureau shall include with this list the statement provided in paragraph (2) on its Internet Web site.
(2)The following institutions were denied approval to operate by the Bureau for Private Postsecondary Education for failing to satisfy the standards relating to educational quality, or consumer protection, or both. These unlicensed institutions are not operating in compliance with the law, and students are strongly discouraged from attending these institutions.
SEC. 5.Section 94879 of the Education Code is amended to read:94879.The bureau shall conduct an outreach program to secondary school pupils students as well as prospective and current private postsecondary students, to provide them with information on how to best select a private postsecondary institution, how to enter into enrollment agreements, how to make informed decisions in the private postsecondary education marketplace, and how to contact the bureau for assistance. The bureau may accomplish the purposes of this section in cooperation with other federal, state, or local entities, or any combination of these entities.
SEC. 6.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94855.1, 94885.1, an institution offering a degree must satisfy one of the following requirements:
(i)
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(ii)
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
SEC. 7.Section 94885.1 of the Education Code is amended to read:94885.1.(a)An institution that is not accredited by an accrediting agency recognized by the United States Department of Education and offering at least one degree program, and that has obtained an approval to operate from the bureau on or before January 1, 2015, shall be required to satisfy at least one of the following no later than July 1, 2015:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)Compliance with subdivision (b).
(b)The bureau shall identify institutions that are subject to subdivision (a) and notify those institutions by February 1, 2015, of the accreditation requirements pursuant to this section and that the institution is required provide the following information to the bureau if the institution plans to continue to offer a degree program after July 1, 2015:
(1)An accreditation plan that, at a minimum, identifies an accrediting agency recognized by the United States Department of Education from which the institution will seek accreditation, with the scope of that accreditation covering the offering of at least one degree program, and outlines the process by which the institution will achieve accreditation candidacy or pre-accreditation by July 1, 2017, and full accreditation by July 1, 2020.
(2)Evidence of having achieved accreditation candidacy or pre-accreditation by July 1, 2017.
(3)Evidence of having obtained full accreditation by July 1, 2020.
(4)Any additional documentation the bureau deems necessary.
(c)An institution that satisfies the requirements of subdivision (b) shall comply with all of the following:
(1)Notify students seeking to enroll in the institution, in writing, prior to the execution of the students enrollment agreement, that the institutions approval to offer a degree program is contingent upon the institution being subsequently accredited.
(2)A visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institution by January 1, 2017, and determine if the institution is likely to achieve full accreditation by July 1, 2020. If the visiting committee finds the institution deficient in its accreditation plan, the bureau may prohibit the institution from enrolling new students in its degree program or programs, and require the execution of a teach-out plan for its enrolled students.
(d)(1)The bureau may, upon the submission of sufficient evidence that an unaccredited institution is making strong progress toward obtaining accreditation, grant an institutions request for an extension of time, not to exceed two years, to obtain pre-accreditation, accreditation candidacy, or accreditation.
(2)Evidence submitted to the bureau pursuant to paragraph (1) shall include, but is not limited to, an amended accreditation plan identifying why pre-accreditation, accreditation candidacy, or accreditation outlined in the original plan submitted to the bureau was not achieved, steps the institution is taking to comply with this section, and documentation from an accrediting agency demonstrating the institutions ability to achieve pre-accreditation, accreditation candidacy, or accreditation.
(d)
(e)Any institution that fails to comply with the requirements of this section by the dates provided, as required, shall have its approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs, and shall execute a teach-out plan for its enrolled students.
(e)
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
(f)
(g) This section shall remain in effect until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 8.Section 94885.5 of the Education Code is amended to read:94885.5.(a)If an institution that has not been accredited by an accrediting agency recognized by the United States Department of Education seeks to offer one or more degree programs, the institution shall satisfy the following requirements in order to be issued a provisional approval to operate from the bureau:
(1)The institution may not offer more than two degree programs during the term of its provisional approval to operate.
(2)The institution shall submit an accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of issuance of its provisional approval to operate. The plan shall include, at a minimum, identification of an accreditation agency recognized by the United States Department of Education, from which the institution plans to seek accreditation, and outline the process by which the institution will achieve accreditation candidacy or pre-accreditation within two years, and full accreditation within five years, of issuance of its provisional approval.
(3)The institution shall submit to the bureau all additional documentation the bureau deems necessary to determine if the institution will become fully accredited within five years of issuance of its provisional approval to operate.
(b)If an institution is granted a provisional approval to operate pursuant to subdivision (a), the following is required:
(1)Students seeking to enroll in that institution shall be notified in writing by the institution, prior to the execution of the students enrollment agreement, that the institutions approval to operate is contingent upon it being subsequently accredited.
(2)Within the first two years of issuance of the provisional approval, a visiting committee, empaneled by the bureau pursuant to Section 94882, shall review the institutions application for approval and its accreditation plan, and make a recommendation to the bureau regarding the institutions progress to achieving full accreditation.
(3)The institution shall provide evidence of accreditation candidacy or pre-accreditation within two years of issuance of its provisional approval, and evidence of accreditation within five years of issuance of its provisional approval, with the scope of that accreditation covering the offering of at least one degree program.
(c)An institution required to comply with this section that fails to do so by the dates provided, as required, shall have its provisional approval to operate automatically suspended on the applicable date. The bureau shall issue an order suspending the institution and that suspension shall not be lifted until the institution complies with the requirements of this section. A suspended institution shall not enroll new students in any of its degree programs and shall execute a teach-out plan for its enrolled students.
(d)The bureau may grant an institutions request for an extension of time, not to exceed two years, to obtain pre-accreditation, accreditation candidacy, or accreditation pursuant to the requirements outlined in subdivision (d) of Section 94885.1.
(d)
(e)An institution issued a provisional approval under this section is required to comply with all other laws and regulations.
(e)
(f)The bureau shall adopt emergency regulations for purposes of implementing this section. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process within one year of the enactment of this section.
SEC. 9.Section 94899 of the Education Code is amended to read:94899.If an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in this state, licensure, including required certification or registration, in this state, the institution shall have an educational program approval from the appropriate state licensing licensing, certifying, or registration agency to conduct that educational program in order that a student who completes the educational program, except as provided in Section 94905, is eligible to sit for any required licensure examination. examination or meet the requirements for certification or registration.
SEC. 10.Section 94905 of the Education Code is amended to read:94905.(a)During the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field requiring licensure licensure, including required certification or registration, in this state shall exercise reasonable care to determine if the student will not be eligible to obtain licensure licensure, including required certification or registration, in the profession, occupation, trade, or career field at the time of the students graduation and shall provide all students enrolled in those programs with a written copy of the requirements for licensure licensure, including required certification or registration, established by the state, including any applicable course requirements established by the state. An institution shall provide all students enrolled in these educational programs with information about voluntary certification or registration being the preferred industry practice. If the minimum course requirements of the institution exceed the minimum requirements for state licensure, licensure, as defined in Section 94848, the institution shall disclose this information, including a list of those courses that are not required for state licensure. licensure, as defined in Section 94848. The institution shall not execute an enrollment agreement with a student that is known to be ineligible for licensure, as defined in Section 94848, unless the students stated objective is other than licensure. licensure, as defined in Section 94848.
(b)During the enrollment process, an institution may discuss internships and student jobs available to the student during the students attendance at the institution. If the institution discusses internships and student jobs, the institution shall disclose the number of requests for internship and student job placement assistance received by the institution during the immediately preceding calendar year and the number of actual placements during that year.
SEC. 11.Section 94909 of the Education Code is amended to read:94909.(a)Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:
(1)The name, address, telephone number, and, if applicable, Internet Web site address of the institution.
(2)Except as specified in Article 2 (commencing with Section 94802), a statement that the institution is a private institution and that it is approved to operate by the bureau.
(3)The following statements:
(A)Any questions a student may have regarding this catalog that have not been satisfactorily answered by the institution may be directed to the Bureau for Private Postsecondary Education at (address), Sacramento, CA (ZIP Code), (Internet Web site address), (telephone and fax numbers).
(B)As a prospective student, you are encouraged to review this catalog prior to signing an enrollment agreement. You are also encouraged to review the School Performance Fact Sheet, which must be provided to you prior to signing an enrollment agreement.
(C)A student or any member of the public may file a complaint about this institution with the Bureau for Private Postsecondary Education by calling (toll-free telephone number) or by completing a complaint form, which can be obtained on the bureaus Internet Web site (Internet Web site address).
(4)The address or addresses where class sessions will be held.
(5)A description of the programs offered and a description of the instruction provided in each of the courses offered by the institution, the requirements for completion of each program, including required courses, any final tests or examinations, any required internships or externships, and the total number of credit hours, clock hours, or other increments required for completion.
(6)If the educational program is designed to lead to positions in a profession, occupation, trade, or career field requiring licensure in this state, a notice to that effect and a list of the requirements for eligibility for licensure.
(7)Information regarding the faculty and their qualifications.
(8)A detailed description of institutional policies in the following areas:
(A)Admissions policies, including the institutions policies regarding the acceptance of credits earned at other institutions or through challenge examinations and achievement tests, admissions requirements for ability-to-benefit students, and a list describing any transfer or articulation agreements between the institution and any other college or university that provides for the transfer of credits earned in the program of instruction. If the institution has not entered into an articulation or transfer agreement with any other college or university, the institution shall disclose that fact.
(B)Cancellation, withdrawal, and refund policies, including an explanation that the student has the right to cancel the enrollment agreement and obtain a refund of charges paid through attendance at the first class session, or the seventh day after enrollment, whichever is later. The text shall also include a description of the procedures that a student is required to follow to cancel the enrollment agreement or withdraw from the institution and obtain a refund consistent with the requirements of Article 13 (commencing with Section 94919).
(C)Probation and dismissal policies.
(D)Attendance policies.
(E)Leave-of-absence policies.
(9)The schedule of total charges for a period of attendance and an estimated schedule of total charges for the entire educational program.
(10)A statement reporting whether the institution participates in federal and state financial aid programs, and if so, all consumer information that is required to be disclosed to the student pursuant to the applicable federal and state financial aid programs.
(11)A statement specifying that, if a student obtains a loan to pay for an educational program, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund, and that, if the student has received federal student financial aid funds, the student is entitled to a refund of the moneys not paid from federal student financial aid program funds.
(12)A statement specifying whether the institution has a pending petition in bankruptcy, is operating as a debtor in possession, has filed a petition within the preceding five years, or has had a petition in bankruptcy filed against it within the preceding five years that resulted in reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13)If the institution provides placement services, a description of the nature and extent of the placement services.
(14)A description of the students rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.
(15)The following statement:
NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is at the complete discretion of an institution to which you may seek to transfer. Acceptance of the (degree, diploma, or certificate) you earn in (name of educational program) is also at the complete discretion of the institution to which you may seek to transfer. If the (credits or degree, diploma, or certificate) that you earn at this institution are not accepted at the institution to which you seek to transfer, you may be required to repeat some or all of your coursework at that institution. For this reason you should make certain that your attendance at this institution will meet your educational goals. This may include contacting an institution to which you may seek to transfer after attending (name of institution) to determine if your (credits or degree, diploma, or certificate) will transfer.
(16)A statement specifying whether the institution, or any of its degree programs, are accredited by an accrediting agency recognized by the United States Department of Education. If the institution is unaccredited and offers an associate, baccalaureate, masters, or doctoral degree, or is accredited and offers an unaccredited program for an associate, baccalaureate, masters, or doctoral degree, the statement shall disclose the known limitations of the degree program, including, but not limited to, all of the following:
(A)Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states. states or become certified or registered as required for the applicable profession, occupation, trade, or career field in California.
(B)A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.
(C)That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.
(b)If the institution has a general student brochure, the institution shall provide that brochure to the prospective student prior to enrollment. In addition, if the institution has a program-specific student brochure for the program in which the prospective student seeks to enroll, the institution shall provide the program-specific student brochure to the prospective student prior to enrollment.
(c)An institution shall provide the school catalog to any person upon request. In addition, if the institution has student brochures, the institution shall disclose the requested brochures to any interested person upon request.
(d)An accredited institution is not required to provide a School Performance Fact Sheet to a prospective student who is not a California resident, not residing in California at the time of his or her enrollment, and enrolling in an accredited distance learning degree program offered by the institution, if the institution complies with all federal laws, the applicable laws of the state where the student is located, and other appropriate laws, including, but not limited to, consumer protection and student disclosure requirements.
SEC. 12.The heading of Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code is amended to read:14.Student Tuition Recovery Fund Office of Student Assistance and ReliefSEC. 13.Section 94922.5 is added, immediately preceding Section 94923, to the Education Code, to read:94922.5.(a)The Office of Student Assistance and Relief is hereby established in order to promote the success of students attending private postsecondary educational institutions.
(b)Duties of the office include, but are not limited to, providing assistance to private postsecondary students, conducting proactive outreach to these students, administering the Student Tuition Recovery Fund, and overseeing the registration of institutions pursuant to Section 94952. The office shall serve as a primary point of contact to address the needs of private postsecondary education students.
(c)The office shall establish and maintain an Internet Web site to provide information to private postsecondary students about their rights and protections available to them. The office shall provide information on its Internet Web site about free services available to private postsecondary students offered by local nonprofit community service organizations with demonstrated experience in assisting students in areas including, but not limited to, legal services and student loan matters. Each local nonprofit community service organization shall be a 501(c)(3) tax-exempt organization in good standing with the Internal Revenue Service and in compliance with all applicable laws and requirements.
(d)The office shall work, in consultation with state and federal agencies, including, but not limited to, the Student Aid Commission, the Office of the Chancellor of the California Community Colleges, the Department of Veterans Affairs, the federal Consumer Financial Protection Bureau, and the United States Department of Education, to determine the extent of options and resources available to private postsecondary students and criteria that indicates what additional steps state agencies need to take to ensure the protection of the public from the closure of a private postsecondary educational institution.
SEC. 14.Section 94923 of the Education Code is amended to read:94923.(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an educational program, as defined in Section 94837, at an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b)The bureau shall adopt by regulation procedures governing the administration and maintenance of the Student Tuition Recovery Fund, including requirements relating to assessments on students and student claims against the Student Tuition Recovery Fund. The regulations Fund shall provide for awards to students who suffer economic loss.
The regulations shall ensure that the following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(1)Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(2)Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued, if the bureau determines there was a significant decline in the quality or value of that educational program during that time period.
(3)Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(4)A student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.
(4)
(5)A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(5)
(6)A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(6)
(7)A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the students economic loss.
(c)Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d)The bureau shall establish regulations ensuring, as permissible under California law, that a A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e)The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f)The bureau shall, by regulation, define economic loss. The regulation shall ensure that the definition of For purposes of this section, economic loss includes, but is not necessarily limited to, pecuniary loss, which is the sum of the students tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.
SEC. 15.Section 94923.5 is added to the Education Code, to read:94923.5.It is the intent of the Legislature to require, to the extent authorized by federal law, a private postsecondary educational institution that does not maintain a physical presence in California and offers distance education to California students to file a surety bond for the benefit of its California students who suffer economic loss.
SEC. 16.Section 94935.5 is added to the Education Code, to read:94935.5.(a)Bureau staff who, during an inspection of an institution, detect a violation of this chapter, or regulations adopted pursuant to this chapter, that is not a minor violation, may issue the institution a citation before leaving the institution.
(b)The citation may contain either or both of the following:
(1)An order of abatement that may require an institution to demonstrate how future compliance with this chapter, or regulations adopted pursuant to this chapter, will be accomplished.
(2)Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. Assessment of the administrative fine shall be based on all of the following considerations:
(A)The nature and seriousness of the violation.
(B)The persistence of the violation.
(C)The good faith of the institution.
(D)The history of previous violations.
(E)The purposes of this chapter.
(F)The potential harm to students.
(c)(1) The citation shall be in writing and describe the nature of the violation and the specific provision of this chapter, or regulation adopted pursuant to this chapter, that is alleged to have been violated.
(2)The citation shall inform the institution of its right to request, in writing, a hearing within 30 days of the issuance of the citation.
(3)If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(4)If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service and shall not constitute an admission of the violation charged.
(5)If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
(6)The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
(d)All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
SEC. 17.Section 94944 of the Education Code is amended to read:94944.Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed fifty thousand dollars ($50,000), one hundred thousand dollars ($100,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.
SEC. 18.Article 20.5 (commencing with Section 94949.5) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:20.5.Enforcement Monitor94949.5.(a)(1)The director shall appoint an enforcement monitor no later than March 1, 2017. The director may retain a person for this position by a personal services contract. In this connection, the Legislature finds, pursuant to Section 19130 of the Government Code, that this is a new state function.
(2)The director shall supervise the enforcement monitor and may terminate or dismiss him or her from this position. If the monitor is terminated or dismissed, the director shall appoint a replacement monitor within two months.
(3)The monitoring duty of the enforcement monitor shall be on a continuing basis for a period of no more than two years from the date of the initial enforcement monitors appointment.
(b)The enforcement monitor shall monitor and evaluate the bureaus enforcement efforts, with specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints, and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
(c)The enforcement monitor shall exercise no authority over the bureaus management or staff; however, the bureau and its staff shall cooperate with the monitor and shall provide data, information, and files as requested by the monitor to perform all of his or her duties.
(d)The director shall assist the enforcement monitor in the performance of his or her duties, and the monitor shall have the same investigative authority as the director.
(e)The director shall specify additional duties of the enforcement monitor.
(f)(1)The enforcement monitor shall submit to the department and the Legislature, in compliance with Section 9795 of the Government Code, an initial written report of his or her findings and conclusions no later than July 1, 2018, and a subsequent written report no later than November 1, 2018. The enforcement monitor shall be available to make oral reports to the department or the Legislature if requested to do so. The monitor may also provide additional information to either the department or the Legislature at his or her discretion or at the request of either the department or the Legislature. The monitor shall make his or her reports available to the public or the media. The monitor shall make every effort to provide the bureau with an opportunity to reply to any facts, findings, issues, or conclusions made in his or her reports to the department or the Legislature with which the bureau may disagree.
(2)The enforcement monitor shall issue a final written report before January 1, 2019. The final report shall include final findings and conclusions on the topics addressed in the initial report submitted by the monitor pursuant to paragraph (1).
(g)The bureau shall pay for all of the costs associated with the employment of the enforcement monitor.
94949.6.This article shall remain in effect only until March 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before March 1, 2019, deletes or extends that date.
SEC. 19.Chapter 8.1 (commencing with Section 94952) is added to Part 59 of Division 10 of Title 3 of the Education Code, to read:8.1.Private Postsecondary Education Offered Through Distance Learning94952.To the extent authorized by federal law, a private postsecondary educational institution that does not maintain a physical presence in California and offers distance education to California students shall register with the bureau and file a surety bond in compliance with Section 94923.5.
SECTION 1.Section 94885 of the Education Code is amended to read:94885.(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94885.1, an institution offering a degree must satisfy one of the following requirements:
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
(a)The bureau shall adopt by regulation minimum operating standards for an institution that shall reasonably ensure that all of the following occur:
(1)The content of each educational program can achieve its stated objective.
(2)The institution maintains specific written standards for student admissions for each educational program and those standards are related to the particular educational program.
(3)The facilities, instructional equipment, and materials are sufficient to enable students to achieve the educational programs goals.
(4)The institution maintains a withdrawal policy and provides refunds.
(5)The directors, administrators, and faculty are properly qualified.
(6)The institution is financially sound and capable of fulfilling its commitments to students.
(7)That, upon satisfactory completion of an educational program, the institution gives students a document signifying the degree or diploma awarded.
(8)Adequate records and standard transcripts are maintained and are available to students.
(9)The institution is maintained and operated in compliance with this chapter and all other applicable ordinances and laws.
(b)Except as provided in Section 94855.1, 94885.1, an institution offering a degree must satisfy one of the following requirements:
(i)
(1)Accreditation by an accrediting agency recognized by the United States Department of Education, with the scope of that accreditation covering the offering of at least one degree program by the institution.
(ii)
(2)An accreditation plan, approved by the bureau, for the institution to become fully accredited within five years of the bureaus issuance of a provisional approval to operate to the institution. The provisional approval to operate to an unaccredited degree-offering institution shall be in compliance with Section 94885.5.
|
Date
|
Status
|
|---|---|
| Aug 23, 2016 | Read third time. Passed. Ordered to the Senate. |
| Jun 16, 2016 | Read second time and amended. Re-referred to Com. on B. & P. |
| Jun 28, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 12. Noes 2.) (June 28). Re-referred to Com. on APPR. |
| Aug 3, 2016 | August 3 set for first hearing. Placed on APPR. suspense file. |
| Aug 12, 2016 | From committee: Do pass as amended. (Ayes 16. Noes 1.) (August 11). |
| Aug 15, 2016 | Read second time and amended. Ordered to second reading. |
| Aug 16, 2016 | Read second time. Ordered to third reading. |
| Aug 19, 2016 | Ordered to third reading. |
| Aug 19, 2016 | Read third time and amended. |
| Aug 19, 2016 | Read third time and amended. (Ayes 73. Noes 0. Page 5963.) |
| Aug 23, 2016 | In Senate. Concurrence in Assembly amendments pending. |
| Jun 15, 2016 | From committee: Do pass as amended and re-refer to Com. on B. & P. (Ayes 10. Noes 0.) (June 14). |
| Aug 23, 2016 | Read third time. Passed. (Ayes 62. Noes 9. Page 6093.) Ordered to the Senate. |
| Aug 24, 2016 | From committee: Be re-referred to Com. on B., P. & E.D. pursuant to Senate Rule 29.10(d). (Ayes 5. Noes 0.) Re-referred to Com. on B., P. & E.D. |
| Aug 24, 2016 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(d). |
| Aug 25, 2016 | From committee: That the Assembly amendments be concurred in. (Ayes 7. Noes 2. Page 5437.) |
| Aug 25, 2016 | From committee: That the Assembly amendments be concurred in. (Ayes 7. Noes 2.) |
| Aug 25, 2016 | Set for hearing August 25. |
| Aug 29, 2016 | Assembly amendments concurred in. (Ayes 27. Noes 9.) Ordered to engrossing and enrolling. |
| Aug 29, 2016 | Assembly amendments concurred in. (Ayes 28. Noes 9. Page 5473.) Ordered to engrossing and enrolling. |
| Sep 8, 2016 | Enrolled and presented to the Governor at 5 p.m. |
| Apr 29, 2016 | Set for hearing May 9. |
| Feb 19, 2016 | From printer. May be acted upon on or after March 20. |
| Mar 3, 2016 | Referred to Coms. on B., P. & E.D. and ED. |
| Mar 11, 2016 | Set for hearing April 11. |
| Apr 6, 2016 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on B., P. & E.D. |
| Apr 12, 2016 | From committee: Do pass and re-refer to Com. on ED. (Ayes 8. Noes 0. Page 3492.) (April 11). Re-referred to Com. on ED. |
| Apr 12, 2016 | From committee: Do pass and re-refer to Com. on ED. (Ayes 8. Noes 0.) (April 11). Re-referred to Com. on ED. |
| Apr 13, 2016 | Set for hearing April 20. |
| Apr 20, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0. Page 3607.) (April 20). Re-referred to Com. on APPR. |
| Apr 20, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (April 20). Re-referred to Com. on APPR. |
| Feb 18, 2016 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| May 9, 2016 | May 9 hearing: Placed on APPR. suspense file. |
| May 20, 2016 | Set for hearing May 27. |
| May 27, 2016 | From committee: Do pass. (Ayes 7. Noes 0. Page 4005.) (May 27). |
| May 27, 2016 | From committee: Do pass. (Ayes 7. Noes 0.) (May 27). |
| May 27, 2016 | Read second time. Ordered to third reading. |
| May 31, 2016 | Read third time. Passed. (Ayes 37. Noes 0. Page 4048.) Ordered to the Assembly. |
| May 31, 2016 | Read third time. Passed. (Ayes 37. Noes 0.) Ordered to the Assembly. |
| Jun 1, 2016 | In Assembly. Read first time. Held at Desk. |
| Jun 6, 2016 | Referred to Coms. on HIGHER ED. and B. & P. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 29, 2016 | Unfinished Business SB1192 Hill Concurrence | Senate Floor |
Passed |
|
| Aug 25, 2016 | That the Assembly amendments be concurred in | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
|
| Aug 23, 2016 | SB 1192 Hill Senate Third Reading By MEDINA | Assembly Floor |
Passed |
|
| Aug 19, 2016 | SB 1192 Hill Senate Third Reading Amendment Set #1 | Assembly Floor |
Passed |
|
| Aug 11, 2016 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 28, 2016 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Business and Professions |
Passed |
|
| Jun 14, 2016 | Do pass as amended and be re-referred to the Committee on [Business and Professions] | Assembly Standing Committee on Higher Education |
Passed |
|
| May 31, 2016 | Senate 3rd Reading SB1192 Hill | Senate Floor |
Passed |
|
| May 27, 2016 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| May 9, 2016 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 20, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Education |
Passed |
|
| Apr 11, 2016 | Do pass, but first be re-referred to the Committee on [Education] | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Association Of Private Postsecondary Schools | ** Support | May 31, 2016 |
| Center for Public Interest Law | ** Support | Aug 25, 2016 |
| Children's Advocacy Institute | ** Support | Aug 25, 2016 |
| Consumer Federation Of California | ** Support | Aug 25, 2016 |
| East Bay Community Law Center | ** Support | Jun 28, 2016 |
| Housing and Economic Rights Advocates | ** Support | Aug 25, 2016 |
| Legal Aid Foundation of Los Angeles | ** Support | Jun 28, 2016 |
| Professional Beauty Federation of California | ** Against | Jun 28, 2016 |
| Public Advocates | ** Support | Jun 28, 2016 |
| Public Counsel | ** Support | Aug 25, 2016 |
| Public Counsel, Public Law Center | ** Support | Aug 25, 2016 |
| Public Law Center | ** Support | Aug 25, 2016 |
| University of Phoenix | ** Support | May 31, 2016 |
| Veterans Legal Clinic | ** Support | Aug 25, 2016 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
UNFINISHED BUSINESS
Bill No: SB 1192
:
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-0, 4/11/16
AYES: Hill, Berryhill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski
NO VOTE RECORDED: Bates
SENATE EDUCATION COMMITTEE: 9-0, 4/20/16
AYES: Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 7-2, 8/25/16 (pursuant to Senate Rule 29.10)
AYES: Hill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski
NOES: Bates, Gaines
SENATE FLOOR: 37-0, 5/31/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Leno, Leyva, Liu, McGuire, Mendoza, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Lara, Mitchell, Runner
ASSEMBLY FLOOR: 62-9, 8/23/16 - See last page for vote
DIGEST: This bill makes various changes to the California Private Postsecondary Education Act (Act) of 2009 intended to improve the effectiveness of the Bureau for Private Postsecondary Education (BPPE or Bureau) and opportunities for student success and extends the Act and BPPE’s operations for four years.
Assembly Amendments rewrite the provisions of the bill as it was approved by the Senate.
ANALYSIS: Existing law establishes the Act until January 1, 2017, and requires BPPE within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions, programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act to include closure of an institution/school, if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and the BPPE is required to administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code § 94800 et seq.)
This bill:
- Requires the DCA director to receive complaints from students related to BPPE’S performance of its responsibilities, including concerns related to the administration of the STRF.
- Requires the director to include in his or her bi-annual report to the Legislature a summary of information received under 1) above, including the total number of student complaints received, the general nature of these complaints, and the outcome of these student complaints.
- Requires an out of state online institution to comply with specified provisions, including registering with the BPPE, with registrations valid for two years; authorizes BPPE to adopt emergency regulations to establish an application process; requires an out-of-state institution to pay an application fee of $1500; specifies that an institution that fails to comply is not authorized to operate in this state.
- Removes two positions from the BPPE Advisory Committee (Advisory Committee) and specifies that a quorum be comprised of a majority of those appointed members; authorizes the chairs of policy committees of the Senate and Assembly with jurisdiction over legislation relating to the BPPE to designate a representative to attend the Advisory Committee meetings if he or she is unable to attend; and requires the Chief of the Office of Student Assistance and Relief (OSAR) to attend and report at all Advisory Committee meetings.
- Extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by USDE to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Requires, during the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the STRF of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being “paid in full” when negotiating student loan obligations with loan servicers or debt holders; and limits the timeframe for a written application to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
- Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action.
- Requires institutions to notify BPPE of investigations by other governmental agencies, as specified.
- Reduces the annual fee calculation from 0.75 percent to 0.45 percent of an institution's revenue derived from California students, increases the annual fee cap from $25,000 to $60,000, establishes the annual fee calculation for branch campuses and establishes an overall cap for institutions of $750,000.
- Establishes legislative intent that the fees in 12) above be evaluated in the 2017-18 state Budget process and, if necessary, adjusted by subsequent legislation based upon the information provided to the Legislature by DCA and the BPPE. Provides that the annual fee calculation shall automatically increase to 0.55 percent on July 1, 2018, in the absence of legislative action.
- Establishes the OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of CCI and to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that a Chief will be appointed by the director of DCA.
- Extends the BPPE sunset date from January 1, 2017, to January 1, 2021.
- Makes various technical changes.
Background
This bill is one a number of “sunset bills” the author is sponsoring this year. According to the author, this bill is necessary to make changes to the Act in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs which are approved in a timely manner, while also making sure a robust government structure prevents predatory practices and promotes student success. According to the author, the focus of any conversation about the Bureau and the Act should be about finding balance between a thoughtful regulatory structure that allows good schools to thrive while at the same time establishing meaningful opportunities for students. The author notes that “we must continue to ensure that the Californians working to better their lives through education and skills based training have some confidence in the quality of education and training they receive. It is also important for us to find ways to increase accountability for California students, as well as for the significant amount of public and private resources spent on educational and training endeavors.” According to the author, most significantly, it is important to ensure that students are provided proper recourse through the Bureau and the vast array of tools the Bureau has to help students in the event that they are not provided all of the opportunities they were promised.
Bureau for Private Postsecondary Education. The BPPE is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. Established by AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the bill took effect January 1, 2010, to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law.
2015-16 sunset review. Beginning in 2015, the Senate Business and Professions Committee and the Assembly Business and Professions Committee (Committees) conducted joint oversight hearings to review 12 regulatory entities. The Committees conducted two hearings in March and joined with the Senate Committee on Education and Assembly Committee on Higher Education to review BPPE. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees and which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year.
In response to concerns that the BPPE has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and BPPE regulations, but has not focused similar efforts on student outreach to inform students about the BPPE’s work and available recourse for students, this bill establishes an OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of CCI and to serve as a primary point of contact to address the needs of private postsecondary education students. This bill also requires the director of the DCA to receive complaints from consumers concerning student concerns related to BPPE’S performance of its responsibilities, including concerns related to the administration of the STRF and requires the director to include in his or her bi-annual report to the Legislature a summary of information received under This bill 1) above, including the total number of student complaints received, the general nature of these complaints, and the outcome of these student complaints. The bill also authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the STRF of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being “paid in full” when negotiating student loan obligations with loan servicers or debt holders; and, limits the timeframe for a written application that to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
In response to concerns about the ability of students enrolled at a California campus of CCI when it abruptly closed in 2015 to make their lives whole, this bill provides that a student who was enrolled at a California campus of CCI or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
In response to concerns that California students enrolled in distance education programs may not be protected under provisions in the Act, this bill requires an out of state online institution to comply with specified provisions, including registering with the BPPE, with registrations valid for two years; authorizes BPPE to adopt emergency regulations to establish an application process; requires an out-of-state institution to pay an application fee of $1,500, specifies that an institution that fails to comply is not authorized to operate in this state.
In response to opportunities to strengthen the Act to ensure students receive training necessary for employment and licensure, this bill requires, during the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
In response to issues remaining about concerns that unaccredited degree granting programs may not be able to meet current statutory requirements for accreditation, this bill extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by USDE to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
In response to issues raised about unlicensed activity, compliance inspections conducted by BPPE, the BPPE’s complaint investigations backlog and enforcement problems, this bill increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000, authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action and requires institutions to notify BPPE of investigations by other governmental agencies, as specified.
In response to concerns that the Bureau lacks adequate resources to effectively perform its duties, since the BPPE’s fee were established by AB 48 and have not been adjusted since the BPPE became operative in 2010, and that the current fee structure is disparate, this bill reduces the annual fee calculation from 0.75 percent to 0.45 percent of an institution's revenue derived from California students, increases the annual fee cap from $25,000 to $60,000, establishes the annual fee calculation for branch campuses and establishes an overall cap for institutions of $750,000. While this change will result in an increase for a school earning tens of millions of dollars, that school will pay a smaller percent of revenue than they are today while a small school will pay thousands of dollars less than they are today. Close to 40 percent of schools regulated by BPPE will see a decrease in fees. This bill also establishes legislative intent that the fees above be evaluated in the 2017-18 state Budget process and, if necessary, adjusted by subsequent legislation based upon the information provided to the Legislature by DCA and the BPPE. This bill provides that the annual fee calculation shall automatically increase to 0.55 percent on July 1, 2018, in the absence of legislative action.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Assembly Appropriations Committee, the BPPE estimates costs of approximately $170,000 related to out-of-state institutions registering with the Bureau, ongoing costs of $600,000 for six positions to fulfill the new OSAR’s responsibilities, an estimated STRF payout of almost $1.1 million, $1 million in one-time moving costs and $250,000 annually in increased rental charges. The Bureau’s revenue would increase by about $300,000 per year as a result of the increase in the fine from $50,000 to $100,000 for operating an institution without proper approval to operate. At the time of the Appropriations Committee analysis, this bill did not include the fee adjustments as currently proposed, which are intended to provide the Bureau with the resources it needs to effectively operate.
Center for Public Interest Law
Children’s Advocacy Institute
Consumer Federation of California
Housing and Economic Rights Advocates
Public Counsel
Public Law Center
SEIU California
Veterans Legal Clinic
OPPOSITION: (Verified 8/25/16)
None received
ARGUMENTS IN SUPPORT: A coalition of organizations including the Center for Public Interest Law, Children’s Advocacy Institute, Consumer Federation of California, Housing and Economic Rights Advocates, Public Counsel, Public Law Center, SEIU California, and Veterans Legal Clinic are supportive of this bill. The groups note that “Californians have been disproportionately harmed by for-profit education businesses that fail to deliver on their promises to students. Strong state oversight will help protect students, so that fewer Californians are harmed in the future. A vigorous BPPE is needed more than ever.”
ASSEMBLY FLOOR: 62-9, 8/23/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Roger Hernández, Holden, Irwin, Jones-Sawyer, Kim, Lackey, Levine, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Weber, Wilk, Williams, Wood, Rendon
NOES: Travis Allen, Brough, Chang, Beth Gaines, Gallagher, Grove, Harper, Melendez, Obernolte
NO VOTE RECORDED: Bigelow, Dahle, Jones, Linder, Mayes, Olsen, Patterson, Steinorth, Waldron
8/25/16 18:00:23
**** END ****
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1192 Hearing Date: August 25, 2016
Author: | Hill | ||
Version: |
| ||
Urgency: | Fiscal: | ||
Consultant: | |||
Subject: Private postsecondary education: California Private Postsecondary Education Act of 2009
SUMMARY:
Makes various changes to the California Private Postsecondary Education Act of 2009 intended to improve the effectiveness of the Bureau for Private Postsecondary Education and opportunities for student success.
NOTE: The Assembly amendments create a new bill and this measure has been referred to the Committee pursuant to Senate Rule 29.10 (d) for consideration. The Committee may, by a vote of the majority, either: (1) hold the bill, or (2) return the bill to the Senate floor for consideration of the bill as amended in the Assembly.
Existing law: Establishes the California Private Postsecondary Education Act of 2009 (Act) until January 1, 2017, and requires the Bureau for Private Postsecondary Education (BPPE or Bureau) within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions, programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act to include closure of an institution/school, if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and the BPPE is required to administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code § 94800 et seq.)
This bill:
- Requires the DCA director to receive complaints from students related to BPPE’S performance of its responsibilities, including concerns related to the administration of the STRF.
- Requires the director to include in his or her bi-annual report to the Legislature a summary of information received under 1) above, including the total number of student complaints received, the general nature of these complaints, and the outcome of these student complaints.
- Requires an out of state online institution to comply with specified provisions, including registering with the BPPE, with registrations valid for two years; authorizes BPPE to adopt emergency regulations to establish an application process; requires an out-of-state institution to pay an application fee of $1500; specifies that an institution that fails to comply is not authorized to operate in this state.
- Removes two positions from the BPPE Advisory Committee (Advisory Committee) and specifies that a quorum be comprised of a majority of those appointed members; authorizes the chairs of policy committees of the Senate and Assembly with jurisdiction over legislation relating to the BPPE to designate a representative to attend the Advisory Committee meetings if he or she is unable to attend; and requires the Chief of the Office of Student Assistance and Relief (OSAR) to attend and report at all Advisory Committee meetings.
- Extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by USDE to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Requires, during the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the STRF of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being “paid in full” when negotiating student loan obligations with loan servicers or debt holders; and limits the timeframe for a written application to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
- Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action.
- Requires institutions to notify BPPE of investigations by other governmental agencies, as specified.
- Reduces the annual fee calculation from 0.75 percent to 0.45 percent of an institution's revenue derived from California students, increases the annual fee cap from $25,000 to $60,000, establishes the annual fee calculation for branch campuses and establishes an overall cap for institutions of $750,000.
- Establishes Legislative intent that the fees in 12) above be evaluated in the 2017-18 state budget process and, if necessary, adjusted by subsequent legislation based upon the information provided to the Legislature by DCA and the BPPE. Provides that the annual fee calculation shall automatically increase to 0.55 percent on July 1, 2018, in the absence of Legislative action.
- Establishes the OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of CCI and to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that a Chief will be appointed by the director of DCA.
- Extends the BPPE sunset date from January 1, 2017 to January 1, 2021.
- Makes various technical changes.
FISCAL EFFECT:
This bill is keyed fiscal by Legislative Counsel. According to an Assembly Committee on Appropriations analysis dated August 1, 2016, the BPPE estimates approximately 500 out-of-state institutions will register with the Bureau to provide online education to California students, resulting in ongoing cost of around $170,000 for two positions to register these institutions and to work with students and the out-of-state institution’s home regulatory body or accrediting agency to ensure compliance with the Act. The analysis notes ongoing costs of $600,000 for six positions to fulfill the new OSAR’s responsibilities. According to the analysis, the Bureau estimates approximately 9,000 Heald and 117 Everest Online students were impacted by the CCI closure and the Bureau indicates that approximately eight percent of those students attending Corinthian institutions (Wyotech and Everest) regulated by the Bureau submitted a STRF claim, with 39 percent of those claims approved resulting in an average payout of $3,800. Assuming the same application and approval rates for all students, the Bureau would receive 720 STRF claims, of which 39 percent (281 cases) would be approved, for a total STRF payout of almost $1.1 million. The analysis notes that the number of applications and approvals could be larger. BPPE indicates that the additional positions described above will require larger office space, resulting in
$1 million in one-time moving costs and $250,000 annually in increased rental charges. The analysis noted that the Bureau’s revenue would increase by about $300,000 per year as a result of the increase in the fine from $50,000 to $100,000 for operating an institution without proper approval to operate. At the time of the Appropriations Committee analysis, the bill did not include the fee adjustments as currently proposed, which are intended to provide the Bureau with the resources it needs to effectively operate.
COMMENTS:
- Purpose. This bill is sponsored by the Author, and is one a number of “sunset bills” the Author is sponsoring this year. According to the Author, this bill is necessary to make changes to the Act in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs which are approved in a timely manner, while also making sure a robust government structure prevents predatory practices and promotes student success. According to the Author, the focus of any conversation about the Bureau and the Act should be about finding balance between a thoughtful regulatory structure that allows good schools to thrive while at the same time establishing meaningful opportunities for students. The Author notes that “we must continue to ensure that the Californians working to better their lives through education and skills based training have some confidence in the quality of education and training they receive. It is also important for us to find ways to increase accountability for California students, as well as for the significant amount of public and private resources spent on educational and training endeavors.” According to the Author, most significantly, it is important to ensure that students are provided proper recourse through the Bureau and the vast array of tools the Bureau has to help students in the event that they are not provided all of the opportunities they were promised.
- Oversight Hearings and Sunset Review of Licensing Boards and Programs. Beginning in 2015, the Senate Business and Professions Committee and the Assembly Business and Professions Committee (Committees) conducted joint oversight hearings to review 12 regulatory entities: DCA, Acupuncture Board, Board of Behavioral Sciences, California Massage Therapy Association, Court Reporters Board, Board of Pharmacy, Physician Assistant Board, Board of Podiatric Medicine, BPPE, Board of Psychology, Bureau of Real Estate, Bureau of Real Estate Appraisers, and Veterinary Medical Board
The Committees conducted two hearings in March and joined with the Senate Committee on Education and Assembly Committee on Higher Education to review BPPE. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees and which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year.
- Background on BPPE. The BPPE is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. Established by AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the bill took effect January 1, 2010, to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law.
AB 48 established BPPE’s authority to regulate private postsecondary institutions and enforce the provisions of the new Act and to respond to the major problems with the former laws governing the industry in California. The Act provides for prohibitions on false advertising and inappropriate recruiting and requires disclosure of critical information to students such as program outlines, graduation and job placement rates, and license examination information, and ensures colleges justify those figures. The Act also provides BPPE with enforcement powers necessary to protect consumers. The Act directs BPPE to:
- Create a structure that provides an appropriate level of oversight, including approval of private postsecondary educational institutions and programs;
- Establish minimum operating standards for California private postsecondary educational institutions to ensure quality education for students;
- Provide students a meaningful opportunity to have their complaints resolved;
- Ensure that private postsecondary educational institutions offer accurate information to prospective students on school and student performance; and,
- Ensure that all stakeholders have a voice and are heard in the operations and rulemaking process of BPPE.
BPPE is also tasked with actively investigating and combatting unlicensed activity, administering the STRF, and conducting outreach and education activities for students and private postsecondary educational institutions within the state.
- Review of the BPPE – Issues Identified and Recommended Changes. Private postsecondary institutions play an important role in ensuring access to higher educational opportunities for California’s students. The landscape of schools that are now regulated under BPPE, and that have become central in California’s discussion of private postsecondary education, has evolved significantly in recent decades. The smaller, independent for-profit institutions that made up the bulk of the former-Bureau’s licensee population have shifted. Today, a large number of California students are being served by multi-campus, publicly-traded institutions with a national presence. These institutions also receive significant public funds; under federal law, up to 90 percent of revenues can come from the Title IV financial aid program. In 2009-10, nationally, for-profit institutions received $32 billion in Title IV grants and loans. High-profile state and federal investigations have revealed deceptive and illegal practices by some institutions within the sector. Federal regulators responded by increasing student outcome and institutional accountability measures. Specifically, in California, BPPE’s approval can enable these institutions to access the Title IV program; USDE relies on the Bureau to provide oversight and student protection.
Students, the public, and quality private postsecondary educational institutions are best served by a well-functioning regulatory entity that effectively enforces the Act. The Bureau has faced significant difficulties in implementing the law. It is important that California’s approval and oversight of an institution assures minimum quality and student protections.
The following are some of the major issues pertaining to BPPE along with background information concerning the particular issue. Recommendations were made by Committee staff regarding the particular issue areas that needed to be addressed.
- Issue: Outreach/School Closures and STRF.
Background: The Bureau has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and Bureau regulations. The Bureau does not appear to focus similar efforts on student outreach to inform students about the Bureau’s work and available recourse for students.
The Bureau has a number of new tools it has employed since the prior sunset review to communicate more directly with schools, including offering workshops once a month to assist institutions in completing applications for approval throughout the state as well as webinars and videos to help schools provide accurate information to the Bureau. These proactive efforts have helped reduce the licensing backlog and are likely a means by which institutions have increased awareness of Bureau requirements and activities.
It does not appear that the Bureau focuses the same effort and resources on proactive outreach to students. Based on the large scale closures during the past year and increased exposure to students about BPPE and the Act, it does not appear that students attending Bureau regulated schools are as aware of the Bureau and options available provided by BPPE. Some students may first interact with the Bureau during site visits amidst an abrupt closure of their school and while BPPE staff have been swift in trying to make contact with students at these school sites, it does not appear that the Bureau utilizes student information collected in a proactive way to then continue communicating with students about their options for recourse. Staff provides students STRF applications during these school closure visits, but the onus is then on students to contact the Bureau again for additional follow up. While BPPE reported during the CCI closure that it made contact with almost 80 percent of Wyotech and Everest students who would be STRF eligible, earlier this year it had received only about 300 applications. BPPE also reported that it has received over 10,000 calls related to the CCI closure and while the Bureau notes that it documents student contact information for students who attended schools under the Bureau’s jurisdiction, it does not appear that contact information is tracked for all students who contact BPPE.
The Committees were interested in providing a simple, streamlined process to students in the wake of a school closure and proposed in AB 573 (Medina, 2015) first a closed schools task force and then a single state point of contact to lead the synchronization of other state agencies with a role in assisting students, monitoring regulatory efforts at the state and federal level and be in a position to work with partner agencies to establish key criteria for determining the appropriate steps the state should take to protect students, particularly in light of abrupt school closures.
The STRF is an important tool to assist harmed students. STRF, administered by the BPPE, exists to relieve or mitigate economic loss suffered by students enrolled at non-exempt private postsecondary education institutions due to the institutions' closure, the institutions' failure to pay refunds or reimburse loan proceeds, or the institutions' failure to pay students' restitution award for a violation of the Act. Students enrolled in institutions that are exempt from, or not covered by the Act are not eligible for STRF. Due to broad exemptions in the Act, over 13,000 students enrolled in Heald College (owned by CCI) at the time of the institution’s unlawful closure were not eligible for STRF. Further, as a result of the requirement in the Act that schools under BPPE oversight have a physical presence in the state, a number of California students enrolled in Everest Online (owned by CCI but housed outside of California) are not eligible for STRF. Several other large, publicly traded colleges are now under regulatory, financial, and legal pressure similar to that facing CCI prior to closure.
Recommendation and Proposed Statutory Change: The Committees may wish to explore establishing a single point of contact for prospective and current students of private postsecondary education institutions. The Committees may wish to extend the timeframe in which a student may file a STRF claim. The Committees may wish to establish an independent student advocate to work with nonprofit community organizations, to provide outreach and support to students that may be eligible for state or federal relief, and to make recommendations to the DCA Director regarding improving student outreach and protection. The Committees may wish to require institutions, including exempt or online institutions) to participate in STRF and/or obtain a surety bond to protect against unlawful activities or closures. The Committees may wish to ensure BPPE has clear authority to help students harmed by illegal or deceptive school practices; for example, to order institutional refunds/restitution to students who have been defrauded or to require institutions to cancel student loan debt when the institution operates as a private lender.
This bill makes the following changes to the Act related to outreach, school closures and STRF:
Requires the director of the DCA to receive complaints from consumers concerning student concerns related to BPPE’S performance of its responsibilities, including concerns related to the administration of the STRF.
Requires the director to include in his or her bi-annual report to the Legislature a summary of information received under 1) above, including the total number of student complaints received, the general nature of these complaints, and the outcome of these student complaints.
Requires an out of state online institution to comply with specified provisions, including registering with the BPPE, with registrations valid for two years; authorizes BPPE to adopt emergency regulations to establish an application process; requires an out-of-state institution to pay an application fee of $1500, specifies that an institution that fails to comply is not authorized to operate in this state.
Authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the STRF of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being “paid in full” when negotiating student loan obligations with loan servicers or debt holders; and, limits the timeframe for a written application that to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
Establishes an OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of CCI and to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that a Chief will be appointed by the director of DCA.
- Issue: Relationship of the Bureau to Other Regulatory Entities.
Background: The Act provides that if an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in California, the institution must have educational program approval from the appropriate state licensing agency for any student who completes that program to sit for any required licensure exam. The law is intended to deal with the issue of students completing an educational program specifically designed to prepare them for certain occupations that in reality does not meet any requirements for education required for licensure.
As the Bureau noted during the prior review, the Act may also be strengthened to ensure students receive training necessary for employment and licensure. Specifically, the definition of “licensure” contained in Education Code section 94848 does not specify certification or registration, but if these are required for a given profession, specific language may be included in this definition. Also, in some professions there are no requirements for official recognition but there may be preferred certification requirements. In those cases, there should be stronger disclosures to students regarding employment impediments they may encounter. For example, ultrasound technicians are not required to graduate from an institution that is accredited by the American Registry for Diagnostic Medical Sonography (ARDMS) but many employers will not hire students who have not graduated from an ARDMS accredited institution.
Recommendation and Proposed Statutory Change: The Committees may wish to amend the Act to clarify the definition of licensure and enhance disclosures to students regarding necessary requirements for training programs.
This bill makes the following changes to the Act related to completion of an education or training program designed to prepare graduates for employment in a profession, occupation or trade:
Requires, during the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Issue: Unaccredited Degree Granting Programs.
Background: During the prior sunset review, the Committees were significantly concerned about the ongoing approval by BPPE of institutions that offer degrees but are not accredited. California is one of few states to continue to allow unaccredited degree granting programs, with approximately 140 approved institutions offering unaccredited degrees. A 2012 New York Times article outlined the experience of students attending these institutions, including one seeking a bachelor’s degree, who had never spoken to a teacher but instead received an email package of reading materials to read with an open choice multiple-choice exam. The practice of offering degrees primarily online and primarily targeted to foreign students has long been at the heart of the state’s role as the diploma mill capital of the world.
Some career fields and licensing agencies require degrees from accredited colleges; this is especially true in professions like education and health care, where certification or licensure is a pre-requisite for employment. Although California licensure requirements in the health care field vary, many practitioners must obtain their required degrees from accredited institutions or institutions approved by their respective licensing boards. While the accrediting process is not perfect, as highlighted by the unlawful activities of institutions accredited by some accrediting agencies, and does not focus on fair business practices that can impact a student’s success, accreditation is designed to provide a baseline measure of the quality of a particularly educational program.
In response to these concerns and as a means of better serving students while aiming to decrease the Bureau’s significant workload associated with reviewing unaccredited degree granting institutions, SB 1247 (Lieu, Chapter 840, Statutes of 2014) amended the Act to require that degree granting programs be accredited. Institutions offering a degree that seek BPPE approval are now required to either be accredited by an accrediting agency recognized by the USDE to offer the degree(s) or have an accreditation plan, approved by BPPE, for the institution to become fully accredited within five years of the BPPE issuance of a provisional approval to operate. For these schools, the Act requires compliance with certain student disclosures about accreditation, review by a visiting committee, and degree limitation requirements. SB 1247 also outlined a process for institutions that are currently approved by BPPE and offer degrees to submit an accreditation plan to the Bureau by July 1, 2015, to obtain pre-accreditation by July 1, 2017, to obtain accreditation by July 1, 2020, and to comply with various student disclosure and visiting committee review requirements.
It appears that some authority to provide extensions for meeting deadlines is still desirable, as the Bureau’s Statement of Reasons provided to the Office of Administrative Law in support of the regulations for implementing the accreditation requirement notes that “a scenario, in which a program was very close, but not quite to the stated goal, was envisioned, where the parties could easily agree that the program would meet the requirement, but it needed a couple more months. In short, substantial performance could be demonstrated. However, extensions were rejected as the statute states that programs failing to meet the deadlines must be automatically suspended, which allows for no other alternatives.”
Unaccredited degree granting institutions have also expressed concerns about the timeframes established in the law to become accrediting, noting that the 2020 deadline is too short.
Recommendation and Proposed Statutory Change: The Committees may wish to provide the Bureau discretionary authority, as outlined in previous version of SB 1247, to extend the deadline by which a school must be accredited, according to certain measures showing meaningful progress toward accreditation.
This bill makes the following changes to the Act related to unaccredited degree granting institutions:
Extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by USDE to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Issue: Unlicensed Activity/Compliance Inspections/BPPE Investigations Backlog and Enforcement Powers.
Background: The Act provides that BPPE’s primary mission is to protect students. One of the ways BPPE achieves this objective is through announced and unannounced compliance inspections that ensure institutions are meeting the minimum operating standards outlined in the Act and regulations. Upon conclusion of a compliance inspection, institutions are issued a notice to comply for any “minor violations” identified during the inspection. Violations that are not “minor" are referred to the complaint investigations unit for further investigation. Committee staff understands that this internal referral occurs because BPPE believes, unlike most other DCA boards and bureaus, it does not currently have the authority to issue a citation for more serious violations identified during the compliance inspection.
Information regarding pending investigations is not made available to the public until a citation or accusation has been issued by the BPPE. This means that students seeking information regarding an institution may be provided inaccurate information regarding an institution's compliance with the law. For example, 13 unannounced compliance inspections were completed in 2015 of Everest and WyoTech (owned by CCI) campuses. According to the compliance inspection outcome data posted on the BPPE website, no minor violations were detected at any of the inspected campuses. These compliance inspections occurred after the AG, and a number of other states and federal agencies, filed charges against CCI for unlawful practices.
The degree to which compliance inspections lead to investigations that result in the issuance of a citation and/or accusation is also unclear; BPPE does not report data on this point. Further, BPPE staff from different units generate complaints and it appears that this internal referral process contributes to the current complaints backlog. According to BPPE data, by 2015 year-end, 32 percent of the 1,045 pending complaints were internal referrals.
The USDE establishes that states are responsible for providing primary protection of consumers and students attending postsecondary educational institutions. BPPE approval not only authorizes institutions to operate and serve students in California, it can also, as outlined above, enable institutions to receive public funds through the federal Title IV financial aid program.
In the last few years, a number of postsecondary educational corporations have been accused by federal and state regulators of engaging in misconduct and fraud. Often, these actions originate from public complaints. The BPPE faces a growing complaint and investigation backlog that may significantly reduce California’s ability to protect students and ensure appropriate use of taxpayer funds.
SB 1247 directed BPPE to consult with the Advisory Committee and adopt regulations to establish complaint priorities. BPPE was required specifically to prioritize complaints related to unlawful, unfair, or fraudulent business practices and institutions making unfair, deceptive, or misleading statements regarding educational programs, placement, loans, tuition and fees, and other outlined areas. BPPE reports the Advisory Committee has discussed new regulations regarding complaint prioritization, and the proposed regulations are currently in the internal review process.
Currently, BPPE reports that it is prioritizing complaints based on a risk assessment score that reviews the following criteria:
- Allegations of complaint
- Population of surrounding community
- Number of open/closed complaints
- Age of complaint
- Institution status
The risk score is used to categorize the complaint as urgent, high, or routine.
BPPE appears to have made some progress toward meeting the Legislature’s directives contained in SB 1247; however, increased staffing and complaint prioritization changes have not reduced the BPPE complaint backlog. Further, as the details of complaints and resolutions are not made available to the Legislature, it is unclear if complaints are being acted upon properly in order to enforce the Act and protect students.
Recommendation and Proposed Statutory Change: To reduce the complaints backlog associated with internal referrals resulting from compliance inspections, the Committees may wish to amend the Act to authorize the Bureau, consistent with all due process requirements, to issue citations for non-minor violations detected during a compliance inspection. To ensure BPPE compliance inspections are properly identifying and responding to institutional violations of law, the Committees may wish to require an independent review and report on the adequacy of BPPE compliance inspections. The Committees may wish to require an independent review of complaint prioritization and investigation and resolution procedures to ensure BPPE is using all authorized tools to mitigate harm to students.
This bill makes the following changes to the Act related to enforcement:
Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action.
Requires institutions to notify BPPE of investigations by other governmental agencies, as specified.
- Issue: Fees.
Background: BPPE is funded through regulatory fees and license fees. The Act requires institutions to pay application fees and annual institutional fees to BPPE, which are deposited in the Private Postsecondary Education Administration Fund. The Bureau’s fees were established by AB 48 and have not been adjusted since BPPE became operative in 2010.
The majority of BPPE funding is derived from annual fees. Pursuant to AB 48, annual fees for a main campus are set at 0.75 percent of the institution's annual California revenues (capped at $25,000) and $1,000 for each branch location. Institutions are only authorized to have one "main" campus; all other campuses are designated as branch campuses or satellite locations. For large institutions, annual fees can be manipulated based on the BPPE-approved organizational structure. For example, if a corporation owns 26 colleges, and is approved by the Bureau as one “main” and 25 branch locations, it could pay $50,000 annually. If that same corporation enters the bureau with 4 main colleges and 22 branch locations, it could pay $122,000 annually. Additionally, because of the cap, an institution with annual revenues of $4 million will pay the same $25,000 annual fee for their main location as an institution with annual revenues of $40 million.
The appropriateness of fees collected by the Bureau has been the source of discussion since AB 48 was introduced. The former BPPVE was consistently insolvent and its fee schedule was questioned in numerous reports and audits. Fees were set in AB 48 to attempt to prevent history from repeating itself and arm the Bureau with the financial resources necessary to do its job. The California Association of Private Postsecondary Schools (CAPPS) has weighed in on this issue and has especially been concerned about the high annual institution fee for small-to-medium sized institutions, lack of “fiscal calculations done by the Governor or the Legislature about how many fees were actually required to operate the BPPE. There was no consideration that the overall number of institutions governed by this statute were shrinking…There are a number of schools paying over $100,000 a year in annual fees alone.” CAPPS has specifically referenced the disparity in requiring each “main” campus to pay an annual fee.
BPPE is projected to have a fund reserve of just 2.7 months at the end of FY 2015/16. In a March 2015 letter to the Legislature, the Director of the DCA noted that “the Bureau is undergoing a major change of operations and staffing levels…Based on the unpredictable nature of implementation, it would be premature to recommend a change to the fee structure at this time.” The Advisory Committee discussed the current fee structure at an August 2015 meeting and again at a November 2015 meeting. At its February 2016 Advisory Committee meeting, the Bureau indicated it was in the process of contracting to have a fee audit conducted “as a means of making decisions moving forward”.
Recommendation and Proposed Statutory Change: The Bureau and DCA should report on the long term resources necessary for the Bureau to effectively regulate institutions and protect students moving forward.
This bill makes the following changes to the Act related to fees:
Reduces the annual fee calculation from 0.75 percent to 0.45 percent of an institution's revenue derived from California students, increases the annual fee cap from $25,000 to $60,000, establishes the annual fee calculation for branch campuses and establishes an overall cap for institutions of $750,000. While this change will result in an increase for a school earning tens of millions of dollars, that school will pay a smaller percent of revenue than they are today while a small school will pay thousands of dollars less than they are today. Close to 40 percent of schools regulated by BPPE will see a decrease in fees.
Establishes Legislative intent that the fees above be evaluated in the 2017-18 state budget process and, if necessary, adjusted by subsequent legislation based upon the information provided to the Legislature by DCA and the BPPE. Provides that the annual fee calculation shall automatically increase to 0.55 percent on July 1, 2018, in the absence of Legislative action.
- Comments from Stakeholders on the Current Version of SB 1192. A coalition of organizations including the Center for Public Interest Law, Children’s Advocacy Institute, Consumer Federation of California, Housing and Economic Rights Advocates, Public Counsel, Public Law Center, SEIU California, and Veterans Legal Clinic are supportive of this bill. The groups note that “Californians have been disproportionately harmed by for-profit education businesses that fail to deliver on their promises to students. Strong state oversight will help protect students, so that fewer Californians are harmed in the future. A vigorous BPPE is needed more than ever.”
SUPPORT AND OPPOSITION:
Support:
Center for Public Interest Law
Children’s Advocacy Institute
Consumer Federation of California
Housing and Economic Rights Advocates
Public Counsel, Public Law Center
SEIU California
Veterans Legal Clinic
Opposition:
None on file as of August 24, 2016.
-- END --
SENATE THIRD READING
STR Bill Id:SB 1192
Author:(Hill)
As Amended Ver:August 19, 2016
Majority vote
SENATE VOTE: 37-0
Committee | Votes | Ayes | Noes |
Higher Education | 10-0 | Medina, Bloom, Chávez, Irwin, Jones-Sawyer, Levine, Low, Santiago, Weber, Williams | |
Business & Professions | 12-2 | Salas, Bloom, Campos, Chávez, Dodd, Eggman, Gomez, Holden, Jones, Mullin, Ting, Wood | Baker, Gatto |
Appropriations | 16-1 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Eduardo Garcia, Holden, Obernolte, Quirk, Santiago, Weber, Wood, McCarty | Gallagher |
SUMMARY: Extends the sunset date and provides for various changes to the California Private Postsecondary Education Act of 2009 (Act) and the oversight of the Act provided by the Bureau for Private Postsecondary Education (BPPE). Specifically, this bill:
- Requires the director of the Department of Consumer Affairs to receive complaints from consumers concerning student concerns related to the Bureau for Private Postsecondary Education's (bureau) performance of its responsibilities, including concerns related to the administration of the Student Tuition Recovery Fund (STRF).
- Requires the director to include in his or her bi-annual report to the Legislature a summary of information received under 1) above, including the total number of student complaints received, the general nature of these complaints, and the outcome of these student complaints.
- Requires an out of state online institution to comply with specified provisions, including registering with the BPPE, with registrations valid for two years; authorizes BPPE to adopt emergency regulations to establish an application process; requires an out-of-state institution to pay an application fee of $1500, specifies that an institution that fails to comply is not authorized to operate in this state.
- Removes two positions from the Advisory Committee and specifies that a quorum be comprised of a majority of those appointed members; authorizes the chairs of policy committees of the Senate and Assembly with jurisdiction over legislation relating to the BPPE to designate a representative to attend the Advisory Committee meetings if he or she is unable to attend; and, requires the Chief of the Office of Student Assistance and Relief (OSAR) to attend and report at all Advisory Committee meetings.
- Extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by the United States Department of Education to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Requires during the enrollment process that an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the Student Tuition Recovery Fund (STRF) of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being "paid in full" when negotiating student loan obligations with loan servicers or debt holders; and, limits the timeframe for a written application that to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
- Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action.
- Requires institutions to notify BPPE of investigations by other governmental agencies, as specified.
- Reduces the annual fee calculation from 0.75% to 0.45% of an institution's revenue derived from California students, increase the annual fee cap from $25,000 to $60,000; establishes the annual fee calculation for branch campuses; and, establish an overall cap for institutions of $750,000.
- Establishes Legislative intent that the aforementioned fees be evaluated in the 2017-18 state budget process and, if necessary, adjusted by subsequent legislation based upon the information provided to the Legislature by the department and the bureau; however, provides that the annual fee calculation shall automatically increase to .55 on July 1, 2018, in the absence of Legislative action.
- Establishes an OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of Corinthian Colleges, Inc., and to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that a Chief will be appointed by the director of Department of Consumer Affairs (DCA).
- Extends the BPPE sunset date from January 1, 2017 to January 1, 2021.
- Makes various technical changes.
EXISTING LAW: Establishes the Act until January 1, 2017, and requires BPPE, within the DCA to, among other things, review, investigate and approve private postsecondary institutions (or institutions), programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code Section 94800 et. seq.)
FISCAL EFFECT: According to the Assembly Appropriations Committee:
- Out-of-State Registration and Enforcement. The BPPE estimates approximately 500 out-of-state institutions will register with the Bureau to provide online education to California students. Ongoing cost will be around $170,000 for two positions to register these institutions and to work with students and the out-of-state institution's home regulatory body or accrediting agency to ensure compliance with the Act. [BPPE Administration Fund]
- OSAR. Ongoing costs will be $600,000 for six positions to fulfill the new office's responsibilities. [BPPE Administration Fund]
- Corinthian Students. The Bureau estimates it would receive 720 STRF claims, of which 39 percent (281 cases) would be approved, for a total STRF payout of almost $1.1 million [STRF]. The number of applications and approvals could be larger, however, with the assistance provided to nonprofits under contract to OSAR. The Bureau will also require $190,000 for two years for two positions to administer this assistance. [BPPE Administration Fund]
- Office Space. The BPPE indicates that the additional positions described above will require larger office space, resulting in $1 million in one-time moving costs and $250,000 annually in increased rental charges. [BPPE Administration Fund]
- Increased Revenue. Increasing, from $50,000 to $100,000, the fine that may be issued to a person for operating an institution without proper approval to operate will increase revenues by about $300,000 per year to the BPPE Administrative Fund. Restructuring the operating fees will increase annual revenues by $5.3 million.
COMMENTS: Existing law sunsets the Act on January 1, 2017. Legislation is necessary to extend the sunset date of the Act and the oversight provided by the BPPE. On March 28, 2016, the Assembly Higher Education Committee and the Senate Business, Professions and Economic Development Committee were joined by the Senate Education Committee and the Assembly Business and Professions Committee to conduct a Sunset Review hearing of the BPPE. This bill is intended to implement legislative changes as discussed and recommended during the Sunset Review process. Additional information regarding the BPPE and recommended changes to the law can be found in the Background Paper prepared by Committee staff, available on the Committee Web site.
Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960 FN: 0004623
SENATE THIRD READING
STR Bill Id:SB 1192
Author:(Hill)
As Amended Ver:August 15, 2016
Majority vote
SENATE VOTE: 37-0
Committee | Votes | Ayes | Noes |
Higher Education | 10-0 | Medina, Bloom, Chávez, Irwin, Jones-Sawyer, Levine, Low, Santiago, Weber, Williams | |
Business & Professions | 12-2 | Salas, Bloom, Campos, Chávez, Dodd, Eggman, Gomez, Holden, Jones, Mullin, Ting, Wood | Baker, Gatto |
Appropriations | 16-1 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Chang, Daly, Eggman, Eduardo Garcia, Holden, Obernolte, Quirk, Santiago, Weber, Wood, McCarty | Gallagher |
SUMMARY: Provides for various changes to the California Private Postsecondary Education Act of 2009 (Act) and the oversight of the Act provided by the Bureau for Private Postsecondary Education (BPPE). Specifically, this bill:
- Requires an out of state online institution to comply with specified provisions, including registering with the BPPE; authorizes BPPE to adopt emergency regulations for the process and procedure whereby an institution can apply for and obtain registration; specifies that an institution that fails to comply is not authorized to operate in this state.
- Removes two positions from the Advisory Committee and specifies that a quorum be comprised of a majority of those appointed members; authorizes the chairs of policy committees of the Senate and Assembly with jurisdiction over legislation relating to the BPPE to designate a representative to attend the Advisory Committee meetings if he or she is unable to attend; and, requires the Chief of the Office of Student Assistance and Relief (OSAR) to attend and report at all Advisory Committee meetings.
- Extends the sunset date for a degree-granting institution that is not accredited by an accrediting agency recognized by the United States Department of Education to obtain accreditation and provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Requires during the enrollment process that an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Authorizes a student who has obtained legal counsel that resulted in the cancellation of student loans to seek reimbursement from the Student Tuition Recovery Fund (STRF) of services rendered, not to exceed $500; requires BPPE to obtain evidence of student loan debt being "paid in full" when negotiating student loan obligations with loan servicers or debt holders; and, limits the timeframe for a written application that to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF, except that a student whose loan is subsequently revived by a loan holder or debt collector to re-apply for recovery from STRF.
- Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation or pursuing an action.
- Require institutions to notify BPPE of investigations by other governmental agencies, as specified.
- Reduces the annual fee calculation from 0.75% to 0.55% of an institution's revenue derived from California students, increase the annual fee cap from $25,000 to $60,000; establishes the annual fee calculation for branch campuses; and, establish an overall cap for institutions of $750,000.
- Establishes an OSAR to provide outreach and individualized assistance to students impacted by the unlawful activities or closure of a BPPE-approved institution, including support for students affected by the closure of Corinthian Colleges, Inc., and to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that a Chief will be appointed by the director of Department of Consumer Affairs (DCA).
- Extends the BPPE sunset date from January 1, 2017 to January 1, 2021.
- Makes various technical changes.
EXISTING LAW: Establishes the Act until January 1, 2017, and requires BPPE, within the DCA to, among other things, review, investigate and approve private postsecondary institutions (or institutions), programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code Section 94800 et. seq.)
FISCAL EFFECT: According to the Assembly Appropriations Committee:
- Out-of-State Registration and Enforcement. The BPPE estimates approximately 500 out-of-state institutions will register with the Bureau to provide online education to California students. Ongoing cost will be around $170,000 for two positions to register these institutions and to work with students and the out-of-state institution's home regulatory body or accrediting agency to ensure compliance with the Act. [BPPE Administration Fund]
- OSAR. Ongoing costs will be $600,000 for six positions to fulfill the new office's responsibilities. [BPPE Administration Fund]
- Corinthian Students. The Bureau estimates it would receive 720 STRF claims, of which 39 percent (281 cases) would be approved, for a total STRF payout of almost $1.1 million [STRF]. The number of applications and approvals could be larger, however, with the assistance provided to nonprofits under contract to OSAR. The Bureau will also require $190,000 for two years for two positions to administer this assistance. [BPPE Administration Fund]
- Office Space. The BPPE indicates that the additional positions described above will require larger office space, resulting in $1 million in one-time moving costs and $250,000 annually in increased rental charges. [BPPE Administration Fund]
- Increased Revenue. Increasing, from $50,000 to $100,000, the fine that may be issued to a person for operating an institution without proper approval to operate will increase revenues by about $300,000 per year to the BPPE Administrative Fund. Restructuring the operating fees will increase annual revenues by $5.3 million.
COMMENTS: Existing law sunsets the Act on January 1, 2017. Legislation is necessary to extend the sunset date of the Act and the oversight provided by the BPPE. On March 28, 2016, the Assembly Higher Education Committee and the Senate Business, Professions and Economic Development Committee were joined by the Senate Education Committee and the Assembly Business and Professions Committee to conduct a Sunset Review hearing of the BPPE. This bill is intended to implement legislative changes as discussed and recommended during the Sunset Review process. Additional information regarding the BPPE and recommended changes to the law can be found in the Background Paper prepared by Committee staff, available on the Committee Web site.
Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960 FN: 0004251
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SBPCA Bill Id:SB 1192
Author:(Hill) – As Amended Ver:June 16, 2016
Policy Committee: | Higher Education | Vote: | 10 - 0 |
Business and Professions | 12 - 2 | ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill makes numerous changes to the California Private Postsecondary Education Act of 2009, including:
- Requiring a private entity with no physical presence in this state that provides postsecondary education to California students to comply with specified provisions of the Act, including registering with the Bureau for Private Postsecondary Education (BPPE), and requiring the BPPE to adopt regulations for the process and procedure whereby an institution can apply for and obtain registration.
- Increasing the required penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Requiring the Director of the Department of Consumer Affairs (DCA) to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints, and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
- Establishing an Office of Student Assistance and Relief (OSAR), within DCA, to serve as a primary point of contact to address the needs of private postsecondary education students and to administer the Student Tuition Recovery Fund (STRF). The OSAR is to be headed by an ombudsperson appointed by the Director of DCA.
- Establishing a Pilot Program until January 1, 2021, to be administered by the OSAR, to provide grants to community-based organizations to assist students harmed by recent school closures with receiving relief under loan forgiveness and STRF, and appropriates $1.3 million from the STRF for this purpose.
- Providing that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who was enrolled as of June 20, 2014, and meets all of the other eligibility requirements is eligible for STRF.
FISCAL EFFECT:
- Enforcement Monitor. Annual cost of around $200,000 for two years to contract for the enforcement monitor. [BPPE Administration Fund]
- Out-of-State Registration and Enforcement. The BPPE estimates approximately 500 out-of-state institutions will register with the Bureau to provide online education to California students. Ongoing cost will be around $170,000 for two positions to register these institutions and to work with students and the out-of-state institution’s home regulatory body or accrediting agency to ensure compliance with the Act. [BPPE Administration Fund]
- OSAR. In addition to the one-time STRF appropriation of $1.3 million for grants to community-based organizations, ongoing costs will be $600,000 for six positions to fulfill the new office's responsibilities. [BPPE Administration Fund]
- Corinthian Students. The Bureau estimates approximately 9,000 Heald and 117 Everest Online students were impacted by the Corinthian closure. The Bureau indicates that approximately eight percent of those students attending Corinthian institutions (Wyotech and Everest) regulated by the Bureau submitted a STRF claim and 39 percent of those claims were approved, with an average payout of $3,800. Assuming the same application and approval rates for all students, the Bureau would receive 720 STRF claims, of which 39 percent. (281 cases) would be approved, for a total STRF payout of almost $1.1 million [STRF]. The number of applications and approvals could be larger, however, with the assistance provided to nonprofits under contract to OSAR. The Bureau will also require $190,000 for two years for two positions to administer this assistance. [BPPE Administration Fund]
- Office Space. The BPPE indicates that the additional positions described above will require larger office space, resulting in $1 million in one-time moving costs and $250,000 annually in increased rental charges. [BPPE Administration Fund]
- Increased Revenue. Increasing, from $50,000 to $100,000, the fine that may be issued to a person for operating an institution without proper approval to operate will increase revenues by about $300,000 per year to the BPPE Administrative Fund.
- Fund Condition. The BPPE Administrative Fund is projected to have a balance of only about $200,000 as of June 30, 2017, and thus would not be able to absorb all of the additional costs described above.
COMMENTS:
- Purpose. In March, the Assembly Committee on Business and Professions and the Senate Committee on Business, Professions and Economic Development conducted multiple joint oversight hearings to review 11 regulatory boards within the DCA and one regulatory entity outside of the DCA. The sunset bills, including SB 1192, are intended to implement legislative changes recommended in the respective background reports drafted by the Committees for the agencies reviewed this year. The sunset review process provides a formal mechanism for the DCA; the Legislature; the regulatory boards, bureaus and committees; interested parties; and stakeholders to make recommendations for improvements to the authority of consumer protection boards and bureaus.
- Background. After numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the Act—AB 48 (Portantino), Chapter 310, Statutes of 2009—established a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law. SB 1247 (Lieu), Chapter 840, Statutes of 2014 reauthorized the Act until January 1, 2017, and made a series of changes aimed at reducing backlogs and increasing meaningful enforcement.
- Private Postsecondary Institutions. Most students attending BPPE-regulated institutions are enrolled in multi-campus, publicly-traded institutions with a national presence. According to the 2014 Annual Report (self-reported data from BPPE-approved institutions), of the 275,624 students enrolled, 161,226 were enrolled in 337 institutions that received $5.8 billion in federal Title IV financial aid. In response to high-profile state and federal investigations that revealed deceptive and illegal practices by some institutions within this sector, federal regulators responded by increasing student outcome and institutional accountability measures. For California, BPPE’s approval can enable these institutions to access the Title IV program, with the US Department of Education relying on the bureau to provide oversight and student protection.
- Related Legislation. AB 2581 (Medina) provides assistance to students of Heald, Everest, and WyoTech campuses in California that were owned by CCI and closed unlawfully on April 27, 2015. AB 2581 was not heard in Senate Business and Professions.
AB 2652 (Eggman), contains provision similar to those in this bill that require a private entity with no physical presence in this state, that would be subject to the requirements of the Act if the entity was located in this state, to register with the BPPE and participate in the STRF. AB 2652 was not heard in Senate Business and Professions.
- Sunset Extension. This bill currently lacks an extension of the act beyond the current sunset date of January 1, 2017. The length of the sunset extension is currently a subject of negotiations.
- OSAR Staffing and Funding. The bill appropriates $1.3 million from the STRF to the OSAR for the pilot program, yet OSAR, which is proposed to be independent from the BPPE, will not be established until January 1, 2017, and will likely not have operational funding until enactment of the 2017-18 Budget Act next July. In the interest of providing more immediate assistance to students, the author may wish to instead consider making the appropriation to the BPPE, and vesting the bureau with the pilot program until OSAR is able to assume this responsibility.
Analysis Prepared by: Chuck Nicol / APPR. / (916) 319-2081
Date of Hearing:
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
SBPCA Bill Id:
Author:() – As Ver:
SENATE VOTE:
NOTE: This bill was double-referred to the Assembly Committee on Higher Education and passed on a 10-0 vote.
SUBJECT:
SUMMARY: Provides for various changes to the California Private Postsecondary Education Act of 2009 (Act) and the oversight of the Act provided by the Bureau for Private Postsecondary Education (BPPE).
EXISTING LAW:
- Establishes the Act until January 1, 2017, and requires BPPE, within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions (or institutions), programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code (EDC) Section 94800, et. seq.)
THIS BILL:
- Requires a private entity with no physical presence in this state that provides postsecondary education to California students for an institutional charge to comply with specified provisions, including registering with the BPPE; requires the BPPE to adopt regulations for the process and procedure whereby an institution can apply for and obtain registration; specifies that an institution that fails to comply is not authorized to operate in this state.
- Removes two positions from the Advisory Committee and specifies that a quorum be comprised of a majority of those appointed members; authorizes the chairs of policy committees of the Senate and Assembly with jurisdiction over legislation relating to the BPPE to designate a representative to attend the Advisory Committee meetings if he or she is unable to attend.
- Extends the sunset date for an institution that is not accredited by an accrediting agency recognized by the United States Department of Education, but is approved by the BPPE, to obtain accreditation or have an accreditation plan that outlines the process by which the institution will achieve accreditation candidacy, pre-accreditation, or full accreditation, by specified dates.
- Extends the sunset date for an institution that is not accredited by an accrediting agency recognized by the United States Department of Education, and is seeking approval by the BPPE, to obtain accreditation or have an accreditation plan that outlines the process by which the institution will achieve accreditation candidacy, pre-accreditation, or full accreditation, by specified dates.
- Provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Requires during the enrollment process that an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Provides that any representation or agreement by a person or entity to not collect a student loan obligation does not reduce a student’s eligibility for recovery from the STRF or reduce the student’s economic loss, unless the student loan obligation is forgiven, discharged, or canceled.
- Limits the timeframe for a written application that to be received by the BPPE to four years after the date of the action that made the student eligible for recovery from the STRF.
- Authorizes the BPPE to use evidence collected during a compliance inspection in support of issuing a citation.
- Require institutions to notify BPPE of investigations by other governmental agencies.
- Requires the Director to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public. Requires the enforcement monitor to submit reports to the Director and Legislature and be available to make oral reports to both if requested to do so.
- Establishes an Office of Student Assistance and Relief (OSAR) to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that the duties of the Office include, but are not limited to, providing assistance to students, conducting proactive outreach to students, administering the Student Tuition Recovery Fund (STRF) and overseeing the registration of institutions that do not have a physical presence in this state and are offering distance education to California students. Requires the Office to establish and maintain a website to provide information to students about their rights and protections available to them as well as information about free services available to students provided by a local nonprofit community service organization with demonstrated experience assisting students in areas like legal services and student loan matters.
- Specifies that an ombudsperson will be appointed by the director of DCA and is responsible for reporting to the director and the BPPE Advisory Committee.
- Establishes a Pilot Program, to be administered by the OSAR, to provide grants to community-based organizations to assist students harmed by recent school closures with receiving relief under loan forgiveness and STRF.
- Provides that a student who was enrolled at a California campus of Corinthian Colleges, Inc. (CCI), or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Makes various technical changes.
FISCAL EFFECT: According to the Senate Committee on Appropriations, this bill will result in:
- BPPE: Net increased costs of about $410,000 in the 2016-17 fiscal year and $360,000 ongoing. This estimate includes the BPPE’s anticipated need for six positions and $829,000 in fiscal year 2016-17 and $781,000 annually thereafter. It also includes increased revenues of about $420,000 ($300,000 attributed to the fine increase from operating without a proper approval and about $120,000 from the new authority to issue citations, as specified. To the extent there are additional fines or citations issued, increased revenues would be generated.) Staff notes that the Private Postsecondary Education Administration Fund has a structural imbalance and is expected to become insolvent in the 2017-18 fiscal year without accounting for the implementation of this bill. Absent a different funding source or creation of an additional fee, the fund could become insolvent sooner.
- Student Tuition Recovery Fund Claim Payout: Unknown payments to students enrolled at a campus or an out-of-state online program of a Corinthian Colleges Inc. institution. If 10 percent of estimated impacted students applied and were approved for a claim in a given year, costs would be $5.8 million. Actual costs would depend upon a number of factors including the number of impacted students making a successful claim and the amount of the claim payouts.
- Minor costs to the California Student Aid Commission, the California Community College Chancellor’s Office, and the California Department of Veterans Affairs to fulfill the consultation requirement with the Office of Student Assistance and Relief, as required by this bill. It is unknown the additional duties, and potential cost pressures, that might result from the required consultation.
COMMENTS:
Purpose. This bill provides for various changes to the Act and its oversight provided by the BPPE. This bill is author-sponsored. According to the author, “students, the public and quality private postsecondary educational institutions are best served by a well-functioning regulatory entity that effectively enforces the Act. The Bureau has faced significant difficulties in implementing the law. It is important that California’s approval and oversight of an institution assures minimum quality and student protections.”
Joint Oversight Hearings and Sunset Review of the DCA Licensing Boards. In March of 2016, the Assembly Committee on Business and Professions and the Senate Committee on Business, Professions and Economic Development (Committees) conducted multiple joint oversight hearings to review 11 regulatory boards within the DCA and one regulatory entity outside of the DCA. The sunset bills are intended to implement legislative changes recommended in the respective background reports drafted by the Committees for the agencies reviewed this year.
The Sunset Review Process. The sunset review process provides a formal mechanism for the DCA; the Legislature; the regulatory boards, bureaus and committees; interested parties; and stakeholders to make recommendations for improvements to the authority of consumer protection boards and bureaus. This is performed on a standard four-year cycle and was mandated by SB 2036 (McCorquodale), Chapter 908, Statutes of 1994. Each eligible agency is required to submit to the Committees a report covering the entire period since last reviewed that includes, among other things, the purpose and necessity of the agency and any recommendations of the agency for changes or reorganization in order to better fulfill its purpose. During the sunset review hearings, the Committees take public testimony and evaluate the eligible agency prior to the date the agency is scheduled to be repealed. An eligible agency is allowed to sunset unless the Legislature enacts a law to extend, consolidate, or reorganize the eligible agency.
Background on BPPE. The BPPE is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. After numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, AB 48 (Portantino), Chapter 310, Statutes of 2009 was enacted to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law. SB 1247 (Lieu), Chapter 840, Statutes of 2014 reauthorized the Act until January 1, 2017 and made a series of improvements aimed at reducing backlogs and increasing meaningful enforcement. The Act directs BPPE to, among numerous outlined activities, approve institutions and programs, establish and enforce minimum operating standards to ensure quality education, provide students a meaningful opportunity to have their complaints resolved, and ensure that institutions offer accurate information to prospective students on school and student performance. The BPPE is also required to actively investigate and combat unlicensed activity, administer the STRF, and conduct outreach and education activities for students and institutions within the state.
Background on Regulated Industry. The landscape of schools regulated under BPPE has shifted in recent decades. Today, most students attending BPPE-regulated institutions are enrolled in multi-campus, publicly-traded institutions with a national presence. According to the 2014 Annual Report (self-reported data from BPPE-approved institutions), of the 275,624 students enrolled, 161,226 were enrolled in institutions that receive federal Title IV financial aid. These 337 institutions received about $5.8 billion in federal Title IV financial aid. In response to high-profile state and federal investigations that revealed deceptive and illegal practices by some institutions within this sector. Federal regulators responded by increasing student outcome and institutional accountability measures. Specifically, in California, BPPE’s approval can enable these institutions to access the Title IV program; USDE relies on the Bureau to provide oversight and student protection.
This bill proposes the following major changes to the Act:
- Definition of Licensure. Under the Act, if an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in California, the institution must have educational program approval from the appropriate state licensing agency for any student who completes that program to sit for any required licensure exam. Rather than redefining licensure, this bill requires during the enrollment process that an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Unaccredited Degree Granting Programs. SB 1247 amended the Act to require that degree granting programs be accredited. Institutions offering a degree that seek BPPE approval are now required to either be accredited by an accrediting agency recognized by the USDE to offer the degree(s) or have an accreditation plan, approved by BPPE, for the institution to become fully accredited within five years of the BPPE issuance of a provisional approval to operate. For these schools, the Act requires compliance with certain student disclosures about accreditation, review by a visiting committee, and degree limitation requirements. SB 1247 also outlined a process for institutions that are currently approved by BPPE and offer degrees to submit an accreditation plan to the Bureau by July 1, 2015, to obtain pre-accreditation by July 1, 2017, to obtain accreditation by July 1, 2020, and to comply with various student disclosure and visiting committee review requirements. This bill provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence provided by the institution.
- Office of Student Assistance and Relief (OSAR). The BPPE has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and BPPE regulations. The BPPE does not appear to focus similar efforts on student outreach to inform students about the Bureau’s work and available recourse for students.
This bill establishes the OSAR (as its own Article within the Act) to be managed by an ombudsperson and to serve as a primary point of contact to address the needs of private postsecondary education students, including outreach to students, coordinating with relevant governmental and non-governmental agencies, and conducting a Pilot Program to provide grants to community-based organizations to assist students harmed by recent school closures with receiving relief under loan forgiveness and the STRF. The ombudsperson will be appointed by the director of the DCA and is responsible for reporting to the director and the BPPE Advisory Committee. The bill would also provide a student who was enrolled at a California campus of CCI, or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF.
- Online Institutions. This bill requires a private postsecondary education institution that does not maintain a physical presence in this state and offers distance education to California students to participate in the STRF for their California students.
- Compliance and Enforcement. BPPE faces a significant backlog of complaints and investigations associated with internal referrals resulting from compliance inspections. Unlike other licensing agencies, the BPPE does not have the authority to issue citations for non-minor violations detected during a compliance inspection. Additionally, concerns have been expressed as to whether BPPE is properly identifying and responding to institutional violations of law; in 2013, the Bureau of State Audits found that the BPPE was failing to properly and consistently enforce the Act. BPPE has indicated that it believes its backlog problem could be addressed, instead, by allowing evidence collected during a compliance inspection to be used in support of issuing a citation. This bill implements those recommendations and additionally implements the BPPE’s request to require institutions to notify the BPPE of investigations by other governmental agencies.
- BPPE Fees. The California Association of Private Postsecondary Schools (CAPPS) notes that under the current fee structure, many schools with fewer school sites, fewer students, and less revenue are paying more in fees than schools with a much larger footprint. The CAPPS has requested "fee fairness" be included in SB 1192. A revised fee schedule that will more appropriately reflect the BPPE workloads and the size/revenue of BPPE-regulated institutions is anticipated to be included in SB 1039 (Hill), pending in Assembly Business and Professions Committee, which contains revised fee schedules for a number of DCA Boards and Bureaus.
- OSAR consultation. The Legal Aid Foundation of Los Angeles (LAFLA) has requested that OSAR be required to consult with legal aid foundations in the performance of its duties. Committee staff recommends that the OSAR be authorized to consult with relevant community based organizations, as the OSAR determines necessary in fulfilling its duties.
- STRF. A coalition of consumer organizations has requested a variety of amendments to expand the STRF eligibility for students. This bill provides students 4-years to file a STRF claim and to require that student loans be formally discharged, rather than an agreement not to collect, before a student's STRF eligibility is reduced.
- Advisory Committee. This bill removes two positions from the Advisory Committee that are necessary to improve the operations of the Committee. These two positions have remained unfilled since 2010. Additionally, this bill requires the OSAR ombudsperson to report to the Advisory Committee and requires that a quorum be comprised of a majority of those appointed members.
- Unintended exemption. An article by Buzzfeed, (Making the Grade, published on May 26, 2016) uncovered a series of documents that implicated a non-profit institution operating in California for manipulating student records and improperly using funds. According to the article, the college "has no full-time, permanent faculty, despite having a student body larger than the undergraduate population of Princeton." In response to the article, the BPPE was asked to review the institution's compliance with California law. However, the BPPE has no jurisdiction to review this institution because it receives an exemption from law under Education Code 94847(j). The Committee may wish to consider removing this exemption as it appears the exemption may no longer be serving its original purpose.
- OSAR Appropriation. LAFLA has expressed concern that the OSAR will require an appropriation in order to effectively conduct its duties. This issue is anticipated to be raised in the Appropriations Committee.
- Consumer Disclosures. Ashford University has requested amendments to better align disclosures (School Performance Fact Sheet, or SPFS) that are required under the Act with disclosures required by accrediting agencies and the federal government. A coalition of organizations that includes SEIU, Public Advocates, and the Veteran's Legal Clinic has also requested amendments to the SPFS, specifically regarding employment. SB 1247 required the Bureau to report to the Legislature by January 1, 2017 regarding student disclosures and possible statutory amendments to streamline and enhance the SPFS. The Assembly Committee on Higher Education staff recommended that changes to the SPFS be delayed until after the report required under current law is submitted to the Legislature.
- STRF Collection. Ashford University has requested an amendment to clarify that the BPPE must notify institutions prior to beginning STRF collection. The BPPE reports that altering the STRF assessment is a regulatory change that requires the BPPE to follow notification procedures outlined in the Administrative Procedures Act. Due to this, the change requested by Ashford does not appear necessary.
Current Related Legislation. AB 1835 (Holden) of the current Legislative Session, exempts institutions that grant doctoral degrees in psychoanalysis from the provisions of the Act requiring unaccredited degree granting institutions to be accredited if all of the institution’s students hold master’s or doctoral degrees before enrollment in the institution and the institution has obtained accreditation from, or has submitted a self-study application to, the Accreditation Council for Psychoanalytic Education on or before July 1, 2017. STATUS: The bill is currently pending in the Senate Committee on Education.)
AB 1916 (Irwin) of the current Legislative Session, requires a private postsecondary institution to file a surety bond with the BPPE before January 1, 2019, as specified. STATUS: This bill failed passage in the Assembly Committee on Business and Professions.
AB 2581 (Medina) of the current Legislative Session, provides financial and other assistance to students of Heald, Everest, and WyoTech campuses in California, which were owned by CCI and closed unlawfully on April 27, 2015. STATUS: This bill is pending in the Senate Committee on Business, Professions and Economic Development.
AB 2652 (Eggman) of the current Legislative Session requires a private entity with no physical presence in this state, that would be subject to the requirements of the Act if the entity was located in this state, to register with the BPPE and participate in the STRF. STATUS: This bill is pending in the Senate Committee on Business, Professions and Economic Development.
Prior Related Legislation. AB 573 (Medina) of 2015, included a number of components contained in AB 2581. NOTE: The bill was vetoed by Governor Brown who noted in his veto message: “I am sympathetic to the many students who were enrolled at Corinthian Colleges when the company abruptly shuttered its doors earlier this year…[USDE] has taken the matter of loan discharge seriously. In recent months, it has greatly eased the burden of filings for many students, and its work to provide a simple, swift and fair process for students continues. As such, it appears premature to create an attorney grant program, especially one that provides little direction on how funds should be used. While the bill's provisions to extend Cal Grant eligibility for Heald students are well-intentioned, I am not comfortable creating new General Fund costs outside of the budget process, particularly given the Cal Grant augmentations already included in this year's budget.”
SB 1247 (Lieu), Chapter 840, Statutes of 2014, extended the sunset date for the BPPE and the Act until January 1, 2017 and made statutory changes to the protections provided to students and the requirements placed on private postsecondary educational institutions, including prohibiting an institution from claiming an exemption from the Act if the institution is approved to participate in Title 38 programs. The bill also contained an exemption for an institution that meets a series of criteria including being accredited by WASC for at least 10 years, headquartered in California, operated continuously for at least 25 years, previously held approval to operate by the former Bureau and derives at least 12.5 percent of its revenues from sources other than state or federal student assistance like Title 38 and CalGrant monies. One institution is currently claiming an exemption pursuant to this provision in SB 1247.
ARGUMENTS IN SUPPORT:
A coalition of organizations* write in support, “We believe this bill will strengthen existing law, and will improve the [BPPE’s] ability to address the needs of students.”
ARGUMENTS IN OPPOSITION:
The California Association of Private Postsecondary Schools (CAPPS) is opposed unless amended and writes, “This challenging state environment coupled with aggressive Federal actions have made it very difficult to operate a private postsecondary school, which is highlighted by the number of schools that have closed in recent years. Despite these challenges our members support the extension of the BPPE because we know it’s important for students and schools to have strong yet fair regulator. We, however, can’t simply support a bill that extends the BPPE and ignore the changes that create a more burdensome and costly Act.”
The University of Phoenix (UOPX) is opposed unless amended and writes “UOPX previously had a ‘support if amended’ position on the bill however recent amendments necessitate a change in that position.”
REGISTERED SUPPORT:
Center for Public Interest Law*
Children's Advocacy Institute*
Public Advocates*
Public Law Center*
SEIU California*
Veterans Legal Clinic*
REGISTERED OPPOSITION:
California Association of Private Postsecondary Schools (CAPPS)
University of Phoenix
Analysis Prepared by: Gabby Nepomuceno / B. & P. / (916) 319-3301
Date of Hearing: June 14, 2016
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
SBPCA Bill Id:SB 1192
Author:(Hill) – As Amended Ver:April 6, 2016
[Note: This bill is double referred to the Assembly Business and Professions Committee.]
SENATE VOTE: 37-0
SUBJECT: Private postsecondary education: California Private Postsecondary Education Act of 2009
SUMMARY: Provides for various changes to the California Private Postsecondary Education Act of 2009 (Act) and the oversight of the Act provided by the Bureau for Private Postsecondary Education (BPPE). Specifically, this bill:
- Provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Establishes an Office of Student Assistance and Relief (Office) to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that the duties of the Office include but are not limited to providing assistance to students, conducting proactive outreach to students, administering the Student Tuition Recovery Fund (STRF) and overseeing the registration of institutions that do not have a physical presence in this state and are offering distance education to California students. Requires the Office to establish and maintain a website to provide information to students about their rights and protections available to them as well as information about free services available to students provided by a local nonprofit community service organization with demonstrated experience assisting students in areas like legal services and student loan matters.
- Provides recourse through the STRF to students impacted by the abrupt closure of Corinthian Colleges, Inc. (CCI).
- States the intent of the Legislature to require a private postsecondary educational institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering economic loss. Requires these institutions to register with BPPE.
- Authorizes BPPE staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Requires the Director to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public. Requires the enforcement monitor to submit reports to the Director and Legislature and be available to make oral reports to both if requested to do so.
- Makes various technical changes.
EXISTING LAW: Establishes the Act until January 1, 2017, and requires BPPE, within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions (or institutions), programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code Section 94800 et. seq.)
FISCAL EFFECT: According to the Senate Appropriations Committee:
Bureau: Net increased costs of about $410,000 in the 2016-17 fiscal year and $360,000 ongoing. This estimate includes the Bureau’s anticipated need for six positions and $829,000 in fiscal year 2016-17 and $781,000 annually thereafter. It also includes increased revenues of about $420,000 ($300,000 attributed to the fine increase from operating without a proper approval and about $120,000 from the new authority to issue citations, as specified. To the extent there are additional fines or citations issued, increased revenues would be generated.) The Private Postsecondary Education Administration Fund has a structural imbalance and is expected to become insolvent in the 2017-18 fiscal year without accounting for the implementation of this bill. Absent a different funding source or creation of an additional fee, the fund could become insolvent sooner. (Special Funds)
Student Tuition Recovery Fund Claim Payout: Unknown payments to students enrolled at a campus or an out-of-state online program of a Corinthian Colleges Inc. institution. If 10 percent of estimated impacted students applied and were approved for a claim in a given year, costs would be $5.8 million. Actual costs would depend upon a number of factors including the number of impacted students making a successful claim and the amount of the claim payouts. (Special Funds)
Minor costs to the California Student Aid Commission, the California Community College Chancellor’s Office, and the California Department of Veterans Affairs to fulfill the consultation requirement with the Office of Student Assistance and Relief, as required by this bill. It is unknown the additional duties, and potential cost pressures, that might result from the required consultation. (General Fund)
COMMENTS: Background on BPPE Sunset Review. As previously outlined, existing law sunsets the Act on January 1, 2017. Legislation is necessary to extend the sunset date of the Act and the oversight provided by the BPPE. On March 28, 2016, the Assembly Higher Education Committee and the Senate Business, Professions and Economic Development Committee were joined by the Senate Education Committee and the Assembly Business and Professions Committee to conduct a Sunset Review hearing of the BPPE. This bill is intended to implement legislative changes as discussed and recommended during the Sunset Review process. Additional information regarding the BPPE and recommended changes to the law can be found in the Background Paper prepared by Committee staff, available on the Committee website.
Background on BPPE. BPPE (or Bureau) is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. Established by
AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the bill took effect January 1, 2010, to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law. SB 1247 (Lieu, Chapter 840, Statutes of 2014) reauthorized the Act until January 1, 2017 and made a series of improvements aimed at reducing backlogs and increasing meaningful enforcement. The Act directs BPPE to, among numerous outlined activities, approve institutions and programs, establish and enforce minimum operating standards to ensure quality education, provide students a meaningful opportunity to have their complaints resolved, and ensure that institutions offer accurate information to prospective students on school and student performance. BPPE is also required to actively investigate and combat unlicensed activity, administer the STRF, and conduct outreach and education activities for students and institutions within the state.
Background on regulated industry. The landscape of schools regulated under BPPE has shifted in recent decades. Today, most students attending BPPE-regulated institutions are enrolled in multi-campus, publicly-traded institutions with a national presence. According to the 2014 Annual Report (self-reported data from BPPE-approved institutions), of the 275,624 students enrolled, 161,226 were enrolled in institutions that receive federal Title IV financial aid. These 337 institutions received about $5.8 billion in federal Title IV financial aid. In response to high-profile state and federal investigations that revealed deceptive and illegal practices by some institutions within this sector. Federal regulators responded by increasing student outcome and institutional accountability measures. Specifically, in California, BPPE’s approval can enable these institutions to access the Title IV program; USDE relies on the Bureau to provide oversight and student protection.
Major changes to the Act contained in SB 1192. The author notes that "students, the public and quality private postsecondary educational institutions are best served by a well-functioning regulatory entity that effectively enforces the Act. The Bureau has faced significant difficulties in implementing the law. It is important that California’s approval and oversight of an institution assures minimum quality and student protections." To that end, this bill proposes the following major changes to the Act:
- Definition of Licensure.
Background. Under the Act, if an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in California, the institution must have educational program approval from the appropriate state licensing agency for any student who completes that program to sit for any required licensure exam.
This bill. Amends the definition of licensure to explicitly include certification and registration for purposes of BPPE approval of a program intended to lead to licensure and adds requirements for institutions to disclose voluntary certification or registration available to a student.
Staff recommendations. The University of Phoenix has expressed concern that this new definition and required disclosures could include non-governmental, voluntary licensure and certification to which an institution would not be aware. BPPE reports that the existing definition of licensure includes mandatory California certification or registration. Therefore, Committee staff recommends removing changes to the definition of licensure, and instead requiring, during the enrollment process, an institution offering educational programs designed to lead to positions in a profession, occupation, trade, or career field where voluntary licensure by a government agency is available, to provide all students seeking to enroll in those programs with a written copy of the voluntary government agency licensure requirements.
- Unaccredited Degree Granting Programs.
Background. SB 1247 amended the Act to require that degree granting programs be accredited. Institutions offering a degree that seek BPPE approval are now required to either be accredited by an accrediting agency recognized by the USDE to offer the degree(s) or have an accreditation plan, approved by BPPE, for the institution to become fully accredited within five years of the BPPE issuance of a provisional approval to operate. For these schools, the Act requires compliance with certain student disclosures about accreditation, review by a visiting committee and degree limitation requirements. SB 1247 also outlined a process for institutions that are currently approved by BPPE and offer degrees to submit an accreditation plan to the Bureau by July 1, 2015, to obtain pre-accreditation by July 1, 2017, to obtain accreditation by July 1, 2020, and to comply with various student disclosure and visiting committee review requirements.
This bill. Due to concerns that unaccredited degree granting institutions may not be able to meet the timeframes established in the law to become accredited, but are still actively working toward the accreditation requirement, this bill provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence provided by the institution.
Staff recommendations. Technical and clarifying amendments to this section have been requested by the BPPE and staff recommends these amendments be adopted.
- Office of Student Assistance and Relief (OSAR).
Background. The Bureau has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and Bureau regulations. The Bureau does not appear to focus similar efforts on student outreach to inform students about the Bureau’s work and available recourse for students. For example, following the closure of Corinthian Colleges, Inc. (CCI), BPPE estimated about 6,000 students would be immediately eligible for tuition recovery under the STRF. BPPE reports that only about 300 CCI students have filed STRF applications. The chart below identifies similarly low STRF participation rates for other colleges that have closed unlawfully in recent years.
School Name | # of Students at Closure | Claims Received | Approved | Denied | Pending | % STRF Claims Approved |
WyoTech (CCI) | 1586 | 100 | 34 | 11 | 55 | 2.1% |
Bryman (+Bio Health) | 311 | 89 | 39 | 31 | 19 | 12.5% |
Career Colleges of America | 771 | 127 | 44 | 73 | 10 | 5.7% |
Everest (CCI) | 4336 | 214 | 75 | 40 | 99 | 1.7% |
Four D College | 620 | 55 | 17 | 9 | 29 | 2.7% |
IME | 480 | 317 | 180 | 129 | 8 | 37.5% |
This bill. The OSAR, created by this bill, would serve as a primary point of contact to address the needs of private postsecondary education students, and would administer the STRF. The bill would also provide a student who was enrolled at a California campus of CCI, or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, is eligible for STRF. The bill also states the intent of the Legislature to require a private postsecondary education institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering economic loss.
Staff recommendations.
OSAR. Committee staff recommends the OSAR be established in its own Article of the Act (outside of STRF) and managed by an ombudsperson, which is appointed by the director of the DCA and responsible for reporting to the director and the BPPE Advisory Committee. Additionally, the OSAR, and not the BPPE, should be responsible for outreach to students, coordinating with relevant governmental and non-governmental agencies, and conducting a Pilot Program to provide grants to community-based organizations to assist students harmed by recent school closures with receiving relief under loan forgiveness and STRF.
Online Institutions. Committee staff recommends, rather than requiring institutions to file a surety bond, these institutions are required to participate in STRF for their California students.
- Compliance and Enforcement.
Background. BPPE faces a significant backlog of complaints and investigations associated with internal referrals resulting from compliance inspections. Unlike other licensing agencies, the Bureau does not have the authority to issue citations for non-minor violations detected during a compliance inspection. Additionally, concerns have been expressed as to whether BPPE is properly identifying and responding to institutional violations of law; in 2013, the Bureau of State Audits found that the Bureau was failing to properly and consistently enforce the Act.
This bill: authorizes Bureau staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection; increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000; and, requires the Director to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts.
Staff recommendations. The California Association of Private Postsecondary Schools (CAPPS) has expressed serious concern regarding due process violations that could occur from allowing BPPE to issue citations at compliance inspections. BPPE has indicated that it believes its backlog problem could be addressed, instead, by allowing evidence collected during a compliance inspection to be used in support of issuing a citation. Staff recommends adopting BPPE's recommended amendments. Staff recommends approval of the BPPE requested amendment to require institutions to notify BPPE of investigations by other governmental agencies.
Additional issues and requested amendments. A number of organizations have requested additional amendments to the Act and this bill. What follows is a summary of those requests and Committee staff recommended actions.
- BPPE Fees. CAPPS notes that under the current fee structure, many schools with fewer school sites, fewer students and less revenue are paying more in fees than schools with a much larger footprint. CAPPS has requested "fee fairness" be included in SB 1192.
Committee staff understands that the author is working with BPPE and DCA regarding a revised fee schedule that will more appropriately reflect the BPPE workloads and the size/revenue of BPPE-regulated institutions. This fee schedule is anticipated to be included in SB 1039 (Hill), pending in Assembly Business and Professions Committee, which contains revised fee schedules for a number of DCA Boards and Bureaus.
- Consumer Disclosures. Ashford University has requested amendments to better align disclosures (School Performance Fact Sheet or SPFS) that are required under the Act with disclosures required by accrediting agencies and the federal government. A coalition of organizations that includes SEIU, Public Advocates, and the Veteran's Legal Clinic has also requested amendments to the SPFS, specifically regarding employment. SB 1247 required the Bureau to report to the Legislature by January 1, 2017 regarding student disclosures and possible statutory amendments to streamline and enhance the SPFS.
Committee staff recommends that changes to the SPFS be delayed until after the report required under current law is submitted to the Legislature.
- STRF Collection. Ashford University has requested an amendment to clarify that the BPPE must notify institutions prior to beginning STRF collection. BPPE reports that altering the STRF assessment is a regulatory change that requires BPPE follow notification procedures outlined in the Administrative Procedures Act. Due to this, the change requested by Ashford does not appear necessary.
- OSAR Appropriation. The Legal Aid Foundation of Los Angeles (LAFLA) has expressed concern that the OSAR will require an appropriation in order to effectively conduct its duties. Committee staff recommends this issue be raised in the Appropriations Committee.
- OSAR consultation. LAFLA has requested that OSAR be required to consult with legal aid foundations in the performance of its duties. Committee staff recommends that OSAR be authorized to consult with relevant community based organizations, as OSAR determines necessary in fulfilling its duties.
- STRF. A coalition of consumer organizations has requested a variety of amendments to expand STRF eligibility for students. Committee staff recommends, of those requests, the bill be amended to provide students 4-years to file a STRF claim and to require that student loans be formally discharged, rather than an agreement not to collect, before a student's STRF eligibility is reduced.
- Advisory Committee. Committee staff understands that revisions to the Advisory Committee are necessary to improve the operations of the Committee, including removing positions that have remained unfilled since 2010, requiring the OSAR ombudsperson to report to the Advisory Committee, and requiring that a quorum be comprised of a majority of those appointed members.
- Unintended exemption. An article by Buzzfeed, (Making the Grade, published on May 26, 2016) uncovered a series of documents that implicated a non-profit institution operating in California for manipulating student records and improperly using funds. According to the article, the college "has no full-time, permanent faculty, despite having a student body larger than the undergraduate population of Princeton." In response to the article, BPPE was asked to review the institution's compliance with California law. Committee staff understands that BPPE has no jurisdiction to review this institution because it receives an exemption from law under Education Code 94847(j). The Committee may wish to consider removing this exemption as it appears the exemption may no longer be serving its original purpose.
REGISTERED SUPPORT / OPPOSITION:
Support
Center for Public Interest Law
Children's Advocacy Institute
Consumer Federation of California
East Bay Community Law Center
Housing and Economic Rights Advocates
Legal Aid Foundation of Los Angeles
Public Advocates
Public Law Center
SEIU California
Veterans Legal Clinic
Opposition
Professional Beauty Federation of California
Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
THIRD READING
Bill No: SB 1192
:
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 8-0, 4/11/16
AYES: Hill, Berryhill, Block, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski
NO VOTE RECORDED: Bates
SENATE EDUCATION COMMITTEE: 9-0, 4/20/16
AYES: Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan, Vidak
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
DIGEST: This bill makes various changes to the California Private Postsecondary Education Act of 2009 (Act) intended to improve the effectiveness of the Bureau for Private Postsecondary Education (BPPE) and opportunities for student success
ANALYSIS: Existing law establishes the Act until January 1, 2017, and requires the BPPE within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions, programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code § 94800 et seq.)
This bill:
- Ensures that certification and registration necessary for a student to engage in a particular profession are reflected in the BPPE’s approval of educational programs.
- Provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Establishes an Office of Student Assistance and Relief (Office) to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that the duties of the Office include but are not limited to providing assistance to students, conducting proactive outreach to students, administering the STRF and overseeing the registration of institutions that do not have a physical presence in this state and are offering distance education to California students. Requires the Office to establish and maintain a Web site to provide information to students about their rights and protections available to them as well as information about free services available to students provided by a local nonprofit community service organization with demonstrated experience assisting students in areas like legal services and student loan matters.
- Provides recourse through the STRF to students impacted by the abrupt closure of Corinthian Colleges, Inc. (CCI).
- States the intent of the Legislature to require a private postsecondary educational institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering economic loss. Requires these institutions to register with BPPE.
- Authorizes BPPE staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Requires the Director of DCA to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of BPPE compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public. Requires the enforcement monitor to submit reports to the Director and Legislature and be available to make oral reports to both if requested to do so.
- Makes various technical changes.
Background
According to the author, this bill, one of the author’s five sunset bills, is necessary to make changes to the Act in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs which are approved in a timely manner, while also making sure a robust government structure prevents predatory practices and promotes student success.
Bureau for Private Postsecondary Education. The BPPE is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. Established by AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the bill took effect January 1, 2010, to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law.
2015-16 sunset review. Beginning in 2015, the Senate Business and Professions Committee and the Assembly Business and Professions Committee (Committees) conducted joint oversight hearings to review 12 regulatory entities. The Committees conducted two hearings in March and joined with the Senate Committee on Education and Assembly Committee on Higher Education to review BPPE. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees and which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year.
In response to opportunities to strengthen the Act to ensure students receive training necessary for employment and licensure, this bill includes certification and registration in the definition of licensure for purposes of BPPE approval of a program intended to lead to licensure and adds requirements for institutions to reflect certification or registration necessary for a student to engage in a particular profession during the enrollment process.
In response to issues remaining about concerns that unaccredited degree granting programs may not be able to meet current statutory requirements for accreditation, this bill provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence provided by the institution.
In response to concerns that the BPPE has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and BPPE regulations, but has not focused similar efforts on student outreach to inform students about the BPPE’s work and available recourse for students, this bill establishes the Office to serve as a primary point of contact to address the needs of private postsecondary education students.
In response to concerns about the ability of students enrolled at a California campus of Corinthian Colleges when it abruptly closed in 2015 to make their lives whole, this bill provides that a student who was enrolled at a California campus of CCI, or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by BPPE, is eligible for STRF.
In response to issues raised about unlicensed activity, compliance inspections conducted by BPPE, the BPPE’s complaint investigations backlog and enforcement problems, this bill authorizes BPPE staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection; increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000 and provides for the appointment of an enforcement monitor to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of BPPE compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Senate Appropriations Committee:
- BPPE: Net increased costs of about $410,000 in the 2016-17 fiscal year and $360,000 ongoing. This estimate includes the BPPE’s anticipated need for six positions and $829,000 in fiscal year 2016-17 and $781,000 annually thereafter. It also includes increased revenues of about $420,000 ($300,000 attributed to the fine increase from operating without a proper approval and about $120,000 from the new authority to issue citations, as specified. To the extent there are additional fines or citations issued, increased revenues would be generated.) The Senate Appropriations Committee staff notes that the Private Postsecondary Education Administration Fund has a structural imbalance and is expected to become insolvent in the 2017-18 fiscal year without accounting for the implementation of this bill. Absent a different funding source or creation of an additional fee, the fund could become insolvent sooner. (Special Funds*)
- Student Tuition Recovery Fund Claim Payout: Unknown payments to students enrolled at a campus or an out-of-state online program of a CCI. If 10 percent of estimated impacted students applied and were approved for a claim in a given year, costs would be $5.8 million. Actual costs would depend upon a number of factors including the number of impacted students making a successful claim and the amount of the claim payouts. (Special Funds**)
- Minor costs to the California Student Aid Commission, the California Community College Chancellor’s Office, and the California Department of Veterans Affairs to fulfill the consultation requirement with the Office of Student Assistance and Relief, as required by this bill. It is unknown the additional duties, and potential cost pressures, that might result from the required consultation. (General Fund)
* Private Postsecondary Education Administration Fund
**Student Tuition Recovery Fund
California Association of Private Postsecondary Schools
Center for Public Interest Law
Children’s Advocacy Institute
Consumer Federation of California
East Bay Community Law Center
Housing and Economic Rights Advocates
Legal Aid Foundation of Los Angeles
Public Advocates
Public Law Center
SEIU California
University of Phoenix
Veterans Legal Clinic
OPPOSITION: (Verified 5/27/16)
Professional Beauty Federation of California
ARGUMENTS IN SUPPORT: Supporters believe this bill will strengthen the existing law and improve the BPPE’s ability to address the needs of students.
The California Association of Private Postsecondary Schools (CAPPS) would like to see changes to this bill to increase the fairness of fees charged by BPPE, remove the enforcement monitor provisions, delete provisions creating the Office, remove or modify additional citation authority, ensure due process, keep STRF provisions in the Act as they are and delete certain fines in this bill for unlicensed activity. According to the University of Phoenix, while this bill keeps much of the existing Act intact, it does propose some significant policy additions.
ARGUMENTS IN OPPOSITION: The Professional Beauty Federation of California opposes this bill because it does not grant sole oversight of barbering and cosmetology schools to the Board of Barbering and Cosmetology.
5/28/16 16:57:34
**** END ****
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1192 (Hill) - Private postsecondary education: California Private Postsecondary Education Act of 2009
Version: April 6, 2016 | Policy Vote: B., P. & E.D. 8 - 0, ED. 9 - 0 |
Urgency: No | Mandate: No |
Hearing Date: May 9, 2016 | Consultant: Jillian Kissee |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
This bill makes various changes to the Private Postsecondary Education Act of 2009 to improve the effectiveness of the Bureau for Private Postsecondary Education (Bureau). Among other things, this bill: (1) establishes a new Office of Student Assistance and Relief; (2) provides for an enforcement monitor to evaluate the Bureau’s enforcement efforts; (3) authorizes the Bureau to give extensions for obtaining accreditation based on specified criteria; and (4) requires certain out-of-state institutions offering distance education to California students to register with the Bureau.
Fiscal Impact:
- Bureau: Net increased costs of about $410,000 in the 2016-17 fiscal year and $360,000 ongoing. This estimate includes the Bureau’s anticipated need for six positions and $829,000 in fiscal year 2016-17 and $781,000 annually thereafter. It also includes increased revenues of about $420,000 ($300,000 attributed to the fine increase from operating without a proper approval and about $120,000 from the new authority to issue citations, as specified. To the extent there are additional fines or citations issued, increased revenues would be generated.) Staff notes that the Private Postsecondary Education Administration Fund has a structural imbalance and is expected to become insolvent in the 2017-18 fiscal year without accounting for the implementation of this bill. Absent a different funding source or creation of an additional fee, the fund could become insolvent sooner. See staff comments. (Special Funds*)
- Student Tuition Recovery Fund Claim Payout: Unknown payments to students enrolled at a campus or an out-of-state online program of a Corinthian Colleges Inc. institution. If 10 percent of estimated impacted students applied and were approved for a claim in a given year, costs would be $5.8 million. Actual costs would depend upon a number of factors including the number of impacted students making a successful claim and the amount of the claim payouts. (Special Funds**)
- Minor costs to the California Student Aid Commission, the California Community College Chancellor’s Office, and the California Department of Veterans Affairs to fulfill the consultation requirement with the Office of Student Assistance and Relief, as required by this bill. It is unknown the additional duties, and potential cost pressures, that might result from the required consultation. (General Fund)
* Private Postsecondary Education Administration Fund
**Student Tuition Recovery Fund
Background:
Existing law establishes the California Private Postsecondary Education Act of 2009 (Act) until January 1, 2017, and requires the Bureau within the Department of Consumer Affairs to, among other things, review, investigate, and approve private postsecondary institutions, programs, and courses of instruction pursuant to the Act and authorizes the Bureau to take formal actions against and institution/school to ensure compliance with the Act and even seek closure of an institution/school if deemed necessary.
The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the Bureau administer the Student Tuition Recovery Fund (STRF) to provide refunds to student affected by the possible closure of an institution/school. (Education Code Section 94800, et seq.)
According to the author, this bill is necessary in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs, which are approved in a timely manner, while also ensuring a robust regulatory structure to prevent predatory practices and promotes student success. This bill seeks to incorporate changes outlined in a Business, Professions and Economic Development Committee background paper prepared for a joint hearing regarding the Bureau’s sunset.
Proposed Law:
This bill makes various changes to the Private Postsecondary Education Act of 2009. Specifically, this bill:
- Provides the Bureau the authority to give extensions on deadlines for unaccredited degree-granting institutions to become accredited provided certain criteria are being met.
Office of Student Assistance and Relief
- Establishes an Office of Student Assistance and Relief to serve as the primary contact to address the needs of private postsecondary students.
- Specifies the duties of the office to include: providing assistance to these students; conducting proactive outreach to these students; administering the STRF; and overseeing the registration of private postsecondary institutions that do not have a physical presence in California but offer distance education to California students.
- Requires the office to work in consultation with state and federal agencies, as specified, to determine the extent of options and resources available to private postsecondary students and criteria that indicates what additional steps state agencies need to take to ensure the protection of the public from the closure of a private postsecondary institution.
Student Tuition Recovery Fund
- Removes the Bureau’s authority to establish regulations related to STRF.
- Makes specified California students enrolled at a campus or in an out-of-state online program of a Corinthian Colleges Inc., (CCI) institution eligible for STRF.
- Declares the intent of the Legislature to require a private postsecondary education institution that does not maintain a physical presence in this state and offers distance learning to California students to file a surety bond for the benefit of students suffering from economic loss. Surety bonds typically refund a student’s tuition if the school closes or if the school fails to uphold the contract it signed with the student.
Compliance, Enforcement, Process, and Penalties
- Expands the authority of the Bureau to enforce the provisions of California Private Postsecondary Education Act.
- Authorizes Bureau staff to issue citations, with a fine not to exceed $5,000 for each violation before leaving an institution when non-minor violations of the Act are found during an inspection, as specified.
- Provides due process procedures for institutions contesting alleged violations.
- Specifies that all administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.
- Increases the penalty for operating an institution without Bureau approval from $50,000 to $100,000.
Enforcement Monitor
- Requires the Department of Consumer Affairs to supervise and appoint an enforcement monitor for a period of two years.
- Requires the enforcement monitor to monitor and evaluate the Bureau’s enforcement efforts, focusing on the adequacy of Bureau compliance inspections, handling and processing of student complaints, and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public.
- Submit reports, as specified, to the Department of Consumer Affairs and the Legislature and be available to deliver oral reports.
- Specifies that the Bureau pay for all of the costs associated with the employment of the enforcement monitor.
- Sunsets the provisions related to the enforcement monitor on March 1, 2019.
Related Legislation:
AB 1916 (Irwin) requires a private postsecondary institution to file a surety bond with the Bureau before January 1, 2016, as specified. AB 1916 is currently pending in the Assembly Committee on Business and Professions Committee.
AB 2581 (Medina) provides financial and other assistance to students of Heald, Everest, and WyoTech campuses in California, which were owned by CCI and closed unlawfully on April 27, 2015. AB 2581 is pending in the Assembly Appropriations Committee.
AB 2652 (Eggman) requires a private entity with no physical presence in this state, that would be subject to the requirements of the Act if the entity was located in this state, to register with the Bureau and participate in the STRF. AB 2652 is pending in the Assembly Appropriations Committee.
Staff Comments:
The Bureau cites costs related to tracking any pending or final civil or criminal case, as specified, that the Bureau has received notice, and to post the information on the Bureau’s website. The bill expands potential cases of which to track to local and state laws of every state outside of California, instead of only those that would be actionable under California or federal law. However, the level of additional tracking that will materialize is unknown, but it is potentially significant.
The Bureau cites costs of $352,000 in the 2016-17 fiscal year and $320,000 ongoing for four positions to establish the new Office of Student Assistance and Relief. This workload includes an anticipated 1,000 out-of-state institutions that will be required to file a surety bond with the Bureau, to the extent it is authorized by federal law. However, the actual number of institutions that will be required to file one as a result of this bill is unknown. It is also unknown the extent to which the number of students will be made eligible for STRF payments as a result of this bill which could drive additional costs to process the claims. For additional specific duties of the office, see the “Proposed Law” section.
The Bureau also anticipates costs of $96,000 in the 2016-17 fiscal year and $88,000 ongoing to track the additional increases in citations issued during an inspection of an institution. There may be additional administrative costs incurred by the Bureau to develop a citation, as specified, and conduct related hearings, upon request.
According to the Department of Consumer Affairs, the Bureau and the department will require $300,000 ongoing to contract with a consultant to provide services as an enforcement monitor. This bill will also require the adoption of regulations and necessary information technology system updates which could result in costs to existing staff potentially in the tens of thousands.
Staff notes that this bill does not extend the authorization of the California Private Postsecondary Education Act of 2009 which is scheduled to no longer be in effect on January 1, 2017.
-- END --
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 1192
Author: | |||
Version: | April 6, 2016 Hearing Date: April 20, 2016 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Olgalilia Ramirez | ||
Subject: Private postsecondary education: California Private Postsecondary Education Act of 2009
SUMMARY
This bill makes various changes to the Private Postsecondary Education Act of 2009 to improve the effectiveness of the Bureau for Private Postsecondary Education (Bureau); It:
- Establishes the Office of Student Assistance and Relief.
- Provides for an enforcement monitor to evaluate the Bureau’s enforcement efforts.
- Authorizes the Bureau to give extensions for obtaining accreditation according based on specified criteria.
- Requires certain out-of-state institutions offering distance education to California students to register with the Bureau, among other things.
BACKGROUND
Existing law:
Establishes the California Private Postsecondary Education Act of 2009 (Act) until January 1, 2017, and requires the Bureau for Private Postsecondary Education (Bureau) within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions, programs and courses of instruction pursuant to the Act and authorizes the Bureau to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if deemed necessary.
The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school.
(Education Code § 94800, et seq.)
ANALYSIS
This bill:
Office of Student Assistance and Relief
- Establishes an Office of Student Assistance and Relief to serve as the primary contact to address the needs of private postsecondary students and:
- Specifies that the duties of the Office include but are not limited to:
- Providing assistance to private postsecondary students.
- Conducting proactive outreach to these students.
- Administering the Student Tuition Recovery Fund.
- Overseeing the registration of private postsecondary institutions that do not have a physical presence in California but offer distance education to California students. These institutions are required to register with the Bureau and file a surety bond, as specified.
- Requires the Office to:
- Establish and maintain a website to provide information to students
- Specifies that the duties of the Office include but are not limited to:
about their rights and protections available to them.
- Provide information on its website about free services offered by a
local nonprofit community service organization with demonstrated
experience in assisting students in areas related to legal services
and student loan matters.
- Work, in consultation with state and federal agencies to determine
the resources and protections available to private postsecondary
students in the event of a school closure as specified.
Student Tuition Recovery Fund (STRF)
- Makes changes to STRF provisions. Specifically it,
- Removes the Bureau’s authority to establish regulations related to STRF.
- Makes specified California students enrolled at a campus or in an out-of-state online program of a Corinthian Colleges Inc., institution eligible for STRF.
- Declares the intent of the Legislature to require a private postsecondary education institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering from economic loss.
Enforcement Monitor
- Requires the Department of Consumer Affairs to supervise and appoint an enforcement monitor for a period of two years in order to:
- Monitor Bureau for Private Postsecondary Education’s (Bureau) enforcement efforts with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons.
- Submit specified reports to the Director of Consumer Affairs and
Legislature and be available to deliver oral reports.
- Sunsets the provisions related to the enforcement monitor on March 1, 2019.
Licensure
- Expands licensure specifications to include required certification or registration that a person must hold to lawfully engage in a profession, occupation, trade, or career field and makes related conforming changes throughout the act.
Compliance, Enforcement, Process, and Penalties
- Expands the authority of the Bureau to enforce the provisions of the Act:
- Authorizes Bureau staff to issue citations, with a fine not to exceed
$5,000 before leaving an institution when non-minor violations of the Act
are found during an inspection, as specified.
- Provides due process procedures for institutions contesting alleged violations.
- Increases the penalty for operating an institution without Bureau approval from $50,000 to $100,000.
- Provides the Bureau the authority to give extensions on deadlines for unaccredited degree granting institutions to become accredited according to certain evidentiary criteria being met.
- Makes other various technical changes.
STAFF COMMENTS
- Need for the bill. According to the author, this bill is necessary in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs, which are approved in a timely manner, while also ensuring a robust regulatory structure to prevent predatory practices and promotes student success. The author asserts that it is important to ensure that students are provided proper recourse through the Bureau for Private Postsecondary Education (Bureau) and the vast array of tools the Bureau has to assist students, in the event that they are not provided all the opportunities afforded to them. This bill seeks to incorporate changes as outlined in the Business, Professions and Economic Development Committee (BPED Committee) background paper for the recent Bureau Sunset Hearing.
- California Private Postsecondary Education Act. The state's program for regulation of private postsecondary and vocational education institutions has historically been plagued with problems. During the late 1980's, California developed a reputation as the "diploma mill capital of the world."
After numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, AB 48 (Portantino, Chapter 310, Statutes of 2009) was enacted to establish the California Private Postsecondary Education Act of 2009 (Act), which took effect January 1, 2010. The Act provided the regulatory framework for oversight of private postsecondary educational institutions operating with a physical presence in California.
The Act requires all unaccredited colleges in California to be approved by the Bureau, and all nationally accredited colleges to comply with numerous student protections. It also establishes prohibitions on false advertising and inappropriate recruiting. The Act requires disclosure of critical information to students such as program outlines, graduation and job placement rates, and license examination information, and ensures colleges justify those figures. The Act also guarantees students can complete their educational objectives if their institution closes its doors while providing the Bureau with enforcement powers necessary to protect consumers.
In 2014, SB 1247 (Lieu, Chapter 840, Statutes of 2014) amended the Act to require degree-granting institutions to be accredited, prohibit an institution that participates in federal veterans’ aid funding from claiming an exemption from the Act, and expanded the use of Student Tuition Recovery Fund payments to cover economic loss.
This bill makes changes to the Act based upon information from a Joint oversight hearing of the BPED Committee, Senate Education, Assembly Committees on Higher Education and Business, Professions and Consumer Protection. Staff notes that the act is currently scheduled to sunset on January 1, 2017. This bill makes no provisions for the extension of the sunset date.
- Joint Oversight Hearing. On March 28, 2016, the Business, Professions and Economic Development Committee (BPED Committee) convened a joint hearing that included the specified committees in both houses. The background paper for the hearing identified 18 different issues for consideration at the hearing, including administrative, budget, licensing, and exemption, enforcement, outreach and accountability issues. Recommendations relevant to the provisions in this bill include the following:
- Provide Bureau the discretionary authority to extend the deadline for accreditation. Accreditation is a baseline measure used to determine academic quality for educational or professional institutions and programs. During prior sunset reviews, concerns were raised about the ongoing approval by the Bureau for Private Postsecondary Education (Bureau) of unaccredited institutions offering degrees as these institutions are unlikely to be recognized by accredited institutions for purpose of transfer, or by many employers. In response to these concerns, SB 1247 amended the Act to require degree granting institutions to be accredited by an agency recognized by the United States Department of Education by July 1, 2020. Institutions are required to submit an accreditation plan to obtain pre-accreditation and full accreditation by specified dates.
Numerous unaccredited intuitions expressed concerns with the 2020 timeframe citing that it is “too short,” for the lengthy and rigorous accreditation process. The Bureau attempted to establish regulations for those schools close to achieving the stated goal but needing a few more months. The limitations in the Act prevented the Bureau from establishing the regulation.
This bill provides the Bureau the authority to give a 2-year extension on the timeline if certain evidence is provided, including documentation from an accrediting agency demonstrating the institution’s ability to achieve accreditation.
- Establish a single point of contact for students of private postsecondary education institutions. The background paper notes that the Bureau has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to inform institutions how to be compliant with the Act and Bureau regulations. The Bureau does not appear to focus similar efforts on student outreach to inform students about the Bureau’s work and available resources for students.
During the closure of Corinthian Colleges Inc., institutions for example, thousands of California students were faced with confusing choices, pressure from private loan companies to begin paying off loans, and the possibility that credits earned at these schools would yield few meaningful educational opportunities. In response to this issue, proposed legislation AB 573 (Medina, 2015) which was ultimately vetoed by the Governor, attempted to simplify and streamline the process by creating an ongoing dedicated single point of contact to coordinate efforts of state and federal agencies to assist any student harmed by a for-profit institution’s closure. During the closure, the Bureau for Private Postsecondary Education (Bureau) dispatched staff to provide students with information about Student Tuition Recovery Fund (STRF) and how to access transcripts. Of the approximately 4,000 Corinthian (WyoTech, Everest) college students eligible for repayment under STRF, 300 filed an application with the Bureau. Outside of these efforts, it appears that no other attempts were made to communicate or follow-up with these students.
This bill establishes an Office of Student Assistance and Relief to serve as a primary point of contact and work with various state agencies to address the needs of private postsecondary education students thereby emphasizing the Bureau’s responsibility to provide support to students.
- Require online institutions to obtain a surety bond to protect against unlawful activities or closure. There is no structure in California to monitor the online offerings of out-of-state institutions. The Bureau is only authorized to regulate institutions that have a physical presence in California. As such, California students enrolled in online programs offered by institutions based in other states do not benefit from the oversight provided by the Act, including access to the STRF.
In recognition of this regulatory gap for online education programs, the United States Department of Education issued federal regulations (75 FR 66831) that among other things, required distance education programs to have authorization in the student’s state. This specific regulation was vacated by a court ruling based on a technicality. Institutions, however, are required to comply with the laws and regulations of the states in which they operate.
To address this challenge, a group of institutions, states, and policy organizations developed the State Authorization Reciprocity Agreement (SARA) whereby institutions approved to operate in one participating state will be deemed automatically to have met approval requirements in other participating states. The state has not chosen to participate in SARA as concerns have been raised that the agreement would undermine California’s ability to regulate online profit programs and provide adequate protection to California students.
As an alternative to SARA, this bill requires out-of-state institutions offering online programs to California students to register with the Bureau and file a surety bond to provide recourse for students who have suffered economic loss as a result of a school closure.
Several states require for-profit institutions to maintain a surety bond. Surety bonds, which schools maintain, will typically refund a student’s tuition if the school closes or if the school fails to uphold the contract it signed with the student.
- Reduce complaints backlog associated with internal referrals resulting from compliance inspections and authorize the Bureau for Private Postsecondary Education (Bureau) to issue citations for non-minor violations. In the last few years, a number of postsecondary educational corporations have been cited by federal and state regulators for engaging in various forms of fraudulent misrepresentation. Often, these actions originate from public complaints. Concerns have been raised regarding the Bureau’s growing complaint and investigation backlog. The Bureau reports 1,045 pending complaints, taking on average one year to resolve (372 days).
In order to reduce the complaints backlog associated with internal referrals resulting from compliance inspections, this bill authorizes the Bureau to issue citations not to exceed $5,000 for non-minor violations, which are those that have the potential to cause student harm.
Additionally, in an attempt to respond to backlog issues, this bill provides for an Enforcement Monitor to evaluate the Bureau’s handling and processing of student complaints and timely application of issued sanctions. The Enforcement Monitor is required to submit several written reports specifying its findings to the Department of Consumer Affairs and the Legislature.
The Enforcement Monitor is appointed by and reports to the Director of Consumer Affairs which is the agency that currently oversees the Bureau. The committee may want to consider whether this structure creates an opportunity for an objective review of the Bureau.
- Remove the requirements that the Bureau establish regulations implementing the Student Tuition Recovery Fund (STRF) reforms. STRF reimburses “economic loss” for California residents enrolled in eligible institutions at the time of closure. Economic loss includes a student’s tuition, cost of required equipment and materials, and interest on student loan debt used to pay those costs. It does not include supplies, living expenses, or consequential damages such as emotional distress. Although the Act requires the Bureau to establish regulations providing relief for a student whose charges were paid by a third party, (such as an employer or a financial aid program) the Bureau has not yet adopted those regulations.
As a result, this bill relieves the Bureau of any requirement to establish regulations related to STRF. This will allow the Bureau, without further delay, to begin administering these provisions of the program as provided by current law.
- Clarify the definition of licensure and enhance disclosures to students. The Act provides that if an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in California, the institution must have educational program approval from the appropriate state licensing agency for any student who completes that program to sit for any required licensure exam. The definition of “licensure” under the Act does not specify certification or registration programs that may also be required for some professions.
This bill expands licensure to include required certification or registration that a person must hold to engage in certain professions and requires institutions offering an educational program in certain professions that require a certificate or registration to have approval from the appropriate agency.
- Corinthian Colleges, Incorporated (CCI) students. The Student Tuition Recovery Fund (STRF) is supported by fees collected from each student at regulated schools. STRF payments are available to California Wyotech and Everest students who have suffered economic losses. However, as a Western Association of Schools and Colleges (WASC) accredited school, Heald Colleges were exempt from Bureau for Private Postsecondary Education (Bureau) oversight, and as such STRF payments are not available to Heald students nor are they available to students enrolled in out-of-state online programs.
This bill would provide these additional sources of relief to students who were enrolled in an online program offered by an out-of-state campus of a CCI institution, if the student was enrolled or withdrew from enrollment within 120 days of the date of the Corinthian closures. The net effect is that Heald students and certain CCI students enrolled in out-of-state online programs would become eligible for STRF payments. Prior proposed legislation, AB 573 (Medina, 2015) provided similar provisions but was vetoed by the Governor.
- Related legislation.
SB 1281 (Block) requires law schools that are not ABA approved to publicly disclose on its website, with a link on its home page under “Admissions” information about the institution, including, among other items, outcomes for graduates and bar passage data. Requires the information to be complete, accurate and not misleading. SB 1281 is currently pending in the Senate Committee on Judiciary.
AB 1916 (Irwin) requires a private postsecondary institution to file a surety bond with the Bureau before January 1, 2019, in an amount no less than the total amount of tuition and fees charged by the institution for the immediately preceding academic year, divided by 4. AB 1916 is currently pending in the Assembly Committee on Business and Professions.
AB 1996 (Gordon) exempts a nonprofit institution that is accredited by WASC, that does not award degrees or diplomas, and is paid from state or federal student financial aid programs for fewer than 20 percent of its students who receive vocational training from the Act. AB 1996 is currently pending in the Assembly floor.
AB 2581 (Medina) provides financial and other assistance to students of Heald, Everest, and WyoTech campuses in California, which were owned by Corinthian Colleges, Incorporated and closed unlawfully on April 27, 2015. AB 2581 is currently pending in the Assembly floor.
AB 1835 (Holden) exempts institutions that grant doctoral degrees in psychoanalysis from the provisions of the Act requiring unaccredited degree granting institutions to be accredited if all of the institution’s students hold master’s or doctoral degrees before enrollment in the institution. AB 1835 is currently pending in the Assembly Committee on Business and Professions.
AB 2652 (Eggman) requires a private entity with no physical presence in this state, that would be subject to the requirements of the Act if the entity was located in this state, to register with the Bureau for Private Postsecondary Education (Bureau) and participate in Student Tuition Recovery Fund (STRF). AB 2652 is currently pending in the Assembly Committee on Higher Education.
- Prior legislation.
SB 81 (Committee on Budget and Fiscal Review, Chapter 22, Statutes of 2015) included numerous statutory changes intended to implement the Budget Act of 2015 related to postsecondary education. Among those changes is a provision that allows the Bureau to enter into a contract with any independent institution of higher education, as defined, to review and act on student complaints against the institution.
SB 634 (Block, 2015) would have authorized the Department of Consumer Affairs to enter into a multistate regional reciprocity agreement on behalf of this state for interstate offering of distance education courses and oversight of postsecondary institutions in states which they maintain no physical presence. SB 634 was held at the request of the author in the Senate Committee on Education.
AB 573 (Medina, 2015) would have extended Cal Grant eligibility for former students of Heald College and create a grant program within the Attorney General's office to fund nonprofit organizations providing free legal services to former students of Corinthian Colleges. AB 573 was vetoed by Governor Brown whose veto message read in part:
I am sympathetic to the many students who were enrolled at Corinthian Colleges when the company abruptly shuttered its doors earlier this year. The USDE has taken the matter of loan discharge seriously. In recent months, it has greatly eased the burden of filings for many students, and its work to provide a simple, swift and fair process for students continues. As such, it appears premature to create an attorney grant program, especially one that provides little direction on how funds should be used.
While the bill's provisions to extend Cal Grant eligibility for Heald students are well-intentioned, I am not comfortable creating new General Fund costs outside of the budget process, particularly given the Cal Grant augmentations already included in this year's budget. For these reasons, I am returning this bill without my signature.
AB 2099 (Frazier, Chapter 676, Statutes of 2014) stipulated new Title 38 veterans funding eligibility standards for postsecondary institutions in California. The bill also provided that, in order for a postsecondary institution to be determined eligible to accept Title 38 monies, determined by California State Approving Agency for Veterans Education, the postsecondary institution, whether it offers degrees or not, must either be a public school, a nonprofit school, approved by the Bureau for Private Postsecondary Education (Bureau) or be regionally accredited.
SB 1247 (Lieu, Chapter 840, Statutes of 2014) extended the sunset date for the Bureau and the Act until January 1, 2017 and made statutory changes to the protections provided to students and the requirements placed on private postsecondary educational institutions, including prohibiting an institution from claiming an exemption from the Act if the institution is approved to participate in Title 38 programs.
AB 2296 (Block, Chapter 585, Statutes of 2012) expanded the disclosure requirements for institutions under the Bureau related to unaccredited programs; expanded disclosure requirements for all regulated institutions; established more stringent criteria for determining gainful employment and calculating job placement rates; and increased institutional documentation and reporting requirements around completion rates, job placement/license exam passage rates, and salary/wage information for graduates.
SB 498 (Liu, 2011) would have abolished the Bureau and transferred the Bureau's powers and duties under the Act to the California Postsecondary Education Commission. SB 498 was held in the Senate Committee on Business, Professions and Economic Development.
AB 611 (Gordon, Chapter 103, Statutes of 2011) set forth certain disclosure requirements pertaining to accreditation status, licensure, and related limitations for unaccredited doctoral programs.
AB 773 (Block, 2011) would have allowed the Bureau to revoke an exemption of an institution which was exempt based on accreditation, but still required to comply with the Student Tuition Recovery Fund requirements, if it determined that the institution had not in fact complied with those requirements. AB 773 was never heard in a policy committee.)
AB 1013 (Assembly Committee on Higher Education, Chapter 167, Statutes of 2011) made clarifying changes to the Act and related Bureau oversight.
AB 1889 (Portantino, 2010) contained provisions regarding doctoral degrees offered by unaccredited institutions, the calculation of placement rates, and Bureau employment requirements. AB 1889 was vetoed by Governor Brown whose veto message read in part:
This bill would require an Executive Branch agency to follow specific Staffing requirements prescribed by the Legislature. This is both an inappropriate and unacceptable action to micro-manage and burden the implementation of regulatory policy.
AB 48 (Portantino, Chapter 310, Statutes of 2009) established the California Private Postsecondary Education Act of 2009.
SB 1568 (Dunn, Chapter 534, Statutes of 2006) transferred regulation and oversight of unaccredited law schools and correspondence law schools from the California Bureau for Private Postsecondary and Vocational Education to the State Bar Committee of Bar Examiners. SB 1568 also required correspondence law schools to be required to disclose their faculty-to-student ratio and their Baby Bar and general bar exam passage rates to prospective students in the same manner required of unaccredited schools.
SB 1544 (Figueroa, Chapter 740, Statutes of 2004) extended the operation of the former Bureau for Private Postsecondary Education to 2007 and directed the Department of Consumer Affairs to appoint an Education Operations and Administrative Monitor to assess the administrative operations and enforcement processes and procedures of that Bureau with the primary goal of improving the Bureau's overall efficiency and compliance with state laws.
SUPPORT
Center for Public Interest Law
Children’s Advocacy Institute
Consumer Federation of California
East Bay Community Law Center
Housing and Economic Rights Advocates
Public Advocates
Veterans Legal Clinic
OPPOSITION
California Association of Private Postsecondary Schools.
-- END --
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1192 Hearing Date: April 11, 2016
Author: | Hill | ||
Version: | Amended | ||
Urgency: | Fiscal: | ||
Consultant: | |||
Subject: Private postsecondary education: California Private Postsecondary Education Act of 2009
SUMMARY:
Makes various changes to the Private Postsecondary Education Act of 2009 intended to improve the effectiveness of the Bureau for Private Postsecondary Education and opportunities for student success.
Existing law: Establishes the California Private Postsecondary Education Act of 2009 (Act) until January 1, 2017, and requires the Bureau for Private Postsecondary Education (BPPE) within the Department of Consumer Affairs (DCA) to, among other things, review, investigate and approve private postsecondary institutions, programs and courses of instruction pursuant to the Act and authorizes BPPE to take formal actions against an institution/school to ensure compliance with the Act and even seek closure of an institution/school if determined necessary. The Act requires unaccredited degree granting institutions to be accredited by an accrediting agency recognized by the United States Department of Education (USDE) by 2020. The Act also provides for specified disclosures and enrollment agreements for students, requirements for cancellations, withdrawals and refunds, and that the BPPE shall administer the Student Tuition Recovery Fund (STRF) to provide refunds to students affected by the possible closure of an institution/school. (Education Code § 94800 et seq.)
This bill:
- Ensures that certification and registration necessary for a student to engage in a particular profession are reflected in the BPPE’s approval of educational programs.
- Provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence.
- Establishes an Office of Student Assistance and Relief (Office) to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that the duties of the Office include but are not limited to providing assistance to students, conducting proactive outreach to students, administering the STRF and overseeing the registration of institutions that do not have a physical presence in this state and are offering distance education to California students. Requires the Office to establish and maintain a website to provide information to students about their rights and protections available to them as well as information about free services available to students provided by a local nonprofit community service organization with demonstrated experience assisting students in areas like legal services and student loan matters.
- Provides recourse through the STRF to students impacted by the abrupt closure of Corinthian Colleges, Inc. (CCI).
- States the intent of the Legislature to require a private postsecondary educational institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering economic loss. Requires these institutions to register with BPPE.
- Authorizes Bureau staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection.
- Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
- Requires the Director to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public. Requires the enforcement monitor to submit reports to the Director and Legislature and be available to make oral reports to both if requested to do so.
- Makes various technical changes.
FISCAL EFFECT: Unknown. This bill is keyed “fiscal” by Legislative Counsel.
COMMENTS:
- Purpose. This bill is sponsored by the Author, and is one of five “sunset bills” the Author is sponsoring this Session. According to the Author, this bill is necessary to make changes to the Act in order to ensure continued oversight of private postsecondary institutions that supports quality, innovative programs which are approved in a timely manner, while also making sure a robust government structure prevents predatory practices and promotes student success. According to the Author, the focus of any conversation about the Bureau and Private Postsecondary Education Act should be about finding balance - balance between a thoughtful regulatory structure that allows good schools to thrive while at the same time establishing meaningful opportunities for students. The Author notes that “we must continue to ensure that the Californians working to better their lives through education and skills based training have some confidence in the quality of education and training they receive. It is also important for us to find ways to increase accountability for California students, as well as for the significant amount of public and private resources spent on educational and training endeavors.” According to the Author, most significantly, it is important to ensure that students are provided proper recourse through the Bureau and the vast array of tools the Bureau has to help students in the event that they are not provided all of the opportunities they were promised.
- Oversight Hearings and Sunset Review of Licensing Boards and Programs. Beginning in 2015, the Senate Business and Professions Committee and the Assembly Business and Professions Committee (Committees) conducted joint oversight hearings to review 12 regulatory entities: DCA, Acupuncture Board, Board of Behavioral Sciences, California Massage Therapy Association, Court Reporters Board, Board of Pharmacy, Physician Assistant Board, Board of Podiatric Medicine, BPPE, Board of Psychology, Bureau of Real Estate, Bureau of Real Estate Appraisers and Veterinary Medical Board
The Committees conducted two hearings in March and joined with the Senate Committee on Education and Assembly Committee on Higher Education to review BPPE. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees and which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year.
- Background on BPPE. The Bureau for Private Postsecondary Education (BPPE or Bureau) is responsible for oversight of private postsecondary educational institutions operating with a physical presence in California. Established by
AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous legislative attempts to remedy the laws and structure governing regulation of private postsecondary institutions, the bill took effect January 1, 2010, to make many substantive changes that created a foundation for oversight and gave the BPPE enforcement tools to ensure schools comply with the law.
AB 48 established BPPE’s authority to regulate private postsecondary institutions and enforce the provisions of the new California Private Postsecondary Education Act (Act) and to respond to the major problems with the former laws governing the industry in California. The Act provides for prohibitions on false advertising and inappropriate recruiting and requires disclosure of critical information to students such as program outlines, graduation and job placement rates, and license examination information, and ensures colleges justify those figures. The Act also provides BPPE with enforcement powers necessary to protect consumers. The Act directs BPPE to:
- Create a structure that provides an appropriate level of oversight, including approval of private postsecondary educational institutions and programs;
- Establish minimum operating standards for California private postsecondary educational institutions to ensure quality education for students;
- Provide students a meaningful opportunity to have their complaints resolved;
- Ensure that private postsecondary educational institutions offer accurate information to prospective students on school and student performance; and,
- Ensure that all stakeholders have a voice and are heard in the operations and rulemaking process of BPPE.
BPPE is also tasked with actively investigating and combatting unlicensed activity, administering the Student Tuition Recovery Fund (STRF), and conducting outreach and education activities for students and private postsecondary educational institutions within the state.
- Review of the BPPE – Issues Identified and Recommended Changes. Private postsecondary institutions play an important role in ensuring access to higher educational opportunities for California’s students. The landscape of schools that are now regulated under BPPE, and that have become central in California’s discussion of private postsecondary education, has evolved significantly in recent decades. The smaller, independent for-profit institutions that made up the bulk of the former-Bureau’s licensee population have shifted. Today, a large number of California students are being served by multi-campus, publicly-traded institutions with a national presence. These institutions also receive significant public funds; under federal law, up to 90 percent of revenues can come from the Title IV financial aid program. In 2009-10, nationally, for-profit institutions received $32 billion in Title IV grants and loans. High-profile state and federal investigations have revealed deceptive and illegal practices by some institutions within the sector. Federal regulators responded by increasing student outcome and institutional accountability measures. Specifically, in California, BPPE’s approval can enable these institutions to access the Title IV program; USDE relies on the Bureau to provide oversight and student protection.
Students, the public and quality private postsecondary educational institutions are best served by a well-functioning regulatory entity that effectively enforces the Act. The Bureau has faced significant difficulties in implementing the law. It is important that California’s approval and oversight of an institution assures minimum quality and student protections.
The following are some of the major issues pertaining to BPPE along with background information concerning the particular issue. Recommendations were made by Committee staff regarding the particular issue areas which needed to be addressed.
- Issue: Relationship of the Bureau to Other Regulatory Entities.
Background: The Act provides that if an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in California, the institution must have educational program approval from the appropriate state licensing agency for any student who completes that program to sit for any required licensure exam. The law is intended to deal with the issue of students completing an educational program specifically designed to prepare them for certain occupations that in reality does not meet any requirements for education required for licensure.
As the Bureau noted during the prior review, the Act may also be strengthened to ensure students receive training necessary for employment and licensure. Specifically, the definition of “licensure” contained in Education Code section 94848 does not specify certification or registration, but if these are required for a given profession, specific language may be included in this definition. Also, in some professions there are no requirements for official recognition but there may be preferred certification requirements. In those cases, there should be stronger disclosures to students regarding employment impediments they may encounter. For example, ultrasound technicians are not required to graduate from an institution that is accredited by the American Registry for Diagnostic Medical Sonography (ARDMS) but many employers will not hire students who have not graduated from an ARDMS accredited institution.
Recommendation and Proposed Statutory Change: The Committees may wish to amend the Act to clarify the definition of licensure and enhance disclosures to students regarding necessary requirements for training programs.
This bill makes the following changes to the Act related to completion of an education or training program designed to prepare graduates for employment in a profession, occupation or trade:
Includes certification and registration in the definition of licensure for purposes of BPPE approval of a program intended to lead to licensure and adds requirements for institutions to reflect certification or registration necessary for a student to engage in a particular profession during the enrollment process.
- Issue: Unaccredited Degree Granting Programs.
Background: During the prior sunset review, the Committees were significantly concerned about the ongoing approval by BPPE of institutions that offer degrees but are not accredited. California is one of few states to continue to allow unaccredited degree granting programs, with approximately 140 approved institutions offering unaccredited degrees. A 2012 New York Times article outlined the experience of students attending these institutions, including one seeking a bachelor’s degree who had never spoken to a teacher but instead received an email package of reading materials to read with an open choice multiple-choice exam. The practice of offering degrees primarily online and primarily targeted to foreign students has long been at the heart of the state’s role as the diploma mill capital of the world.
Some career fields and licensing agencies require degrees from accredited colleges; this is especially true in professions like education and health care, where certification or licensure is a pre-requisite for employment. Although California licensure requirements in the health care field vary, many practitioners must obtain their required degrees from accredited institutions or institutions approved by their respective licensing boards. While the accrediting process is not perfect, as highlighted by the unlawful activities of institutions accredited by some accrediting agencies, and does not focus on fair business practices that can impact a student’s success, accreditation is designed to provide a baseline measure of the quality of a particularly educational program.
In response to these concerns and as a means of better serving students while aiming to decrease the Bureau’s significant workload associated with reviewing unaccredited degree granting institutions, SB 1247 (Lieu, Chapter 840, Statutes of 2014) amended the Act to require that degree granting programs be accredited. Institutions offering a degree that seek BPPE approval are now required to either be accredited by an accrediting agency recognized by the USDE to offer the degree(s) or have an accreditation plan, approved by BPPE, for the institution to become fully accredited within five years of the BPPE issuance of a provisional approval to operate. For these schools, the Act requires compliance with certain student disclosures about accreditation, review by a visiting committee and degree limitation requirements. SB 1247 also outlined a process for institutions that are currently approved by BPPE and offer degrees to submit an accreditation plan to the Bureau by July 1, 2015, to obtain pre-accreditation by July 1, 2017, to obtain accreditation by July 1, 2020, and to comply with various student disclosure and visiting committee review requirements.
It appears that some authority to provide extensions for meeting deadlines is still desirable, as the Bureau’s Statement of Reasons provided to the Office of Administrative Law in support of the regulations for implementing the accreditation requirement notes that “a scenario, in which a program was very close, but not quite to the stated goal, was envisioned, where the parties could easily agree that the program would meet the requirement, but it needed a couple more months. In short, substantial performance could be demonstrated. However, extensions were rejected as the statute states that programs failing to meet the deadlines must be automatically suspended, which allows for no other alternatives.”
Unaccredited degree granting institutions have also expressed concerns about the timeframes established in the law to become accrediting, noting that the 2020 deadline is too short.
Recommendation and Proposed Statutory Change: The Committees may wish to provide the Bureau discretionary authority, as outlined in previous version of SB 1247, to extend the deadline by which a school must be accredited, according to certain measures showing meaningful progress toward accreditation.
This bill makes the following changes to the Act related to unaccredited degree granting institutions:
Provides BPPE the authority to give extensions on the timeline for unaccredited degree granting institutions to become accredited according to certain evidence provided by the institution.
- Issues: Outreach/School Closures and STRF.
Background: The Bureau has focused significant efforts to provide outreach to schools, including new workshops to assist with application completion and web-based tools to allow institutions to better understand how they can be compliant with the Act and Bureau regulations. The Bureau does not appear to focus similar efforts on student outreach to inform students about the Bureau’s work and available recourse for students.
Legislative intent outlined in the Act specifically references “meaningful student protections through essential avenues of recourse for students” and “prevention of the harm to students and the deception of the public that results from fraudulent or substandard educational programs and degrees” in continuing the operation of the Bureau and Act. The Bureau is also required, under Education Code Section 94879, to “conduct an outreach program to secondary school pupils as well as prospective and current private postsecondary students, to provide them with information on how best to select a private postsecondary institution, how to enter into enrollment agreements, how to make informed decisions in the private postsecondary education marketplace and how to contact the Bureau for assistance.”
The Bureau has a number of new tools it has employed since the prior sunset review to communicate more directly with schools, including offering workshops once a month to assist institutions in completing applications for approval throughout the state as well as webinars and videos to help schools provide accurate information to the Bureau. These proactive efforts have helped reduce the licensing backlog and are likely a means by which institutions have increased awareness of Bureau requirements and activities.
It does not appear that the Bureau focuses the same effort and resources on proactive outreach to students. The Bureau reports that it attends college fairs with agencies like the California Student Aid Commission (CSAC) which, the Bureau reports, “informs students of the Bureau and the resources available to them from the Bureau”. Based on the large scale closures during the past year and increased exposure to students about BPPE and the Act, it does not appear that students attending Bureau regulated schools are as aware of the Bureau and options available provided by BPPE. Some students may first interact with the Bureau during site visits amidst an abrupt closure of their school and while BPPE staff have been swift in trying to make contact with students at these school sites, it does not appear that the Bureau utilizes student information collected in a proactive way to then continue communicating with students about their options for recourse. Staff provides students STRF applications during these school closure visits, but the onus is then on students to contact the Bureau again for additional follow up. While BPPE reported during the CCI closure that it made contact with almost 80 percent of Wyotech and Everest students who would be STRF eligible, it has received around 300 applications. BPPE also reports that it has received over 10,000 calls related to the CCI closure and while the Bureau notes that it documents student contact information for students who attended schools under the Bureau’s jurisdiction, it does not appear that contact information is tracked for all students who contact BPPE.
The Committees were interested in providing a simple, streamlined process to students in the wake of a school closure and proposed in AB 573 (Medina, 2015) first a closed schools task force and then a single state point of contact to lead the synchronization of other state agencies with a role in assisting students, monitoring regulatory efforts at the state and federal level and be in a position to work with partner agencies to establish key criteria for determining the appropriate steps the state should take to protect students, particularly in light of abrupt school closures.
The STRF is an important tool to assist harmed students. STRF, administered by the BPPE, exists to relieve or mitigate economic loss suffered by students enrolled at non-exempt private postsecondary education institutions due to the institutions' closure, the institutions' failure to pay refunds or reimburse loan proceeds, or the institutions' failure to pay students' restitution award for a violation of the Act.
SB 1247 directed BPPE to enact regulations to expand the uses of STRF to provide relief to harmed students. However, BPPE has not yet enacted new regulations. Due to this delay, several categories of students that were harmed by illegal institutional practices and closure are not provided full recovery under STRF.
Students enrolled in institutions that are exempt from, or not covered by the Act are not eligible for STRF. Due to broad exemptions in the Act, over 13,000 students enrolled in Heald College (owned by CCI) at the time of the institution’s unlawful closure were not eligible for STRF. Further, as a result of the requirement in the Act that schools under BPPE oversight have a physical presence in the state, a number of California students enrolled in Everest Online (owned by CCI but housed outside of California) are not eligible for STRF. Several other large, publicly traded colleges are now under regulatory, financial and legal pressure similar to that facing CCI prior to closure. A requirement for a surety bond or for inclusion in STRF for exempt and online institutions may ensure that all California students are protected.
Recommendation and Proposed Statutory Change: The Committees may wish to explore establishing a single point of contact for prospective and current students of private postsecondary education institutions. The Committees may wish to extend the timeframe in which a student may file a STRF claim. The Committees may wish to establish an independent student advocate to work with nonprofit community organizations, to provide outreach and support to students that may be eligible for state or federal relief, and to make recommendations to the DCA Director regarding improving student outreach and protection. The Committees may wish to require institutions, including exempt or online institutions) to participate in STRF and/or obtain a surety bond to protect against unlawful activities or closures. The Committees may wish to ensure BPPE has clear authority to help students harmed by illegal or deceptive school practices; for example, to order institutional refunds/restitution to students who have been defrauded or to require institutions to cancel student loan debt when the institution operates as a private lender.
This bill makes the following changes to the Act related to outreach, school closures and STRF:
Establishes an Office of Student Assistance and Relief (Office) to serve as a primary point of contact to address the needs of private postsecondary education students. Specifies that the duties of the Office include, but are not limited to, providing assistance to students, conducting proactive outreach to students, administering the STRF and overseeing the registration of institutions that do not have a physical presence in this state and are offering distance education to California students. Requires the Office to establish and maintain a website to provide information to students about their rights and protections available to them, as well as information about free services available to students provided by a local nonprofit community service organization with demonstrated experience assisting students in areas like legal services and student loan matters.
Provides that a student who was enrolled at a California campus of CCI, or was a California student enrolled in an online program offered by an out-of-state campus of a CCI institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by BPPE, is eligible for STRF.
States the intent of the Legislature to require a private postsecondary education institution that does not maintain a physical presence in this state and offers distance education to California students to file a surety bond for the benefit of students suffering economic loss. Requires these institutions to register with BPPE.
- Issue: Unlicensed Activity/Compliance Inspections/BPPE Investigations Backlog and Enforcement Powers.
Background: The Act provides that the BPPE primary mission is to protect students. One of the ways BPPE achieves this objective is through announced and unannounced compliance inspections that ensure institutions are meeting the minimum operating standards outlined in the Act and regulations. Upon conclusion of a compliance inspection, institutions are issued a notice to comply for any “minor violations” identified during the inspection. Violations that are not “minor" are referred to the complaint investigations unit for further investigation. Committee staff understands that this internal referral occurs because BPPE believes, unlike most other DCA boards and bureaus, it does not currently have the authority to issue a citation for more serious violations identified during the compliance inspection.
Information regarding pending investigations is not made available to the public until a citation or accusation has been issued by the BPPE. This means that students seeking information regarding an institution may be provided inaccurate information regarding an institution's compliance with the law. For example, 13 unannounced compliance inspections were completed in 2015 of Everest and WyoTech (owned by CCI) campuses. According to the compliance inspection outcome data posted on the BPPE website, no minor violations were detected at any of the inspected campuses. These compliance inspections occurred after the AG, and a number of other states and federal agencies, filed charges against CCI for unlawful practices.
The degree to which compliance inspections lead to investigations that result in the issuance of a citation and/or accusation is also unclear; BPPE does not report data on this point. Further, BPPE staff from different units generate complaints and it appears that this internal referral process contributes to the current complaints backlog. According to BPPE data, by 2015 year-end, 32 percent of the 1045 pending complaints were internal referrals.
The USDE establishes that states are responsible for providing primary protection of consumers and students attending postsecondary educational institutions. BPPE approval not only authorizes institutions to operate and serve students in California, it can also, as outlined above, enable institutions to receive public funds through the federal Title IV financial aid program.
In the last few years, a number of postsecondary educational corporations have been accused by federal and state regulators of engaging in misconduct and fraud. Often, these actions originate from public complaints. The BPPE faces a growing complaint and investigation backlog that may significantly reduce California’s ability to protect students and ensure appropriate use of taxpayer funds.
SB 1247 directed BPPE to consult with the Advisory Committee and adopt regulations to establish complaint priorities. BPPE was required specifically to prioritize complaints related to unlawful, unfair or fraudulent business practices and institutions making unfair, deceptive or misleading statements regarding educational programs, placement, loans, tuition and fees, and other outlined areas. BPPE reports the Advisory Committee has discussed new regulations regarding complaint prioritization, and the proposed regulations are currently in the internal review process.
Currently, BPPE reports that it is prioritizing complaints based on a risk assessment score that reviews the following criteria:
- Allegations of complaint
- Population of surrounding community
- Number of open/closed complaints
- Age of complaint
- Institution status
The risk score is used to categorize the complaint as urgent, high or routine.
BPPE appears to have made some progress toward meeting the Legislature’s directives contained in SB 1247; however, increased staffing and complaint prioritization changes have not reduced the BPPE complaint backlog. Further, as the details of complaints and resolutions are not made available to the Legislature, it is unclear if complaints are being acted upon properly in order to enforce the Act and protect students.
Recommendation and Proposed Statutory Change: To reduce the complaints backlog associated with internal referrals resulting from compliance inspections, the Committees may wish to amend the Act to authorize the Bureau, consistent with all due process requirements, to issue citations for non-minor violations detected during a compliance inspection. To ensure BPPE compliance inspections are properly identifying and responding to institutional violations of law, the Committees may wish to require an independent review and report on the adequacy of BPPE compliance inspections. The Committees may wish to require an independent review of complaint prioritization and investigation and resolution procedures to ensure BPPE is using all authorized tools to mitigate harm to students.
This bill makes the following changes to the Act related to enforcement:
Authorizes Bureau staff to issue a citation, with a fine not to exceed $5,000, before leaving an institution when non-minor violations of the Act are detected during an inspection.
Increases the penalty for operating an institution without BPPE approval from $50,000 to $100,000.
Requires the Director to appoint an enforcement monitor for a period of two years to monitor the BPPE’s enforcement efforts, with a specific concentration on the adequacy of bureau compliance inspections, handling and processing of student complaints and timely application of sanctions or discipline imposed on institutions and persons in order to protect the public. Requires the enforcement monitor to submit reports to the Director and Legislature and be available to make oral reports to both if requested to do so.
- Current Related Legislation. There are a number of bills moving through the Legislature this year that also make changes to the Act, or propose statutory changes that could impact BPPE and students attending private postsecondary education institutions. It may be appropriate for the Committee to consider whether some of the proposed policy changes, particularly those which were addressed in the Background Paper for BPPE, be included in this more comprehensive measure.
SB 1059 (Monning) exempts law schools accredited by the State Bar of California Committee on Bar Examiners from requirements that they be accredited by an accrediting agency recognized by USDE in order to receive Title 38 veterans benefits. (Status: The measure passed this Committee on April 4, 2016 and is pending in the Senate.)
SB 1281 (Block) requires law schools that are not ABA approved to publicly disclose on its website, with a link on its home page under “Admissions” information about the institution, including, among other items, outcomes for graduates and bar passage data. Requires the information to be complete, accurate and not misleading. (Status: The bill is currently pending in the Senate Committee on Judiciary.)
AB 1835 (Holden) exempts institutions that grant doctoral degrees in psychoanalysis from the provisions of the Act requiring unaccredited degree granting institutions to be accredited if all of the institution’s students hold master’s or doctoral degrees before enrollment in the institution and the institution has obtained accreditation from, or has submitted a self-study application to, the Accreditation Council for Psychoanalytic Education on or before July 1, 2017. (Status: The bill is currently pending in the Assembly Committee on Higher Education.)
AB 1916 (Irwin) requires a private postsecondary institution to file a surety bond with BPPE before January 1, 2019, in an amount no less than the total amount of tuition and fees charged by the institution for the immediately preceding academic year, divided by 4. Provides that in the event the institution ceases operation, requires BPPE to make a demand on the institution to provide recovery to students who were enrolled at the time of the closure, or within 120 days of the closure, and reimburse the Student Tuition Recovery Fund for moneys paid from the fund for these students. (Status: The bill is currently pending in the Assembly Committee on Higher Education.)
AB 1996 (Gordon) exempts a nonprofit institution that is accredited by WASC, that does not award degrees or diplomas, and is paid from state or federal student financial aid programs for fewer than 20 percent of its students who receive vocational training from the Act. (Status: The bill is currently pending in the Assembly Committee on Higher Education.)
AB 2581 (Medina) provides financial and other assistance to students of Heald, Everest, and WyoTech campuses in California, which were owned by CCI and closed unlawfully on April 27, 2015. (Status: The bill is currently pending in the Assembly.)
AB 2652 (Eggman) requires a private entity with no physical presence in this state, that would be subject to the requirements of the Act if the entity was located in this state, to register with the bureau and participate in STRF. Establishes a private task force comprised of specified individuals to make recommendations, by July 1, 2018, to the Legislature and the Governor on how California should regulate educational programs offered by institutions with no physical presence in this state by means of distance education. (Status: The bill is currently pending in the Assembly Committee on Higher Education.)
- Prior Related Legislation. SB 81 (Committee on Budget and Fiscal Review, Chapter 22, Statutes of 2015) included numerous statutory changes intended to implement the Budget Act of 2015 related to postsecondary education. Among those changes is a provision that allows the Bureau to enter into a contract with any independent institution of higher education, as defined, to review and act on student complaints against the institution.
SB 410 (Beall, Chapter 258, Statutes of 2015) defined “on-time graduates” to mean students who graduate within 100% of the program length in lieu of classifying this group as “graduates” for purposes of reporting requirements.
SB 634 (Block) of 2015 would have applied the Act to an accredited private entity with no physical presence in this state that offers distance education if the entity does not participate in a regional state authorization reciprocity agreement entered into or recognized by the state and would have authorized DCA to enter into a regional state authorization reciprocity agreement with other states through a compact on behalf of this state, allowing an entity regulated in one member state to be able to provide distance education in other member states. (Status: This bill failed passage in the Senate Committee on Education.)
AB 573 (Medina) of 2015) included a number of components contained in AB 2581 above. (Status: The bill was vetoed by Governor Brown who noted in his veto message: “I am sympathetic to the many students who were enrolled at Corinthian Colleges when the company abruptly shuttered its doors earlier this year…[USDE] has taken the matter of loan discharge seriously. In recent months, it has greatly eased the burden of filings for many students, and its work to provide a simple, swift and fair process for students continues. As such, it appears premature to create an attorney grant program, especially one that provides little direction on how funds should be used. While the bill's provisions to extend Cal Grant eligibility for Heald students are well-intentioned, I am not comfortable creating new General Fund costs outside of the budget process, particularly given the Cal Grant augmentations already included in this year's budget.”)
AB 752 (Salas, Chapter 560, Statutes of 2015) required the Bureau to review, by July 1, 2016, the examinations for ability-to-benefit students prescribed by the United States Department of Education. As part of this review, the Bureau is required to determine whether the examinations are appropriate for ability-to-benefit students who possess limited English proficiency and approve an alternative examination if the Bureau decides the examinations are inappropriate.
AB 509 (Perea, Chapter 558, Statutes of 2015) created an exemption from the Act and related oversight by the Bureau for a bona fide organization, association, or council that offers pre-apprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards approved apprenticeship programs.
AB 2099 (Frazier, Chapter 676, Statutes of 2014) stipulated new Title 38 veterans funding eligibility standards for postsecondary institutions in California. All institutions now must provide license examination passage rates to students, and institutions that offer degrees must have institutional and programmatic accreditation in order to receive Title 38 monies. The bill also provided that, in order for a postsecondary institution to be determined eligible to accept Title 38 monies, determined by CSAAVE, the postsecondary institution, whether it offers degrees or not, must either be a public school, a nonprofit school, approved by the Bureau or be regionally accredited.
SB 1247 (Lieu, Chapter 840, Statutes of 2014) extended the sunset date for the BPPE and the Act until January 1, 2017 and made statutory changes to the protections provided to students and the requirements placed on private postsecondary educational institutions, including prohibiting an institution from claiming an exemption from the Act if the institution is approved to participate in Title 38 programs. The bill also contained an exemption for an institution that meets a series of criteria including being accredited by WASC for at least 10 years, headquartered in California, operated continuously for at least 25 years, previously held approval to operate by the former Bureau and derives at least 12.5 percent of its revenues from sources other than state or federal student assistance like Title 38 and CalGrant monies. One institution is currently claiming an exemption pursuant to this provision in SB 1247.
AB 2296 (Block, Chapter 585, Statutes of 2012) expanded the disclosure requirements for institutions under the Bureau related to unaccredited programs; expanded disclosure requirements for all regulated institutions; established more stringent criteria for determining gainful employment and calculating job placement rates; and increased institutional documentation and reporting requirements around completion rates, job placement/license exam passage rates, and salary/wage information for graduates.
SB 498 (Liu) of 2011 would have abolished the Bureau and transferred the Bureau's powers and duties under the Act to the California Postsecondary Education Commission. (Status: The bill was held by the Senate Committee on Business, Professions and Economic Development.)
SB 619 (Fuller, Chapter 309, Statutes of 2011) exempted flight instructors or flight schools from Bureau regulation if they do not require the upfront payment of tuition or fees, and that do not require students to enter into a contract of indebtedness in order to receive training.
AB 611 (Gordon, Chapter 103, Statutes of 2011) set forth certain disclosure requirements pertaining to accreditation status, licensure, and related limitations for unaccredited doctoral programs.
AB 773 (Block) of 2011 would have allowed the Bureau to revoke an exemption of an institution which was exempt based on accreditation, but still required to comply with the Student Tuition Recovery Fund requirements, if it determined that the institution had not in fact complied with those requirements. (Status: The bill was never heard in a policy committee.)
AB 797 (Conway) of 2011 would have exempted schools of cosmetology, as defined, from the Act. (Status: The bill was held in Assembly Committee on Higher Education.)
AB 1013 (Assembly Committee on Higher Education, Chapter 167, Statutes of 2011) made clarifying changes to the Act and related Bureau oversight.
AB 1889 (Portantino) of 2010 contained provisions regarding doctoral degrees offered by unaccredited institutions, the calculation of placement rates, and Bureau employment requirements. (Status: The bill was vetoed by Governor Brown due to concerns over Bureau employment requirements.)
AB 2393 (Ammiano) of 2010 altered the definition of “graduates employed in the field” for apprenticeship and nursing programs. (Status: The bill was vetoed by Governor Brown, who indicated that it put the state on the same path to overly confusing statutes and guidelines that existed prior to the new Act.)
AB 48 (Portantino, Chapter 310, Statutes of 2009) established the California Private Postsecondary Education Act of 2009.
SB 1568 (Dunn, Chapter 534, Statutes of 2006) transferred regulation and oversight of unaccredited law schools and correspondence law schools from the BPPVE to the State Bar CBE. The bill also required correspondence law schools to be required to disclose their faculty-to-student ratio and their Baby Bar and general bar exam passage rates to prospective students in the same manner required of unaccredited schools.
SB 1544 (Figureroa, Chapter 740, Statutes of 2004) extended the operation of the former Bureau to 2007 and directed DCA to appoint an Education Operations and Administrative Monitor to assess the administrative operations and enforcement processes and procedures of that Bureau with the primary goal of improving the Bureau's overall efficiency and compliance with state laws.
- Arguments in Support. A coalition of organizations including the Center for Public Interest Law, Children’s Advocacy Institute, East Bay Community Law Center, Housing and Economic Rights Advocates, Public Advocates, Public Law Center and Veterans Legal Clinic are supportive of this bill if amended. The groups believe that the bill will strengthen the existing law, and will improve the Bureau’s ability to address the needs of students.
Supporters state that they hope the extension provided unaccredited degree granting institutions end the legislative efforts designed to undermine and diminish the accreditation and minimum operating standard requirements created by SB 1247, noting “We are confident that schools will be able to comply within this extended timeline, and that there will be no further need to seek exemptions or to otherwise attempt to reduce the requirements which the Legislature has found necessary to ensure program quality.” Supporters also strongly support the prohibition against institutions executing enrollment agreements with students who are known to be ineligible for licensure, certification, or registration. Supporters support the creation of the Office of Student Assistance and Relief and note that it is their hope the office will be given the appropriate resources to conduct effective outreach and assistance to both current students with questions and complaints about their institutions, as well as students at closed schools but would like the bill to amended to require the office to consult regularly with student and consumer advocates and legal aid organizations. Supporters agree with the efforts related to distance education providers located in another state but believe that it would be simpler and more efficient for the Bureau if these institutions simply paid into the STRF, or if students at these institutions were permitted to draw recovery from STRF and the bond was instead designed to reimburse STRF. Supporters note that creating another system for relief would further complicate the Bureau’s management of student claims and is unnecessary given that the STRF infrastructure and procedures are already established. Supporters also agree with providing BPPE authority to issue citations when it encounters non-minor violations during a compliance inspection but believe when the Bureau encounters a material violation it should take action beyond mere citation and fine. Supporters strongly support the appointment of an Enforcement Monitor but believe the bill should be amended to include a conflict of interest provision to ensure the Monitor has never been affiliated with or employed by a for-profit institution or any for-profit accreditor; require minimum qualifications for the position to ensure the Monitor has experience with postsecondary education, administrative law and regulatory enforcement; and require the Monitor to solicit and document public input into his or her report to the Legislature.
NOTE:
Double-referral to second to Senate Committee on Education.
SUPPORT AND OPPOSITION:
Support:
Center for Public Interest Law
Children’s Advocacy Institute
East Bay Community Law Center
Housing and Economic Rights Advocates
Public Advocates
Public Law Center
Veterans Legal Clinic
Opposition: None on file as of April 6, 2016.
-- END --
Discussed in Hearing
44SEC
Assembly Floor
3MIN
Senate Floor
6MIN
Senate Standing Committee on Business, Professions and Economic Development
2MIN
Assembly Floor
16MIN
Assembly Standing Committee on Business and Professions
2MIN
Senate Floor
16MIN
Senate Standing Committee on Education
23MIN
Senate Standing Committee on Business, Professions and Economic Development
Bill Author
