BILL NUMBER: SB 823 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 20, 2007
AMENDED IN ASSEMBLY JULY 17, 2007
AMENDED IN ASSEMBLY JULY 2, 2007
AMENDED IN SENATE MAY 24, 2007
AMENDED IN SENATE MARCH 27, 2007
INTRODUCED BY Senator Perata
FEBRUARY 23, 2007
An act to amend Sections 146, 149, and 473.1 of the Business and
Professions Code, and to add and repeal Chapter 7 (commencing with
Section 94700) of Part 59 of Division 10 of Title 3 of the Education
Code, relating to private postsecondary education, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 823, as amended, Perata. Private postsecondary education:
California Private Postsecondary Education Act of 2007.
(1) The Private Postsecondary and Vocational Education Reform Act
of 1989 generally sets set forth
minimum standards of instructional quality, ethical and business
practices, health and safety, and fiscal responsibility for private
postsecondary and vocational educational institutions, as defined.
The act establishes established in the
Department of Consumer Affairs the Bureau for Private Postsecondary
and Vocational Education, which, among other things, is
was required to review and investigate all
institutions, programs, and courses of instruction approved under the
act.
The act establishes est
ablished the Private Postsecondary and Vocational Education
Administration Fund and the continuously appropriated Student Tuition
Recovery Fund. The act specifies specified
that certain violations of its provisions are subject to civil
penalties and that certain willful violations of the act are
were punishable as crimes.
A provision of the act provides for it to become
The act became inoperative on July 1, 2007, and
provides for its repeal will be repealed
on January 1, 2008.
This bill would recast, revise, and reenact the provisions of the
Private Postsecondary and Vocational Education Reform Act of 1989 as
the California Private Postsecondary Education Act of 2007. The bill
would establish the Board for Private Postsecondary Education in the
Department of Consumer Affairs, and would provide that the board
would generally succeed to the duties assigned to the bureau under
the 1989 act. The bill would repeal the California Private
Postsecondary Education Act of 2007 on January 1, 2015.
The bill would continue the existence of the Private Postsecondary
and Vocational Education Administration Fund and the continuously
appropriated Student Tuition Recovery Fund, thereby making an
appropriation. Certain violations of the new act would be punishable
as crimes, thereby establishing a state-mandated local program.
(2) 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.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 146 of the Business and Professions Code is
amended to read:
146. (a) Notwithstanding any other provision of law, a violation
of any code section listed in subdivision (c) or (d) is an infraction
subject to the procedures described in Sections 19.6 and 19.7 of the
Penal Code when:
(1) A complaint or a written notice to appear in court pursuant to
Chapter 5c (commencing with Section 853.5) of Title 3 of Part 2 of
the Penal Code is filed in court charging the offense as an
infraction unless the defendant, at the time he or she is arraigned,
after being advised of his or her rights, elects to have the case
proceed as a misdemeanor, or
(2) The court, with the consent of the defendant and the
prosecution, determines that the offense is an infraction in which
event the case shall proceed as if the defendant has been arraigned
on an infraction complaint.
(b) Subdivision (a) does not apply to a violation of the code
sections listed in subdivisions (c) and (d) if the defendant has had
his or her license, registration, or certificate previously revoked
or suspended.
(c) The following sections require registration, licensure,
certification, or other authorization in order to engage in certain
businesses or professions regulated by this code:
(1) Sections 2052 and 2054.
(2) Section 2630.
(3) Section 2903.
(4) Section 3660.
(5) Sections 3760 and 3761.
(6) Section 4080.
(7) Section 4825.
(8) Section 4935.
(9) Section 4980.
(10) Section 4996.
(11) Section 5536.
(12) Section 6704.
(13) Section 6980.10.
(14) Section 7317.
(15) Section 7502 or 7592.
(16) Section 7520.
(17) Section 7617 or 7641.
(18) Subdivision (a) of Section 7872.
(19) Section 8016.
(20) Section 8505.
(21) Section 8725.
(22) Section 9681.
(23) Section 9840.
(24) Subdivision (c) of Section 9891.24.
(25) Section 19049.
(d) Institutions that are required to register with the Bureau for
Private Postsecondary Education pursuant to Chapter 7 (commencing
with Section 94700) of Part 59 of Division 10 of Title 3 of the
Education Code.
(e) Notwithstanding any other provision of law, a violation of any
of the sections listed in subdivision (c), which is an infraction,
is punishable by a fine of not less than two hundred fifty dollars
($250) and not more than one thousand dollars ($1,000). No portion of
the minimum fine may be suspended by the court unless as a condition
of that suspension the defendant is required to submit proof of a
current valid license, registration, or certificate for the
profession or vocation which was the basis for his or her conviction.
SEC. 2. Section 149 of the Business and Professions Code is
amended to read:
149. (a) If, upon investigation, an agency designated in
subdivision (e) has probable cause to believe that a person is
advertising in a telephone directory with respect to the offering or
performance of services, without being properly licensed by or
registered with the agency to offer or perform those services, the
agency may issue a citation under Section 148 containing an order of
correction that requires the violator to do both of the following:
(1) Cease the unlawful advertising.
(2) Notify the telephone company furnishing services to the
violator to disconnect the telephone service furnished to any
telephone number contained in the unlawful advertising.
(b) This action is stayed if the person to whom a citation is
issued under subdivision (a) notifies the agency in writing that he
or she intends to contest the citation. The agency shall afford an
opportunity for a hearing, as specified in Section 125.9.
(c) If the person to whom a citation and order of correction is
issued under subdivision (a) fails to comply with the order of
correction after that order is final, the agency shall inform the
Public Utilities Commission of the violation and the Public Utilities
Commission shall require the telephone corporation furnishing
services to that person to disconnect the telephone service furnished
to any telephone number contained in the unlawful advertising.
(d) The good faith compliance by a telephone corporation with an
order of the Public Utilities Commission to terminate service issued
pursuant to this section shall constitute a complete defense to any
civil or criminal action brought against the telephone corporation
arising from the termination of service.
(e) Subdivision (a) shall apply to the following boards, bureaus,
committees, commissions, or programs:
(1) The Bureau of Barbering and Cosmetology.
(2) The Funeral Directors and Embalmers Program.
(3) The Veterinary Medical Board.
(4) The Hearing Aid Dispensers Advisory Commission.
(5) The Landscape Architects Technical Committee.
(6) The California Board of Podiatric Medicine.
(7) The Respiratory Care Board of California.
(8) The Bureau of Home Furnishings and Thermal Insulation.
(9) The Bureau of Security and Investigative Services.
(10) The Bureau of Electronic and Appliance Repair.
(11) The Bureau of Automotive Repair.
(12) The Tax Preparers Program.
(13) The California Architects Board.
(14) The Speech-Language Pathology and Audiology Board.
(15) The Board for Professional Engineers and Land Surveyors.
(16) The Board of Behavioral Sciences.
(17) The State Board for Geologists and Geophysicists.
(18) The Structural Pest Control Board.
(19) The Acupuncture Board.
(20) The Board of Psychology.
(21) The California Board of Accountancy.
(22) The Bureau of Naturopathic Medicine.
(23) The Bureau for Private Postsecondary Education.
SEC. 3. Section 473.1 of the Business and Professions Code is
amended to read:
473.1. This chapter shall apply to all of the following:
(a) Every board, as defined in Section 22, that is scheduled to
become inoperative and to be repealed on a specified date as provided
by the specific act relating to the board.
(b) The Bureau for Postsecondary Education. For purposes of this
chapter, "board" includes the bureau.
(c) The Cemetery and Funeral Bureau.
SEC. 4. Chapter 7 (commencing with Section 94700) is added to Part
59 of Division 10 of Title 3 of the Education Code, to read:
CHAPTER 7. CALIFORNIA PRIVATE POSTSECONDARY EDUCATION ACT OF
2007
Article 1. Administration
94700. This chapter shall be known and may be cited as the
California Private Postsecondary Education Act of 2007. Whenever a
reference is made, other than in this chapter, to the Private
Postsecondary Education and Student Protection Act or the Private
Postsecondary and Vocational Education Reform Act of 1989 (Chapter 7
(commencing with Section 94700) of Part 59 of Division 10 of Title
3), by the provisions of any statute or regulation, it is to be
construed as referring to this chapter.
94701. The Legislature finds and declares the following:
(a) In 2007, there were more than 400,000 Californians attending
the more than 1,500 private postsecondary schools in California. Many
of these students are low-income students who incur up to tens of
thousands of dollars in long-term debt in an effort to learn a trade
and become employed in order to financially provide for themselves
and their families.
(b) Private postsecondary schools meet a great need in California.
These schools complement the public education system and help
develop a trained workforce that helps meet the demands of California
businesses and the economy.
(c) Numerous reports and studies have concluded that California
law and regulatory oversight have failed to provide effective student
protections or oversight of private postsecondary schools. The law
and regulatory oversight were allowed to expire on June 30, 2007,
thereby creating an urgent need to reform the law and create a new
regulatory structure to take effect on January 1, 2008.
(d) This chapter intends to provide a body of law that ensures all
of the following:
(1) Minimum educational quality standards and opportunities for
success for California students attending private post secondary
schools.
(2) Meaningful student protections through essential avenues of
recourse for students.
(3) A regulatory structure that provides for an appropriate level
of oversight.
(4) A regulatory governance structure that ensures that all
stakeholders have a voice and are heard in policymaking by the new
bureau created by this chapter.
(5) A regulatory governance structure that provides for
accountability and oversight by the Legislature through program
monitoring and periodic reports.
(e) (1) In determining the scope of institutions subject to this
chapter, the Legislature finds no conclusive evidence to be used as a
basis for determining whether institutions should be exempted from
this chapter and, if so, under what circumstances. Therefore, the
Legislature concludes it best to continue exemptions in effect on
June 30, 2007, and to require a study to assess accrediting bodies.
This study is intended to serve as the basis for legislative
reexamination of exemptions in the future.
(2) The Western Association of Schools and Colleges (WASC),
through its two commissions, the Accrediting Commission for Senior
Colleges and Universities, and the Accrediting Commission for
Community and Junior Colleges has for more than 40 years been
responsible for academic review and accreditation of all University
of California campuses, California State University system campuses,
and public junior or community colleges in California. Therefore, as
a public policy, the Western Association of Schools and Colleges has
been accepted as an appropriate level of accreditation for public
post secondary instruction and all private post secondary
institutions approved by the Western Association of Schools and
Colleges are exempt from this chapter.
(f) The law has historically failed to address the issue of
Internet-based education. There is no reliable data on this issue,
but it is widely believed that up to 20 percent of the private
postsecondary education provided in California in 2007 is
Internet-based. Therefore, this chapter calls for a thorough review
of Internet-based private postsecondary education. This review is
intended to serve as a basis for future policymakers to address any
deficiencies in law in regulating Internet-based private
postsecondary education.
(g) The Legislature advises future policymakers to continually and
carefully evaluate this chapter and its administration and
enforcement. Where there are deficiencies in the law or regulatory
oversight, the Governor and Legislature should act quickly to correct
them. A failure to act in a timely manner allowed expiration of the
regulatory structure on June 30, 2007. This history should never be
repeated.
94702. The Bureau for Private Postsecondary Education is subject
to periodic and ongoing review by the Legislature.
94703. It is the intent and purpose of this chapter to protect
students, reputable institutions, the public, and the economy of the
state; ensure appropriate state control of business and operational
standards; ensure institutional stability; ensure minimum standards
for educational quality, including through accountability for program
completion and student employment in occupations or job titles to
which training is represented to lead; prohibit various
misrepresentations, including misrepresentations related to the
quality of education, the availability and quality of equipment and
materials, the transferability of credits, and employment and salary
opportunities; require full disclosure; and protect the citizens of
California against fraud, misrepresentation, or other practices that
may lead to an improper loss of funds paid for educational costs,
whether financed through personal resources, state and federal
student financial aid, or private loans. It is also the intent and
purpose of this chapter to ensure that the cost to taxpayers of
government loans and grants for instruction is commensurate with the
benefits obtained by students and flowing to the state's economy.
94704. There is a Bureau for Private Postsecondary Education in
the Department of Consumer Affairs. The bureau has the responsibility
for approving and regulating private postsecondary educational
institutions and programs. The bureau shall have, as its objective,
the protection of the public from fraud and misrepresentation and the
development of a strong, vigorous, and widely respected sector of
private postsecondary education that protects the interests of
students and the public and serves the interests of the economy of
California.
94704.5. Whenever a reference is made to the Bureau for Private
Postsecondary and Vocational Education, by the provisions of any
statute or regulation, that reference shall be construed as referring
to the Bureau for Private Postsecondary Education.
94705. Protection of the public shall be the highest priority for
the bureau in exercising its approval, regulatory, and disciplinary
functions. Whenever the protection of the public is inconsistent with
other interests sought to be promoted, the protection of the public
shall be paramount.
94706. (a) The duty of administering and enforcing this chapter
is vested in the Director of Consumer Affairs, who may assign and
delegate those duties to a bureau chief, subject to the other
provisions of this section.
(b) Every power granted to, or duty imposed upon, the bureau under
this chapter may be exercised or performed in the name of the
bureau, subject to any conditions and limitations the director may
prescribe. The bureau chief may redelegate any of those powers or
duties to his or her designee. The bureau chief shall be appointed by
the Governor and confirmed by the Senate, and is exempt from the
State Civil Service Act (Part 2 (commencing with Section 18500) of
Division 5 of Title 2 of the Government Code).
(c) The director, in accordance with the State Civil Service Act,
may appoint and fix the compensation of clerical, inspection,
investigation, evaluation, and auditing personnel, as may be
necessary to carry out this chapter.
94707. The proceedings under this chapter shall be conducted by
the bureau in accordance with the provisions of this chapter or
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code at the bureau's option. To the extent
of any conflict between any of the provisions of this chapter and
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, this chapter shall prevail.
94708. (a) The director shall appoint an ombudsperson, subject to
confirmation by the Senate.
(b) The ombudsperson shall be a person with sufficient knowledge
of private postsecondary education and consumer protection.
(c) The bureau chief shall establish the compensation of the
ombudsperson.
(d) The duties of the ombudsperson shall include, but not be
limited to, all of the following:
(1) Working as a liaison between students and the bureau.
(2) Working as a liaison between institutions and the bureau.
(3) Reviewing the handling of student complaints, initiation of
investigations, and Student Tuition Recovery Fund claims.
(4) Reviewing and commenting on bureau reports to the Governor and
the Legislature.
(5) Making recommendations for the selection of an independent
monitor under Section 94751.
94709. The bureau has the following functions and
responsibilities:
(a) The administration of this chapter and promulgation of
necessary regulations.
(b) The enforcement of this chapter and the approval of
institutions and programs that meet the requirements of this chapter.
(c) The development and maintenance of a public Internet Web site
that shall include clearly accessible and searchable information
regarding approved private postsecondary institutions in California.
The Internet Web site shall provide information for prospective
students so they may make informed choices regarding their
educational opportunities and provide information for current
students so they may understand their rights. The bureau shall also
provide a directory of approved institutions which shall provide the
following information, if applicable, about each program at each site
of each institution:
(1) The completion information described in subparagraph (A) of
paragraph (1) of subdivision (a) of Section 94893.
(2) The employment information described in subparagraphs (C) and
(D) of paragraph (1) of subdivision (a) of Section 94893.
(3) The salary information described in clauses (i) and (ii) of
subparagraph (E) of paragraph (1) of subdivision (a) of Section
94893.
(4) The licensing examination information described under clause
(ii) of subparagraph (B) of paragraph (1) of subdivision (a) of
Section 94893.
(5) The total charge.
(6) The status of the institution's approval.
(7) Information on student complaints.
(8) Any disciplinary actions against the institution.
(d) Providing outreach to prospective and current private
postsecondary education students and high school students, to provide
them with information on how best to select postsecondary
institutions, how to enter into contracts and student enrollment
agreements, how to protect themselves in the postsecondary education
marketplace, and how to contact the bureau for assistance if problems
arise. The bureau may accomplish the purposes of this section in
cooperation with the department.
(e) Establishment of a regular inspection program, which shall
include announced and unannounced inspections during normal business
hours of a sample of educational programs and institutions each year
and may include all matters included in subdivision (d) of Section
94858 and all records required to be maintained under Section 94904,
or necessary to show compliance with this chapter. Inspections under
the program may be based, but not limited to, all of the following:
(1) Documents submitted to the bureau by the institution.
(2) Complaints received about the institution.
(3) Accrediting agency documents.
(4) The time elapsed since a previous inspection.
(5) Any other rational basis.
(f) Review and investigation of institutions and programs approved
under this chapter. Consideration in the scheduling of reviews and
investigations shall be afforded to student complaints and
information collected by the Attorney General, Student Aid
Commission, any bureau within the department, or any other federal,
state, or local agency.
(g) If the bureau believes that there may have been a violation of
this chapter or regulations adopted by the bureau by an institution,
the bureau shall conduct a timely investigation of the institution.
If the bureau determines, after completing an investigation, that an
institution has violated this chapter or any regulations adopted by
the bureau, the bureau shall take action against the institution
pursuant to Article 8 (commencing with Section 95000), as it deems
appropriate.
(h) Objective and regular assessment of the cost of meeting its
statutory obligations, including the staffing necessary to meet those
obligations, determination whether the prevailing fee and cost
structure allows for collection of revenue sufficient to support the
necessary costs, and report of that information to the Legislature
and Governor through the annual state budget process, and regular
adjustments to the fee and cost structure, as permitted in this
chapter, sufficient to ensure that the bureau accomplishes its
statutory obligations.
(i) The receipt, review, and investigation of complaints received
from students and the public, and complaints transmitted by other
federal, state, or local agencies, including timely responses and
appropriate investigations.
(j) Development and maintenance of a management information system
sufficient to meet the bureau's responsibilities, including, but not
necessarily limited to, a public Web site and database as provided
in this article.
(k) To the extent funding and resources are available for this
purpose, the establishment of a training program, including, but not
necessarily limited to, information and support necessary for
institutions to undertake corrective action to comply with this
chapter, information and support to assist in the successful
development of a new institution, and information and support to
assist existing institutions in development that is necessary for
them to become eligible for participation in student financial aid
programs under Title IV of the federal Higher Education Act of 1965.
(l) Establishment of a plan to identify unlicensed institutions
operating in violation of this chapter and initiate appropriate legal
enforcement action against those institutions.
(m) Other duties and functions as the bureau deems necessary to
accomplish the provisions and purposes of this chapter.
94710. For the purposes of administration and enforcement of this
chapter, the department, the bureau, and the director and officers
and employees of the department and the bureau, shall have all the
powers and authority granted under this chapter and under Division 1
(commencing with Section 100), and Division 1.5 (commencing with
Section 475), of the Business and Professions Code. In addition to
satisfying the approval, compliance, and enforcement provisions of
this chapter, the bureau shall also comply with and exercise all
authority granted by Division 1 (commencing with Section 100), and
Division 1.5 (commencing with Section 475), of the Business and
Professions Code.
94711. The bureau shall, as it deems necessary, impanel qualified
visiting committees to assist the bureau in the investigation,
review, inspection, or evaluation of programs or institutions
pursuant to this chapter. The members of a qualified visiting
committee shall receive no compensation but shall be reimbursed for
their actual expenses for attendance at official meetings and actual
expenses when on official bureau business. The members of the
qualified visiting committees shall serve at no expense to the state.
The actual travel and per diem expenses incurred by each member of a
qualified visiting committee shall be reimbursed by the institution
that is the subject of the investigation, review, inspection, or
evaluation.
94712. (a) A person serving on a qualified visiting committee who
provides information to the bureau or its staff in the course and
scope of evaluating any institution subject to this chapter or who
testifies at any administrative hearing arising under this chapter,
is entitled to a defense by, and indemnification from, the bureau in
any action arising out of information or testimony to the bureau
which that person would have if he or she were a public employee.
(b) A defense by, or indemnification from, the bureau, as
specified in subdivision (a) shall be solely with respect to that
claim or action pursuant to Article 4 (commencing with Section 825)
of Chapter 1 of Part 2 of, and Part 7 (commencing with Section 995)
of, Division 3.6 of Title 1 of the Government Code.
94713. The bureau may adopt and enforce regulations that are
necessary, appropriate, or useful to interpret and implement this
chapter pursuant to Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. The bureau
may adopt emergency regulations that shall become effective
immediately, subject to Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
94714. The bureau shall, in consultation and coordination with
the director and the Attorney General, develop and implement an
enforcement program to carry out this chapter, including a plan for
investigating complaints filed with the bureau and monitoring data
institutions.
94715. The bureau shall make available to members of the public,
upon request, the nature and disposition of all
complaints filed with the bureau against an
institution.
94716. The bureau shall adopt a strategic plan by December 31,
2009, and update the plan periodically as needed.
94717. The bureau shall adopt, and periodically review and
update, internal quality review and audit procedures to ensure that
processes are in place to promote and achieve full compliance with
this chapter.
94718. The bureau may design and administer a process for the
approval of programs offered to veterans of the armed forces, and for
the approval and supervision of the institutions offering programs
to veterans, pursuant to any applicable act of Congress and the
regulations adopted pursuant to such an act. For purposes of this
section, the bureau:
(a) Is designated as the state approving agency for veterans'
institutions and veterans' programs, and is authorized to be
reimbursed for its services in this regard.
(b) Has the same powers conferred on the Director of Education by
Article 6 (commencing with Section 12090) of Chapter 1 of Part 8, to
enter into agreements and cooperate with the United States Department
of Veterans Affairs, or any other federal agency, regarding approval
of programs, and the approval and supervision of institutions that
offer programs to veterans.
94719. For purposes of compliance with Section 94903, the bureau
shall do the following:
(a) Adopt regulations concerning the manner of documenting the
nature of a student's existing knowledge, training, and skill and
that ESL instruction offered by the institution is necessary to
enable the student to use that existing knowledge, training, and
skill, as prescribed in subdivision (d) of Section 94903. The
regulations shall specify all of the following:
(1) Reliable sources of information, independent of the student
and the institution, from which documentation of a student's existing
knowledge, training, and skill shall be obtained.
(2) Circumstances that must be documented by the institution to
establish that information from a designated reliable source of
information cannot reasonably be obtained.
(3) Alternate acceptable sources of information if designated
reliable sources are not available.
(4) The nature of all required types of documentation.
(b) Develop and distribute instructions, informational materials,
or forms to assist institutions in developing the documentation
described in this section. These instructions, materials, and forms
shall not be subject to review or approval by the Office of
Administrative Law pursuant to any provision of the Government Code.
Article 1.5. Advisory Committee
94730. There is hereby created within the bureau an advisory
committee.
94731. (a) The committee shall consist of 15 members: nine
members appointed by the Governor, three members appointed by the
Senate Committee on Rules, and three members appointed by the Speaker
of the Assembly. The committee members shall include representatives
of law enforcement, consumer protection organizations,
representatives of institutions, consumer advocates, student
advocates, employers who hire persons in occupations or job titles
which require vocational training, and persons who have expertise in
matters relevant to the duties of the bureau.
(b) In addition to those designated in subdivision (a), the
ombudsperson shall serve as an ex officio member of the committee.
(c) Duly appointed members shall be eligible for per diem payment
and reimbursement of expenses associated with attendance at meetings
and other functions as assigned by the bureau, subject to the
approval of the bureau.
(d) The bureau chief, the ombudsperson, and any member of the
committee may each place items on the agenda for the consideration of
the advisory committee.
94732. The appointing authority may remove any member of the
committee for causes specified in Section 106 of the Business and
Professions Code.
94733. Protection of the public shall be the highest priority for
the committee in exercising its functions. Whenever the protection
of the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
94734. A majority of the appointed members of the committee
constitutes a quorum for the transaction of business. The affirmative
vote of a majority of committee members is necessary to render a
decision or pass a motion. Any dissents from committee actions
approved by a majority vote of the committee may be submitted in
writing and shall be entered in the record of the committee.
94735. The committee members shall elect one of their number as
the chair and another member as the vice chair. The chair and vice
chair shall be elected at the first meeting of each calendar year or
when a vacancy exists.
94736. Each committee member shall receive a per diem and
necessary travel expenses as provided in Section 103 of the Business
and Professions Code.
94738. The committee shall meet at least quarterly or more often
as the committee deems necessary.
94739. The bureau shall provide staff and administrative support
for the committee necessary for the committee to perform its duties.
94740. The committee shall be responsible for activities
including, but not limited to, all of the following:
(a) At its inception, the priorities of the committee shall be to
consider issues identified in this chapter, including, but not
limited to, providing advice to the bureau in its obligation to
administer and enforce provisions of this chapter and the
promulgation of regulations.
(b) Making reports, as the committee deems necessary, to the
Governor and the Legislature on any deficiencies in this chapter or
the administration and implementation of this chapter.
(c) Making recommendations to the ombudsperson and the bureau on
the administration and enforcement of this chapter.
(d) Reviewing and publicly commenting on the report provided
pursuant to subdivision (c) of Section 94750 after its final release.
Article 1.7. Program Monitor and Reports
94750. (a) The Legislature finds and declares the following:
(1) Many students who attend institutions accredited by the
accrediting bodies described in paragraph (1) of subdivision (b) of
Section 94841 receive Cal Grant awards toward the costs of attending
these institutions.
(2) The state has a responsibility to ensure that, to the extent
the state relies on the accreditation processes for institutions
described in subdivision (b) of Section 94841, minimum standards of
quality are met and that accreditation processes meet the goals and
requirements of this chapter.
(b) (1) The Bureau of State Audits shall conduct an audit pursuant
to Chapter 6.5 (commencing with Section 8543) of Division 1 of Title
2 of the Government Code that assesses the extent accreditation by
the accrediting bodies described in paragraph (1) of subdivision (b)
of Section 94841 provides sufficient assurance that the various goals
and requirements of this chapter are met, including, but not limited
to, the degree to which the accreditation process assures the
quality and effectiveness of education at accredited institutions and
affords meaningful and effective student protections.
(2) In conducting the audit, the Bureau of State Audits shall
protect the confidentiality of information obtained from private
individuals and organizations pursuant to subdivision (a) of Section
8545 of the Government Code.
(3) In conducting the audit, the Bureau of State Audits may
perform, but is not limited to, all of the following:
(A) Examine accrediting bodies recognized by the United States
Department of Education (USDE) and accredited institutions in
California. These shall include all regional accrediting bodies and a
sample of national accrediting bodies.
(B) To the extent deemed necessary to meet the audit standards the
Bureau of State Audits is required to comply with pursuant to
Section 8546.1 of the Government Code, contacting and obtaining
information from institutions or programs operated by institutions
accredited by the accrediting bodies.
(c) The Bureau of State Audits shall issue a public report on the
results of the audit not later than December 31, 2009. Based on the
assessment, the audit report shall include recommendations on the
continuation, elimination, or modification of the exemptions in
Section 94841.
(d) (1) It is the intent of the Legislature that the accrediting
bodies described in paragraph (1) of subdivision (b) of Section
94841, and any of the institutions or programs operated by those
institutions accredited by those bodies, provide the Bureau of State
Audits with full access to any information, records, or individuals
that the State Auditor determines are necessary to perform the audit,
in a manner consistent with Section 8545.2 of the Government Code.
(2) Upon receiving the information provided pursuant to paragraph
(1), the Bureau of State Audits shall protect the confidentiality of
that information as required by subdivision (a) of Section 8545,
Section 8545.1, and subdivision (b) of Section 8545.2 of the
Government Code. In keeping information confidential as required by
those provisions, the Bureau of State Audits shall provide reasonable
assurances to the accrediting bodies and institutions that any
information used to support the conclusions and facts in the audit
report will be used in a manner that does not disclose confidential
information that the accrediting body or the institution reasonably
claims is not subject to public disclosure under state or federal
law.
(3) If any of the entities described in paragraph (1) refuse to
provide the Bureau of State Audits access to the information,
records, or individuals the Bureau of State Audits determines are
necessary to perform the audit, the Bureau of State Audits shall
notify the Legislature and the Governor in writing of that fact, and
that notification shall become a public record.
(e) The Bureau of Private Postsecondary Education, shall reimburse
the Bureau of State Audits for the costs of the work performed by
the Bureau of State Audits under this section
94751. (a) Beginning on January 1, 2011, and each January 1
thereafter, the bureau shall provide an annual report to the
Legislature and Governor on the bureau's activities in implementing
this chapter, data summarizing private postsecondary education in
California, and its recommendations for amendments to this chapter,
as it deems necessary.
(b) Between January 1, 2011, and December 31, 2011, the bureau
shall employ an independent monitor to undertake a comprehensive
review of its policies and operations. The bureau shall forward the
results of that review to the Legislature and the Governor.
(c) The bureau shall include, in its January 1, 2013, regular
annual report to the Legislature and the Governor, information on the
bureau's activities to improve and correct any deficiencies noted by
the independent monitor and shall, where appropriate, adopt
meaningful, measurable, and manageable performance standards as one
mechanism to ensure improvement where there are deficiencies, and
shall include information pertaining to those performance standards
in this report to the Legislature.
(d) Between January 1, 2013, and December 31, 2013, the bureau
shall employ an independent monitor to undertake a followup review of
its policies and operations, and shall forward the results of that
review to the Legislature and the Governor.
94752. The bureau shall, in conjunction with California
Postsecondary Education Commission, include in its January 1, 2012,
regular annual report to the Legislature and Governor, a report on
private postsecondary distance learning available to California
students on the Internet. This report shall include, but not
necessarily be limited to, the following:
(a) Data on the numbers of students receiving Internet-based
private postsecondary education.
(b) Information on institutions, including whether the
institutions are accredited, or otherwise regulated, and the location
of the institutions, including institutions located outside of
California.
(c) The types of courses offered.
(d) An identification of the opportunities and limitations in
California law to regulate these institutions.
Article 2. Definitions
94760. "Academic year" generally means a period including a
minimum of 30 weeks of instruction, beginning in the fall term of a
calendar year and ending at the end of the summer term of the
succeeding calendar year.
94761. "Accredited" means that an institution has received
accreditation for having the standards established by an accrediting
agency recognized by the United States Department of Education, or
the Committee of Bar Examiners of the State Bar of California. It
does not include an institution that has applied for accreditation,
is identified by an accrediting association as a candidate for
accreditation, or has provisional accreditation.
94761.5. "Adverse accreditation action" or "negative
accreditation action" means the denial or withdrawal of accreditation
or candidate status by a USDE recognized accrediting body.
94762. "Agency" means a person or business entity, regardless of
the form of organization, that employs, or in any manner contracts
with, one or more agents. "Agency" does not include an institution.
94763. "Agency authorization" means a written document issued by
the bureau authorizing a business entity or an institution to engage
in the recruitment of students for enrollment in private
postsecondary educational institutions approved under this chapter.
94764. "Agent" means a person who, at a place away from an
institution's premises or site of instruction, but within the United
States, for consideration, solicits, promotes, advertises, offers, or
attempts to secure enrollment for that institution, refers any
person to that institution, either for enrollment or to receive a
solicitation for enrollment, or accepts application fees or
admissions fees for education in that institution. An administrator
or faculty member who makes informational public appearances, but
whose primary task does not include service as a paid recruiter, is
not an agent. A publisher of a directory that contains general
information on an institution and its offerings and who does not
otherwise engage in any of the activities described in this section
is not an agent.
94765. "Annual report" means the report required to be filed
pursuant to Section 94883.6.
94766. "Applicant" means a person or entity that has submitted an
application on which the bureau has not yet made a determination. An
applicant shall not enroll students or offer educational services
until the bureau has made a determination regarding the application.
94767. "Approval," "approval to operate," "approved to operate,"
or "institutional approval" means that the bureau has determined,
pursuant to Article 4 (commencing with Section 94850), that an
institution or program meets minimum standards established by the
bureau for integrity, financial stability, educational quality,
including the offering of bona fide instruction by qualified faculty,
and assessment of students' achievement prior to, during, and at the
end of its program, as appropriate.
94768. "Avocational education" means education offered only for
purposes of personal entertainment, personal pleasure, or enjoyment,
such as a hobby. Education that directly leads to an objective other
than personal entertainment, personal pleasure, or enjoyment is not
"education solely avocational in nature."
94769. "Branch" means a site other than the main location of an
institution or a satellite. Only educational services approved at the
main location may be offered at the branch. The name of the branch
location shall be identical to that of the main location approved by
the bureau.
94770. "Bureau" means the Bureau for Private Postsecondary
Education in the Department of Consumer Affairs, established pursuant
to Section 94704.
94770.5. "Bureau chief" means the Chief of the Bureau for Private
Postsecondary Education described in Section 94706.
94771. "Business day," when referring to a student's right to
cancel an agreement with an institution, means the following:
(a) Except as provided in subdivision (b), a day on which a
student is scheduled to attend a class session.
(b) For distance learning courses, any calendar day except
Saturday, Sunday, or any holiday enumerated in Section 6700 of the
Government Code.
94772. "Cancellation period" means the initial period during
which a student may cancel and receive a refund under Section 94941.
94772.5. "Certificate" means a diploma, certificate, document, or
other writing in any language, other than a degree, which signifies,
purports, or is generally taken to signify satisfactory completion
of the requirements of an academic, educational, technological, or
professional program of study beyond the secondary educational level.
94773. "Change of location" means a move of up to 25 miles of the
location at which an institution offers any education, training, or
instruction.
94774. "Class" or "course" means a subject, such as English or
mathematics, that is taught as part of a program.
94775. "Class session" means the part of a day that an
institution conducts instruction or training in a particular class,
such as an hour of instruction in English or mathematics, offered on
a particular day of the week.
94776. "Commencement of operations" or "commence operations"
means that an institution has begun to offer instruction, training,
or education to students.
94777. "Committee" means the advisory committee established
pursuant to Section 94730
94778. "Completion of a program," "complete the program," or
"completing the program" means a student has completed all
requirements of a program and received a certificate or degree, as
applicable, for that program.
94779. "Completion tracking period" means the year during which a
student's scheduled completion and actual completion are tracked for
purposes of determining, reporting, and disclosing a school's
completion numbers and rates and reporting to the bureau pursuant to
Section 94883.6.
94780. (a) Except as provided in subdivision (b), "continuing
education" means instruction in any of the following circumstances:
(1) Only in a subject a licensee is required to take as a
condition of continued licensure and solely for that purpose.
(2) Only in a subject necessary to continue to practice or work in
a profession such as law or medicine, and solely for that purpose.
(3) To a person who is already in a particular profession, trade,
or job category for the sole purpose of enhancing that person's
skills or knowledge within that particular profession, trade, or job
category.
(b) "Continuing education" does not include any of the following:
(1) A vocational program.
(2) A degree program.
(3) An educational service where any part of the charge for which
is paid from the proceeds of a loan or grant subject to a
governmental student financial aid program.
94781. "Default" means the failure of a borrower to make an
installment payment when due, or to meet other terms of the
promissory note under circumstances where the guarantee agency finds
it reasonable to conclude that the borrower no longer intends to
honor the obligation to repay, provided that this failure persists
for 180 days for a loan repayable in monthly installments, or 240
days for a loan repayable in less frequent installments.
94782. "Degree" means any type of degree or honorary degree or
title of any designation, mark, appellation, series of letters or
words including, but not necessarily limited to, associate, bachelor,
master, doctor, or fellow, that signifies, purports to constitute,
or is generally taken to signify, satisfactory completion of the
requirements of an academic, educational, technological, or
professional program of study beyond the secondary educational level,
or is an honorary title conferred for recognition of some
meritorious achievement.
94784. "Degree program" means a program leading to a degree.
94785. "Degree title" means the designated subject area of study
that also appears on the face of the document awarded to a student
signifying the conferring of a "degree."
94786. "Department" means the Department of Consumer Affairs.
94787. "Director" means the Director of Consumer Affairs.
94788. "Distance learning" means lessons for study and completion
by a student at a location separate from an institution with a
physical location in California by home study, correspondence, or the
Internet or other electronic means, including the instruction
offered in combination with instruction at the institution.
94789. "Distance learning institution" means any institution that
provides lessons for study and completion by a student at a location
separate from the institution by home study, correspondence, or the
Internet, or other electronic means, including, but not limited to,
those institutions that offer that instruction in combination with
instruction at the institution.
94790. "Document or record" means a test score, grade, record of
grades, attendance record, record indicating student program
completion or employment, financial information, including any
financial report required to be filed pursuant to Section 94883.6,
information or records relating to the student's eligibility for
financial assistance or attendance at the institution, or any other
record or document required by this chapter or by the bureau.
94791. "Education," "educational services," or "educational
program" includes, but is not necessarily limited to, a class,
course, or program of training, instruction, or study.
94791.5. "Emerging new fields of study" means a subject area that
is not generally recognized by colleges and universities and by the
bureau, at the time of the bureau's evaluation of the field, as a
discipline for certificate or degree study in postsecondary
education.
94792. (a) "Employment" means a paid position in which a student
was employed for at least 60 days within the employment tracking
period, in an occupation for which the student received the
certificate or degree; the position requires education beyond the
high school level; the routine work in the position requires
utilization of the skills and knowledge reasonably expected to be
imparted in a program culminating in the degree or certificate the
student received; and which is either of the following:
(1) Full-time employment for at least 32 hours per week.
(2) Part-time employment for at least 17.5 hours, but less than 32
hours, per week.
(b) Employment includes self-employment.
94793. "Employment tracking period" means the period during which
a student's employment is tracked for purposes of determining a
program's employment numbers and rate.
(a) For occupations for which the state does not require passing a
licensing examination, the employment tracking period is the
eight-month period after a student completes a program.
(b) For occupations for which the state requires passing an
examination, the employment tracking period is extended to include
the eight-month period after the announcement of the examination
results for the first examination available after a student completes
a program.
94794. "Enrollment" means the date on which the student signed an
agreement for educational services.
94795. "ESL instruction" means any educational service involving
instruction in English as a second language.
94796. "Equipment" includes all textbooks, supplies, materials,
implements, tools, machinery, computers, electronic devices, or any
other goods related to any education, training, or instruction, or an
agreement for educational services or a program.
94797. "Faculty" means an instructor or instructors within any of
the divisions or comprehensive branches of learning at an
institution. For purposes of this chapter, "faculty," "instructor,"
"professor," and "teacher" are synonymous.
94798. "Hearing" means a hearing conducted pursuant to Article 9
(commencing with Section 95030) or other alternative adjudicative
process established by the bureau consistent with due process.
94799. (a) "Institution" means a person doing business in this
state that offers to provide or provides, for a fee, tuition, or
other charge, any instruction, training, or education under any of
the following circumstances:
(1) A majority of the students to whom instruction, training, or
education is provided during any 12-month period who have completed
their secondary education or terminated their secondary education and
are beyond the age of compulsory high school attendance.
(2) More than 50 percent of the revenue derived from providing
instruction, training, or education during any 12-month period is
obtained from, or on behalf of, students who have completed or
terminated their secondary education or are beyond the age of
compulsory high school attendance.
(3) More than 50 percent of the hours of instruction, training, or
education provided during any 12-month period is provided to
students who have completed or terminated their secondary education
or are beyond the age of compulsory high school attendance.
(4) A substantial portion, as determined by the bureau by
regulation, of the instruction, training, or education provided by
the institution is provided to students who have completed their
secondary education or terminated their secondary education and are
beyond the age of compulsory high school attendance.
(b) An institution includes its branch and satellite sites.
(c) An educational institution established, operated, and governed
by the federal government or by this state, or its political
subdivisions is not considered an institution under this chapter.
94800. "Instruction" includes any specific, formal arrangement by
an institution or its enrollees to participate in learning
experiences in which the institution's faculty present a planned
curriculum appropriate to the enrollee's educational program.
94802. "License," for purposes of this chapter, includes an
approval to operate or registration to engage in a business.
94803. "Licensure" includes a license, certificate, permit, or
similar credential that a person must hold to lawfully engage in an
occupation or activity.
94804. "Main location" or "main site" means an institution's
primary teaching location. If an institution operates at only one
site, that site is its main location or main site.
94805. "Nondegree institution" means an institution that
exclusively offers nondegree programs.
94806. "Nondegree program" means a program that does not lead to
a degree.
94807. "Occupational associate degree," "associate of
occupational studies," or "associate of applied science," designated
by terms including, but not necessarily limited to, associate
occupational studies (AOS), associate applied science (AAS),
associate specialist technical (AST), or associate specialist
business (ASB), means an associate degree that may be awarded to
students who complete 60 semester units or 90 quarter units in an
occupational program that provides preparation for employment in an
occupational field.
94808. "Out-of-state institution" means an institution that has
its place of instruction or its principal location outside the
boundaries of this state, that offers or conducts programs on
premises maintained by the institution outside the boundaries of this
state, that provides distance learning materials from a location
outside the boundaries of this state, that evaluates completed lesson
materials or otherwise conducts its evaluation service from a
location outside the boundaries of this state, or that otherwise
offers or provides California students with programs through
activities engaged in or conducted outside the boundaries of this
state.
94809. "Overall employment rate" means the percentage of those
students who started the program, did not cancel during the
cancellation period, and were originally scheduled at the time of
enrollment to complete the program during the applicable completion
tracking period who both completed the program within that completion
tracking period and obtained employment.
94810. "Owner" means a person who has a legal or equitable
interest in 10 percent or more of an institution's stocks or assets.
94811. "Parent corporation" means a corporation that owns more
than 80 percent of the stock of an institution.
94812. "Person" means a natural person or a business entity,
regardless of the form or organization.
94813. "Person in control" means a person who has sufficient
capacity, directly or indirectly, to direct or influence the
management, policies, or conduct of an institution so that the person
can cause or prevent a violation of this chapter. There is a
rebuttable presumption affecting the burden of proof that an owner,
director, or officer of an institution is a person in control.
94814. "Private Postsecondary Institution" means an institution.
94815. "Program" or "program of instruction" means a program of
training, course, set of related courses, or education for which a
student enrolls.
94816. "Registered," "registered institution," or "registered
educational service" means a person that offers an educational
service and is registered to operate under Article 4 (commencing with
Section 94850).
94818. "Representative" means an employee, an agent as defined in
Section 2295 of the Civil Code, an agent as defined in Section
94764, an agency, as defined in Section 94762, or any person who, for
compensation, does either of the following:
(a) Solicits, promotes, advertises, or refers or recruits students
or prospective students for an institution.
(b) Is involved with enrollment, admissions, student attendance,
administration, financial aid, instruction, or job placement
assistance on behalf of an institution.
94819. "Satellite" means an auxiliary classroom or a teaching
site separate from an institution's main location at which all of the
following apply:
(a) Only educational services that are approved at the main
location shall be offered at the satellite.
(b) The permanent records of attendance or academic progress for
students taking courses or enrolled in a program at the satellite
shall be maintained at the main location.
(c) Advertisement of a satellite shall indicate that the satellite
is an auxiliary classroom or a teaching site.
94820. "Satisfactory academic progress" means that a student is
on track to complete a program within 150 percent of the published
length of the program, measured in academic years, terms, credit
hours, clock hours, or other form.
94821. "Scheduled to complete" means the date the institution
determined, when the student enrolled, that the student was scheduled
to complete the program.
94823. "Site" means a main location, branch, or satellite campus.
94824. "To offer" includes in addition to its usual meanings,
offering, advertising, publicizing, soliciting, encouraging, or
offering to a person, directly or indirectly, in any form, to perform
an act as described.
94825. "To operate" an educational institution, "to operate an
institution in this state," or like term, means educational services
are offered or educational degrees or certificates are offered or
granted by, through, or from a person doing business in this state.
94826. "Total charge" means the total charge for a program or
other education, instruction, or training, including the charge for
tuition, equipment, finance charges paid to the institution, and all
other fees, charges, costs, and expenses paid to the institution.
94827. "USDE" means the United States Department of Education.
94828. "Vocational program" means an educational program having
all of the following characteristics:
(a) The educational program consists of a job-training program or
other instruction, training, or education that the institution
identifies as, or represents as a program that will lead to, fit, or
prepare students for employment in any particular occupation.
(b) The program is offered to students who do not possess a
bachelor's or a graduate degree in the field of training.
(c) Students who complete all or a portion of the program are
awarded a certificate or an associate degree, including, but not
necessarily limited to, an Occupational Associate Degree, Associate
of Occupational Studies, or Associate of Applied Science.
94829. "Year" means a calendar year.
Article 3. Exemptions
94840. This chapter does not apply to publicly operated
institutions.
94841. (a) The following private institutions are exempt from the
requirements of this chapter:
(1) An institution offering education solely as avocational or
recreational in nature, and offering this education exclusively.
(2) An institution offering education sponsored by a bona fide
trade, business, professional, or fraternal organization, solely for
that organization's membership.
(3) An institution offering continuing education where 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, trade, or job category.
(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, trade, or job category.
(C) A bona fide trade, business, or professional organization.
(4) (A) A nonprofit institution owned, controlled, and operated
and maintained by a bona fide church, religious denomination, or
religious organization composed of multidenominational members of the
same well-recognized religion, 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:
(i) The education is limited to instruction in the principles of
that church, religious denomination, or religious organization, or to
courses offered pursuant to Section 2789 of the Business and
Professions Code.
(ii) The certificate or degree is limited to evidence of
completion of that education.
(iii) The meritorious recognition upon which any honorary degree
is conferred is limited to the principles of that church, religious
denomination, or religious organization.
(B) An institution operating under this paragraph shall offer
degrees and diplomas only in the beliefs and practices of the church,
religious denomination, or religious organization.
(C) This paragraph expresses the legislative intent that the state
shall not involve itself in the content of certificate or degree
programs awarded by any institution operating under this paragraph,
as long as the institution awards certificates or degrees only in the
beliefs and practices of the church, religious denomination, or
religious organization.
(D) An institution exempt under this paragraph shall not award
certificates or degrees in any area of physical science.
(E) Any certificate or degree granted in any area of study under
this paragraph shall contain on its face, in the written description
of the title of the certificate or degree being conferred, a
reference to the theological or religious aspect of the certificate
or degree's subject area.
(F) A degree awarded under this paragraph 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."
(G) The use of the degree titles "associate of arts" or "associate
of science," "bachelor of arts" or "bachelor of science," "master of
arts" or "master of science," or "doctor of philosophy" or "Ph.D."
shall only be awarded by institutions approved to operate under this
chapter.
(5) Institutions solely offering programs that have a total charge
of one thousand dollars ($1,000) or less. The bureau may adjust this
cost threshold based upon the Consumer Price Index, and post
notification of the adjusted cost threshold on its public Web site on
or after January 1, 2009, and each January 1 thereafter.
(6) All private postsecondary institutions offering instruction in
California which are accredited by the Accrediting Commission for
Senior Colleges and Universities of the Western Association of
Schools and Colleges.
(7) All private postsecondary institutions offering instruction in
California which are accredited by the Accrediting Commission for
Community and Junior Colleges of the Western Association of Schools
and Colleges.
(b) (1) The following institutions are exempt from this chapter
until January 1, 2011, except as otherwise specifically provided in
this chapter:
(A) All private postsecondary institutions offering instruction in
California which are not accredited by the Accrediting Commission
for Community and Junior Colleges of the Western Association of
Schools and Colleges but are accredited by another regional
accrediting body recognized by the USDE.
(B) Any nonprofit public benefit corporation organized pursuant to
Part 2 (commencing with Section 5110) of Division 2 of Title 1 of
the Corporations Code and not managed or administered by an entity
for profit, that meets all of the following requirements:
(i) Accredited by an accrediting agency recognized by the USDE.
(ii) Operated continuously in this state for at least 20 years.
(iii) The institution's cohort default rate on guaranteed student
loans does not exceed 15 percent for the three most recent years as
published by the USDE.
(iv) The institution submits to the bureau copies of the most
recent IRS Form 990 and the Integrated Postsecondary Education Data
System Report of the USDE and the accumulated default rate.
(v) The institution pays fees to the bureau in accordance with
Article 10 (commencing with Section 95040).
(2) To verify that any institution is exempt from this chapter,
the bureau shall review and continue to monitor the accreditation
status of each institution to determine if the institution received a
negative accreditation action at any time between January 1, 2007,
and December 31, 2010. The bureau's duty under this provision does
not relieve any institution from its obligation to comply with this
chapter.
94843. It is the intent of the Legislature that this article be
amended before January 1, 2011 to reflect the findings and
recommendations of the report required by Section 94750.
Article 4. Operating Requirements of Institutions
94850. An institution may not provide private postsecondary
education in California unless that institution is one of the
following:
(a) Approved to operate pursuant to this article.
(b) Exempt from, or not subject to, this chapter.
94851. An institution making application under this article is
subject to fees as specified in Article 10 (commencing with Section
95040). Approval of an institution to operate shall not be renewed
prior to full payment of assessments, fees, fines, and penalties due
under Article 7 (commencing with Section 94970) and Article 10
(commencing with Section 95040).
94852. If an institution is regulated by another state licensing
agency, the institution shall, in addition to approval as specified
in this article, obtain and retain the authorization of that agency.
94853. (a) A new institution in California may be granted initial
approval to operate under this chapter if the person's application
satisfies the requirements of this article, there is no reason to
expect that the person will not operate the institution in compliance
with this chapter and any standard or regulation pertaining to it,
the person is not in violation of this chapter or any standard or
regulation pertaining to it, and there are no grounds for denial of
the application under this chapter. An approval to operate shall be
issued to the owners or governing body, and shall be nontransferable,
unless approved by the bureau.
(1) Initial approval shall be for a period of three years from the
approval date if the institution is not accredited by an accrediting
agency recognized by the USDE.
(2) Initial approval shall be for a period of five years from the
approval date if the institution is accredited by an accrediting
agency recognized by the USDE.
(3) If the institution has not commenced instruction within 18
months of the date of initial approval and notified the bureau of
commencing instruction, the initial approval shall be terminated by
operation of law.
94853.5. An institution that receives approval to operate shall
be maintained and operated, or in the case of an initial approval for
a person that has not commenced to operate, shall demonstrate that
it will be maintained and operated, in compliance with the following
minimum standards:
(a) The institution shall be financially capable of fulfilling its
commitments to its students.
(b) The institution shall, upon satisfactory completion of
training, ensure that each student is given an appropriate degree or
certificate by the institution, indicating that the program or
programs of instruction have been satisfactorily completed by the
student.
(c) The institution shall provide sufficient instruction and
materials pursuant to a planned curriculum appropriate to each
student's educational program.
(d) The institution shall provide each student with sufficient
materials, including current publications and equipment, not later
than the time the materials are appropriate for use in the program.
(e) The institution shall maintain sufficient student admission,
attendance, academic progress, and performance standards to
reasonably ensure that students acquire the education, training,
skill, and experience that the program is represented to provide.
(f) The institution shall comply with all local, city, county,
municipal, state, and federal regulations relative to the safety and
health of all persons upon the premises, including fire, building,
and sanitation codes.
(g) The institution shall not employ any person to be in a
position of control, direct the financial operations, or be
responsible for the development or management of student financial
and academic policies who has been convicted of, or pled nolo
contendre or guilt to, a crime involving the acquisition, use, or
expenditure of federal or state funds, or who has been judicially or
administratively determined to have committed any violation of this
chapter or the Private Postsecondary and Vocational Education Reform
Act of 1989.
(h) The institution shall have technical resources to comply with
the minimum standards of this chapter.
94854. An institution seeking an approval to operate shall file
an application in a manner specified by the bureau, which shall be
sufficient to demonstrate that the institution meets minimum obtain
evidence of the minimum standards provided in Section 94853.5 and
shall also include all of the following:
(a) The name and California address of a designated agent upon
whom any process, notice, or demand may be served.
(b) The signatures and certifications under oath by the owners of
the institution or, if the institution is incorporated, by the
corporate officers, or, if the institution is a limited liability
corporation, by all members who own 10 percent or more of that
corporation, attesting to the accuracy of the information in the
application and an acknowledgment that the owners, directors, and
anyone in a position of control of the institution understands the
responsibility to comply with the minimum standards in this chapter
and that those minimum standards will be reviewed at the time of the
initial approval onsite inspection and at other times as provided by
this chapter.
(c) (1) An application for an initial approval shall include
proposed versions of all of the following documents:
(A) All media advertising and promotional literature.
(B) All student enrollment agreements.
(C) All instruments of indebtedness made available to students.
(D) The institution's catalogue.
(E) All other documents that the institution is required to
provide to students pursuant to Article 5 (commencing with Section
94890).
(F) A description of the institution's placement assistance.
(G) The institution's most current financial report as described
in Section 94883.3.
(H) A list of all accrediting agencies recognized by the USDE
which accredited the institution or program.
(2) An application for a renewal approval shall include copies of
the documents specified in paragraph (1) in use on the date of the
renewal application.
(d) If the application is for an initial approval, an operational
plan sufficient to demonstrate that the institution will be
maintained and operated in compliance with the requirements of this
chapter. If the application is for a renewal approval, the
information specified in Section 94883.6 and any other information
needed to demonstrate that the institution is maintained and operated
in compliance with the requirements of this chapter.
94855. An institution may combine all, or some, of its separate
operating sites under one application for initial approval or may
submit separate applications for each site. The sites, whether
included in a combined application or separate applications will be
considered to be part of the main location, and all sites will be
treated as a single institution for purposes of regulation, approval,
and compliance under this chapter.
94856. (a) (1) The bureau shall inform the institution within 60
days of receipt of an application for initial approval or renewal of
approval to operate if additional information is required to complete
or substantiate the application. The bureau shall provide a time
period of no less than 30 days for an institution to provide
requested information, and may grant extensions if requested and
warranted.
(2) The bureau shall provide a time period of no less than 30 days
for an institution to provide requested information.
(3) The bureau may grant extensions if requested and
warranted.
(b) An application may be deemed abandoned if an institution fails
to comply within the time period as specified or extended by the
bureau according to subdivision (a).
(c) (1) The bureau may charge a delinquency fee of 20 percent of
the application fee if an institution fails to comply within the time
period as specified or extended by the bureau according to
subdivision (a).
(2) The bureau may charge the fee on an institution that is
subject to subdivision (a) if both of the following apply:
(A) The institution provides the missing information either with a
new application or with a request in writing that the bureau process
the original application even after the bureau had deemed it
abandoned.
(B) The bureau agrees to process the application.
(d) If an application is deemed by the bureau to be abandoned, the
bureau shall notify the applicant in writing of the determination.
This notification shall also notify the applicant that if the
applicant continues to seek initial approval, or renewal of approval,
a new application shall be submitted.
94857. Following review of an institution's application for an
initial approval to operate, accompanying documentation, and any
other information required by this article, and any assessment or
review of the applicant as the bureau deems necessary or appropriate,
the bureau shall either approve or deny the institution's
application. If the bureau determines the institution's application
is not in compliance with the requirements of this article, the
bureau shall deny the application. If the bureau determines that the
institution's application satisfies the requirements of this article,
that there is no reason to expect that the institution will not
implement its business or operational plan, and that no grounds for
denial of the application exist, the bureau shall grant the
institution an initial approval to operate.
94858. (a) For institutions that are not accredited by an
accrediting agency recognized by USDE, within one year of an
institution's commencement of operations, following the bureau's
issuance of an initial approval to operate, the bureau shall commence
a qualitative review and assessment of all operations of an
institution and all programs offered by that institution, and verify
the institution's compliance with this chapter.
(b) The qualitative review and assessment shall, except for onsite
inspection of an out-of-state institution which shall be at the
discretion of the bureau, include an onsite inspection of the
institution and its operations, and may include branches and
satellites included in the initial approval to operate.
(c) The bureau may, pursuant to Article 1 (commencing with Section
94700), impanel a qualified visiting committee for purposes of
conducting the initial onsite inspection of an institution and the
programs offered by that institution as required by subdivision (b).
The visiting committee may include educators and other individuals
from institutions legally operating within this state with expertise
in the areas listed in subdivision (d) or employers with expertise
related to the program being reviewed.
(d) The qualitative review and assessment shall encompass the
required minimum standards as provided in Sections 94853 and 94853.5,
and shall include interviews with administrators, faculty, staff,
and students, and inspection of facilities, records, and record
keeping. If student or public complaints have been received by the
bureau since the time of initial approval to operate, all issues
raised in such complaints shall be investigated.
(e) The institution being reviewed shall bear the cost of the
onsite review.
(f) The bureau shall, within 60 days of its onsite view, notify
the institution of any deficiency noted in that review that requires
corrective action, and shall notify the institution of the date by
which the institution must provide evidence of that corrective
action, which date shall not exceed 180 days from the date of the
onsite review.
(g) The bureau may conduct followup qualitative reviews and
assessments at any time, with or without empaneling a visiting
committee.
94864. At least 120 days before the expiration of its approval to
operate, an institution seeking a renewal of that approval to
operate shall file an application in a manner specified by the bureau
and for a renewal approval which shall be fully demonstrate
compliance with this chapter.
94866. If an institution files an application for a renewal
approval within the time period specified in Section 94864, an
institution's approval to operate is automatically continued until
its application for renewal of approval to operate is acted upon by
the bureau.
94867. Within 120 days of receipt of an application for renewal
of approval to operate, the bureau shall review the application and
take one or more of the following actions:
(a) Grant approval to operate for a period not to exceed five
years.
(b) Provide the institution with a corrective action plan to
address deficiencies noted in the review and a time period not to
exceed 18 months for the institution to undertake corrective action
and present evidence of corrective activity as required, during which
time period the institution's current approval to operate is
extended.
(c) Deny renewal of the approval to operate and either impose a
plan for closure of the institution that affords students already
enrolled the opportunity to continue the program of instruction, or
order the institution to cease instruction and provide a refund of
tuition and all other charges to currently enrolled students.
94869. (a) Notwithstanding any other provision of this article,
if an institution loses its exemption from this chapter pursuant to
subparagraphs (A) or (B) of paragraph (1) of subdivision (b) of
Section 94841, it shall notify the bureau of that action within 10
days of receiving notice of that action, and the bureau shall
immediately grant a 90 day approval of the institution and conduct a
preliminary investigation to determine the causes for the action.
(b) Notwithstanding any other provision of this article, if an
institution approved under this article loses its accreditation or
its eligibility for participation in student financial aid programs
under Title IV of the federal Higher Education Act of 1965, it shall
notify the bureau of that action within 10 days of receiving notice
of that action, and the bureau shall immediately place the license in
a 90 day probationary period and conduct a preliminary investigation
to determine whether the institution is operating in violation of
this chapter.
(c) Grant an initial approval of the institution pursuant to
Section 94853.
(d) Either impose a plan for closure of the institution that
affords students already enrolled the opportunity to continue the
program of instruction, or order the institution to cease instruction
and provide a refund of tuition and all other charges to currently
enrolled students.
94870. Except for continuing education programs and programs that
are exclusively avocational or recreational in nature, all programs
offered by the institution shall meet the minimum standards
prescribed by this article.
94871. (a) An institution that is accredited by an accrediting
body recognized by the USDE with no current negative actions by that
accrediting agency, is fully in compliance with the standards set
forth in this chapter, has been granted approval to operate by the
bureau, and has not been subject to involuntary withdrawal from
student financial aid participation under Title IV of the federal
Higher Education Act of 1965, may add a program, a branch, or a
satellite at any time if the program is, or if the branch or
satellite will offer programs, substantially related to an existing
approved program. The institution shall notify the bureau of an
addition of a program, branch, or satellite within 30 days after the
institution finalizes its plan to add the program, branch, or
satellite, and certify to the bureau that it currently meets, and
will continue to meet, the requirements of this subdivision after the
addition of the program, branch or satellite.
(b) An institution that is unaccredited, or operating under
initial approval, or unable to meet the standards set forth in
subdivision (a) shall not add any program, branch, or satellite
without authorization by the bureau, except as noted in paragraph
(3). An institution seeking to add an additional program, a branch,
or a satellite shall apply to do so in a manner specified by the
bureau.
(1) The bureau shall review a proposed addition of a program,
branch, or satellite and determine if the institution will continue
to meet the minimum standards set forth in this article if the
program, branch, or satellite is added. If the bureau determines that
the institution will continue to meet those standards after the
addition, and if the program meets the standards set forth in this
article, the bureau shall authorize the addition of the program,
branch, or satellite. If the bureau determines that the institution
will not continue to meet those standards after the addition, the
bureau may not authorize the addition of the program, branch, or
satellite, and the institution may not continue with the addition.
(2) The bureau may first conduct a site visit before acting on an
application to add a new program, branch, or satellite.
(3) An institution may add a program with a total charge of less
than two thousand five hundred dollars ($2,500) at any time, if the
new program is substantially related to an existing, approved
program. The institution shall notify the bureau of an addition of
the program within 30 days, after the institution finalizes its plan
to add the program; shall certify to the bureau that it is fully in
compliance with, and after the addition of the program will remain
fully in compliance with, this chapter and any standard or regulation
pertaining to it; and shall not represent it to current or
prospective students as an "approved program."
94872. An instructional program shall lead to a defined objective
and shall, if an institution represents that a course or program
leads to employment in a particular occupation, evidence quality,
content, and instruction sufficient to ensure that students may
acquire the necessary level of education, training, skill, and
experience to obtain employment in the occupation or job title to
which the course or program of instruction is represented to lead.
94873. A program represented to lead to licensure shall evidence
the quality, content, and instruction sufficient to ensure that
students may acquire the necessary level of education, training,
skill, and experience to obtain the licensure to which the program is
represented to lead.
94874. The program shall have sufficient instruction, breadth,
depth, rigor, sequencing, and time to completion to reasonably meet
its stated learning and training objectives.
94875. The program shall utilize systems and modes of instruction
compatible with the objectives of the curriculum.
94876. A program provided by distance learning shall evidence the
technical resources necessary to provide that instruction for the
full duration of the program.
94877. Faculty shall possess adequate academic, experiential, and
professional qualifications to teach the course or to perform the
duties as assigned. A faculty member in a program that leads to a
degree shall possess a degree of equal or higher level in the
occupation for which certification is sought.
94878. A person shall not serve as a faculty member if that
person has been convicted of, or has pled nolo contendere or guilty
to, a crime involving the acquisition, use, or expenditure of federal
or state funds, or who has been judicially or administratively
determined to have committed any violation of this chapter or of any
law involving state or federal funds.
94879. The standards for student admission to the program shall
ensure the following:
(a) If an institution represents that the program leads to
employment in a particular occupation, a student shall not be
enrolled who cannot perform the duties of that occupation.
(b) If a program is represented to lead to a credential or
licensure, the institution shall be responsible for knowing the
requirements of that credential or licensure, and shall not enroll
any student who cannot meet those requirements for reasons other than
lacking the education and training that would be provided by
successful completion of the program.
94880. Notwithstanding the provisions of this article, an
institution that is not otherwise exempt from this chapter, and
proposes to offer solely, and after commencing operation solely
offers programs with a total direct charge of less than two thousand
five hundred dollars ($2,500), may apply in a manner specified by the
bureau for an exemption from having to obtain approval under this
article, and shall be deemed to be a registered institution. The
bureau may annually adjust the two thousand five hundred dollar
($2,500) threshold of this section annually to reflect changes in the
Consumer Price Index for California.
(a) The bureau shall act upon an exemption from approval within 90
days of receipt of a completed application.
(b) The bureau may grant an exemption for a period not to exceed
five years, and shall specify which, if any, of the other provisions
of this article to which the institution shall remain subject.
(c) At least 90 days before the expiration of its exemption from
approval, an institution shall apply for renewal in a manner
specified by the bureau.
(d) The bureau shall act upon an application for renewal of
exemption from approval within 90 days of receipt of a completed
application.
(e) The bureau may grant a renewal under this section for a period
not to exceed five years, and shall specify to which, if any, of the
other provisions of this article the institution shall remain
subject.
(f) The bureau may, prior to granting an exemption, prior to
granting a renewal of an exemption, or upon a determination that an
institution may not be in compliance with the relevant provisions of
this chapter, in addition to any other action the bureau is
authorized to take by this chapter, conduct a review of that
institution and, upon determination of violations of this chapter,
provide the institution with a 90-day time period in which to apply
for initial approval to operate under this article.
94881. An institution registered under this article shall not
represent itself to current or prospective students as an approved
institution.
94882. (a) Each owner, director, and administrator of an
institution shall expend or authorize the expenditure of the
institution's assets and funds, including tuition, fees and other
charges collected from or on behalf of students, in a diligent and
prudent manner to ensure that students receive the education and
student services that the institution represented it would provide to
the students and that the institution is required to provide to the
students pursuant to this chapter.
(b) Each owner, director, and administrator of an institution has
the duty to act in the utmost good faith to take all reasonable steps
within his or her capacity to cause the institution to comply with
all applicable law and to correct the effects of noncompliance.
(c) Each owner, director, and administrator of an institution
shall immediately disclose to the bureau evidence that the
institution or any person connected with the institution has engaged
in fraud, misrepresentation, or misappropriation of funds.
94882.3. (a) An institution shall maintain, for a period of not
less than five years at its principal place of business in this state
complete and accurate records, evidencing the following:
(1) The programs of study offered by the institution and the
curriculum for each.
(2) The names and addresses of its faculty, together with a record
of the educational qualifications of each.
(3) The records required to be maintained by subdivision (e) of
Section 94945.
(b) For each student the institution shall maintain permanent
records of the degree or certificate granted, the date it was
granted, the courses and units of each on which the certificate or
degree was based, and the grades earned in those courses.
(c) Notwithstanding any other provision of this chapter, an
institution may not disclose the personal student records maintained
pursuant to this section unless production of those records is
required by any law or by subpoena or court order.
(d) All records that an institution is required to maintain by
this chapter or that relate to an institution's compliance with this
chapter shall be made immediately available by the institution for
inspection and copying during normal business hours, upon request, by
the bureau, the Attorney General, any district attorney or city
attorney, and the Student Aid Commission.
94882.6. (a) An institution shall be considered financially
capable of fulfilling its commitments to its students if it has
sufficient assets to do all of the following:
(1) Provide the education, training, skills, and experience that
the institution represented in any manner it would provide.
(2) Pay timely refunds as required by Sections 94941 and 95026.
(3) Provide the administrative and financial resources to fully
comply with this chapter.
(4) Timely pay any fines owed under Article 10 (commencing with
Section 95040).
(b) An institution shall be considered financially capable of
fulfilling its commitments to its students if an opinion by a
certified public accountant states or demonstrates both of the
following conditions:
(1) The institution has available sufficient funds and accounts
receivable to pay all operating expenses due within 30 days. For the
purpose of this subdivision, "funds" means cash or assets that can be
converted into cash within seven days.
(2) Under generally accepted accounting principles, the
institution had, at the end of its latest fiscal year, or upon filing
an application for initial approval, a ratio of current assets to
current liabilities of greater than 1.25 to 1. For the purpose of
this subdivision, "current assets" does not include either of the
following:
(A) Intangible assets, including goodwill, going concern value,
organization expense, startup costs, long-term prepayment of deferred
charges, and nonreturnable deposits.
(B) State or federal grant funds that are not the property of the
institution, but are held for future disbursement for the benefit of
students.
(c) Unearned tuition shall be accounted for in accordance with
generally accepted accounting principles. When another government
agency requires an institution to file an annual financial audit
prepared by a certified public accountant, that agency's current
ratio standard may apply in lieu of the ratio specified in this
subdivision if the ratio of current assets to current liabilities
under that standard is 1 to 1 or greater. Institutions shall certify
that they meet the requirements of this section, and incorporate the
certification into their annual report.
(d) In determining the institution's compliance with the
requirements of this section the bureau may, at the institution's
request, consider the financial resources of a parent corporation if
the parent corporation files with the bureau, and at all times
complies with, an irrevocable and unconditional agreement approved by
its bureau board of directors that provides that the parent
corporation shall do all of the following:
(1) Consent to be sued in California.
(2) Consent to be subject to the administrative jurisdiction of
the bureau and the Student Aid Commission in connection with the
institution's compliance with this chapter.
(3) Appoint an agent for service of process in California and all
notices required by this chapter.
(4) Agree to pay any refund, claim, fine, penalty, or judgment
that the institution is obligated to pay.
(5) File financial reports, maintain financial records, and permit
the inspection and copying of financial records to the same extent
as is required of the institution.
94882.9. If the bureau determines that an institution is not
financially capable of fulfilling its commitments to its students,
the bureau, in addition to any other action the bureau may take under
this chapter, under terms and conditions prescribed by the bureau,
may require the institution to submit all of the following:
(a) A financial audit of the institution conducted by a licensed
certified public accountant, in accordance with generally accepted
auditing standards.
(b) The institution's financial plan for establishing financial
capability.
(c) Any other appropriate and necessary information requested by
the bureau.
94883.3. (a) This section applies to any audit prepared by an
independent accountant and to every financial report required to be
prepared or filed under this chapter.
(b) Institutional audits and financial reports, including the
preparation of financial statements, required to be prepared or filed
under this chapter shall comply with all of the following:
(1) Financial reports shall be prepared in accordance with
generally accepted accounting principles established by the American
Institute of Certified Public Accountants, and audited by an
independent certified public accountant who is not an employee,
officer, or corporate director or member of the governing bureau of
the institution. If the institution is a corporation that is publicly
traded on a national stock exchange, the submission of the
corporation's annual report shall be deemed to comply with this
paragraph.
(2) Financial reports shall be prepared on an annual basis and
shall include the institution's financial statement, including a
balance sheet, statement of operations, statement of cashflow, and
statement of retained earnings or capital. Nonprofit institutions
shall provide this information in the manner required under generally
accepted accounting principles for nonprofit organizations.
(3) Financial reports shall establish whether the institution is
or is not financially capable of fulfilling its commitments to its
students.
(4) If an audit that is performed to determine compliance with any
federal or state student financial aid program reveals any failure
to comply with the requirements of the program, and the noncompliance
creates any liability or potential liability for the institution,
the financial report shall reflect the liability or potential
liability.
(5) Work papers and the supporting documentation for the financial
report shall be retained for five years from the date of the report,
and shall be made available to the bureau upon request.
(6) Audits shall be conducted in accordance with generally
accepted auditing standards, and the accountant conducting the audit
shall obtain an understanding of the institution's internal
financial control structure,
assess any risks, and report any material deficiencies in the
internal controls.
(7) Financial reports shall contain a statement signed by the
individual who prepared the report stating that the institution has
paid or has not paid to the bureau all amounts owed under Section
94983. The bureau shall be deemed an intended beneficiary of that
statement in the financial report and of the audit certifying the
financial report. An institution that has not paid all amounts owed
to the bureau under Section 94983 shall report to the bureau within
30 days after the unpaid amounts were due on its plan to become
current in these payments. This subdivision shall not be construed to
require the institution to prepare a report on its obligations under
the Student Tuition Recovery Fund separately from its institutional
financial report.
94883.6. (a) An institution approved to operate under this
chapter shall report to the bureau, under penalty of perjury, by July
1 of each year, or another date designated by the bureau,
electronically and in writing, the following information for
educational programs offered in the prior year:
(1) The total number of students enrolled, by level of degree or
type of diploma program.
(2) The number of degrees and diplomas awarded, by level of
degree.
(3) The degree levels offered.
(4) The schedule of tuition and fees required for each term,
program, course of instruction, or degree offered.
(5) Financial information demonstrating compliance with Section
94882.6.
(6) A statement indicating whether the institution is or is not
current on its payments to the Student Tuition Recovery Fund.
(7) Any additional information that the bureau may prescribe.
(b) An institution approved to operate under this chapter shall
report to the bureau, under penalty of perjury, by October 1 of each
year, or another date designated by the bureau, electronically and in
writing, the following information for the applicable completion
tracking and employment tracking periods:
(1) Completion numbers and rates as set forth in Section 94887.9.
(2) Employment numbers and rates as set forth in Section 94887.9.
(3) The information specified under subdivision (e) of Section
94945.
(c) The information required to be submitted by subdivisions (a)
and (b) shall be provided in two electronic formats, one of which may
be a form that cannot be changed, such as in a portable document
format (PDF) file, and one of which shall be in a searchable
modifiable electronic format to be specified by the bureau, or if
none is specified, in a commonly available spreadsheet program with
any necessary narrative provided in a commonly available word
processing program.
(d) Based on the review of information submitted to fulfill the
requirements of this section, the bureau may initiate a compliance
review and may require evidence of financial stability and
responsibility pursuant to this chapter.
94883.9. (a) An institution shall designate and maintain an agent
for service of process within this state, and provide the name,
address, and telephone number of the agent to the bureau. The bureau
shall furnish the name, address, and telephone number of the agent
for service of process to any person upon request.
(b) If an institution is not operating in California when it
applies for approval to operate, the institution shall set forth the
name, address, and telephone number of its agent for service of
process in the institution's application.
(c) If an institution fails to designate or maintain an agent for
service of process pursuant to subdivision (a), and if service on the
institution cannot reasonably be effected in the manner provided in
Section 415.10, 415.20, 415.30, or 415.40 of the Code of Civil
Procedure, the institution may be served by leaving a copy of the
process or any other document in an office of the bureau and by
sending, by first-class mail, a notice of the service upon the bureau
and a copy of the process or other document to the institution at
its last address on file with the bureau. Service in this manner
shall be deemed complete on the 10th day after that mailing to the
institution. Proof of service may be made by a declaration showing
compliance with this subdivision.
94884.3. The bureau shall maintain records for five years of each
application for an agent or agency authorization, each verification
by the bureau of an agent or agency application, and each denial,
issuance, or revocation of an agent or agency authorization.
94884.6. (a) The governing board or other governing authority of
an institution shall adopt rules providing for the withholding of
institutional services from students or former students who have been
notified, in writing, at the student's or former student's last
known address, that the student is in default on a loan or loans
insured or issued by the United States Department of Education
including, but not limited to, the Federal Family Education Loan
Program and the Federal Direct Loan Program.
(b) The rules adopted pursuant to subdivision (a) shall provide
that the services withheld may be provided during a period when the
facts are in dispute and when the student or former student
demonstrates to either the governing board or other appropriate
governing authority of the institution, or the Student Aid Commission
and the appropriate entity or its designee, that reasonable progress
has been made to repay the loan or that there exists a reasonable
justification for the delay as determined by the institution. The
rules shall specify the services to be withheld from the student,
which may include the following, except that the rules may not
include the withholding of registration privileges:
(1) The provision of grades.
(2) The provision of transcripts.
(3) The provision of diplomas.
(c) If an individual is in default on a loan or loans under either
of the loan programs specified in subdivision (a), the Student Aid
Commission shall give notice of the default to all institutions
through which that individual acquired the loan or loans.
(d) Guarantors, or those who act as their agents, as defined in
Section 2295 of the Civil Code, or act under their control, who
provide information to institutions pursuant to this section, shall
defend, indemnify, and hold harmless the governing board or other
governing authority of the institutions from an action resulting from
compliance with this section when the action arises as a result of
incorrect, misleading, or untimely information provided to the
institution by the guarantors, their agents, as defined in Section
2295 of the Civil Code, or those acting under the control of the
guarantors.
94885. (a) A shift in control or change in ownership of an
institution may not be made until that institution submits an
application for approval to operate under the changed ownership or
control and that application is approved by the bureau. This
application shall be submitted at least 30 days prior to the shift in
control or change in ownership.
(b) An application filed pursuant to this section shall be
approved if that application is filed properly and complies with this
chapter and any standard or regulation pertaining to it. Upon
approval of a change in ownership, the bureau shall give written
notice to the Student Aid Commission.
(c) An application filed pursuant to this section shall include a
fee pursuant to Article 10 (commencing with Section 95040).
(d) An application filed pursuant to this section may include
pertinent portions of the institution's previous application prepared
in connection with programs of instruction that remain unchanged or
unaffected by the change in ownership.
(e) An application filed pursuant to this section may not be
approved for a person that has been found previously in a judicial or
administrative proceeding to have violated this chapter, or if there
exists any of the grounds for denial set forth in Section 480 of the
Business and Professions Code or Section 95005 of this code.
(f) A change in ownership of the institution shall not be made
until the application is approved. If an application for a new
approval to operate is not timely filed by an institution, as
required by this section, that institution's approval to operate
shall terminate.
(g) For the purposes of this section, a change in ownership occurs
when there is a change of control of the institution, or where a
person who previously did not own at least 25 percent of the stock or
controlling interest of an institution or its parent corporation,
acquires ownership of at least 25 percent of the stock of the
institution or its parent corporation, or when a for-profit business
converts to nonprofit corporation status or forms a nonprofit
corporation as a subsidiary to provide the educational services for
which the for-profit business is approved to operate.
94885.3. The enrollment, course completion, and employment data
used to determine compliance with this chapter and for the purposes
of disclosures under Section 94893 shall continue to apply to an
institution notwithstanding a change in the institution's ownership,
name, or identification number.
94885.6. Notwithstanding any other provision in this chapter, a
person shall not own or operate an institution, or give instruction,
for the driving of motortrucks of three or more axles that are more
than 6,000 pounds unladen weight unless all of the following
conditions are met:
(a) The institution has been approved by the bureau.
(b) The institution, at the time of application and thereafter,
maintains both of the following:
(1) Proof of compliance with liability insurance requirements that
are the same as those established by the Department of Motor
Vehicles for a driving institution owner, pursuant to Section 11103
of the Vehicle Code, unless the bureau deems it necessary to
establish a higher level of insurance coverage.
(2) A satisfactory safety rating by the Department of the
California Highway Patrol established pursuant to Division 14.8
(commencing with Section 34500) of the Vehicle Code.
(c) The institution, at all times, shall maintain the vehicles
used in driver training in safe mechanical condition. The institution
shall keep all records concerning the maintenance of the vehicles.
(d) The driving instructions meet the requirements set forth in
Section 11104 of the Vehicle Code.
(e) Any other terms and conditions required by the bureau to
protect the public safety or to meet the requirements of this
chapter.
94885.9. (a) A person may not act as an agent of any institution
that offers vocational programs unless that person holds a valid
authorization issued by the bureau and maintains at all times a
surety bond as described in Section 94886.
(b) An agent representing more than one institution shall obtain a
separate agent's authorization and bond for each institution
represented.
(c) A person may not be issued an authorization if he or she has
been found in a judicial or administrative proceeding to have
violated this chapter, or there exists any of the grounds for denial
set forth in Section 480 of the Business and Professions Code.
(d) An authorization shall be valid for the calendar year in which
it is issued, unless sooner revoked or suspended by the bureau for
fraud or misrepresentation in connection with the solicitation for
the sale of any course of study, for any violation of this chapter,
or for the existence of any condition in respect to the authorized
agent or the institution he or she represents which, if in existence
at the time the authorization was issued, would have been grounds for
denial of the authorization.
(e) An authorized agent shall carry the authorization with him or
her for identification purposes when engaged in the solicitation of
sales and the selling of programs of instruction away from the
premises of the institution, and shall produce the authorization for
inspection upon the request of any person.
(f) The issuance of an authorization pursuant to this section
shall not be interpreted to mean, and it shall be unlawful for any
individual holding any authorization to expressly or impliedly
represent by any means whatsoever, that the bureau has made any
evaluation, recognition, accreditation, or endorsement of any program
being offered for sale by the individual.
(g) It is unlawful for any individual holding an authorization
under this section to expressly or impliedly represent, by any means
whatsoever, that the issuance of the authorization constitutes an
assurance by the bureau that any program of instruction being offered
for sale by the individual will provide and require of the student
program of instruction or training necessary to reach a professional,
educational, or vocational objective, or will result in employment
or personal earnings for the student.
94886. The application for an authorization of an agent shall
include the following:
(a) A statement signed by the applicant that he or she has read
this chapter and the regulations adopted pursuant thereto.
(b) Evidence of a surety bond issued in favor of the State of
California by an admitted surety insurer making provision for
indemnification of any person for any loss suffered as a result of
the occurrence, during the period of coverage, of any fraud or
misrepresentation used in connection with the solicitation for the
sale or the sale of any program of instruction, or as a result of any
violation of this chapter. The term of the bond shall extend over
the period of the authorization. The bond may be supplied by the
institution or by the person for whom the issuance of the
authorization is sought, and may extend to cover individuals
separately or to provide blanket coverage for all persons to be
engaged as representatives of the institution. The bond shall provide
for liability in the penalty sum of twenty-five thousand dollars
($25,000) for each agent to whom coverage is extended by its terms.
Neither the principal nor the surety on a bond may terminate the
coverage of the bond, except upon giving 30 days' prior written
notice to the bureau, and upon contemporaneously surrendering the
agent's authorization. Liability on the bond may be enforced after a
hearing provided according to Article 10 (commencing with Section
95040) after 30 days' advance written notice to the principal and
surety. This subdivision supplements, but does not supplant, any
other rights or remedies to enforce liability on the bond.
94886.6. An agency that recruits for an institution that offers
vocational programs shall hold a valid authorization issued by the
bureau.
94886.9. The application for an authorization for an agency shall
include all of the following:
(a) A current financial statement prepared by a California
licensed certified public accountant who is not an employee, officer,
or director of the institution.
(b) Evidence of a surety bond issued in favor of the State of
California by an admitted surety insurer making provision for
indemnification of any person for any loss suffered as a result of
the occurrence, during the period of coverage, of any fraud or
misrepresentation used in connection with the solicitation for the
sale or the sale of any program of instruction, or as a result of any
violation of this chapter. The term of the bond shall extend over
the period of the authorization. The bond shall provide for liability
in the penal sum of two hundred fifty thousand dollars ($250,000)
for each agency to which coverage is extended by its terms. Neither
the principal nor the surety on a bond may terminate the coverage of
the bond except upon giving 30 days' prior written notice to the
bureau, and upon contemporaneously surrendering the agency's
authorization to operate. Liability on the bond may be enforced after
a hearing before the bureau, after 30 days' advance written notice
to the principal and surety. This subdivision supplements, but does
not supplant, any other rights or remedies to enforce liability on
the bond.
(c) A copy of the student disclosure statement to be read by,
signed by, and provided to all prospective students referred to an
institution by the agency. The student disclosure statement shall
include, but not be limited to, all of the following:
(1) A statement to the effect that no promise of employment has
been made by the agency.
(2) A statement to the effect that repayment of any debt incurred
by a student in connection with his or her education will be the sole
responsibility of the student.
(3) The amount and terms of any fee to be paid by the student to
the agency.
(4) The following statement: "Any questions or problems concerning
this agency should be directed to the Bureau for Private
Postsecondary Education," including the current address and telephone
number for the bureau.
(5) A statement to the effect that the institution or institutions
to which the prospective student is referred by the agency have the
obligation to make available to the student a catalog or brochure
containing information describing all of the following:
(A) The programs offered.
(B) Program objectives.
(C) Length of program.
(D) The faculty and their qualifications.
(E) A schedule of tuition, fees, and all other charges and
expenses necessary for the completion of the program course of study.
(F) The cancellation and refund policies.
(G) The total charge for the period needed to complete the student'
s education.
(H) For vocational programs completion, employment, and starting
salary information specified in subdivision (a) of Section 94893.
(I) Other material facts concerning the institution and the
program of instruction that are reasonably likely to affect the
decision of the student to enroll in the institution.
(d) Identification of all employees of the agency and their
titles, and of all agents with whom the agency contracts.
(e) Identification of all owners, and if the entity is a
corporation, the identification of all persons possessing an interest
equal to, or in excess of, 10 percent.
(f) Identification of all vendors of educational services for
which the agency provides recruitment services.
(g) A signed statement by the applicant that all employees engaged
in recruitment activities will be required to read and comprehend
Sections 94885.9 to 94887.6, inclusive, of Article 4 (commencing with
Section 94850) and Article 5 (commencing with Section 94890).
94887. Within 45 days of receipt of a person's completed
application for authorization as an agency, and prior to issuance of
that authorization, the bureau may inspect the applicant and verify
the application. Within 45 days of the inspection, the bureau shall
either issue an authorization for a one-year period, subject to
annual renewal at the end of that period, or deny the application for
authorization. The bureau shall deny the authorization if the
applicant or any owner, officer, or director of the applicant
previously has been found in a judicial or administrative proceeding
to have violated this chapter, or if there exists any of the grounds
for denial set forth in Section 480 of the Business and Professions
Code.
94887.6. An institution approved under this chapter shall cease
all recruitment activities involving an agent or agency if the bureau
takes action to revoke or deny that agent or agency's authorization.
The failure of the institution to do so upon presentation of notice
of the bureau's action shall be cause to deny or revoke any approval
held by that institution.
94887.9. (a) (1) Every institution shall meet the following
completion performance standard for each program offered at a site
during the applicable completion tracking period described in
subdivision (b):
(2) Sixty percent or more of the students who began the program,
did not cancel within the cancellation period, and were originally
scheduled at the time of enrollment to complete the program during
that completion tracking period, shall complete it during that
completion tracking period.
(b) (1) Every institution shall meet the following employment
performance standard for each vocational program offered at a site
during the applicable completion tracking period described in
paragraph (2):
(2) Seventy percent or more of the students who completed the
program within that completion tracking period, regardless of when
they were scheduled to complete, shall obtain employment.
(c) For the purposes of subdivisions (a) and (b), students who, as
documented by the institution, have been prevented from completing
the program or obtaining employment due to death, disability,
pregnancy, military service, incarceration, or participation in the
Peace Corps or domestic volunteer service, shall be excluded from the
computations used to determine whether an institution has met the
performance standards prescribed by those subdivisions.
(d) (1) This subdivision applies only to an institution in which
15 or fewer students started a program, did not cancel during the
cancellation period, and were originally scheduled at the time of
enrollment to complete the program during that completion tracking
period.
(2) If an institution described in paragraph (1) fails to meet any
of the performance standards in subdivision (a) or (b), but would
have met the standard if one more student had completed or obtained
employment, then the institution shall be deemed to have complied
with this section in connection with that program.
94888. Any institution that commits any of the following acts
shall not be approved or have its approval renewed by the bureau:
(a) Furnishing false, misleading, or incomplete information to the
bureau, or the failure to furnish information requested by the
bureau or required by this chapter.
(b) An owner, a person in control, a director, or an officer of an
institution violated this chapter while serving as an owner, person
in control, director, or officer of an institution or licensee within
the previous five-year period.
(c) A signatory to an application for a license was responsible
for the closure of an institution or licensee in which there were
unpaid liabilities to a state or federal government, or uncompensated
pecuniary losses suffered by students without restitution.
(d) An applicant, owner, or person in control has been found
previously in any judicial or administrative proceeding to have
violated this chapter or admitted to having violated this chapter.
(e) Failing to maintain financial resources as required by this
chapter.
(f) Failing to correct a deficiency or act of noncompliance under
this chapter, or the standards, rules, regulations, and orders
established and adopted under this chapter, within reasonable time
limits set forth in the notice from the bureau.
(g) Paying a commission or other consideration to a person for an
act or service in violation of this chapter.
(h) Failing to pay any fee
assessment, costs, or penalty duly required by this chapter.
94888.6. No institution shall be approved if an owner, person in
control, director, officer of the institution is, or has been, found
in any criminal, civil, or administrative proceeding, after notice
and an opportunity to be heard, to have violated any law regarding
the obtaining, maintenance, or disbursement of state or federal
funds, or to have unpaid financial liabilities involving the refund
or unlawful acquisition, use, or expenditure of state or federal
funds.
94888.9. No institution shall be approved if all of the following
are, or have been, found in any criminal, civil, or administrative
proceeding:
(1) A person in control of the institution was a person in control
of another institution within one year before that institution's
closure.
(2) While the person was acting as a person in control of the
other institution, the person knew or, by the exercise of reasonable
care, should have known, that the institution violated this chapter.
(3) That the violation was a cause of that institution's closure
or of damage to students.
(4) That institution did not pay to all students refunds owed as a
result of the closure and full compensation for actual damages from
that violation.
94889. (a) Completion numbers and rates from a particular
completion tracking period are to be reported to the bureau under
Section 94887.9 the following year, and disclosed under subdivision
(a) of Section 94893, and paragraph (10) of subdivision (a) of
Section 94896 beginning as of January 1 of the second year following
the completion tracking period. Completion numbers and rates from the
2008 completion tracking period shall be reported to the bureau
during 2009 and disclosed beginning January 1, 2010, unless the
licensing examination exemption in subdivision (b) applies.
(b) If the state requires passing an examination to work in the
occupation for which a certificate or degree is awarded after
completion of a vocational program, and the examination results for
the first examination available after the end of a year period are
announced less than eight months before the end of the following
year, then the completion tracking period shall be one year earlier
so that the completion numbers and rates shall be reported to the
bureau in the second year following the completion tracking period
and disclosed under Sections 94893 and 94896 beginning as of January
1 of the third year following the completion tracking period.
Completion numbers and rates from the 2008 completion tracking period
shall be reported to the bureau in 2010, and disclosed beginning in
January 2011.
94889.6. (a) (1) The test required by Section 94938 shall be a
standardized test that is designed to reliably and validly measure
the student's ability to be successfully trained to perform the tasks
associated with the occupations or job titles to which the program
of instruction is represented to lead. The student's performance on
the test shall demonstrate that ability.
(2) Nothing in paragraph (1) precludes an institution from using
additional tests to determine a student's ability to be trained to
perform tasks associated with the occupations and job titles for
which training is offered as described in paragraph (1).
(3) (A) If no standardized test is available that satisfies
paragraph (1), the institution shall use other appropriate tests to
determine the student's ability to be trained to perform the tasks
associated with the occupations and job titles for which training is
offered as described in paragraph (1). Within 30 days of determining
that no standardized test satisfies paragraph (1), the institution
shall so inform the bureau and shall describe and, if possible,
furnish the bureau with the test to be used in lieu of the test
required by paragraph (1).
(B) Upon reasonable notice to the institution, the bureau may
order the institution to demonstrate to the reasonable satisfaction
of the bureau that the test and passing score are an appropriate
measure of the student's ability to be trained to perform the tasks
associated with the occupations or job titles to which the course is
represented to lead. If the bureau determines that the test is not an
appropriate measure, the bureau, after notice, and if requested, a
hearing, shall order that the institution cease administering the
test.
(b) The institution shall have the burden of proof that the test
complies with subdivision (a). If no minimum passing score is
established by the test developer or if the minimum passing score
used by the institution is below the minimum passing score
established by the test's developer, the institution shall have the
burden of proof that the student's achievement of the minimum passing
score reasonably measures the student's ability to be successfully
trained to perform the tasks associated with the occupations and job
titles to which the course of instruction is represented to lead. The
test shall be administered in accordance with the test's
instructions, rules, and time limits.
(c) (1) The test shall be completed solely by the student.
(2) (A) No institution or any person in any manner associated with
the institution shall do any of the following:
(i) Answer any of the test questions.
(ii) Read any of the test questions to the student.
(iii) Provide any assistance whatsoever to the student in
answering test questions.
(B) This paragraph does not prevent an institution from providing
nonsubstantive assistance to accommodate the disability of a
handicapped person otherwise qualified to take the test.
(3) The test shall be given by the institution on its premises or
by an independent testing service. The site requirement does not
apply to an institution offering a distance learning program.
(4) If a prospective student fails a test, the institution or the
testing service that administered the test shall not administer
another test to that prospective student for at least the period
specified by the test developer or one week, whichever period is
longer. Any subsequent test administered by an institution to the
same prospective student shall be a substantially different form of
the same test or a substantially different test than the preceding
test, and shall satisfy the requirements of paragraph (1) or, if
applicable, paragraph (3) of subdivision (a).
(d) An institution's application for approval to operate shall do
all of the following:
(1) Identify the test used to comply with this section.
(2) State the minimum score, if any, that the test's developer
indicates a prospective student must achieve to demonstrate an
ability to be successfully trained to perform the tasks associated
with the occupations or job titles to which the course is represented
to lead.
(3) State the minimum passing score used by the institution.
(4) If the institution accepts a lower minimum passing score than
is indicated by the test's developer, state an explanation of why the
institution accepts a lower minimum passing score.
(e) The institution shall, for five years, retain an exemplar of
each test administered by the institution pursuant to this section,
an exemplar of the answer sheet for each test, a record of the
passing score for each test, and the answer sheets or other responses
submitted by each person who took each test.
Article 5. Student Protections
94890. (a) This article shall apply to all institutions subject
to this chapter. For institutions subject to this article under this
subdivision, enforcement of this article shall include, but not be
limited to, applicable provisions of Article 8 (commencing with
Section 95000).
(b) This article shall also apply to all institutions that are
exempt from this chapter under subparagraph (A) of paragraph (1) of
subdivision (b) of Section 94841. For institutions subject to this
article under this subdivision the bureau shall have no authority or
power to enforce this article.
94893. (a) An institution shall clearly and conspicuously post on
its Web site a "How Our Students Do" fact sheet that discloses the
following information:
(1) If the institution has offered the program for more than one
calendar year, the following information applies:
(A) The number and percentage of students who began the program,
did not cancel within the cancellation period, and were originally
scheduled at the time of enrollment to complete the program during
the completion tracking period, who completed it during that
completion tracking period.
(B) If the institution or a representative of the institution in
any manner represents that the program might lead to employment in an
occupation or job title for which a state licensing examination or
certification is required, the following shall apply:
(i) All licensure or certification requirements established by the
state for the occupation or job title.
(ii) The number and percentage of students who completed the
program during the completion tracking period who took the required
examination the first time it was available after completion of the
program, and who passed it.
(C) If the institution offers a vocational program, the number and
percentage of students who completed the program during the
completion tracking period who obtained employment, excluding
self-employment during the employment tracking period.
(D) If the institution offers a vocational program, and claims
that any students who completed the program during the completion
tracking period are self-employed, the number and percentage of
students who completed the program during the completion tracking
period who are self-employed and a clear and conspicuous statement to
the effect that the school does not know if any of the persons
listed as self-employed earn enough money to support themselves or
their families.
(E) If the institution or a representative of the institution
makes any express or implied claim about the salary that may be
earned after completing a program, including a claim that the student
may be able to repay a student loan from the salary received at a
job obtained following completion of the program, the following shall
apply:
(i) The percentage of students who completed the program during
the completion tracking period who obtained employment and earned
salaries at or above the claimed level during the employment tracking
period.
(ii) The average annual salary earned during the employment
tracking period by the students who completed the program during the
completion tracking period and obtained employment.
(2) If the institution has offered the program of instruction for
one calendar year or less, the following statement: "This program is
new. We are not able to tell you how many students graduate, how many
students find jobs, or how much money you can earn after finishing
this course."
(b) The institution shall document and maintain all the facts
necessary to substantiate the information specified in subdivision
(a) and contained in the "How Our Students Do" fact sheet.
94894. (a) An institution shall provide to each prospective
student the following statement in a separate one page document in at
least 12-point type, with double-spacing between the heading and
each numbered point, in substantially the following format, with the
heading in at least 14-point type:
"Will Credits You Earn at (Name of Institution) Be Transferable?
"1. Credits you earn here MIGHT NOT be transferable to another
college.
"2. Accreditation does not mean credits will be transferable.
"3. Whether credits are transferable depends on the college you wish
to transfer to.
"4. Even if credits "transfer," they may not count toward graduation
requirements at another college.
"5. For example, if you entered our school as a freshman, you may
still be a freshman if you enter another college or university in the
future, even though you earned units here.
"6. If you earn a degree or certificate in our school, it MIGHT NOT
serve as a basis for obtaining a higher level degree at another
college or university.
"7. Unless the college you may want to transfer to tells you, you
cannot know for sure if credits you earn here will be accepted toward
graduation at that other college."
(b) If the solicitation or negotiation leading to the agreement
for a program was in a language other than English, the statement
shall be in that other language.
94895. If the bureau grants approval to an institution to offer a
degree or certificate in an emerging field of study, the institution
shall disclose in its catalog and a separate written notice provided
to students before enrollment that the educational service is in an
emerging field and will have limited, if any, transferability to
other institutions because of the nature of an emerging field.
94896. (a) Before a person executes an agreement obligating that
person to pay any money to an institution for a program or related
equipment, the institution shall:
(1) Provide to that person a copy of the enrollment agreement
containing, at a minimum, the information required by Section 94902.
(2) Provide to that person a clear statement, containing its
refund policy, a written statement set forth in a table of the amount
of the refund to which the student would be entitled if the student
withdrew from the program after completing a period of days or weeks
of instruction equivalent to 10 percent, 25 percent, 50 percent, 60
percent, and 75 percent of the program, and a description of the
procedures that a student is required to follow to cancel the
agreement and obtain a refund. If the institution solicited the
student or negotiated the agreement in a language other than English,
the statement shall be in that same language. The institution shall
also make its refund policy known to currently enrolled students.
(3) Provide to that person a schedule of the total charge for the
program, separately itemized into tuition, assessments for the
Student Tuition Recovery Fund, the cost of each item of equipment,
including textbooks, shop and studio fees, and any other fees the
student will pay to the institution in order to complete the program,
with a statement of the purpose for each of these charges. The
schedule shall clearly indicate and differentiate all mandatory and
optional charges. The schedule shall clearly identify all charges and
deposits that are nonrefundable. The schedule shall also contain
both of the following:
(A) A statement, to be provided by the bureau, specifying that it
is a state requirement that a student who pays his or her own
tuition, either directly or through a loan, is required to pay a
state-imposed fee for the Student Tuition Recovery Fund.
(B) A statement, to be provided by the bureau, describing the
purpose, operation, and eligibility requirements of the Student
Tuition Recovery Fund.
(4) If a state bureau, bureau, department, or agency has
established the minimum number of classes or class hours or the
minimum criteria of a program necessary for licensure in an
occupation and an institution offers a program differing from the
state entity's minimum requirements, disclose orally and in writing
the state entity's minimum requirements and how the program differs
from those requirements.
(5) If the institution provides a specific program of study where
the students will need program approval by a specific authority or
agency for the students to take an examination for certification,
licensure, or other similar approval allowing the student to perform
services in the field of study, or if the institution knows or
reasonably should know that certification, licensure, or other
approval, while not necessarily required to perform services in the
field of study, is widely requested or required by employers,
disclose to the student if the program is not approved.
(6) Disclose in writing that, if the student obtains a loan to pay
for the course of instruction, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund.
(7) Disclose in writing that, if the student is eligible for a
loan guaranteed or reinsured by the state or federal government and
the student defaults on the loan, the following may occur:
(A) The federal or state government or the loan guarantee agency
can take action against the student, including applying any income
tax refund to which the person is entitled to reduce the balance owed
on the loan.
(B) The student may not be eligible for any other federal
financial assistance for education at a different institution or for
government housing assistance until the loan is repaid.
(8) Disclose in writing that the institution is not a public
institution.
(9) Disclose in writing whether or not the institution has filed,
or has had filed against it, a petition in bankruptcy.
(10) Provide orally and in a written "How Our Students Do" fact
sheet the information required by subdivision (a) of Section 94893.
(b) The disclosures required by subdivision (a) shall be in
English unless the solicitation or negotiation leading to the
agreement for a course of instruction was in a language other than
English, in which case, the disclosures shall be in that other
language.
(c) Notwithstanding any other provision of this section, an
institution offering a distance learning program need not orally make
the disclosures required by subdivision (a) in connection with that
course if the institution did not orally solicit or recruit the
student for enrollment and the student enrolled by mail or
electronically.
94897. (a) An institution shall provide to students and other
interested persons, prior to enrollment, a catalog or brochure
containing, at a minimum, all of the following information:
(1) Descriptions of the instruction provided under each course
offered by the institution, including the length of programs offered,
and all of the occupations or job titles, if any, to which the
program of instruction is represented to lead.
(2) The number of credit hours or clock hours of instruction or
training per unit or units required for completion of the educational
degree or certificate program.
(3) The attendance, dropout, and leave-of-absence policies.
(4) The faculty including their relevant qualifications as of the
date of the publication of the catalogue or brochure.
(5) The schedule of tuition payments, fees, and all other charges
and expenses necessary for the term of instruction and the completion
of the course of study.
(6) The cancellation and refund policies.
(7) For institutions that participate in federal and state
financial aid programs, all consumer information that the institution
is required to disclose to the student.
(8) A description of a student's rights under the Student Tuition
Recovery Fund.
(9) The institution's admissions policies, including the
institution's policies regarding the acceptance of units of credit
earned by the student at other institutions or through challenge
examinations and standardized tests.
(10) If an institution represents that it provides employment
placement services, a description of the nature and extent of the
placement services that indicates when they are available to
students.
(11) All other material facts concerning the institution and the
program or course of instruction that are reasonably likely to affect
the decision of the student to enroll, as prescribed by rules and
regulations adopted by the bureau.
(b) The institution shall provide the catalog or brochure to any
person upon request.
(c) A written contract signed by a student is not enforceable
unless the student has first received the institution's catalog or
brochure containing the information required by this section.
94898. An institution shall not require the signature of a person
to an agreement obligating that person to pay any money to the
institution until the person has had at least one business day to
read and review all of the items required to be provided to that
person by this article.
94899. (a) When a person executes an agreement obligating that
person to pay any money to an institution for a course program of
instruction or related equipment, the institution shall provide the
person with a document containing only the following notice:
"NOTICE OF CANCELLATION, REFUND AND OTHER RIGHTS"
"1. You may cancel your contract for school, without any penalty
or obligations prior to or on (insert 'the fifth business day
following your first class session' or 'the first day of class,'
whichever is applicable) as described in the Notice of Cancellation
form that will be given to you (insert 'on your first day of class'
or 'with the first lesson in a distance learning program,' whichever
is applicable).
"A different cancellation policy applies for distance learning
programs. Read the Notice of Cancellation form for an explanation of
your cancellation rights and responsibilities. If you have lost your
Notice of Cancellation form, ask the school for another form.
"2. After the end of the cancellation period, you also have the
right to stop school at any time, and you have the right to receive a
refund for the part of the course not taken. Your refund rights are
described in the contract. If you have lost your contract, ask the
school for a description of the refund policy.
"3. If the school closes before you graduate, you may be entitled
to a refund. Contact the Bureau for Private Postsecondary Education
at the address and telephone number printed below for information.
"4. If you have any complaints, questions, or problems that you
cannot work out with the school, write or call the Bureau for Private
Postsecondary Education:
____________________________________________________________________
(insert address and telephone number of the Bureau for Private
Postsecondary Education)"
(b) Except as otherwise provided in subdivision (a), the notice
required by subdivision (a) shall be printed in 10-point type in
English and, if any solicitation or negotiation leading to the
agreement for a course of instruction was in a language other than
English, in that other language.
(c) A copy of the notice, in each language in which the notice was
printed pursuant to subdivision (b), shall be posted at all times in
a conspicuous place at the main entrance of the institution, in each
admissions office, and in each room used for instruction. The bureau
may prescribe the size and format of the posted notice. This
subdivision does not apply to an institution that exclusively offers
distance learning programs.
(d) Upon request, the institution shall provide a student with a
copy of a Notice of Cancellation form, a written description of the
student's refund rights, a copy of the contract executed by the
student, a copy of documents relating to loans or grants for the
student, and a copy of any document executed by the student.
(e) The bureau may provide for the inclusion of additional
information in the notice set forth in subdivision (a).
94900. An institution shall provide the student with two
cancellation forms at the first class attended by the student or with
the first lesson in a distance learning course submitted by the
student. The form shall be completed in duplicate, captioned "Notice
of Cancellation," and shall contain the following statement:
"Notice of Cancellation
______________________________
(Date)
(Enter date of first class, date
first lesson received, or date
first lesson was mailed, whichever
is applicable)
"You may cancel this contract for school, without any penalty or
obligation by the date stated below.
"If you cancel, any payment you have made and any negotiable
instrument signed by you shall be returned to you within 30 days
following the school's receipt of your cancellation notice.
"But, if the school gave you any equipment, you must return the
equipment within 30 days of the date you signed a cancellation
notice. If you do not return the equipment within this 30-day period,
the school may keep an amount out of what you paid that equals the
cost of the equipment.
"The total amount charged for each item of equipment shall be
separately stated. The amount charged for each item of equipment
shall not exceed the equipment's fair market value. The school shall
have the burden of proof to establish the equipment's fair market
value. The school is required to refund any amount over that as
provided above, and you may keep the equipment.
"To cancel the contract for school, mail or deliver a signed and
dated copy of this cancellation notice, or any other written notice
to:
___________________________, at ________________________________.
(name of institution) (address of institution)
"NOT LATER THAN ____________________________________
(Enter midnight of the date applicable under Section 94939)
"I cancel the contract for school.
__________________________________
(Date)
__________________________________
(Student's signature)
"REMEMBER, YOU MUST CANCEL IN WRITING. You do not have the right
to cancel by just telephoning the school or by not coming to class.
"If you have any complaints, questions, or problems which you
cannot work out with the school, write or call the Bureau for Private
Postsecondary Education:
______________________________________________________________________
_
(insert address and telephone number of the Bureau for Private
Postsecondary Education)"
94901. (a) In addition to making any other required disclosures,
a representative of an institution who in any manner solicits or
recruits any person in person at any place other than the institution'
s premises, or by telephone, for enrollment in a course of
instruction shall disclose all of the following, orally, and, if the
solicitation is in person, in a correctly dated written document
given to the person and printed in at least 10-point type and signed
by the representative:
(1) That the representative is a paid recruiter for an institution
and the institution is not a public school.
(2) That the representative is not offering a job, making job
referrals, or conducting a survey.
(3) That there is no guarantee of a job after a student graduates
from the course of instruction.
(4) The total charge for the course of instruction or, if the
solicitation or recruitment is for more than one course, the range of
the total charges for the courses offered.
(b) The representative shall make the disclosures required by
paragraphs (1) to (3), inclusive, of subdivision (a) before
attempting to solicit or recruit any person. The representative shall
make the disclosure required by paragraph (4) of subdivision (a)
before the end of a solicitation or attempt to recruit any person.
(c) A representative who solicits or recruits any person as
described in subdivision (a) shall provide the person with a copy of
the institution's current catalogue or brochure, containing the
information described in Section 94897 which the person may obtain
without charge. The institution or its representative shall provide
the catalog or brochure required by this subdivision at the time of
an in-person solicitation or recruitment or send the catalog brochure
within two days of a telephonic solicitation or recruitment.
(d) An institution shall not enter an agreement for a course of
instruction with, or prepare or assist in preparation of a student
loan or grant application for, a person solicited or recruited as
described in subdivision (a) within three days of the date on which
the person was solicited or recruited.
(e) The disclosure of information pursuant to this section does
not relieve any institution of any obligation to make any disclosure
required under other provisions of this article.
(f) This section does not apply to solicitations or presentations
made at informational public appearances directed to five or more
people or to advertisements in print or broadcast media.
94902. (a) An institution shall not offer a program of
instruction to a person, or receive consideration from a person,
except pursuant to a written contract or agreement that is signed by
both parties, including the student, that meets the requirements of
this section. A written contract or agreement for educational
services with an institution shall include all of the following:
(1) On the first page of the agreement or contract, in 12-point
boldface type or larger, the following statement: "Any questions or
problems concerning this institution which have not been
satisfactorily answered or resolved by the institution should be
directed to the Bureau for Private Postsecondary Education," and
include the current mailing address, Web site address, and telephone
and fax numbers for the bureau.
(2) In underlined capital letters on the same page of the contract
or agreement in which the student's signature is required, the total
amount that the student is obligated to pay for the course of
instruction, including any charges made by the institution for
tuition, room and board, books, materials, supplies, shop and studio
fees, and any other fees and expenses that the student will incur
upon enrollment, separately itemized, and all other services and
facilities furnished or made available to the student by the
institution. The total amount shall appear immediately above the
following notice:
"YOU ARE RESPONSIBLE FOR THIS AMOUNT. IF YOU GET A STUDENT LOAN,
YOU ARE RESPONSIBLE FOR REPAYING THE LOAN AMOUNT PLUS ANY INTEREST."
(3) A schedule of payments and charges, including a list of any
charges and deposits that are nonrefundable, clearly identified as
nonrefundable charges.
(4) The name and address of the institution and the addresses
where instruction will be provided.
(5) The name and description of the program of instruction,
including the total number of credits, classes, hours, or lessons
required to complete the program of instruction.
(6) A clear and conspicuous statement that the agreement or
contract is a legally binding instrument when signed by the student
and accepted by the institution.
(7) A clear and conspicuous caption, "BUYER'S RIGHT TO CANCEL,"
under which the student's right to cancel and obtain a refund under
this article is explained in detail along with a description of the
form and means of notice that the student should use in the event
that he or she elects to cancel the enrollment agreement, and the
title and address of the institution official to whom the notice
should be sent or delivered.
(8) A clear and conspicuous caption, "YOU HAVE A RIGHT TO WITHDRAW
AND OBTAIN A REFUND," under which is placed an explanation of the
student's right to withdraw from the program of instruction and
obtain a refund and of how the amount of the refund will be
determined including a hypothetical example.
(9) The signature of the student under the following statement
that is presented in 12-point boldface or larger type: "My signature
below certifies that I have read, understood, and agreed to my rights
and responsibilities, and that the institution's cancellation and
refund policies have been clearly explained to me."
(10) If the student is the recipient of third-party payer tuition
and course costs, such as workforce investment vouchers or
rehabilitation funding, a clear statement that the student is not
eligible for protection under and recovery from the Student Tuition
Recovery Fund.
(11) A statement that the student is responsible for paying the
state assessment amount for the Student Tuition Recovery Fund.
(b) A contract or enrollment agreement signed by a student shall
be written in language that is capable of being easily understood.
Unless otherwise provided in subdivision (a), the institution shall
provide the information required under this section and Section 94900
in at least 10-point type in English and, if any solicitation or
negotiation leading to the agreement for a course of instruction was
in a language other than English, in that other language.
(c) A written contract or agreement signed by a prospective
student may not become operative until the student attends the first
class or session of instruction. This section does not
distance-learning programs.
(d) If a student is a client of a third-party organization and
that organization pays all of the student's tuition and fees, the
institution may substitute for the contract or enrollment agreement
required by subdivision (a) a form provided to the student that
contains the information required by this section. The form shall
also include a statement that students whose entire tuition and fees
are paid by a third-party organization are not eligible for payments
from the Student Tuition Recovery Fund.
(e) A provision in an agreement that purports to require a student
to invoke a grievance dispute procedure established by the
institution before enforcing a right or remedy is void and
unenforceable.
(f) The bureau shall have the authority to standardize the format
of the enrollment agreement by regulation.
94903. (a) An institution shall not offer English as a second
language (ESL) instruction without the prior approval of the bureau.
(b) An institution that offers ESL instruction to a student shall
not enroll the student in any educational service presented in the
English language unless the student passes a test indicating that he
or she has attained adequate proficiency in oral and written English
to comprehend instruction in English.
(c) A student who has completed ESL instruction at an institution
shall not be enrolled in any course of instruction presented in the
English language at that institution unless the student passes a test
indicating that he or she has attained adequate proficiency in oral
and written English to be successfully trained by English language
instruction to perform tasks associated with the occupations or job
titles to which the educational program is represented to lead.
(d) If an institution offers ESL instruction to a student to
enable the student to use already existing knowledge, training, or
skills in the pursuit of an occupation, the institution shall test
the student after the student completes the ESL instruction to
determine that the student has attained adequate proficiency in oral
and written English to use his or her existing knowledge, training,
or skills. Before enrolling the student in ESL instruction, the
institution shall document the nature of the student's existing
knowledge, training, or skills and that the ESL instruction is
necessary to enable the student to use that existing knowledge,
training, or skills.
(e) If an institution offers ESL instruction to a student in
connection with a course of instruction leading to employment in any
occupation requiring licensure awarded after the passage of an
examination offered in English, the institution shall test the
student after the student completes the ESL instruction to determine
that the student has attained a level of proficiency in English
reasonably equivalent to the level of English in which the licensure
examination is offered.
(f) If the results of a test administered pursuant to subdivision
(b), (c), (d), or (e) indicate that the student has not attained
adequate English language proficiency after the completion of ESL
instruction, the institution shall offer the student additional
instruction without charge, for a period of up to 50 percent of the
number of hours of instruction previously offered by the institution
to the student, to enable the student to attain adequate English
language proficiency.
(g) This section does not apply to grantees funded under Section
1672 of Title 29 of the United States Code.
(h) The institution, for five years, shall retain an exemplar of
each language proficiency test administered pursuant to this section,
an exemplar of the answer sheet for each test, a record of the score
for each test, the answer sheets or other responses submitted by
each person who took each test, and the documentation required by
subdivision (d).
(i) For the purpose of determining compliance with this article,
ESL instruction shall be deemed a course, and a charge shall be
deemed to be made for ESL instruction if a student is obligated to
make any payment in connection with the educational service,
including, but not necessarily limited to, the ESL instruction that
is offered by the institution.
(j) The tests used by an institution pursuant to this section
shall be tests that are approved by the USDE, or tests such as the
Test of English as a Foreign Language and the Comprehensive Adult
Student Assessment System, that are generally recognized by public
and private institutions of higher learning in this state for the
evaluation of English language proficiency. An institution shall
demonstrate to the bureau that the tests and passing scores that it
uses establish that students have acquired the degree of proficiency
in oral and written English required by subdivision (b), (c), (d), or
(e), whichever is applicable. The required level of proficiency in
oral and written English shall not be lower than the sixth grade
level.
(k) All tests shall be independently administered, without charge
to the student and in accordance with the procedures specified by the
test publisher. The tests shall not be administered by a previous or
current owner, director, consultant, or representative of the
institution or by any person who previously had, or currently has, a
direct or indirect financial interest in the institution other than
the arrangement to administer the test. The bureau shall adopt
regulations that contain criteria to ensure independent tests
administered including the criteria established by the USDE and set
forth on pages 52160 and 52161 of Volume 55 of the Federal Register,
dated December 19, 1990.
94905. An institution shall make available to a student, or a
person designated by a student, all of that student's records.
However, an institution may withhold a student's transcript or grades
if that student is in default on a student tuition contract, as
provided in Section 94884.6.
94917. An agent, an agency, or an employee of an agency shall not
make an untrue or misleading statement in the course of a
solicitation or recruitment activity or engage in the sales,
collection, credit, or other practices of any type that are false,
deceptive, misleading, or unfair.
94918. An agency or an employee of an agency shall provide a
prospective student with the disclosure statement described in
subdivision (c) of Section 94886.9, and shall allow the prospective
student a sufficient opportunity to read it before soliciting or
recruiting that prospective student for enrollment or referring that
prospective student to an institution. That disclosure statement
shall be printed in 10-point type in English and, if the
solicitation, recruitment, or referral is to be conducted in a
language other than English, in that other language.
94919. No institution shall pay any consideration to an agent or
agency subject to Section 94884.3, Sections 94886 to 94887.6,
inclusive, Sections 94917 to 94918, inclusive, and Section 95024,
whichever are applicable, that has not complied with those sections,
or enter into an enrollment agreement with any person who was
recruited or solicited to enroll in that institution by an agent,
agency, or by an agent employed by or under contract with an agency
if the agent or agency was not in compliance with those sections,
whichever are applicable, at the time of the recruitment or
solicitation.
94925. (a) (1) An institution extending credit or lending money
to a person for tuition, fees, or other charges for educational
services to be rendered or furnished shall cause any note,
instrument, or other evidence of indebtedness taken in connection
with that loan or extension of that credit to be conspicuously marked
on the face thereof with the following notice:
"NOTICE
"ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL
CLAIMS AND DEFENSES THAT THE DEBTOR COULD ASSERT AGAINST THE SELLER
OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS
HEREOF, RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS
PAID BY THE DEBTOR HEREUNDER."
(2) An institution that fails to comply with paragraph (1) shall
be liable for any damage or loss suffered or incurred by any
subsequent assignee, transferee, or holder of that evidence of
indebtedness on account of the absence of that notification.
(b) Notwithstanding the presence or absence of the notification
required in subdivision (a), and notwithstanding an agreement in
which a student waives the right to assert a claim or defense, an
institution making a loan or extending credit and the transferee,
assignee, or holder of that evidence of indebtedness, are subject to
all defenses and claims that could be asserted against the
institution that was to render or furnish those educational services
by a party to that evidence of indebtedness or by the person to whom
these educational services were to be rendered or furnished up to the
amount remaining to be paid thereon.
(c) An institution that participates in a federal student
assistance program and that complies with the financial disclosure
and notification requirements for those programs is in compliance
with the standards prescribed by this section.
94926. (a) A note, or other instrument of indebtedness, or
contract relating to payment for educational services is not
enforceable by an institution within or outside this state governed
by this chapter unless, at the time of execution of that note, other
instrument of indebtedness, or contract, the institution has a valid
approval to operate pursuant to this chapter.
(b) No note, other instrument of indebtedness, or contract
relating to payment for educational services shall be enforceable by
any institution within or outside this state governed by this chapter
unless the agent or agency that enrolled persons, to which
educational services were to be rendered or to which degrees or
diplomas were to be granted pursuant to this chapter, held a valid
agent or agency authorization at the time of execution of the note,
other instrument of indebtedness, or contract.
94927. A student may not waive a provision of this chapter. A
waiver or limitation of a substantive or procedural right or remedy
is in violation of this section, and is void and unenforceable.
94931. An institution or representative of an institution shall
not do any of the following:
(a) Operate in this state a postsecondary educational institution
not exempted from this chapter unless the institution is approved by
the bureau.
(b) Offer in this state, as or through an agent, enrollment or
instruction in, or the granting of educational credentials from, an
institution not exempted from this chapter, whether that institution
is within or outside this state, unless that agent is a natural
person and has a currently valid agent's permit issued pursuant to
this chapter, or accept contracts or enrollment applications from an
agent who does not have a current permit as required by this chapter.
(c) Instruct or educate, or offer to instruct or educate,
including soliciting for those purposes, enroll or offer to enroll,
contract or offer to contract with any person for that purpose, or
award any educational credential, or contract with any institution or
party to perform any act, in this state, whether that person, agent,
group, or entity is located within or without this state, unless
that person, agent, group, or entity observes and is in compliance
with the minimum standards set forth in this article.
(d) Use, or allow the use of, any reproduction or facsimile of the
Great Seal of the State of California on a diploma.
(e) Promise or guarantee employment.
(f) Advertise concerning job availability, degree of skill, or
length of time required to learn a trade or skill unless the
information is accurate and in no way misleading.
(g) Advertise, or indicate in a promotional material, that
distance learning programs are offered, without including in all
advertising or promotional material the fact that the instruction or
programs of study are offered by distance learning.
(h) Advertise, or indicate in a promotional material, that
resident instruction or programs of study are offered, without
including in all advertising or promotional material the location
where the training is given or the location of the resident
instruction.
(i) Solicit students for enrollment by causing an advertisement to
be published in "help wanted" columns in a magazine, newspaper, or
publication, or use "blind" advertising that fails to identify the
institution.
(j) Advertise, or indicate in a promotional material, that the
institution is accredited, unless the institution has been recognized
or approved as meeting the standards established by an accrediting
agency recognized by the USDE or the Committee of Bar Examiners for
the State of California.
(k) Fail to comply with federal requirements relating to the
disclosure of information to students regarding vocational and career
training programs, as described in Section 94894.
(l) (1) Fail to comply with Part 433 (commencing with Section
433.1) of Title 16 of the Code of Federal Regulations, as it existed
on January 1, 2007, and as it is amended from time to time
thereafter.
(2) For each student who enters into a consumer credit contract
that is subject to Part 433 (commencing with Section 433.1) of Title
16 of the Code of Federal Regulations, as it existed on January 1,
2007, and as it is amended from time to time thereafter, the
institution shall include the following statement in any written
contract or agreement for educational services or, in the
alternative, shall provide the student with a separate written notice
containing the following statement:
"YOU MAY ASSERT AGAINST THE HOLDER OF THE PROMISSORY NOTE YOU
SIGNED IN ORDER TO FINANCE THE COST OF INSTRUCTION ALL OF THE CLAIMS
AND DEFENSES THAT YOU COULD ASSERT AGAINST THIS INSTITUTION, UP TO
THE AMOUNT YOU HAVE ALREADY PAID UNDER THE PROMISSORY NOTE."
(3) The statement set forth in paragraph (2) shall be printed in
boldface print of at least 12-point type.
94932. An institution or representative of an institution may not
do any of the following:
(a) Make or cause to be made any statement that is in any manner
untrue or misleading, either by actual statement, omission, or
intimation.
(b) Engage in any false, deceptive, misleading, or unfair act in
connection with any matter, including the institution's advertising
and promotion, the recruitment of students for enrollment in the
institution, the offer or sale of a program of instruction, course
length, course credits, the withholding of equipment, educational
materials, or loan or grant funds from a student, training and
instruction, the collection of payments, or job placement.
(c) Induce a person to enter into an agreement for a program of
instruction by offering to compensate that person to act as the
institution's representative in the solicitation, referral, or
recruitment of others for enrollment in the institution.
(d) Offer to pay or pay any consideration to a student or
prospective student to act as a representative of the institution
with regard to the solicitation, referral, or recruitment of any
person for enrollment in the institution in either of the following:
(1) During the 60-day period following the date on which the
student began the program.
(2) At a subsequent time, if the student has not maintained
satisfactory academic progress in acquiring the necessary level of
education, training, skill, and experience to obtain employment in
the occupation or job title to which the program is represented to
lead. The institution shall have the burden of proof to establish
that the student has maintained satisfactory academic progress.
(e) Pay any consideration to a person to induce that person to
sign an agreement for a program of instruction.
(f) Use a misleading name in any manner implying any of the
following:
(1) The institution is affiliated with any governmental agency,
public or private corporation, agency, or association.
(2) The institution is a public institution.
(3) The institution grants degrees.
(g) In any manner make an untrue or misleading change in, or
untrue or misleading statement related to, a test score, grade,
record of grades, attendance record, record indicating student
completion or employment, or financial information, including any of
the following:
(1) A financial report required to be filed pursuant to Sections
94882.6 to 94883.6, inclusive.
(2) Information or records relating to the student's eligibility
for financial assistance or attendance at the institution.
(3) Any other record or document required by this chapter or by
the bureau.
(h) Falsify, destroy, or conceal any record or other item while
that record or item is required to be maintained by this chapter or
by the bureau.
(i) Use the terms "approval," "approved," "approval to operate,"
or "approved to operate" without stating clearly and conspicuously
that approval to operate means compliance with state standards as set
forth in this chapter. If the bureau has granted an institution
approval to operate, the institution or its representative may
indicate that the institution is "licensed" or "licensed to operate,"
but may not state or imply any of the following:
(1) The institution or its programs of instruction are endorsed or
recommended by the state or by the bureau.
(2) The bureau's grant to the institution of approval to operate
indicates that the institution exceeds minimum state standards as set
forth in this chapter.
(3) The bureau or the state endorses or recommends the
institution.
(j) Direct a representative to perform any unlawful act, to
refrain from complaining or reporting unlawful conduct to the bureau
or another government agency, or to engage in any unfair act to
persuade a student not to complain to the bureau or another
government agency.
(k) An institution offering programs represented to lead to
occupations or job titles requiring a credential or licensure shall
be responsible for knowing the requirements of that credential or
licensure and shall not enter into an agreement for a program with a
person who the institution knows or, by the exercise of reasonable
care, should know, cannot meet those requirements for reasons other
than lacking the education and training that would be provided by
successful completion of the program.
(l) An institution may not compensate a representative involved in
recruitment, enrollment, admissions, student attendance, or sales of
equipment to students on the basis of a commission, commission draw,
bonus, quota, or other similar method except as follows:
(1) If the program of instruction is scheduled to be completed in
90 days or less, the institution shall pay compensation related to a
particular student only if that student completes the course.
(2) If the program of instruction is scheduled to be completed in
more than 90 days, the institution shall pay compensation related to
a particular student as follows:
(A) Compensation shall not be paid for at least 90 days after that
student has begun the program.
(B) Up to one-half of the compensation may be paid before the
student completes the program only if the student has made
satisfactory academic progress, documented by the institution in the
student's file, for more than 90 days.
(C) The remainder of the compensation shall be paid only after the
student's completion of the program. This subdivision shall not
prevent the payment at any time of an hourly, weekly, monthly, or
annual wage or salary.
94935. (a) If a program of instruction is based on a sequence of
classes, class sessions, or lessons, and the learning experience to
be derived from any class, class sessions, or lesson within the
sequence is based in any manner on a student's attendance at or
completion of a prior class, class session, or lesson, an institution
shall not enroll a student in that program of instruction unless the
instruction begins with the first class, class session, or lesson
and proceeds in the appropriate sequence.
(b) (1) If a program of instruction is based on a series of
modules composed of class sessions or lessons, and the learning
experience to be derived from any module is based in a manner on a
student's attendance at, or completion of, any class sessions or
lessons in any other module, an institution shall not enroll a
student in that course of instruction unless the student begins and
proceeds in the appropriate sequence.
(2) If a program of instruction is based on a series of modules
composed of class sessions or lessons, and the learning experience to
be derived from any module is not based on a student's attendance
at, or completion of, any classes or lessons in any other module, an
institution shall only enroll a student in the program of instruction
if the student begins with the first class, class session, or lesson
in a module.
(c) Notwithstanding subdivisions (a) and (b), if a class or a
module consists of more than 60 days of instruction, the institution
may enroll a student to begin no later than the fifth class session
of the first class or the fifth class session in the appropriate
module.
(d) An institution shall not merge classes unless all of the
students have received the same amount of instruction and training.
This subdivision does not prevent the placement of students, who are
enrolled in different programs of instruction, in the same class if
that class is part of each of the courses and the placement in a
merged class will not impair the students' learning of the subject
matter of the class.
(e) After a student has enrolled in a program of instruction, the
institution shall not do any of the following:
(1) Make any unscheduled suspension of any class unless caused by
circumstances beyond the institution's control.
(2) Change the day or time in which any class is offered to a day
when the student is not scheduled to attend the institution or to a
time that is outside of the range of time that the student is
scheduled to attend the institution on the day for which the change
is proposed, unless at least 90 percent of the students who are
enrolled consent to the change and the institution offers full
refunds to the students who do not consent to the change. For the
purposes of this paragraph, "range of time" means the period
beginning with the time at which the student's first scheduled class
session for the day is set to start and ending with the time the
student's last scheduled class session for that day is set to finish.
(f) If an institution enrolls a student in a program of
instruction that is not offered or designed as a distance learning
program at the time of enrollment, the institution shall not convert
the program of instruction from classroom instruction to a distance
learning program.
(g) An institution shall not move the class instruction to a
location more than five miles from the location of instruction at the
time of enrollment unless any of the following occur:
(1) The institution discloses orally, and clearly and
conspicuously in writing, to each student before enrollment in the
program that the location of instruction will change after the
program begins and the address of the proposed location.
(2) The institution applies for, and the bureau grants, approval
to change the location. The bureau shall grant the application within
30 days if the bureau, after notice to affected students and after
offering an opportunity for them to be heard as prescribed by the
bureau, concludes that the change in location would not be unfair or
unduly burdensome to students. The bureau may grant approval to
change the location, and may make that approval subject to reasonable
conditions, such as requiring the institution to provide
transportation, transportation costs, or refunds to adversely
affected students.
(3) The institution offers a full refund to students enrolled in
the program of instruction who do not voluntarily consent to the
change.
94937. An institution shall establish specific written standards
for student admissions for each educational program. These standards
shall be related to the particular educational program.
94938. An institution shall not enter into an agreement for a
program of instruction with a student unless the institution first
administers to the student, and the student passes, a test as
provided in Section 94889.6.
94939. (a) A student shall have the right to cancel an agreement
for a program of instruction, including any equipment, as follows:
(1) For degree programs, the student shall have the right to
cancel prior to or on the first day of instruction.
(2) For nondegree programs in excess of 50 days, the student shall
have the right to cancel until midnight of the fifth business day
after the day on which the student did any of the following,
whichever is later:
(A) Attended the first class of the program of instruction that is
the subject of the agreement.
(B) Received a copy of the notice of cancellation as provided in
Section 94899.
(C) Received a copy of the enrollment agreement and the
disclosures as required by Section 94893.
(3) For nondegree programs of 50 or fewer days, the student shall
have the right to cancel the agreement until midnight of the date
that is one business day for every 10 days of scheduled program
length, rounded up for any fractional increments thereof.
(4) For distance learning programs, if the first lesson is sent to
the student by mail, the institution shall send it by first-class
mail, postage prepaid, documented by a certificate of mailing, and
the student shall have a right to cancel until midnight of the eighth
business day after the first lesson was mailed. If the first lesson
is sent to the student electronically, the student shall have the
right to cancel until midnight of the third business day after the
first lesson was electronically received by the student.
(b) Cancellation shall occur when the student gives written notice
of cancellation to the institution at the address specified in the
agreement.
(c) The written notice of cancellation, if given by mail, is
effective when deposited in the mail properly addressed with postage
prepaid.
(d) The written notice of cancellation need not take a particular
form and, however expressed, is effective if it indicates the student'
s desire not to be bound by the agreement.
(e) Except as provided in subdivision (g) of Section 94941, if the
student cancels the agreement, the institution shall refund, without
penalty or obligation, 100 percent of the amount paid to that
institution by or on behalf of the student, less a reasonable deposit
or application fee not to exceed one hundred fifty dollars ($150),
within 10 days after the institution receives notice of the
cancellation.
(f) If the institution gave the student any equipment, the student
shall return the equipment within 10 days following the date of the
notice of cancellation. If the student fails to return the equipment
within this 10-day period, the institution may retain that portion of
the consideration paid by the student equal to the documented cost
to the institution of the equipment, and shall refund the portion of
the consideration exceeding the documented cost to the institution of
the equipment within 10 days after the period within which the
student is required to return the equipment. The student may retain
the equipment without further obligation to pay for it.
94940. (a) If a student withdraws from a program of instruction
after the applicable period described in Section 94939, the
institution shall remit a refund as provided in Section 94941 within
30 days following the student's withdrawal.
(b) If any portion of the tuition was paid from the proceeds of a
loan, the refund shall be sent to the lender or, if appropriate, to
the state or federal agency that guaranteed or reinsured the loan.
Any amount of the refund in excess of the unpaid balance of the loan
shall be first used to repay any student financial aid program from
which the student received benefits, in proportion to the amount of
the benefits received, and any remaining amount shall be paid to the
student.
(c) Within 10 days of the day on which the refund is made, the
institution shall notify the student in writing of the date on which
the refund was made, the amount of the refund, the method of
calculating the refund, and the name and address of the entity to
which the refund was sent. The following statement shall be placed at
the top of the notice in at least 10-point boldface type: "This
Notice is Important. Keep It For Your Records."
(d) Except for subdivision (a), this section shall not apply to a
student if both of the following occur:
(1) All of that student's tuition and fees are paid by a
third-party organization, such as a Job Training Partnership Act
agency, a regional occupational program or regional occupational
center, a private industry council, or a vocational rehabilitation
program, if the student is not obligated to repay the third-party
organization or does not lose time-limited educational benefits.
(2) The third-party organization and the institution have a
written agreement, entered into on or before the date the student
enrolls, that no refund will be due to the student if the student
withdraws prior to completion. The institution shall provide a copy
of the written agreement to the bureau. The institution shall
disclose to any student whose refund rights are affected by this
agreement, in all disclosures required to be given to the student by
this chapter, that the student is not entitled to a refund. It is the
intent of the Legislature that this paragraph not apply to any
student whose tuition and fees are paid with funds provided to the
third-party organization for the student's benefit as part of any
program that provides funds for training welfare recipients or that
is related to welfare reform.
94941. (a) An institution shall refund the unused portion of
tuition fees and other charges if a student does not register for the
period of attendance, withdraws at any time prior to completion of
the course, or otherwise fails to complete the period of enrollment
as provided in this section.
(b) For students enrolled in a degree program, the institution
shall provide a pro rata refund to students who completed 60 percent
or less of the course of instruction.
(c) Except as provided in subdivision (d), the refund shall be
calculated as follows:
(1) Deduct a registration fee not to exceed one hundred fifty
dollars ($150) from the total tuition charge.
(2) Divide this figure by the number of hours in the program.
(3) The quotient derived in paragraph (2) is the hourly charge for
the program.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total hours attended by the
hourly charge for instruction and adding to that product the amount
of the registration fee specified in paragraph (1).
(5) The refund shall be any amount in excess of the figure derived
in paragraph (4) that was paid by the student.
(6) The refund amount shall be adjusted as provided in subdivision
(f) or (g) for equipment and as provided in subdivision (h) for
resident instruction, if applicable.
(d) For an educational service offered by distance learning, the
refund shall be calculated as follows:
(1) Deduct a registration fee not to exceed one hundred dollars
($100) from the total tuition charge.
(2) Divide this figure by the number of lessons for which the
student has paid, but which the student has not completed and
submitted.
(3) The quotient derived in paragraph (2) is the per lesson
charge.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total number of lessons for
which the student has paid by the per lesson charge calculated in
paragraph (3) and adding to that product the amount of the
registration fee specified in paragraph (1).
(5) The refund shall be any amount in excess of the figure derived
in paragraph (4) that was paid by the student.
(6) For the purposes of this section, an institution may specify
in an enrollment agreement the time limits within which a student is
required to complete the requirements of a distance learning program.
(e) Notwithstanding any provision in any agreement, all of the
following shall apply:
(1) All amounts that the student has paid, however denominated,
shall be deemed to have been paid for instruction, unless the student
has paid a specific charge for equipment set forth in the agreement
for the program of instruction.
(2) In the case of an educational service offered by distance
learning, all amounts that the student has paid, however denominated,
shall be deemed to have been paid for lessons unless the student has
paid a specific charge for equipment or resident instruction as set
forth in the agreement for the educational service.
(3) The total number of hours necessary to complete each lesson of
distance learning instruction shall be substantially equivalent to
each other lesson unless otherwise permitted by the bureau.
(4) An equal charge shall be deemed to have been made for each
hour of instruction or each lesson.
(f) If the institution specifies in the agreement a separate
charge for equipment that the student actually obtains and the
student returns that equipment in good condition, allowing for
reasonable wear and tear, within 30 days following the date of the
student's withdrawal, the institution shall refund the charge for the
equipment paid by the student. If the student fails to return that
equipment in good condition, allowing for reasonable wear and tear,
within 30 days following the date of the student's withdrawal, the
institution may offset against the refund calculated under
subdivision (a) the documented cost to the institution of that
equipment. The student shall be liable for the amount, if any, by
which the documented cost for equipment exceeds the refund amount
calculated under subdivision (a). For the purposes of this
subdivision, equipment cannot be returned in good condition if the
equipment cannot be reused because of clearly recognized health and
sanitary reasons and this fact is clearly and conspicuously disclosed
in the agreement.
(g) If the institution specifies in the agreement a separate
charge for equipment, which the student has not obtained at the time
of the student's withdrawal, the refund also shall include the amount
paid by the student that is allocable to that equipment.
(h) If an agreement for educational service offered by distance
learning includes a separate charge for resident instruction, which
the student has not begun at the time of the student's withdrawal,
the institution shall refund the charge for the resident instruction
paid by the student. If the student withdraws from the educational
service after beginning the resident instruction, the institution
shall pay a refund equal to the amount the student paid for the
resident instruction multiplied by a fraction, the numerator of which
is the number of hours of resident instruction which the student has
not received but for which the student has paid, and the denominator
of which is the total number of hours of resident instruction for
which the student has paid.
(i) For the purpose of determining a refund under this section, a
student shall be deemed to have withdrawn from a program of
instruction when any of the following occurs:
(1) The student notifies the institution of the student's
withdrawal or of the date of the student's withdrawal, whichever is
later.
(2) The institution terminates the student's enrollment as
provided in the agreement.
(3) The student has failed to attend classes for a three-week
period. For the purpose of determining the amount of the refund, the
date of the student's withdrawal shall be deemed the last date of
recorded attendance. For the purposes of determining when the refund
must be paid pursuant to subdivision (a) of Section 94940, the
student shall be deemed to have withdrawn at the end of the
three-week period.
(4) The student has failed to submit three consecutive lessons, or
has failed to submit a completed lesson within 60 days of its due
date as set by an educational service offered by distance learning.
For the purposes of this paragraph, the date of the student's
withdrawal shall be deemed to be the date on which the student
submitted the last completed lesson.
(j) An institution shall have the burden of proof to
establish the validity of the amount of every refund. The institution
shall maintain records for five years of all the evidence on which
the institution relies for the determination of refund amounts.
94942. A degree granting institution offering an educational
program for which the refund calculations set forth in this article
cannot be utilized because of the unique way in which the program is
structured may petition the bureau for an alternative method of
calculating tuition refunds. The bureau shall determine the details
of an alternative refund policy, by regulation, and shall take into
consideration the contract for educational services entered into with
the student, as well as the length and character of the educational
program in determining standards for refunds. The decision of the
bureau shall be final.
94945. (a) (1) The following applies to any program about which
either of the following is true:
(A) It fails to meet either or both of the performance standards
in subdivision (a) or (b) of Section 94887.9 by 10 percent or less.
(B) It fails to meet either or both of the performance standards
in subdivision (a) or (b) of Section 94887.9 by more than 10 percent,
but has an overall employment rate as described in subdivisions (a),
(b), and (c) of Section 94887.9 of 40 percent or higher.
(2) If any institution fails to demonstrate by February 28 of the
third year, or by February 28 of the fourth year if the licensing
examination exception of subdivision (b) of Section 94889 applies,
after the completion of the tracking period in which a program failed
the completion performance standard, that 60 percent of the students
who started at that site, did not cancel during the cancellation
period, and who were originally scheduled to complete in the prior
year, completed the program in that year, the bureau shall order the
institution to stop enrolling any students in that course for two
years from that date.
(3) If any institution fails to demonstrate by February 28 of the
fourth year, or by February 28 of the fifth year if the licensing
examination exception of subdivision (b) of Section 94889 applies,
after the completion tracking period for a program that failed the
employment performance standard, that 70 percent of the students who
completed the program at that site in the most recent completion
tracking period obtained employment, the bureau shall order the
institution to stop enrolling any students in that course for two
years from that date.
(4) No action shall be taken pursuant to this subdivision without
notice, and, if requested by the institution, a hearing.
(5) In taking action pursuant to paragraph (3), the bureau shall
consider the impact, if any, of changes in the employment rate of the
area served by the site.
(b) (1) This subdivision applies to either of the following:
(A) Any program that fails to meet either performance standard in
subdivision (a) or (b) of Section 94887.9 by more than 10 percent, or
any vocational program which fails to meet either performance
standard in those subdivisions by more than 10 percent if the
institution cannot demonstrate that the vocational program has an
overall employment rate as described in subdivisions (a), (b), and
(c) of Section 94887.9 of 40 percent or higher.
(B) Any site at which the majority of the programs fail to meet
either performance standard in subdivision (a) or (b) of Section
94887.9 by more than 10 percent, or any site at which the majority of
the programs fail to meet either performance standard in those by
more than 10 percent and the institution cannot demonstrate that the
majority of the vocational programs have an overall employment rate
as described in subdivisions (a), (b), and (c) of Section 94887.9 of
40 percent or higher.
(2) If either of the situations described in paragraph (1)
occurs:
(A) The bureau shall order the institution to stop offering that
program.
(B) The bureau shall revoke the approval of the institution to
operate that site.
(3) No action shall be taken pursuant to this subdivision without
notice, and, if requested by the institution, a hearing.
(c) (1) The institution shall have the burden of complying with
this section.
(2) The bureau shall investigate an institution whenever the
bureau deems it appropriate to verify the institution's compliance
with this section. The investigation shall include an examination of
the institution's records and contacts with students and employers.
(3) If an institution willfully falsifies, alters, destroys,
conceals, or provides false or misleading information relating to
compliance with this section, including, but not necessarily limited
to, records maintained pursuant to subdivision (e), the bureau shall
revoke the institution's approval to operate. No action shall be
taken pursuant to this subdivision without notice, and if requested
by the institution, a hearing.
(4) The remedies provided in this section supplement, but do not
supplant, any other penalty or remedy provided by law.
(d) A determination (1) that a program or programs failed to meet
any completion or employment performance standard, (2) of the
percentage by which an institution failed to meet that standard, or
(3) that a program or programs met or failed to meet the overall
employment rate, shall be effective on the date an institution
reports any completion or employment rate that does not meet the
performance standard completion or employment performance standards
or overall employment rate or rates to the bureau, or if not based on
the institution's reporting, then when an order is entered
determining the fact.
(e) For each program an institution has offered at each location,
the institution shall maintain all records necessary to substantiate
its completion and employment performance numbers and rates,
including all of the following:
(1) An electronic list or spreadsheet showing all of the
following:
(A) For each student who enrolled in the program, the student's
name, address, electronic mail address if available, and telephone
number; the date the student enrolled; whether the student canceled
within the cancellation period; the date the student was scheduled at
the time of enrollment to complete the program; whether the student
completed the program; and the date the student left the program or
completed the program.
(B) The identity of each student the institution counts as having
taken the first available state examination after the student
completed the program, if the examination is required by the state
for particular employment, whether the student passed the examination
or not, and the date the examination results were first made
available.
(C) The identity of each student the institution counts as having
obtained employment; for that employment, the employer's name,
address, electronic mail address if available, and telephone number;
the name, address, electronic mail address if available, and
telephone number of the person who provided the information to the
institution regarding the student's employment; the name, title, or
description of the job; the date the student obtained the job; the
number of hours per week the student worked at the job; the duration
of the student's employment; and the amount of the student's salary,
if the institution makes any salary claims.
(2) For each student the institution counts as having obtained
part-time employment, a handwritten statement completed by the
student at the beginning of the program and at the end of the program
which states that the student's educational objective is part-time
employment. The institution shall not require the student to complete
the statement or provide any incentive, financial or otherwise, to
any student for signing the statement.
(3) For each student the institution counts as having obtained
employment based on being self-employed, reliable indices of self
employment such as contracts, checks for payment, tax returns, social
security contribution records, records of accounts receivable or
customer payments, invoices for business supplies, rent receipts,
appointment book entries, or business licenses, or a statement signed
by the student at least 60 days after the student completed the
course stating that the student considers himself or herself
self-employed, that the student has earned money from the
self-employment, and the identity of one or more of the documents
listed above which the student has to document the self-employment.
(4) For each student the institution excludes from the computation
of performance standards under this subdivision, documentation of
the date or dates and fact of the applicable death, disability,
pregnancy, military service, incarceration, or participation in the
Peace Corps or as a Domestic Volunteer.
94948. (a) All institutions subject to the approval requirements
of this chapter shall identify each student who makes an application
for, and receives, loan moneys other than loans provided under a
governmental student financial aid program, to the extent that this
information is reasonably available to the institution, including,
but not necessarily limited to, students for whom the institution
makes a referral to a lender, students for whom the institution acts
as lender, students receiving loan proceeds from a lending entity in
which the institution has a financial interest, or students for whom
loan proceeds are received by the institution on behalf of the
student.
(b) The institution shall ensure, either by providing the service
or by documenting that the service has been provided by the lending
entity, that each student has received information regarding the
student's rights and obligations related to loans at the time of
signing a promissory note, and at the end of a student's academic
program. If a student leaves a program prior to completion of the
program, the institution shall make an attempt to contact that
student at the last known student address to ensure the student has
received information from the lending entity or to provide
information to the student itself, and shall keep evidence of its
attempt to do so.
(c) (1) An institution shall disclose to the student any formal or
informal relationship between the institution and the lender,
including, but not necessarily limited to, an agreement between the
institution and lender to make referrals, to place that lender in a
preferred status for students of that institution, or to provide any
benefit, financial or otherwise, to the institution as a result of
referral or student borrowing, and shall disclose any financial
interest of the institution in the lending entity.
(2) Disclosure under this subdivision shall be made, prior to the
loan proceeds being received by the student, whenever the institution
has a reasonable opportunity to know of the student's application
for the loan.
(3) Disclosure under this subdivision shall be included in the
information and materials provided to the student at the time of
negotiation of the enrollment contract, whenever the institution has
a reasonable opportunity to know of the student's application for
that loan.
(4) A gift or other consideration of below one hundred dollars
($100) in total value exchanged between an institution and a lender
in a calendar year shall not be considered to create a financial
relationship.
(d) The institution shall keep sufficient records to demonstrate
compliance with this section.
(e) If it is determined that an institution failed to disclose a
financial relationship with, or a financial interest in, a lending
entity that provided a loan to a student at that institution as
required by this chapter, that loan shall be considered paid in full.
(f) Where federal statutes and regulations conflict with or exceed
the disclosure provisions of this chapter, the federal statutes and
regulations shall take precedence for institutions subject to
approval under this chapter that are eligible to participate in
student financial aid programs under Title IV of the federal Higher
Education Act of 1965.
94949. Any institution approved by the bureau shall do all of the
following:
(a) Maintain the minimum standards prescribed by this chapter, and
maintain standards that are the same as, or substantially equivalent
to, those represented in the institution or licensee's applications
and advertising.
(b) Not present to prospective students information that is false
or misleading relating to an institution, to employment
opportunities, or to enrollment opportunities in institutions of
higher learning, after entering into or completing courses offered by
the institution.
(c) Provide timely and accurate refunds to students, as required
by this chapter, or failing to satisfy, within 30 days of its
issuance, a final judgment obtained by a student against the
institution.
(d) Not attempt to confer a degree, diploma, or certificate to a
student in violation of this chapter.
(e) Not misrepresent to a student or prospective student that the
student is or will be qualified, upon completion of a course, for
admission to a professional examination under a state occupational
licensing provision.
(f) Conduct business or instructional services only at a location
approved by the bureau.
(g) Comply with any provision of law or regulation governing
sanitary conditions as specified in Section 94853.5.
Article 6. Operating Requirements for Institutions Regardless
of Exemption Status
94960. (a) Notwithstanding any exemption from this chapter under
Article 3 (commencing with Section 94840), an institution that
provides medical training providing for students to interact with
health care patients, and that is required to provide criminal
background checks, medical blood tests, or drug tests on its
students, shall keep complete, accurate, and up-to-date files of
these checks and test results.
(b) Records kept under this section shall be available for review
by the medical facility in which the students are obtaining their
clinical rotation work, by law enforcement personnel, and by the
bureau.
(c) An institution shall implement procedures to ensure that
records kept under this article are safeguarded and that the privacy
rights of students are protected.
94961. Notwithstanding any exemption from this chapter under
Article 3 (commencing with Section 94840), no private postsecondary
institution providing instruction in California shall design its
public Web site in a manner that requires a student to register,
identify themselves, provide electronic or other personal contact
information, or agree to be contacted by an admission representative,
in order to access information regarding the institution's program
or programs, cost of attendance, student financial aid information,
accreditation or approval status, faculty qualifications, facilities,
location, admissions policies, or any item required under the
consumer information requirements of Title IV of the federal Higher
Education Act of 1965.
Article 7. Student Tuition Recovery Fund
94970. The Student Tuition Recovery Fund is continued in
existence. All assessments and fees collected pursuant to this
article shall be credited to this fund, along with any interest on
the moneys, for the administration of this article. Notwithstanding
Section 13340 of the Government Code, the moneys in the fund are
continuously appropriated to the bureau without regard to fiscal year
for the purposes of this chapter.
94970.5. This article applies to all of the following:
(a) Institutions subject to this chapter.
(b) Institutions exempt under subparagraphs (A) and (B) of
paragraph (1) of subdivision (b) of Section 94841.
(c) Students and former students of the institutions in
subdivisions (a) and (b).
94971. The fund shall consist of assessments subject to this
article. A student of an approved or registered institution which is
subject to this article and who meets any of the following conditions
is eligible for reimbursement from the fund:
(a) (1) The student was enrolled in an institution, prepaid
tuition, and suffered economic loss as a result of the closure of the
institution.
(2) For the purposes of this section, "closure" means the closure
of a branch or satellite campus, the termination of either the
distance learning or residence portion of a distance learning
program, and the termination of a course of instruction for some or
all of the students enrolled in the course before the time these
students were originally scheduled to complete it, or before a
student who has been continuously enrolled in a course of instruction
has been permitted to complete all the educational services and
classes that comprise the course.
(b) The student obtained a final judgment against the institution
for a violation of this chapter, and the student certifies that the
judgment cannot be collected after diligent collection efforts. A
court judgment obtained under this subdivision shall be paid in
accordance with subdivision (a) of Section 94975, unless the judgment
indicates that a lesser amount is due.
(c) The institution failed to pay refunds or charges on behalf of
a student to a third party for license fees or any other purposes, or
to provide equipment or materials for which a charge was collected
within 180 days before the closure of the institution.
(d) The institution failed to pay or reimburse loan proceeds under
a federally guaranteed student loan program as required by law or to
pay or reimburse proceeds received by the institution prior to
closure in excess of tuition and other costs.
(e) The commission of a breach or anticipatory breach by the
institution of the agreement for the course of instruction.
(f) A decline in the quality or value of the course of instruction
occurred within the 30-day period before the closure of the
institution or, if the decline began before that period, the period
of decline determined by the bureau.
(g) The commission of fraud by the institution during the
solicitation or enrollment of, or during the program participation
of, the student.
94972. A student's claim shall be initiated within three years of
the closure of the institution or final judgment.
94973. (a) A student filing a claim for payment from the Student
Tuition Recovery Fund shall submit an application indicating each of
the following:
(1) The student's name, address, telephone number, and social
security number.
(2) If a portion of the tuition was paid from the proceeds of a
loan, the name of the lender, and any state or federal agency that
guaranteed or reinsured the loan.
(3) The amount of the paid tuition, the amount and description of
the student's loss, and the amount of the student's claim.
(4) The date the student started and ceased attending the
institution.
(b) The bureau may require additional information designed to
facilitate payment to entitled students. The bureau shall waive the
requirement that a student provide all of the information required by
this subdivision if the bureau has the information or the
information is not reasonably necessary for the resolution of a
student's claim.
(c) If the student is filing an application after receiving a
final judgment against an institution for a violation of this
chapter, the application shall include the amount of the judgment
obtained against the institution, a statement that the judgment
cannot be collected, and a description of the efforts attempted to
enforce the judgment. The application shall be accompanied by a copy
of the judgment, and any other documents indicating the student's
efforts made to enforce the judgment, and shall be filed within two
years after the date upon which the judgment became final.
(d) Notwithstanding any other provision of law, if a student fails
to file a completed application, including providing any information
required by this section, within one year after filing an initial
application, that application shall be deemed abandoned. An
application submitted subsequent to the abandonment of a former
application shall be treated as a new application.
94974. Within 60 days of the bureau's receipt of a completed
application for payment in accordance with this article, the bureau
shall pay the claim from the Student Tuition Recovery Fund or deny
the claim. The bureau may extend the time period for up to an
additional 90 days to investigate the accuracy of the claim.
94975. (a) If the bureau pays a claim in accordance with this
article, the amount of the payment shall be (1) the greater of either
(A) the total guaranteed student loan debt incurred by the student
in connection with attending the institution, or (B) the total of the
student's tuition and the cost of equipment and materials related to
the course of instruction, less (2) the amount of any refund,
reimbursement, indemnification, restitution, compensatory damages,
settlement, debt forgiveness, discharge, cancellation, or compromise,
or any other benefit received by, or on behalf of, the student
before the bureau's payment of the claim in connection with the
student loan debt or cost of tuition, equipment, and materials. The
payment also shall include the amount the institution collected and
failed to pay to third parties on behalf of the student for licensing
fees or any other purpose. However, if the claim is based solely on
a final judgment being awarded, the amount of the payment shall be
the amount of the loss suffered by the student. In addition to the
amount determined under this subdivision, the amount of the payment
shall include all interest and collection costs on all student loan
debt incurred by the student in connection with attending the
institution.
(b) (1) The bureau may reduce the total amount specified in
subdivision (a) by the value of the benefit, if any, of the education
obtained by a student before the closure of an institution. If the
bureau makes a reduction pursuant to this subdivision, the bureau
shall notify the claimant in writing, at the time the claim is paid,
of the basis of its decision and provide a brief explanation of the
reasons upon which the bureau relied in computing the amount of the
reduction.
(2) No reduction shall be made to the amount specified in
subdivision (a) in any of the following circumstances:
(A) The student did not receive adequate instruction to obtain the
training, skills, or experience, or employment to which the
instruction was represented to lead.
(B) Credit for the instruction obtained by the student is not
generally transferable to other institutions approved by the bureau.
(C) The institution or one of its representatives fraudulently
misrepresented to students the likely starting salary or job
availability, or both, after training.
(c) Upon payment of a claim, all of a student's rights against an
institution shall be deemed assigned to the bureau to the extent of
the amount of the payment.
94976. If the bureau denies a
student's claim, or reduces the amount of a claim, the bureau shall
notify the student of the denial or reduction and of the student's
right to request a hearing within 60 days or any longer period
permitted by the bureau. If a hearing is not requested within 60 days
or any additional period reasonably requested by the student, the
bureau's decision shall be final. If a hearing is requested, Chapter
5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2
of the Government Code shall apply.
94977. The bureau may deny any application for any or all of the
following reasons:
(a) Failure to provide any information required by this article or
that is required by the bureau that is necessary to process the
application or pay the claim.
(b) Fraud or misrepresentation on the part of the applicant.
(c) Failure to make a diligent effort to collect a judgment from
the institution.
(d) Receipt of third-party payer benefits for his or her
institutional charges.
(e) The institution attended by the student was not subject to
this article.
(f) Any other grounds for denial established through regulation by
the bureau.
94978. (a) Whenever reasonably possible, the bureau shall
negotiate with a lender, holder, guarantee agency, or the USDE for
the full compromise or writeoff of student loan obligations to
relieve students of loss, and thereby reduce the amount of student
claims.
(b) In the case of a student who was a recipient of a loan to
attend an institution, payment from the Student Tuition Recovery Fund
shall first be made to the lender of financial aid funds to that
student, to repay the student's indebtedness that pertains to tuition
and fees related to attendance at the institution.
94979. It is the intent of the Legislature that, when a student
is enrolled in an institution that closes prior to the completion of
the student's program, the student shall have the option for a
teach-out at another institution approved by the bureau. The bureau
shall seek to promote teach-out opportunities wherever possible and
shall inform the student of his or her rights, including payment from
the fund, transfer opportunities, and available teach-out
opportunities, if any.
94980. In the event of the closure of an institution or a
teach-out, the bureau shall give priority, for payments from the
fund, to a student who transfers to another institution to complete a
course of study.
94981. Once the bureau has determined that a student claim is
eligible for payment under this article and intends to use the
Student Tuition Recovery Fund, in whole or in part, to satisfy the
eligible claim, the bureau shall document its negotiations with the
relevant lender, holder or guarantee agency, the USDE, or the
applicable state agency. The bureau shall prepare a written summary
of the parties and results of the negotiations, including the amounts
offered and accepted, the discounts requested and granted, and any
other information that is available to any party that files a request
for this information with the bureau.
94982. The bureau shall assess an institution, except for an
institution that receives all of its students' total charges from
third-party payers, for the purpose of compliance with the provisions
of this chapter that are related to the Student Tuition Recovery
Fund. A "third-party payer," for the purposes of this article, means
an employer, government program, or other payer that pays a student's
total charges directly to the institution when no separate agreement
for the repayment of that payment exists between the third-party
payer and the student. A student who receives third-party payer
benefits for his or her institutional charges is not eligible for
benefits from the Student Tuition Recovery Fund.
94983. (a) (1) The amount assessed each institution shall be
calculated only for those students who are eligible to be reimbursed
from the fund and shall be based on the actual amount charged each of
these students for total tuition cost, regardless of the portion
that is prepaid. The amount of the assessment on an institution shall
be determined in accordance with subdivisions (b) and (c).
(2) Each institution shall collect the amount assessed by the
bureau in the form of a Student Tuition Recovery Fund fee from its
new students, and remit these fees to the bureau during the quarter
immediately following the quarter in which the fees were collected
from the students, or from loans funded on behalf of the students,
except that an institution may waive collection of the Student
Tuition Recovery Fund fee and assume the fee as a debt of the
institution. The fees collected by the institution shall be placed in
a separate bank or trust account and not commingled with any other
moneys until the institution remits those fees to the bureau. If the
institution assumes the fee, this need not be placed in a separate
account. The student's subsequent disenrollment shall not relieve the
institution of the obligation to pay the fee to the bureau, nor be
the basis for refund of the fee to the student. An institution may
not charge a fee of any kind for the collection of the Student
Tuition Recovery Fund fee. An institution shall refuse to enroll a
student who has not paid, or made provisions to pay, the appropriate
Student Tuition Recovery Fund fee.
(b) A Student Tuition Recovery Fund fee shall be collected from
students upon enrollment and in its entirety at the rate of two
dollars and fifty cents ($2.50) per thousand dollars of tuition
charged, rounded to the nearest thousand dollars.
(c) If, at any time, the balance in the Student Tuition Recovery
Fund is more than five million dollars ($5,000,000), net of the
estimated liability associated with any pending claims, the bureau
may reduce the amount of the assessment collected from new students
to a level less than two dollars and fifty cents ($2.50) per thousand
dollars of tuition charged, rounded to the nearest thousand dollars,
or suspend collection of the fee for a period determined by the
bureau, so as to maintain a fund balance of between five million
dollars ($5,000,000) and ten million dollars ($10,000,000). Prior to
any reduction in the assessment, the bureau shall demonstrate that
amounts in the fund would be reasonably sufficient to pay any pending
or future claims.
(d) The bureau may by regulation levy additional reasonable
special assessments on an institution under this section only if
these assessments are required to ensure that sufficient funds are
available to satisfy the anticipated costs of paying student claims.
(e) The bureau may not levy a special assessment unless the
balance in the Student Tuition Recovery Fund falls below two hundred
fifty thousand dollars ($250,000), as certified by the Secretary of
the State and Consumer Services Agency.
(f) The assessments, fees, and special assessments shall be paid
into the Student Tuition Recovery Fund, and the deposits shall be
allocated, except as otherwise provided for in this chapter, solely
for the payment of valid claims to students. Unless additional
reasonable assessments are required, no assessment may be levied
during any fiscal year if, as of June 30 of the prior fiscal year,
the balance in the fund exceeds ten million dollars ($10,000,000).
However, regardless of the balance in the fund, assessments shall be
made on a newly approved institution.
94984. Moneys deposited in the Student Tuition Recovery Fund are
exempt from execution and may not be the subject of litigation or
liability on the part of creditors of those institutions or students.
94985. (a) On or before December 31, 2010, the bureau shall adopt
a procedure allowing for payments to the fund to be made through
online transactions and other electronic means.
(b) The bureau shall adopt audit and accounting procedures to
ensure that institutions fully pay the amounts that are due to the
fund.
94986. The bureau's costs of administration of the Student
Tuition Recovery Fund authorized by this article shall not be paid
from the fund, but shall be paid from the Private Postsecondary
Education Fund.
94987. In the event of a closure by any approved institution
under this chapter, any assessments that have been made against those
institutions, but have not been paid into the fund, shall be
recovered. Any payments from the fund made to students on behalf of
any institution shall be recovered from that institution.
94988. In addition to civil remedies, the bureau may order an
institution to remit or collect previously unpaid Student Tuition
Recovery Fund fees or to reimburse the bureau for any payments made
from the fund in connection with the institution. Before any order is
made pursuant to this section, the bureau shall provide written
notice to the institution and notice of the right to request a
hearing within 30 days of the service of the notice. If a hearing is
not requested within 30 days of the service of the notice, the bureau
may order payment. If a hearing is requested, Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code shall apply, and the bureau shall have all powers
prescribed in that chapter. Within 30 days after the effective date
of the issuance of the order, the bureau may enforce the order in the
same manner 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.
94989. (a) Payment of Student Tuition Recovery Fund fees is due
within 30 days of the bureau's demand for payment. A penalty of 20
percent of the amount due shall be added for late payment.
(b) In addition to any other action that the bureau may take under
this chapter, the bureau may suspend or revoke an institution's
approval to operate because of the institution's failure to collect
or remit Student Tuition Recovery Fund fees and pay penalties.
Article 8. Enforcement
95000. The bureau, with the assistance and guidance of, and in
cooperation with, the Attorney General, shall develop an enforcement
program. The enforcement program shall include, but not necessarily
be limited to, all of the following:
(a) Initial and periodic training of bureau staff.
(b) The enforcement process shall ensure that all institutions
subject to this chapter are in compliance with this chapter and that
the bureau takes appropriate action, pursuant to this article,
against institutions not in compliance.
(c) Site visits that include a review of records, inspection of
facilities, interviews of administrators, faculty and students, and
observation of class instruction.
(d) Audits, site visits, and investigations that are triggered by
complaints and where the bureau has reasonable cause to believe an
institution commits one or more acts constituting grounds for
discipline. The audits and site visits may be unannounced.
95001. A person claiming damage or loss as a result of an act or
practice by an institution, its agent, its employee or
representative, or any combination thereof, that is a violation of
this chapter or of the regulations adopted pursuant to this chapter,
may file, with the bureau, electronically or in writing, a complaint
against that institution. The complaint shall set forth the alleged
violation, and shall contain any other information as may be required
by the bureau.
95002. (a) A copy of a complaint received by the bureau
pertaining to an institution accredited by the Western Association of
Schools and Colleges shall be forwarded to the association. The
bureau shall notify the complainant that the complaint has been
forwarded and that the bureau will not take any other action due to
its lack of jurisdiction. An action by the bureau relating to a
complaint against these institutions shall be limited to the
transmittal of this information to the Western Association of Schools
and Colleges and notification to the complainant.
(b) Except as provided in subdivision (a), a complaint received by
the bureau pertaining to an institution accredited by a USDE
recognized accrediting agency shall be forwarded to the accrediting
agency that accredited that institution. The bureau shall notify the
complainant that the complaint has been forwarded. The bureau may
only take additional action as specifically authorized elsewhere by
this chapter.
95003. (a) If a person, an institution or its employees, agent,
or representative commits an act constituting grounds for discipline,
the bureau may do any or all of the following:
(1) Take an action authorized under Section 95006.
(2) Revoke or suspend the license.
(3) Place the institution on probation.
(4) Issue an administrative citation with an administrative fine,
order of abatement, or both, pursuant to Section 95007 of this code
or Section 125.9, 146, 147, or 148 of the Business and Professions
Code. A citation shall be in writing, and shall describe the nature
of the violation and the specific provision of law determined to have
been violated. A citation may contain an order of abatement, an
assessment of an administrative fine, or both. The order of abatement
may include, but is not necessarily limited to, any of the following
provisions:
(A) An order to cease operating without a license.
(B) An order prohibiting the enrollment of new students.
(C) An order to cease entering into new agreements for one or more
courses of instruction.
(D) An order to cease offering a class or program. This order may
permit the licensee to complete the class or course of instruction
only for those students enrolled, or may order the licensee to
immediately cease instruction and provide a refund of tuition and all
other charges to students.
(E) Other remedial measures intended to address the acts
constituting grounds for discipline.
(5) Order reimbursement of the costs of an investigation and any
enforcement action taken in accordance with Section 125.3 of the
Business and Professions Code. A licensee may not be required to pay
the same costs and expenses to more than one investigating entity.
(6) If the bureau has probable cause to believe that a person has
violated this chapter, notify a telephone corporation to disconnect
the person's telephone as authorized by Section 149 of the Business
and Professions Code.
(b) Any enforcement proceeding may be referred to mediation or
nonbinding arbitration with the consent of both the bureau and the
licensee in accordance with the regulations of the Office of
Administrative Hearings, the department, or the bureau.
95004. (a) 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), for any of the
following:
(1) Operating an institution without proper approval to operate
issued by the bureau pursuant to this chapter.
(2) Disseminating by any means any statement indicating directly
or by implication that the person operates an institution or provides
education, degrees or certificates, unless the person is an approved
institution or exempt from this chapter.
(3) Offering to provide education, degrees or certificates, or
proposing to operate an institution, unless the person is an approved
institution or exempt from this chapter.
(b) In addition to subdivision (a), the bureau may take other
steps to prevent unapproved activity, which may include, but is not
necessarily limited to, either of the following:
(1) Notify a telephone corporation to disconnect the person's
telephone as authorized by Section 149 of the Business and
Professions Code.
(2) Issue a cease and desist order.
95005. For purposes of this chapter, grounds for discipline
include a violation of this chapter or the regulations adopted
pursuant to it.
95006. (a) The bureau chief, or his or her designee, may issue an
order of correction to a licensee directing the licensee to comply
with this chapter or regulations adopted pursuant to this chapter.
(b) The order of correction shall be in writing, and shall
describe in detail the nature and facts of the violation, including a
reference to the statute or regulations violated.
(c) The order of correction shall inform the licensee that within
30 days of service of the order of correction, the licensee may do
any of the following:
(1) Submit a written request for an office conference with the
bureau chief to contest the order of correction.
(A) Upon a timely request, the bureau chief, or his or her
designee, shall hold an office conference with the licensee or the
licensee's legal counsel or authorized representative. Unless so
authorized by the bureau chief, or his or her designee, no individual
other than the licensee's legal counsel or authorized representative
may accompany the licensee to the office conference.
(B) Prior to or at the office conference, the licensee may submit
to the bureau chief declarations and documents pertinent to the
subject matter of the order of correction.
(C) The office conference is intended to be an informal
proceeding, and shall not be subject to the provisions of the
Administrative Procedure Act (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).
(D) The bureau chief, or his or her designee, may affirm, modify,
or withdraw the order of correction. Within 14 calendar days from the
date of the office conference, the bureau chief, or his or her
designee, shall personally serve or send by certified mail to the
licensee's address of record with the bureau a written decision. This
decision shall be deemed the final administrative decision
concerning the order of correction.
(E) The institution may request a hearing on the decision of the
bureau chief, or his or her designee, pursuant to the procedures set
forth in Article 9 (commencing with Section 95030).
(2) Comply with the order of correction, and submit a written
corrective action plan to the bureau chief, or his or her designee,
documenting compliance. If an office conference is not requested
pursuant to this section, compliance with the order of correction
shall not constitute an admission of the violation noted in the order
of correction.
(d) The order of correction shall be served upon the licensee
personally or by certified mail at the licensee's address of record
with the bureau. If the licensee is served by certified mail, service
shall be effective upon deposit in the United States mail.
(e) The licensee shall maintain a copy of the order of correction
and corrective action plan for at least three years from the date of
issuance of the order of correction.
(f) Nothing in this section shall in any way limit the bureau's
authority or ability to take any other enforcement action authorized
by this chapter.
(g) Unless a writ of mandate is filed, a citation issued, a
hearing is requested, or a disciplinary proceeding instituted, an
order of correction shall not be considered a public record and shall
not be disclosed pursuant to a request under the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code).
95007. (a) An administrative fine assessed with a citation may
not exceed five thousand dollars ($5,000) for each violation. The
bureau shall base its assessment of the administrative fine on the
nature and seriousness of the violation, the persistence of the
violation, the good faith of the institution or licensee, the history
of previous violations, and the extent to which the violation
undermined the purposes of this chapter.
(b) The citation shall inform the institution or licensee of a
right to request a hearing pursuant to this chapter, in writing,
within 15 days of the date that the citation was issued. If a hearing
is not requested, payment of the administrative fine shall not
constitute an admission of the violation charged. If a hearing is
requested, the bureau shall provide a hearing pursuant to Article 9
(commencing with Section 95030). Payment of the administrative fine
is due 15 days after the citation was issued if a hearing is not
requested, or when a final order is entered if a hearing is
requested. The bureau may enforce the administrative fine as if it
were a money judgment pursuant to Title 9 (commencing with Section
680.10) of Part 2 of the Code of Civil Procedure.
(c) The citation shall also inform the licensee of its right to
submit a written request for an office conference with the bureau
chief to contest the citation under paragraph (1) of subdivision (c)
of Section 95006.
(d) Failure to pay a fine within 30 days of the date of
assessment, unless the citation is being appealed, may result in
disciplinary action taken by the bureau. The bureau shall take
immediate action to collect the fine.
(e) All administrative fines shall be deposited in the Private
Postsecondary Education Administration Fund or its successor fund.
95008. (a) If the bureau places a licensee on probation, it shall
articulate the terms and conditions of the probation. The terms and
conditions of probation may include the required submission of
periodic reports and documents, and unannounced inspections by bureau
representatives to determine compliance with the terms of probation.
The onsite inspections may include an inspection of the licensee's
facilities and records, interviews of administrators, faculty, and
students, and observation of class instruction.
(b) The licensee shall reimburse the bureau for all reasonable
costs and expenses incurred in connection with this section. Payment
of the reimbursement shall be a condition of probation.
(c) If the licensee fails to comply with the terms of probation,
the bureau may suspend or revoke the license, or may take other
action pursuant to this article.
(d) In addition to any other terms of probation, the bureau may
assess a penalty of up to ten thousand dollars ($10,000) as part of a
probation order for violations of this chapter. In determining the
amount of that penalty, the bureau shall consider the number, nature
and seriousness of the violations, the persistence of the violations,
the degree of the licensee's good faith or culpability, the history
of the licensee's previous violations, the licensee's ability to pay,
and the extent to which the violation undermined the purposes of
this chapter. Full and timely payment of any penalty charged under
this subdivision shall be a term of probation.
95009. (a) If the bureau determines that immediate action is
necessary to protect students or prevent the loss of public funds,
tuition, or other money paid by students, the bureau may institute an
emergency action to suspend the approval of an institution to
operate, or the approval to operate a branch or satellite campus, for
not more than 30 days
unless the bureau initiates a proceeding to suspend or revoke the
approval to operate within that period.
(b) (1) The bureau shall provide notice of an emergency action to
the institution by either (A) certified mail, in which case the
effective date of the emergency action shall be not less than 10
working days after mailing, or (B) personal service, in which case
the effective date of the emergency action shall be not less than
five days after service.
(2) The notice shall specify all of the following:
(A) The violations upon which the emergency action is based.
(B) The nature and grounds of the emergency action, including
whether the action applies to the continuation of instruction to
enrolled students or to the enrollment of new students.
(C) The effective date of the action.
(D) The institution's right to show cause that the emergency
action is unwarranted by submitting to the bureau, at least two days
before the effective date of the emergency action, declarations,
documentary evidence, and written arguments demonstrating that the
violations did not occur or that immediate action is not required.
(E) The right of the institution to request, in writing, within 30
days of the service of the notice, a hearing.
(c) At any time, the bureau may (1) continue the effective date of
an emergency action or (2) terminate an emergency action if the
bureau concludes that the institution has shown cause that the
emergency action is unwarranted or that the grounds for instituting
the emergency action no longer remain. The bureau shall provide
written notice of a continuance or termination of an emergency action
to the institution.
(d) (1) If an institution does not take the opportunity to show
cause why an emergency action is unwarranted, the emergency action
shall become effective on the date specified in the notice or notice
of continuance.
(2) If an institution takes the opportunity to show cause why an
emergency action is unwarranted, and the bureau decides, after a
consideration of the declarations, documentary evidence, and written
arguments submitted by the institution, that the emergency action
should become effective, the emergency action shall be effective on
the date specified in the notice or notice of continuance. The bureau
shall notify the institution of the decision at least one day before
the effective date, and the institution may thereafter seek judicial
relief upon notice to the bureau and the Attorney General.
(e) (1) If an institution requests a hearing to contest an
emergency action within the 30-day period specified in subdivision
(b), the bureau shall set a date for a hearing within 20 days after
receipt of the request.
(2) If an institution does not request a hearing to contest an
emergency action within the 30-day period specified in subdivision
(b), or if the bureau concludes after a hearing requested by the
institution that grounds exist for the suspension or revocation of
the institution's approval to operate or approval to operate a branch
or satellite campus, the bureau may extend the action or take
another disciplinary action, as the bureau deems appropriate.
(f) During the pendency of an emergency action, the bureau may
investigate the institution's compliance with this chapter, including
an onsite inspection, and may take another disciplinary action as
the bureau deems appropriate.
(g) This section supplements, but does not supplant, the authority
of the bureau to seek judicial relief, including a temporary
restraining order and injunction, to redress any violation of this
chapter.
95010. (a) An institution, the approval to operate of which has
been revoked or suspended or that has been placed on probation, may
petition the bureau for reinstatement or modification of penalty,
including modification or termination of probation, after not less
than the following minimum periods have elapsed from the effective
date of the decision ordering disciplinary action:
(1) At least three years for reinstatement of a revoked license.
(2) At least two years for early termination of probation of three
years or more.
(3) At least one year for modification of a condition, or
reinstatement of a license revoked for termination of probation of
less than three years.
(b) The petition shall be accompanied by a reinstatement
processing fee of ____dollars ($____).
(c) In considering reinstatement or modification of penalty, the
bureau may consider factors including, but not necessarily limited
to, all of the following:
(1) The petitioner's activities since the disciplinary action was
taken.
(2) The offense for which the petitioner was disciplined.
(3) The petitioner's activities during the time the license was in
good standing.
(4) The petitioner's documented rehabilitative efforts, including
repayment of restitution.
(d) No petition under this section shall be considered while the
petitioner is under sentence for any criminal offense, including any
period during which the petitioner is on court-imposed probation or
parole. No petition shall be considered while there is an accusation
or petition to revoke probation pending against the person. The
bureau may deny without a hearing or argument any petition filed
pursuant to this section within a period of two years from the
effective date of the prior decision following a hearing under this
section.
95011. (a) The bureau may bring an action for equitable relief
for any violation of this chapter in addition to, or instead of, any
other remedy or procedure. The equitable relief may include
restitution, a temporary restraining order, the appointment of a
receiver, or a preliminary or permanent injunction. The action may be
brought in the county in which the defendant resides, or in which
any violation has occurred, or may occur.
(b) The suspension or revocation of an institution's approval to
operate also may be embraced in any action brought by the Attorney
General, a district attorney, or city attorney otherwise proper in
any court involving the institution's compliance with this chapter or
performance of its legal obligations.
95013. (a) The Attorney General, a district attorney, or a city
attorney may make investigations as may be necessary to carry out
this chapter, including investigations of complaints. The bureau may
jointly bring actions as necessary to enforce this chapter, including
civil actions for injunctive relief.
(b) Nothing in this section or this chapter precludes the Attorney
General, a district attorney, or a city attorney from taking any
action each is otherwise lawfully authorized to take.
95014. (a) If an institution, or its agent, representative, or
employee, violates any provision of Article 5 (commencing with
Section 94890) in connection with an agreement for a course of
instruction, that agreement shall be unenforceable, and the
institution shall refund all consideration paid by or on behalf of
the student.
(b) Notwithstanding any provision in an agreement, a student may
bring an action for a violation of any provision of Article 5
(commencing with Section 94890) and, upon prevailing, shall be
entitled to the recovery of damages, equitable relief, any other
relief authorized by this article, and reasonable attorney's fees and
costs.
(c) If a court finds that a violation was willfully committed or
that the institution failed to refund all consideration as required
by subdivisions (a) or (b) on the student's written demand, the
court, in addition to the relief awarded under subdivision (b), shall
award a civil penalty of up to two times the amount of the damages
sustained by the student.
(d) The remedies provided in this article supplement, but do not
supplant, the remedies provided under other provisions of law.
(e) An action brought under this section shall be commenced within
three years of the discovery of the facts constituting grounds for
commencing the action.
(f) Any provision in any agreement that purports to require a
student to invoke any grievance dispute procedure including
arbitration established by the institution or any other procedure
before bringing an action to enforce any right or remedy is void and
unenforceable. After a grievance has arisen, a student may
voluntarily elect to avail himself or herself of a nonbinding
grievance dispute procedure available to students after the student's
grievance has arisen but prior to enforcing any right or remedy
under law or filing a judicial action.
(g) A student may assign his or her causes of action for a
violation of this article to the bureau, or to any state or federal
agency that guaranteed or reinsured a loan for the student or
provided any grant or other financial aid.
(h) If a student commences an action or asserts any claim
described in Section 17200 of the Business and Professions Code in an
existing action for recovery on behalf of a class of persons, or on
behalf of the general public, the student shall notify the bureau of
the existence of the lawsuit, the court in which the action is
pending, the case number of the action, and the date of the filing of
the action or of the assertion of the claim. The student shall
notify the bureau as required by this subdivision within 30 days of
the filing of the action or of the first assertion of the claim,
whichever is later. The student shall also notify the court that he
or she has notified the bureau pursuant to this subdivision.
Notwithstanding any other provision of law, no judgment may be
entered pursuant to this section until the student has notified the
bureau of the suit and notified the court that the bureau has been
notified. This subdivision only applies to a new action filed or to a
new claim asserted on or after January 1, 2002.
(i) An institution is liable in a civil action or proceeding for a
violation of Article 5 (commencing with Section 94890) committed by
a representative of the institution.
95014.5. A student may bring an action for an agent's, agency's,
or agency employee's violations of this chapter or any fraud or
misrepresentation and, upon prevailing, is entitled to the recovery
of damages, reasonable attorney's fees, and costs. If a court finds
that the violation was willfully committed, the court shall, in
addition to the award of damages, award a civil penalty of up to two
times the amount of damages sustained by the student.
95021. (a) Notwithstanding any other provision of this chapter,
each institution, including regionally accredited institutions that
qualify for exemption under Article 3 (commencing with Section
94840), shall be deemed to have authorized the accrediting agency
that accredited the institution to provide to the Attorney General,
any district attorney or city attorney, or the Student Aid
Commission, within 30 days of written notice, copies of all documents
and other material concerning the institution that is maintained by
the accrediting agency.
(b) Within 30 days of receiving written notice from the Attorney
General, any district attorney or city attorney, or the Student Aid
Commission, an accrediting agency shall provide, free of charge, the
requesting official with all documents or other material concerning
an institution accredited by that accrediting agency that are
designated specifically or by category in the written notice.
(c) If the Attorney General, any district attorney or city
attorney, or the Student Aid Commission is conducting a confidential
investigation of an institution and so informs the accrediting
agency, the accrediting agency shall not inform that institution of
the investigation.
(d) If an accrediting agency willfully fails to comply with this
section, the accrediting agency shall be liable for a civil penalty
of not less than two thousand five hundred dollars ($2,500) or more
than twenty-five thousand dollars ($25,000) for each violation.
Penalties awarded pursuant to this section shall be deposited in the
Private Postsecondary and Vocational Education Administration Fund or
any successor fund.
95022. (a) A person or business entity, regardless of the form of
organization, that willfully violates Sections 94882.3, 94883.9,
94893, 94894, 94896, 94897, 94902, 94931, 94932, or 94939 through
94942, inclusive, is guilty of a crime, and shall be subject to
separate punishment for each violation by either of the following:
(1) Imprisonment in a county jail not to exceed one year, by a
fine not to exceed ten thousand dollars ($10,000), or by both that
imprisonment and fine.
(2) Imprisonment in state prison for a period not to exceed _____
years, by a fine not to exceed fifty thousand dollars ($50,000), or
by both that imprisonment and fine.
(b) Notwithstanding any other law, any prosecution under this
section shall be commenced within three years of the discovery of the
facts constituting grounds for commencing the prosecution.
(c) The penalties provided by this section supplement, but do not
supplant, remedies and penalties provided under other law.
(d) In addition to any other fines or penalties imposed pursuant
to this section, any person or business entity found guilty of a
crime as described in subdivision (a) shall be ordered to pay the
Attorney General, any district attorney, or any city attorney all of
their costs and expenses in connection with any investigation
incident to that prosecution. An institution or licensee shall not be
required to pay the same costs and expenses to more than one
investigating agency.
95023. (a) Any person who, in any manner, makes or causes to be
made any untrue or misleading statement in connection with offering
or providing a program, or who makes or causes to be made any untrue
or misleading change in any document or record and who knows or, by
the exercise of reasonable care, should know that the statement or
change is untrue or misleading is guilty of a crime, punishable as
provided in subdivision (d).
(b) Any person who willfully falsifies, destroys, fails to
maintain, or conceals any document or record that is required to be
maintained by this chapter or by the bureau is guilty of a crime,
punishable as provided in subdivision (d).
(c) Any person who is required to file any report required by
Section 94883.6 and who willfully fails to file that report as
required, or willfully violates or causes the violation of
subdivision (d) of Section 94882.3, is guilty of a crime and is
subject to punishment for each violation as provided in paragraph (2)
of subdivision (d).
(d) Any person who violates subdivision (a) or (b), or who
willfully violates Section 94901, 94931, 94932, or subdivision (c) of
Section 95014 is guilty of a crime and is subject to separate
punishment for each violation either by:
(1) Imprisonment in the state prison, by a fine not to exceed
fifty thousand dollars ($50,000), or by both that imprisonment and
fine.
(2) Imprisonment in a county jail not to exceed one year, by a
fine not to exceed ten thousand dollars ($10,000), or by both that
imprisonment and fine.
(e) Notwithstanding any other law, any prosecution under this
section shall be commenced within three years of the discovery of the
facts constituting grounds for commencing the prosecution.
(f) The penalties provided by this section supplement, but do not
supplant, the remedies and penalties provided under other law.
95024. Any person who willfully violates Section 94884.3,
Sections 94885.9 to 94887, inclusive, Section 94887.6 and Sections
94917 to 94919, inclusive, is guilty of a misdemeanor punishable by
imprisonment in a county jail not exceeding six months, by a fine not
to exceed five thousand dollars ($5,000), or by both that
imprisonment and fine. To the extent permitted by law, an institution
is liable in a criminal action for violations of Article 4
(commencing with Section 94850) committed by a representative of the
institution.
95025. An institution is liable in an administrative action or
proceeding for a violation of Article 4 (commencing with Section
94850) or Article 5 (commencing with Section 94890) committed by a
representative of the institution.
95026. If any person willfully violates this chapter and the
violation results in the closure of an institution, that person shall
pay to all students of the closed institution full refunds or full
compensation for actual damages resulting from the closure that were
not paid by the closed institution.
Article 9. Hearings
95030. Any hearing allowed or required by this chapter shall be
carried out in accordance with the provisions set forth in Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, in accordance with the procedures set forth in
this article, or in accordance with any alternative adjudicative
process established by the bureau that is consistent with due
process. In connection with hearings carried out under Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code, the bureau shall have all powers granted in
that chapter.
95031. Upon taking an action to suspend or revoke an institution'
s approval to operate, or to deny an application for renewal of an
approval to operate, the bureau shall provide written notice to the
Student Aid Commission, the United States Department of Education,
and to any appropriate accrediting association.
95032. The bureau may use the following procedures in lieu of
other notice or hearing requirements provided for by this chapter.
(a) If notice of administrative action is required by this
chapter, the bureau shall serve notice stating all of the following:
(1) The action, including the penalties and administrative
sanctions sought.
(2) The grounds for the action, with sufficient particularity to
give notice of the transactions, occurrences, violations, or other
matters on which the action is based.
(3) The right to a hearing and the time period within which the
party subject to the notice may request a hearing in writing. The
time period shall not be less than 15 days after service of the
notice unless a longer period is provided by statute.
(4) The right to be present at the hearing, to be represented by
counsel, to cross-examine witnesses, and to present evidence.
(5) That, if the party subject to the notice does not request a
hearing in writing within the time period expressed in the notice, he
or she will waive or forfeit his or her right to an administrative
hearing and the action will become final.
(b) If a party subject to a notice provided pursuant to
subdivision (a) requests a hearing in writing within the time period
specified in paragraph (3) of subdivision (a), then within 30 days of
receiving this request, the bureau shall schedule a hearing. The
hearing shall be held in a location determined pursuant to Section
11508 of the Government Code. The bureau shall serve reasonable
notice of the time and place for the hearing at least 10 days before
the hearing. The bureau may continue the date of the hearing upon a
showing of good cause.
(c) (1) A party, including the bureau, may submit a written
request to another party before a hearing to obtain the name and
address of any person who has personal knowledge, or who the party
receiving the request claims to have personal knowledge, of any of
the transactions, occurrences, violations, or other matters that are
the basis of the administrative action. In addition, the requesting
party shall have the right to inspect and copy a written statement
made by that person or a writing, as defined by Section 250 of the
Evidence Code, or thing that is in the custody, or under the control,
of the party receiving the request and that is relevant and not
privileged. This subdivision shall constitute the exclusive method
for prehearing discovery. However, nothing in this paragraph shall
affect the bureau's authority, at any time, to investigate, inspect,
monitor, or obtain and copy information under any provision of this
chapter.
(2) The written request described in paragraph (1) shall be made
before the hearing and within 30 days of the service of the notice
described in subdivision (a). Each recipient of a request shall
comply with the request within 15 days of its service by providing
the names and addresses requested and by producing at a reasonable
time at the bureau's office, or other mutually agreed reasonable
place, the requested writings and things. The bureau may extend the
time for response upon a showing of good cause.
(3) Except as provided in this paragraph, a party may not
introduce the testimony or statement of a person or a writing or
thing into evidence at the hearing if that party failed to provide
the name and address of the person or to produce the writing or thing
for inspection and copying as provided by this subdivision. A party
may introduce the testimony, statement, writing, or thing that was
not identified or produced as required herein only if all of the
following are true:
(A) There is no objection, or the party establishes that the
person, writing, or thing was unknown at the time when the response
was made to the written request.
(B) The party could not have informed other parties within a
reasonable time after learning of the existence of the person,
writing, or thing.
(C) No party would be prejudiced by the introduction of the
evidence.
(d) Before a hearing has commenced, the bureau shall issue
subpoenas at the written request of a party for the attendance of
witnesses or the production of documents or other things in the
custody or under the control of the person subject to the subpoena.
Subpoenas issued pursuant to this section are subject to Section
11510 of the Government Code.
(e) (1) The bureau shall designate an impartial hearing officer to
conduct a hearing. The hearing officer may administer oaths and
affirmations, regulate the course of the hearing, question witnesses,
and otherwise investigate the issues, take official notice according
to the procedure provided in Division 4 (commencing with Section
450) of the Evidence Code of any technical or educational matter in
the bureau's special field of expertise and of any matter that may be
judicially noticed, set the time and place for continued hearings,
fix the time for the filing of briefs and other documents, direct any
party to appear and confer to consider the simplification of issues
by consent, and prepare a statement of decision.
(2) A hearing officer and a person who has a direct or indirect
interest in the outcome of the hearing may not communicate directly
or indirectly with each other regarding an issue involved in the
hearing while the proceeding is pending without notice and
opportunity for all parties to participate in the communication. A
hearing officer who receives an ex parte communication shall
immediately disclose the communication to the bureau and all other
parties. The bureau may disqualify the hearing officer, if necessary,
to eliminate the effect of
the ex parte communication. If the bureau finds that a party
willfully violated, or caused a violation of, this paragraph, the
bureau shall enter that party's default and impose the administrative
sanction set forth in the notice provided pursuant to subdivision
(a).
(f) (1) Each party at a hearing shall be afforded an opportunity
to present evidence, respond to evidence presented by other parties,
cross-examine, and present written argument or, if permitted by the
hearing officer, oral argument on the issues involved in the hearing.
The bureau may call a party as a witness who may be examined as if
under cross-examination.
(2) Each party may appear through its representative or through
legal counsel.
(3) The technical rules relating to evidence and witnesses shall
not apply. However, only relevant evidence is admissible.
(4) Oral evidence shall be taken only upon oath or affirmation. A
hearing shall be conducted in the English language. The proponent of
any testimony to be offered by a witness who is not proficient in
English shall provide, at the proponent's cost, an interpreter
proficient in English and the language in which the witness will
testify.
(5) A hearing shall be recorded by tape recording or other
phonographic means unless all parties agree to another method of
recording the proceedings.
(6) (A) At any time 10 or more days before a hearing, a party may
serve on the other parties a copy of a declaration that the party
proposes to introduce in evidence.
(B) A declaration provided pursuant to subparagraph (A) shall be
accompanied by a notice indicating the date of service of the notice
and stating that the declarations will be offered into evidence, the
declarants will not be called as witnesses, and there will be no
right of cross-examination unless the party receiving the notice
requests the right to cross-examine, in writing, within seven days of
the service of the declarations and notice.
(C) If no request for cross-examination is served within seven
days of the service of the declarations and notice described in
subparagraph (B), the right to cross-examination is deemed waived and
the declaration shall have the same effect as if the declarant
testified orally. Notwithstanding this subparagraph, a declaration
may be admitted as hearsay evidence without cross-examination.
(7) Disposition of an issue involved in a hearing may be made by
stipulation or settlement.
(8) If a party fails to appear at a hearing, that party's default
shall be taken and the party shall be deemed to have waived the
hearing and agreed to the administrative action and the grounds for
that action described in the notice given pursuant to subdivision
(b). The bureau shall serve the party with an order of default
including the administrative action ordered. The order shall be
effective upon service or at any other time designated by the bureau.
The bureau may relieve a party from an order of default if the party
applies for relief within 15 days after the service of an order of
default and establishes good cause for relief. An application for
relief from default shall not stay the effective date of the order
unless expressly provided by the bureau.
(g) (1) At any time before a matter is submitted for decision, the
bureau may amend the notice provided pursuant to subdivision (a) to
set forth any further grounds for the originally noticed
administrative action or any additional administrative action and the
grounds therefor. The statement of the further grounds for the
originally noticed administrative action, or of the grounds for any
additional administrative action, shall be made with sufficient
particularity to give notice of the transactions, occurrences,
violations, or other matters on which the action or additional action
is based. The amended notice shall be served on all parties. All
parties affected by the amended notice shall be given reasonable
opportunity to respond to the amended notice as provided in this
section.
(2) The bureau may amend a notice provided pursuant to subdivision
(b) after a case is submitted for decision. The bureau shall serve
each party with notice of the intended amendment, and shall provide
the party with an opportunity to show that the party will be
prejudiced by the amendment unless the case is reopened to permit the
party to introduce additional evidence. If prejudice is shown, the
bureau shall reopen the case to permit the introduction of additional
evidence.
(h) (1) Within 30 days after the conclusion of a hearing, or at
another time established by the bureau, a hearing officer shall
submit a written statement of decision setting forth a recommendation
for a final decision and explaining the factual and legal basis for
the decision as to each of the grounds for the administrative action
set forth in the notice or amended notice. The bureau shall serve the
hearing officer's statement of decision on each party and its
counsel within 10 days of its submission by the hearing officer.
(2) The director shall make the final decision, which shall be
based exclusively on evidence introduced at the hearing. The final
decision shall be supported by substantial evidence in the record.
The director also shall issue a statement of decision explaining the
factual and legal basis for the final decision as to each of the
grounds for the administrative action set forth in the notice or
amended notice. The director shall issue an order based on its
decision, and that order shall be effective upon service or at any
other time designated by the director. The director, or his or her
agent, shall serve a copy of the final decision and order, within 10
days of their issuance, on each party and its counsel.
(3) The bureau shall serve a certified copy of the complete record
of the hearing, or any part thereof designated by a party, within 30
days after receiving the party's written request and payment of the
cost of preparing the requested portions of the record. The complete
record shall include all notices and orders issued by the bureau, a
transcript of the hearing, the exhibits admitted or rejected, the
written evidence and any other papers in the case, the hearing
officer's statement of decision, and the final decision and order.
(i) The bureau shall serve all notices and other documents that
are required to be served by this section on each party by personal
delivery, by certified mail, return receipt requested, or by other
means designated by the bureau.
(j) (1) A party aggrieved by the director's final decision and
order may seek judicial review by filing a petition for a writ of
mandate, pursuant to Section 1085 of the Code of Civil Procedure,
within 30 days of the issuance of the final decision and order. If
review is not sought within that period, the party's right to review
shall be deemed waived.
(2) An aggrieved party shall present the complete record of the
hearing or all portions of the record necessary for the court's
review of the director's final decision and order. The court shall
deny the petition for a writ of mandate if the record submitted by
the party is incomplete. The court may not consider a matter not
contained in the record. The director's findings of fact and legal
conclusions supporting the final decision shall be conclusive if
supported by substantial evidence on the record considered as a
whole.
(3) A final order may not be stayed or enjoined during review
except upon the court's grant of an order on a party's application
after due notice to the director and the Attorney General. The order
shall be granted only if the party establishes the substantial
likelihood that it will prevail on the merits and posts a bond
sufficient to protect fully the interests of the students, the
bureau, and the fund from any loss.
(k) The bureau may adopt regulations establishing alternative
means of providing notice and an opportunity to be heard in
circumstances in which a full hearing is not required by law.
(l) For the purposes of this section, "good cause" shall require
sufficient ground or reason for the determination to be made by the
bureau.
Article 10. Fees, Costs, and Regulatory Structure
95040. The provisions of this article shall apply to all
institutions subject to this chapter and, notwithstanding any other
provision of this chapter, to all institutions that are exempt under
subparagraphs (A) and (B) of paragraph (1) of subdivision (b) of
Section 94841.
95041. (a) There is in the State Treasury the Private
Postsecondary Education Administration Fund, which is continued in
existence as the Private Postsecondary Education Administration Fund.
All fees collected pursuant to this section shall be credited to
this fund along with any interest on the money, for the
administration of this chapter. If the Legislature makes an
appropriation for the support of the bureau in the Budget Act of any
fiscal year, the amount for the support of the bureau expended from
the fund during the fiscal year shall not exceed the amount
appropriated by the Budget Act, unless that amount is modified in
accordance with the Budget Act.
(b) It is the intent of the Legislature that the Private
Postsecondary and Vocational Education Administration Fund be
administered, and that fees be established and collected, in a manner
that assures full and effective implementation of this chapter.
95041.5. The bureau may, by regulation, adjust the fees
established by this article. These fees shall be adjusted
periodically by regulation as necessary to allow the bureau to fully
and effectively implement this chapter.
95042. The initial application fees prescribed by this section
shall be the following:
(a) For a new degree-granting institution that is not accredited
by a state recognized accrediting agency, five thousand dollars
($5,000).
(b) For a new branch of a degree-granting institution that is not
accredited by a state recognized accrediting agency, three thousand
dollars ($3,000).
(c) For a new nondegree-granting institution that is not
accredited by a state recognized accrediting agency, ____ dollars
($____).
(d) For a new branch of a nondegree-granting institution that is
not accredited by a state recognized accrediting agency, ____ dollars
($____).
95043. The renewal fees prescribed by this section shall be the
following:
(a) For the main campus of a degree-granting institution that is
accredited by a state recognized accrediting agency, _____ dollars ($
_____).
(b) For a branch of a degree-granting institution that is
accredited by a state recognized accrediting agency, _____ dollars
($_____).
(c) For the main campus of a degree-granting institution that is
not accredited by a state recognized accrediting agency, _____
dollars ($____).
(d) For a branch of a degree-granting institution that is not
accredited by a state recognized accrediting agency, _____ dollars
($____).
(e) For the main campus of a nondegree-granting institution that
is accredited by a state recognized accrediting agency, ___ dollars
($___).
(f) For a branch of a nondegree-granting institution that is
accredited by a state approved accrediting agency, ___ dollars
($____).
(g) For the main campus of a nondegree-granting institution that
is not accredited by a state recognized accrediting agency, ___
dollars ($____).
(h) For a branch of a nondegree-granting institution that is not
accredited by a state recognized accrediting agency, ____ dollars
($____).
95044. The annual fees prescribed by this section shall be the
following:
(a) For degree- and nondegree-granting institutions with annual
revenues less than one hundred thousand dollars ($100,000), ____
dollars ($____).
(b) For degree- and nondegree-granting institutions with revenues
from one hundred thousand dollars ($100,000) to four hundred
ninety-nine thousand nine hundred ninety-nine dollars ($499,999),
inclusive, five thousand dollars ($5,000).
(c) For degree- and nondegree-granting institutions with revenues
from five hundred thousand ($500,000) to nine hundred ninety-nine
thousand nine hundred ninety-nine dollars ($999,999), inclusive, is
____ dollars ($____).
(d) For degree- and nondegree-granting institutions with revenues
from one million dollars ($1,000,000) to nine million nine hundred
ninety-nine thousand nine hundred ninety-nine dollars ($9,999,999),
inclusive, ____ dollars ($____).
(e) For degree- and nondegree-granting institutions with revenues
from ten million dollars ($10,000,000) to nineteen million nine
hundred ninety-nine thousand nine hundred ninety-nine dollars
($19,999,999), inclusive, ____ dollars ($____).
(f) For degree- and nondegree-granting institutions with revenues
from twenty million dollars ($20,000,000) to twenty nine million nine
hundred ninety-nine thousand nine hundred ninety-nine dollars
($29,999,999), inclusive, ____ dollars ($____).
(g) For degree- and nondegree-granting institutions with revenues
greater than twenty-nine million nine hundred ninety-nine thousand
nine hundred ninety-nine dollars ($29,999,999), ____ dollars ($____).
95044.5. The fees for registered programs prescribed by this
section shall be the following:
(a) For the initial application fee, ___ dollars ($___).
(b) For the renewal fee, ___ dollars ($___).
(c) For the annual fee, ___ dollars ($___).
95045. The application fee for an agency authorization is ____
dollars ($____).
95045.5. Notwithstanding paragraph (4) of subdivision (a) of
Section 94841, there is a fee for an institution claiming an
exemption under that section. The fee for a religious institution
exemption under paragraph (4) of subdivision (a) of Section 94841 is
___ dollars ($___).
95046. (a) A fee not paid within 30 calendar days of the due date
for payment of the fee is subject to a 25 percent late payment
penalty fee.
(b) A fee not paid within 90 calendar days of the due date for
payment of the fee is subject to a 35 percent late payment penalty
fee.
95046.5. Any institution more than 30 days delinquent in the
payment of any fee or order for the recovery of costs and expenses
under subdivisions (c) and (d) of Section 95042 may be assessed a
penalty fee by the bureau.
95047. If the bureau determines after an investigation that an
institution has violated this chapter, the bureau may order the
institution to pay the costs and expenses incurred in connection with
the investigation and any civil or administrative proceeding
involving the violation that was investigated, including charges made
by the Attorney General for his or her services, and any expenses
incurred by a district attorney. Before any order for the payment of
costs and expenses is made under this section, the bureau shall
provide the institution with written notice, including notice of the
institution's right to request a hearing within 15 days of service of
the notice. If a hearing is not timely requested, the bureau may
order payment. If a hearing is requested, the bureau shall comply
with Article 9 (commencing with Section 95030). Within 30 days after
the effective date of the order, the bureau may enforce the order as
if it were a money judgment pursuant to Title 9 (commencing with
Section 680.10) of Part 2 of the Code of Civil Procedure.
Alternatively, the bureau may seek the costs and expenses allowed
under this section in a civil proceeding. An institution shall not be
required to pay the same costs and expenses incurred in connection
with the investigation and any civil or administrative proceeding to
more than one investigating agency.
95047.5. The bureau shall establish an annual fee for
institutions that are exempt from this chapter under subparagraphs
(A) and (B) of paragraph (1) of subdivision (b) of Section 94841. The
fee shall be commensurate with the oversight responsibilities of the
bureau for this group of institutions.
Article 11. Transition
95050. (a) An institution that had a valid approval to operate on
June 30, 2007, issued by the Bureau for Private Postsecondary and
Vocational Education pursuant to Chapter 7 (commencing with Section
94700) of Part 59 of Division 10 of Title 3, as it existed on June
30, 2007, which was not revoked, shall maintain that approval under
this chapter. For the purposes of this chapter, the approval shall be
valid until two calendar years after the expiration date of the
approval, as it existed on June 30, 2007.
(b) Applications for reapproval that had been pending action
before the Bureau for Private Postsecondary and Vocational Education
on June 30, 2007, shall be deemed processed as follows:
(1) Applications received prior to January 1, 2006, shall be
granted a reapproval until 2009 to coincide with the anniversary date
of the current approval.
(2) Applications received after January 1, 2006, shall be granted
a reapproval until 2010 to coincide with the anniversary date of the
current approval.
95051. (a) Each regulation in Division 7.5 (commencing with
Section 70000) of Title 5 of the California Code of Regulations in
effect on June 30, 2007, shall be in full force and effect on and
after January 1, 2008, to the extent the regulation is consistent
with the relevant provisions in this chapter.
(b) The bureau may, by emergency regulation, designate which
existing regulations are consistent with this chapter and which are
not and may replace inconsistent regulations. The bureau may adopt
emergency regulations, as required, to allow for the immediate
implementation of this chapter as this chapter succeeds the Private
Postsecondary and Vocational Education Reform Act of 1989 ( former
Chapter 7 (commencing with Section 94700), as it existed on June 30,
2007).
95052. The bureau shall succeed to any and all rights and claims
of the former Bureau for Private Postsecondary and Vocational
Education and that may have been asserted in a judicial or
administrative action pending on July 1, 2007, and shall take any
action reasonably necessary to assert and realize those rights and
claims in its own name. The functions and responsibilities of the
former Bureau for Private Postsecondary and Vocational Education for
the administration of former Chapter 7 (commencing with Section
94700) on June 30, 2007, are transferred to the bureau, effective
July 1, 2007, as provided by this chapter.
95053. The bureau shall have possession and control of all
records, papers, offices, equipment, supplies, or other property,
real or personal, held for the benefit or use by the former Bureau
for Private Postsecondary and Vocational Education in the performance
of the duties, powers, purposes, responsibilities, and jurisdictions
that are vested in the bureau.
95053.5. Notwithstanding any other provision of law:
(a) Each matter submitted to the Bureau for Private Postsecondary
and Vocational Education prior to July 1, 2007, shall be deemed to
remain pending before the bureau irrespective of any applicable
deadlines. With respect to any deadline applicable to a pending
matter, no time shall be deemed to have elapsed from July 1, 2007,
through December 31, 2007, inclusive.
(1) For the purposes of this subdivision, "matter" includes, but
is not necessarily limited to, an appeal, a complaint, an evaluation,
a hearing, or an investigation.
(2) For the purposes of this subdivision, "matter" does not
include a Student Tuition Recovery Fund Claim. Nothing in this
paragraph shall be construed to prevent the payment of existing
Student Tuition Recovery Fund claims that have been filed with, and
approved by, the Bureau for Private Postsecondary and Vocational
Education as of June 30, 2007.
(b) Student complaints received from July 1, 2007, through
December 31, 2007, inclusive, continue to be duly recorded and, to
the extent practicable, investigated, so that no Californian is
harmed by the delay in the provision of full services.
(c) Any institution, program, or course of study that is approved
by the bureau or authorized pursuant to Section 94905, as it read on
June 30, 2007, as of the close of business on June 30, 2007, shall be
deemed to be approved as of February 1, 2008, irrespective of any
applicable conditions, deadlines, or additional requirements. With
respect to any deadline applicable to the approval, renewal of
approval, or conditional approval of an institution, program, or
course of study, no time shall be deemed to have elapsed between July
1, 2007, and January 31, 2008, inclusive.
95054. (a) Notwithstanding any exemption from this chapter under
Article 3 (commencing with Section 94840) or any other provision of
law, the rights and obligations established by the Private
Postsecondary and Vocational Education Reform Act of 1989 on or
before June 30, 2007, shall be determined by the law in effect on or
before June 30, 2007, and any claim or cause of action in any manner
based on the act that arose on or before June 30, 2007, whether or
not reduced to a final judgment, shall be preserved, and any remedy
that was or could have been ordered to redress a violation of the act
on or before June 30, 2007, may be ordered or maintained thereafter.
(b) The rights, obligations, claims, causes of action, and
remedies described in subdivision (a) shall remain subject to the
provisions of the Private Postsecondary and Vocational Education
Reform Act of 1989 in effect on or before June 30, 2007,
notwithstanding the inoperative status or repeal of the Private
Postsecondary and Vocational Education Reform Act of 1989 on or after
July 1, 2007.
95055. A Student Tuition Recovery Fund claim filed with the
Bureau for Private Postsecondary and Vocational Education prior to
July 1, 2007, or the department prior to January 1, 2008, but not
paid by the department between July 1, 2007, and January 31, 2008,
inclusive, shall be deemed pending before the bureau on January 1,
2008.
Article 12. Severability and Construction
95060. The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
95061. This chapter shall be liberally construed to effectuate
its intent and achieve its purposes.
Article 13. Repeal
95070. This chapter shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
94700. This chapter shall be known and may be cited as the
California Private Postsecondary Education Act of 2007. Whenever a
reference is made to the Private Postsecondary Education and Student
Protection Act, the former Private Postsecondary and Vocational
Education Reform Act of 1989, or the former Chapter 7 (commencing
with Section 94700) of Part 59 of Division 10 of Title 3 of the
Education Code, by the provisions of any statute or regulation,
unless the context requires otherwise, it is to be construed as
referring to the provisions of
this chapter.
94701. The bureau is subject to periodic and ongoing review by
the Legislature.
94702. Unless the context requires otherwise, the definitions set
forth in Article 3 (commencing with Section 94840) govern the
construction of this chapter.
94703. It is the intent and purpose of this chapter to protect
students, reputable institutions, the public, and the economy of the
state; ensure appropriate state control of business and operational
standards; ensure institutional stability; ensure minimum standards
for educational quality, including through accountability for course
completion and student employment in occupations or job titles to
which training is represented to lead; prohibit various
misrepresentations, including misrepresentations related to the
quality of education, the availability and quality of equipment and
materials, the transferability of credits, and employment and salary
opportunities; require full disclosure; and protect the citizens of
California against fraud, misrepresentation, or other practices that
may lead to an improper loss of funds paid for educational costs,
whether financed through personal resources, state and federal
student financial aid, or private loans. It is also the intent and
purpose of this article to ensure that the cost to taxpayers of
government loans and grants for instruction is commensurate with the
benefits obtained by students and flowing to the state's economy.
94704. There is a Bureau for Private Postsecondary Education in
the Department of Consumer Affairs. The bureau has the responsibility
for approving and regulating private postsecondary educational
institutions and programs. The bureau shall have, as its objective,
the development of a strong, vigorous, and widely respected sector of
private postsecondary education that protects the interests of
students and the public and serves the interests of the economy of
California.
94705. Protection of the public shall be the highest priority for
the bureau in exercising its approval, regulatory, and disciplinary
functions. Whenever the protection of the public is inconsistent with
other interests sought to be promoted, the protection of the public
shall be paramount.
94706. (a) The duty of administering and enforcing this chapter
is vested in the Director of Consumer Affairs, who may assign and
delegate those duties to a bureau chief, subject to the other
provisions of this section.
(b) Every power granted to, or duty imposed upon, the bureau under
this chapter may be exercised or performed in the name of the
bureau, subject to any conditions and limitations the director may
prescribe. The bureau chief may redelegate any of those powers or
duties to his or her designee. The bureau chief shall be appointed by
the Governor and confirmed by the Senate, and is exempt from the
State Civil Service Act (Part 2 (commencing with Section 18500) of
Division 5 of Title 2 of the Government Code).
(c) The director, in accordance with the State Civil Service Act,
may appoint and fix the compensation of clerical, inspection,
investigation, evaluation, and auditing personnel, as may be
necessary to carry out this chapter.
94707. The proceedings under this chapter shall be conducted by
the bureau in accordance with the provisions of this chapter or
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code at the bureau's option. To the extent
of any conflict between any of the provisions of this chapter and
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, this chapter shall prevail.
94708. (a) The director shall appoint an advisory committee of no
more than 15 members, who shall include, among other parties,
representatives of law enforcement or consumer protection
organizations, representatives of institutions, student advocates,
employers who hire persons in occupations or job titles which require
vocational training, and persons who have expertise in matters
relevant to the duties of the bureau.
(b) The advisory committee shall meet no less than quarterly.
(c) The ombudsperson shall serve as an ex officio member of the
committee.
(d) Duly appointed members shall be eligible for reimbursement of
expenses associated with attendance at meetings and other functions
as assigned by the bureau, subject to the approval of the bureau.
(e) At its inception, the priorities of the advisory committee
shall be to consider issues as identified in this chapter, including,
but not necessarily limited to, providing advice to the bureau in
its obligation to promulgate regulations for purposes of
administering this chapter.
(f) The bureau chief, the ombudsperson, and the chair may each
place items on the agenda for the consideration of the advisory
committee.
94709. The bureau has the following functions and
responsibilities:
(a) The establishment of policies for the administration of this
chapter.
(b) The enforcement of minimum criteria for the approval of
institutions to operate in this state and award degrees and diplomas,
and for the approval of institutions and programs that meet those
criteria.
(c) The development and maintenance of a public Web site that
shall include sufficient, clearly accessible and searchable
information regarding approved and unapproved private postsecondary
institutions in California, and which shall provide information for
prospective students so they may make informed choices regarding
their educational opportunities, information for current students so
they may understand their rights and responsibilities, and
information for policymakers so they may undertake studies related to
postsecondary education.
(d) Providing outreach to prospective and current private
postsecondary education students and high school students, to provide
them with information on how best to select postsecondary
institutions, how to enter into contracts and student enrollment
agreements, how to protect themselves in the postsecondary education
marketplace, and how to contact the bureau for assistance if problems
arise. The bureau may accomplish the purposes of this section in
cooperation with the department.
(e) Establishing a regular inspection program, which may include
announced and unannounced inspections of a random sample of
educational programs and institutions each year. The bureau shall
conduct announced and unannounced inspections based upon information
in its possession that indicates to the bureau that these inspections
may be warranted.
(f) Reviewing and investigating all institutions, programs, and
courses of instruction approved under this chapter. Consideration in
the scheduling of reviews and investigations shall be afforded to
student complaints and information collected by the Attorney General,
Student Aid Commission, any bureau within the department, or any
other federal, state, or local agency.
(g) If the bureau believes that there may have been a violation of
the standards prescribed by this chapter by an institution, the
bureau shall conduct an investigation of the institution. Within a
reasonable period of time after the commencement of the
investigation, the bureau shall conclude the investigation. If the
bureau determines, after completing an investigation, that an
institution has violated this chapter or any regulations adopted by
the bureau, the bureau shall take action against the institution
pursuant to Article 8 (commencing with Section 95000), as it deems
appropriate.
(h) Objective and regular assessment of the cost of meeting its
statutory obligations, including the staffing necessary to meet those
obligations, determination whether the prevailing fee and cost
structure allows for collection of revenue sufficient to support the
necessary costs, and report of that information to the Legislature
and Governor through the annual state budget process, and regular
adjustments to the fee and cost structure, as permitted in this
chapter, sufficient to ensure that the bureau accomplishes its
statutory obligations.
(i) The receipt, review, and investigation of complaints received
from students and the public, and complaints transmitted by other
federal, state, or local agencies, including a timely response and,
where appropriate, initiation of investigation.
(j) Development and maintenance of a management information system
sufficient to meet the bureau's responsibilities, including, but not
necessarily limited to, a public Web site as provided in this
article, a database of institutional and student characteristics
developed in consultation with the California Postsecondary Education
Commission and the USDE, and state-of-the-art functionalities to
provide efficient and effective on-line administration of the
provisions of this chapter.
(k) The establishment of a training program, including, but not
necessarily limited to, information and support necessary for
institutions to undertake corrective action to comply with this
chapter, information and support to assist in the successful
development of a new institution, and information and support to
assist existing institutions in development that is necessary for
them to become eligible for participation in student financial aid
programs under Title IV of the federal Higher Education Act of 1965.
(l) Monitoring unaccredited, unapproved, distance education
programs and aggressively pursuing enforcement of current laws in
this regard, and the review, in consultation with its advisory
committee, of distance education statutes in California and other
selected states, to determine the adequacy of those statutes to
protect against potentially fraudulent, unaccredited, and unapproved
certificates and degrees, including the protection of employers who
rely upon those degrees, and the development of recommendations to
the Legislature and Governor regarding distance education in an
annual report as required under this article.
(m) Other duties and functions as the bureau deems necessary to
accomplish the provisions and purposes of this chapter.
94710. For the purposes of administration and enforcement of this
chapter, the department, the bureau, and the director and officers
and employees of the department and the bureau, shall have all the
powers and authority granted under this chapter and under Division 1
(commencing with Section 100) and Division 1.5 (commencing with
Section 475) of the Business and Professions Code. In addition to
satisfying the approval, compliance, and enforcement provisions of
this chapter, the bureau shall also comply with and exercise all
authority granted by Division 1 (commencing with Section 100) and
Division 1.5 (commencing with Section 475) of the Business and
Professions Code.
94711. The bureau shall, as it deems necessary, impanel qualified
visiting committees to assist the bureau in the evaluation of an
application or institutions pursuant to this chapter. The members of
the qualified visiting committee shall receive no compensation but
shall be reimbursed for their actual expenses for attendance at
official meetings and actual expenses when on official bureau
business. The members of the qualified visiting committees shall
serve at no expense to the state. The actual travel and per diem
expenses incurred by each member of a qualified visiting committee
shall be reimbursed by the institution that is the subject of
inspection or investigation.
94712. (a) A person serving on a qualified visiting committee,
pursuant to this chapter, and who provides information to the bureau
or its staff in the course and scope of evaluating any institution
subject to this chapter or who testifies at any administrative
hearing arising under this chapter, is entitled to a defense by, and
indemnification from, the bureau to any action arising out of
information or testimony to the bureau which that person would have
if he or she were a public employee.
(b) A defense by, or indemnification from, the bureau, as
specified in subdivision (a) shall be solely with respect to that
claim or action pursuant to Article 4 (commencing with Section 825)
of Chapter 1 of Part 2 of, and Part 7 (commencing with Section 995)
of, Division 3.6 of Title 1 of the Government Code.
94713. The bureau may adopt and enforce regulations that are
necessary, appropriate, or useful to interpret and implement this
chapter pursuant to Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. The bureau
may adopt emergency regulations that shall become effective
immediately, subject to Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code.
94714. The bureau shall, in consultation and coordination with
the director and the Attorney General, develop and implement an
enforcement program to carry out the provisions of this chapter.
94715. The bureau shall make available to members of the public,
upon request, the nature and disposition of all complaints on file
with the bureau against an institution.
94716. The bureau shall adopt a strategic plan for the support of
the California economy by December 31, 2009, and update the plan
periodically as needed. The plan shall be developed in consultation
with appropriate stakeholders to ensure that institutions are
provided training and support to assist in producing well-trained
graduates and that a process exists by which new and continuing
institutions can survey and assess the identified current and
anticipated future needs of the California economy in a manner that
provides for more informed choices regarding program initiation or
closure.
94717. The bureau shall adopt, and periodically review and
update, internal quality review and audit procedures to ensure that
processes are in place to promote and achieve full compliance with
this chapter.
94718. (a) Beginning on January 1, 2011, and each year
thereafter, the bureau shall provide an annual report to the
Legislature and Governor on the bureau's activities in implementing
this chapter, data summarizing private postsecondary education in
California, and its recommendations for amendments to this chapter,
as it deems necessary.
(b) Between January 1, 2011, and December 31, 2011, the bureau
shall employ an independent monitor to undertake a comprehensive
review of its policies and operations. The bureau shall forward the
results of that review to the Legislature and the Governor. The
independent monitor shall be selected by the board in consultation
with the Attorney General.
(c) The bureau shall include, in its December 31, 2012, regular
annual report to the Legislature and the Governor, information on the
bureau's activities to improve and correct any deficiencies noted by
the independent monitor and shall, where appropriate, adopt
meaningful, measurable, and manageable performance standards as one
mechanism to ensure improvement where there are deficiencies, and
shall include information pertaining to those performance standards
in this report to the Legislature.
(d) Between January 1, 2013, and December 31, 2013, the bureau
shall employ an independent monitor to undertake a followup review of
its policies and operations, and shall forward the results of that
review to the Legislature and the Governor. The independent monitor
shall be selected by the board in consultation with the Attorney
General.
Article 1.5. Enforcement Advisory Board
94730. There is hereby created within the bureau an Enforcement
Advisory Board.
94731. The board shall consist of four public individuals: two
appointed by the Governor and one each appointed by the Senate
Committee on Rules and the Speaker of the Assembly. Each member of
the board shall be appointed for a term expiring on January 1, 2011.
A vacancy on the board occurring prior to January 1, 2011, shall be
filled by the appropriate appointing authority for the remainder of
the unexpired term.
94732. The appointing authority may remove any member of the
board for causes specified in Section 106 of the Business and
Professions Code.
94733. Protection of the public shall be the highest priority for
the board in exercising its functions. Whenever the protection of
the public is inconsistent with other interests sought to be
promoted, the protection of the public shall be paramount.
94734. A majority of the appointed members of the board shall
constitute a quorum for the transaction of business. The affirmative
vote of a majority of board members is necessary to render a decision
or pass a motion.
94735. The board members shall elect one of their number as the
chair and another member as the vice chair. The chair and vice chair
shall be elected at the first meeting of each calendar year or when a
vacancy exists.
94736. Each board member shall receive a per diem and necessary
travel expenses as provided in Section 103 of the Business and
Professions Code.
94737. The board is subject to all of the provisions of Division
1 (commencing with Section 100) of the Business and Professions Code,
and for the purposes of that division shall be deemed to be a board.
Except for the purposes of Section 102 of the Business and
Professions Code, the board shall not be deemed to be a board created
by an initiative act.
94738. The board shall meet at least quarterly or more often as
the board deems necessary.
94739. The bureau shall provide staff and administrative support
for the board as the bureau and the board deem necessary.
94740. The board shall be responsible for activities including,
but not necessarily limited to, all of the following:
(a) Providing advice and assistance in the bureau's initial
development and implementation of the enforcement program under
Article 8 (commencing with Section 95000).
(b) Appointing a full-time permanent ombudsperson to the bureau
and establishing the duties and responsibilities of the ombudsperson.
(c) Reviewing and commenting on bureau reports being submitted to
the Governor and the Legislature.
(d) Receiving reports from the ombudsperson.
(e) Making reports, as the board deems necessary, to the Governor
and the Legislature on any deficiencies in this chapter or the
administration and implementation of this chapter. These reports
shall include, but are not necessarily limited to, a final report to
be submitted no later than December 31, 2010.
94741. This article shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date.
Article 1.7. Ombudsperson
94750. There is within the bureau a position to be known as
ombudsperson.
94751. The ombudsperson shall be a person with sufficient
knowledge of private postsecondary education.
94752. The ombudsperson shall be appointed by and report to the
Enforcement Advisory Board.
94753. Pursuant to subdivision (c) of Section 4 of Article VII of
the California Constitution, the ombudsperson shall be an employee
exempt from civil service.
94754. The bureau chief shall establish the compensation of the
ombudsperson.
94755. (a) The board, in consultation with the director and
bureau chief, shall establish the initial duty statement of the
ombudsperson, which may, from time to time, be amended by the board.
(b) The duties of the ombudsperson shall include, but not
necessarily be limited to, the following:
(1) Working as a liaison between students and the bureau.
(2) Working as a liaison between institutions and the bureau.
(3) Reviewing and commenting on proposed regulations before or
during the public comment period.
(4) Reviewing and commenting on bureau reports prior to the
reports being submitted to the Governor and the Legislature.
(5) Providing a quarterly public report to the board on
enforcement activities of the bureau.
(6) Making recommendations to the board for selection of an
independent monitor under Section 94718.
Article 2. Definitions
94760. "Academic year" generally means a period including a
minimum of 30 weeks of instruction, beginning in the fall term of a
given year and ending at the end of the summer term of the succeeding
year. Some private postsecondary institutions may adopt a different
definition, such as the calendar year, for their academic term, to
accommodate unique or nontraditional conditions such as continuous
enrollment or shorter or longer term sessions.
94761. "Accredited" means that an institution has been recognized
as meeting the standards established by an accrediting agency
recognized by the United States Department of Education, or the
Committee of Bar Examiners of the State Bar of California. It does
not include an institution that has applied for accreditation, is
identified by an accrediting association as a candidate for
accreditation, or has provisional accreditation.
94762. "Agency" means a person or business entity, regardless of
the form of organization, that employs, or in any manner contracts
with, one or more agents. "Agency" does not include an institution.
94763. "Agency authorization" means a written document issued by
the bureau authorizing a business entity or an institution to engage
in the recruitment of students for enrollment in private
postsecondary educational institutions approved under this chapter.
94764. "Agent" means a person who, at a place away from an
institution's premises or site of instruction, but within the United
States, for consideration, solicits, promotes, advertises, offers, or
attempts to secure enrollment for that institution, refers any
person to that institution, either for enrollment or to receive a
solicitation for enrollment, or accepts application fees or
admissions fees for education in that institution. An administrator
or faculty member who makes informational public appearances, but
whose primary task does not include service as a paid recruiter, is
not an agent. A publisher of a directory that contains general
information on an institution and its offerings and who does not
otherwise engage in any of the activities described in this section
is not an agent.
94765. "Annual report" means the report required to be filed
pursuant to Section 94910.
94766. "Applicant" means a person or entity that has submitted an
application but whose evaluation has not been completed by the
bureau. An applicant shall not enroll students or offer educational
services until the bureau has made a determination regarding the
application.
94767. "Approval," "approval to operate," "approved to operate,"
or "institutional approval" means that the bureau has determined,
pursuant to Article 5 (commencing with Section 94890) or Article 6
(commencing with Section 94960), that an institution or program meets
minimum standards established by the bureau for integrity, financial
stability, educational quality, including the offering of bona fide
instruction by qualified faculty, and assessment of students'
achievement prior to, during, and at the end of its program, as
appropriate.
94768. "Avocational education" means education offered
only for purposes of personal entertainment, personal pleasure, or
enjoyment, such as a hobby. Education that directly leads to an
objective other than personal entertainment, personal pleasure, or
enjoyment is not "education solely avocational in nature."
94769. "Branch" means a site other than the main location of an
institution or a satellite. Only educational services approved at the
main location may be offered at the branch. The name of the branch
location shall be identical to that of the main location approved by
the bureau.
94770. "Bureau" means the Bureau for Private Postsecondary
Education in the Department of Consumer Affairs, established pursuant
to Section 94704.
94770.5. "Bureau chief" means the Chief of the Bureau for Private
Postsecondary Education described in Section 94706.
94771. "Business day," when referring to a student's right to
cancel an agreement with an institution, means the following:
(a) Except as provided in subdivision (b), a day on which a
student is scheduled to attend a class session.
(b) For home study or correspondence courses, any calendar day
except Saturday, Sunday, or any holiday enumerated in Section 6700 of
the Government Code.
94772. "Cancellation period" means the initial period during
which a student may cancel and receive a refund under Section 94941.
94773. "Change of location" means a move of up to 25 miles of the
location at which an institution offers any education, training, or
instruction.
94774. "Class" means a subject, such as English or mathematics,
that is taught as part of a course of instruction.
94775. "Class session" means the part of a day that an
institution conducts instruction or training in a particular class,
such as an hour of instruction in English or mathematics, offered on
a particular day of the week.
94776. "Commencement of operations" or "commence operations"
means that an institution has begun to offer instruction, training,
or education to students.
94777. "Completion of a program," "complete the program," or
"completing the program" means a student has completed all
requirements of a program and received a certificate or degree, as
applicable, for that program.
94778. (a) Except as provided in subdivision (b), "continuing
education" means instruction in any of the following circumstances:
(1) Only in a subject a licensee is required to take as a
condition of continued licensure and solely for that purpose.
(2) Only in a subject necessary to continue to practice or work in
a profession such as law or medicine, and solely for that purpose.
(3) To a person who is already in a particular profession, trade,
or job category for the sole purpose of enhancing that person's
skills or knowledge within that particular profession, trade, or job
category.
(b) "Continuing education" does not include any of the following:
(1) A vocational program.
(2) A degree program.
(3) An educational service where any part of the charge for which
is paid from the proceeds of a loan or grant subject to a
governmental student financial aid program.
94779. "Correspondence school" or "home study school" means an
institution that provides correspondence lessons for study and
completion by a student at a location separate from the institution,
including those institutions which offer that instruction by
correspondence in combination with in-residence instruction.
94780. "Course of study" means either a single course or a set of
related courses for which a student enrolls.
94781. "Default" means the failure of a borrower to make an
installment payment when due, or to meet other terms of the
promissory note under circumstances where the guarantee agency finds
it reasonable to conclude that the borrower no longer intends to
honor the obligation to repay, provided that this failure persists
for 180 days for a loan repayable in monthly installments, or 240
days for a loan repayable in less frequent installments.
94782. "Degree" means any type of degree or honorary degree or
title of any designation, mark, appellation, series of letters or
words including, but not necessarily limited to, associate, bachelor,
master, doctor, or fellow, that signifies, purports to constitute,
or is generally taken to signify, satisfactory completion of the
requirements of an academic, educational, technological, or
professional program of study beyond the secondary educational level,
or is an honorary title conferred for recognition of some
meritorious achievement.
94783. "Degree institution" means an institution that offers one
or more degree programs.
94784. "Degree program" means a program leading to a degree.
94785. "Degree title" means the designated subject area of study
that also appears on the face of the document awarded to a student
signifying the conferring of a "degree."
94786. "Diploma" means a diploma, certificate, document, or other
writing in any language, other than a degree, which signifies,
purports, or is generally taken to signify satisfactory completion of
the requirements of an academic, educational, technological, or
professional program of study beyond the secondary educational level.
94787. "Director" means the Director of Consumer Affairs.
94788. "Distance education" means education that is designed for
learners who live at a distance from the teaching institution or
education provider. It is the enrollment and study with an
educational institution that provides organized formal learning
opportunities for students. Presented in a sequential and logical
order, the instruction is offered wholly or primarily by distance
study, through any media.
94789. "Distance learning institution" means any institution that
provides lessons for study and completion by a student at a location
separate from the institution by correspondence, the Internet, or
other electronic means, including, but not necessarily limited to,
those institutions that offer that instruction in combination with
in-residence instruction.
94790. "Document or record" means a test score, grade, record of
grades, attendance record, record indicating student course
completion or employment, financial information, including any
financial report required to be filed pursuant to Section 94910,
information or records relating to the student's eligibility for
financial assistance or attendance at the institution, or any other
record or document required by this chapter or by the bureau.
94791. "Education," "educational services," or "educational
program" includes, but is not necessarily limited to, a class,
course, or program of training, instruction, or study.
94792. (a) "Employment" means a paid position in which a student
was employed for at least 60 days within the employment tracking
period, in an occupation for which the student received the
certificate or degree; the position requires education beyond the
high school level; the routine work in the position requires
utilization of the skills and knowledge reasonably expected to be
imparted in a program culminating in the degree or diploma the
student received; and which is either of the following:
(1) Full-time employment for at least 32 hours per week.
(2) Part-time employment for at least 17.5 hours, but less than 32
hours, per week.
(b) Employment includes self-employment.
94793. "Employment tracking period" means the period during which
a student's employment is tracked for purposes of determining a
program's employment numbers and rate.
(a) For occupations for which the state does not require passing a
license examination, the employment tracking period is the
eight-month period after a student completes a program.
(b) For occupations for which the state requires passing an
examination, the employment tracking period is extended to include
the eight-month period after the announcement of the examination
results for the first examination available after a student completes
a program.
94794. "Enrollment" means the date on which the student signed
any agreement for education.
94795. "ESL instruction" means any educational service involving
instruction in English as a second language.
94796. "Equipment" includes all textbooks, supplies, materials,
implements, tools, machinery, computers, electronic devices, or any
other goods related to any education, training, or instruction, or an
agreement for educational services or a course of instruction.
94797. "Faculty" means an instructor or instructors within any of
the divisions or comprehensive branches of learning at an
institution. For purposes of this chapter, "faculty," "instructor,"
"professor," and "teacher" are synonymous.
94798. "Hearing" means a hearing pursuant to Article 9
(commencing with Section 95000) or other alternative adjudicative
process established by the bureau.
94799. "Institution" means a private postsecondary educational
institution, including its branch and satellite campuses, which is a
person doing business in this state that offers to provide or
provides, for a fee, tuition, or other charge, any instruction,
training, or education under any of the following circumstances:
(a) A majority of the students to whom instruction, training, or
education is provided during any 12-month period is obtained from, or
on behalf of, students who have completed or terminated their
secondary education or are beyond the age of compulsory high school
attendance.
(b) More than 50 percent of the revenue derived from providing
instruction, training, or education during any 12-month period is
obtained from, or on behalf of, students who have completed or
terminated their secondary education or are beyond the age of
compulsory high school attendance.
(c) More than 50 percent of the hours of instruction, training, or
education provided during any 12-month period is provided to
students who have completed or terminated their secondary education
or are beyond the age of compulsory high school attendance.
(d) A substantial portion, as determined by the bureau by
regulation, of the instruction, training, or education provided by
the institution is provided to students who have completed or
terminated their secondary education or are beyond the age of
compulsory high school attendance.
94800. "Instruction" includes any specific, formal arrangement by
an institution or its enrollees to participate in learning
experiences in which the institution's faculty or contracted
instructors present a planned curriculum appropriate to the enrollee'
s educational program.
94801. "License and examination preparation" means a program that
is designed to assist students to prepare for an examination for
licensure.
94802. "License," for purposes of this chapter, includes an
approval to operate, a registration, or any other authority to engage
in a business.
94803. "Licensure" includes a license, certificate, permit, or
similar credential that a person must hold to lawfully engage in an
occupation or activity.
94804. "Main location" or "main site" means an institution's
primary teaching location. If an institution operates at only one
site, that site is its main location or main site.
94805. "Nondegree institution" means an institution that
exclusively offers nondegree programs.
94806. "Nondegree program" means a program that does not lead to
a degree.
94807. "Occupational associate degree," "associate of
occupational studies," or "associate of applied science," designated
by terms including, but not necessarily limited to, associate
occupational studies (AOS), associate applied science (AAS),
associate specialist technical (AST), or associate specialist
business (ASB), means an associate degree that may be awarded to
students who complete 60 semester units or 90 quarter units in an
occupational program that provides preparation for employment in an
occupational field.
94808. "Out-of-state institution" means an institution that has
its place of instruction or its principal location outside the
boundaries of this state, that offers or conducts programs of
instruction or subjects on premises maintained by the institution
outside the boundaries of this state, that provides correspondence or
home-study lesson materials from a location outside the boundaries
of this state, that evaluates completed lesson materials or otherwise
conducts its evaluation service from a location outside the
boundaries of this state, or that otherwise offers or provides
California students with programs of instruction or subjects through
activities engaged in or conducted outside the boundaries of this
state.
94809. "Overall employment rate" means the percentage of those
students who started the program, did not cancel during the
cancellation period, and were originally scheduled at the time of
enrollment to complete the program during the applicable completion
tracking period who both completed the program within that completion
tracking period and obtained employment as defined in Section 94792.
94810. "Owner" means a person who has a legal or equitable
interest in 10 percent or more of an institution's stocks or assets.
94811. "Parent corporation" means a corporation that owns more
than 80 percent of the stock of an institution.
94812. "Performance related time periods" include all of the
following:
(a) "Cancellation period" means the initial period during which a
student may cancel and receive a refund under this chapter.
(b) "Completion tracking period" means the year during which a
student's scheduled completion and actual completion are tracked for
purposes of determining, reporting, and disclosing a school's
completion numbers and rates.
(1) Completion numbers and rates from a particular completion
tracking period are to be reported to the bureau under Section 94945
in the following year, and disclosed under subdivision (a) of Section
94893, and paragraph (10) of subdivision (a) of Section 94896
beginning as of January 1 of the second year following the completion
tracking period. Completion numbers and rates from the 2008
completion tracking period shall be reported to the bureau during
2009, and disclosed beginning January 1, 2010, unless the license
examination exception in paragraph (2) applies.
(2) If the state requires passing an examination to work in the
occupation for which a certificate or degree is awarded after
completion of a vocational program, and the examination results for
the first examination available after the end of a year period are
announced less than eight months before the end of the following
year, then the completion tracking period shall be one year earlier
so that the completion numbers and rates shall be reported to the
bureau in the second year following the completion tracking period
and disclosed under Sections 94893 and 94896 beginning as of January
1 of the third year following the completion tracking period.
Completion numbers and rates from the 2008 completion tracking period
shall be reported to the bureau in 2010, and disclosed beginning in
January 2011.
(c) "Employment tracking period" means the period during which a
student's employment is tracked for purposes of determining a program'
s employment numbers and rates.
(1) For occupations for which the state does not require passing a
license examination, the employment tracking period is the
eight-month period after a student completes a program.
(2) For occupations for which the state requires passing an
examination, the employment tracking period is extended to include
the eight-month period after the announcement of the examination
results for the first examination available after a student completes
a program.
94813. "Person" means a natural person or a business entity,
regardless of the form or organization.
94814. "Person in control" means a person who has sufficient
capacity, directly or indirectly, to direct or influence the
management, policies, or conduct of an institution so that the person
can cause or prevent a violation of this chapter. There is a
rebuttable presumption affecting the burden of proof that an owner,
director, or officer of an institution is a person in control.
94815. "Program" or "program of instruction" means a program of
training, set of related courses, or education for which a student
enrolls.
94816. "Registered," "registered institution," or "registered
educational service" means a person that offers an educational
service and is registered to operate under Article 5 (commencing with
Section 94890).
94817. "Reporting period" means an institution's fiscal year or a
year period designated by the bureau to be covered in an institution'
s annual report.
94818. "Representative" means an employee, an agent as defined in
Section 2295 of the Civil Code, an agency subject to Section 94914,
or any person who, for compensation, does either of the following:
(a) Solicits, promotes, advertises, or refers or recruits students
or prospective students for an institution.
(b) Is involved with enrollment, admissions, student attendance,
administration, financial aid, instruction, or job placement
assistance on behalf of an institution.
94819. "Satellite" means an auxiliary classroom or a teaching
site separate from an institution's main location and without
administrative services provided to students.
94820. "Satisfactory academic progress" means that a student is
on track to complete a program within 150 percent of the published
length of the program, measured in academic years, terms, credit
hours, clock hours, or other form.
94821. "Scheduled to complete" means the date the institution
determined, when the student enrolled, that the student was scheduled
to complete the program.
94822. "Vocational program" means an educational program having
all of the following characteristics:
(a) The educational program consists of a job-training program or
other instruction, training, or education that the institution
identifies as, or represents as a program that will lead to, fit, or
prepare students for employment in any particular occupation.
(b) The program is offered to students who do not possess a
bachelor's or a graduate degree in the field of training.
(c) Students who complete all or a portion of the program are
awarded a certificate or an associate degree, including, but not
necessarily limited to, an AOS, AAS, or AA degree.
94823. "Site" means a main location, branch, or satellite campus.
94824. "To offer" includes offering, advertising, publicizing,
soliciting, encouraging, or offering to a person, directly or
indirectly, in any form, to perform an act as described.
94825. "To operate" an educational institution, or like term,
includes establishing, keeping, maintaining, or operating a facility
or location in this state where, or from or through which,
educational services are offered or educational degrees or diplomas
are offered or granted.
94826. "Total charge" means the total charge for a course of
instruction or other education, instruction, or training, including
the charge for tuition, equipment, finance charges, and all other
fees, charges, costs, and expenses.
94827. "USDE" means the United States Department of Education.
94828. "Year" means a calendar year.
Article 3. Exemptions
94840. This chapter regulates education in California provided by
private institutions offering instruction primarily to persons who
have obtained a high school diploma or its equivalent, or primarily
to persons who are beyond the age of compulsory school attendance.
94841. (a) The following private educational activities and
private institutions are exempt from the requirements of this
chapter:
(1) An institution offering education solely as avocational or
recreational in nature, and offering this education exclusively.
(2) An institution offering education sponsored by a bona fide
trade, business, professional, or fraternal organization, solely for
that organization's membership.
(3) An institution offering continuing education where 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, trade, or job category.
(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, trade, or job category.
(4) A bona fide trade, business, or professional organization.
(5) (A) A nonprofit institution owned, controlled, and operated
and maintained by a bona fide church, religious denomination, or
religious organization composed of multidenominational members of the
same well-recognized religion, 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:
(i) The education is limited to instruction in the principles of
that church, religious denomination, or religious organization, or to
courses offered pursuant to Section 2789 of the Business and
Professions Code.
(ii) The diploma or degree is limited to evidence of completion of
that education.
(iii) The meritorious recognition upon which any honorary degree
is conferred is limited to the principles of that church, religious
denomination, or religious organization.
(B) An institution operating under this paragraph shall offer
degrees and diplomas only in the beliefs and practices of the church,
religious denomination, or religious organization. The enactment of
this paragraph expresses the legislative intent that the state shall
not involve itself in the content of degree programs awarded by any
institution operating under this paragraph, as long as the
institution awards degrees and diplomas only in the beliefs and
practices of the church, religious denomination, or religious
organization.
(C) An institution operating under this paragraph shall not award
degrees in any area of physical science.
(D) Any degree or diploma granted in any area of study under these
provisions 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 degree's subject area.
(E) A degree awarded under this paragraph 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) The use of the degree titles "associate of arts" or "associate
of science," "bachelor of arts" or "bachelor of science," "master of
arts" or "master of science," or "doctor of philosophy" or "Ph.D."
shall only be awarded by institutions approved to operate under this
chapter.
(G) Institutions solely offering programs that have a total direct
cost of one thousand dollars ($1,000) or less. The bureau shall
annually adjust this cost threshold based upon the Consumer Price
Index, and post notification of the adjusted cost threshold on its
public Web site on or after January 1, 2009, and each year
thereafter.
(b) (1)
The following institutions are exempted from all provisions of this
chapter through December 31, 2010, except as noted in paragraphs (2)
to (8), inclusive:
(A) All private postsecondary institutions offering instruction in
California and accredited by regional accrediting bodies recognized
and approved by the United States Department of Education (USDE).
(B) Any nonprofit public benefit corporation organized pursuant to
Part 2 (commencing with Section 5110) of Division 2 of Title 1 of
the Corporations Code and not managed or administered by an entity
for profit, that meets all of the following requirements:
(i) Accredited by an accrediting agency recognized by the USDE.
(ii) Operated continuously in this state for at least 20 years.
(iii) The institution's cohort default rate on guaranteed student
loans does not exceed 15 percent for the three most recent years as
published by the USDE.
(iv) The institution submits to the bureau copies of the most
recent IRS Form 990 and the Integrated Postsecondary Education Data
System Report of the USDE and the accumulated default rate.
(v) The institution pays fees to the bureau in accordance with
Article 10 (commencing with Section 95040).
(2) The bureau shall review and continue to monitor the publicly
noticed accreditation status of each institution to determine if the
institution received a negative accreditation action at any time
between January 1, 2007, and December 31, 2010.
(3) If the bureau determines there is a publicly noticed, negative
accreditation action for an institution, it shall contact that
institution and request that the institution provide, within 10
working days, a release to its accrediting body to allow it to share
information with the bureau to make the determination required in
paragraph (4). If the institution refuses to provide such a release,
the bureau shall find that it has no recourse to make an informed
determination regarding the protection of students, and shall proceed
to take action as provided in paragraph (6).
(4) The bureau shall review and continue to monitor the student
financial aid performance status of each institution in cooperation
with the USDE to determine if the institution was placed under a
limitation, suspension, or termination by the USDE pursuant to Title
IV of the federal Higher Education Act of 1965 at any time between
January 1, 2007, and December 31, 2010.
(5) Negative accreditation actions or federal student financial
aid performance-related conditions as described in paragraph (2),
(3), or (4) shall be reviewed by the bureau to determine if those
actions or conditions relate to material issues of student protection
or educational quality and if the conditions and actions have been
resolved in a manner deemed sufficient by the bureau.
(6) If resolution has not taken place or if the resolution is not
deemed sufficient, the bureau shall undertake a more thorough review
for the purposes of determining the advisability of canceling the
exemption granted in this chapter in order to protect the education
and rights of citizens of this state.
(7) If the bureau finds existing, unresolved material concerns
related to student protections or educational quality, it shall
notify the institution that the exemption will be revoked in 90 days
and, during that time period, shall provide the institution with an
opportunity to appeal that decision to the Director of Consumer
Affairs, whose decision shall be final.
(8) If an institution becomes subject to this chapter under this
subdivision, the bureau shall, upon determination that sufficient
corrective action has been taken, restore the exemption as otherwise
provided under this article.
(c) (1) By December 31, 2009, the Legislative Analyst's Office
shall conduct a comprehensive review, and provide to the Legislature
and the Governor a report that assesses the extent to which
accreditation by accrediting bodies approved by the USDE provides
sufficient assurance that the various goals of this chapter have been
met, including, but not necessarily limited to, the degree to which
accreditation affords student protections. Based on this assessment,
the report shall include recommendations for the continuation,
elimination, or modification of the exemptions in subdivision (a).
(2) Notwithstanding any other provision of law:
(A) The Legislative Analyst's Office may, at its discretion,
contact institutions and request permission to review their
accreditation status in a manner not available to the public, in
order to conduct necessary research.
(B) Information acquired under this paragraph shall be kept
strictly confidential, and shall not be shared with any governmental
agency that has oversight or enforcement responsibilities for private
postsecondary education.
(3) The Legislative Analyst's Office is requested to work with the
bureau, the board, the Attorney General, and interested stakeholders
in the development of its report under this subdivision.
(4) Upon consultation with the Legislative Analyst's Office, the
bureau may provide funding from the Private Postsecondary Education
Administration Fund to assist the Legislative Analyst's Office in
covering the costs associated with the Legislative Analyst's Office
requirements under this section.
Article 4. Approved Institutions and Programs
94850. An institution may not provide private postsecondary
education in California unless that institution is one of the
following:
(a) Approved to operate pursuant to this article.
(b) Exempt from this chapter.
94851. An institution making application under the provisions of
this article shall be subject to fees as specified in Article 10
(commencing with Section 95040).
94852. If an institution is regulated by another state licensing
agency, the institution shall, in addition to approval as specified
in this article, obtain and retain the authorization of that agency.
94853. The following are the minimum conditions an institution
shall meet to be granted initial approval to operate pursuant to this
article:
(a) A mission statement.
(b) Development and readiness of no less than one instructional
program, pursuant to this article.
(c) Sufficient financial resources, including anticipated tuition
and fee revenue that can reasonably be expected, to operate for a
time period necessary to complete instruction in the program or
programs approved as part of an institution's initial approval to
operate, as evidenced in a financial plan and financial statements,
including demonstration of the institution's officer's, director's,
and owner's financial and fiduciary responsibility.
(d) Planned student support services and policies sufficient to
ensure minimum standards of student protection including the
following:
(1) Student financial policies, including tuition, fees, required
purchase of equipment and supplies, cancellation and refund policies,
and compliance with the requirements related to the Student Tuition
Recovery Fund.
(2) Student academic policies, including admissions, attendance,
withdrawal, leave of absence, and satisfactory academic progress.
(3) Placement, if the institution plans to conduct a program
leading to a recognized occupation and advertise placement assistance
to its students.
(e) Physical resources sufficient to provide no less than one
program, including demonstration of compliance with local, city,
county or, city and county health and safety rules and regulations.
(f) Human resources sufficient to comply with the minimum
standards of this chapter, including minimum qualifications of
principal employees that shall be sufficient to demonstrate capacity
to perform the duties and functions necessary to meet the minimum
operating standards of Article 5 (commencing with Section 94890).
(g) The planned or actual employment of no person who shall be in
a position of control, or directs the financial operations or is
responsible for the development or management of student financial
and academic policies who has been convicted of, or pled nolo
contendere or guilty to, a crime involving the acquisition, use, or
expenditure of federal or state funds, or who has been judicially or
administratively determined to have committed any violation of this
chapter or the Reform Act or of any law involving state or federal
funds.
(h) Technical resources sufficient to comply with the minimum
standards of this chapter, and where appropriate, sufficient to
support no less than one instructional program.
(i) Leadership, governance, and an administrative organization
sufficient to demonstrate capacity to plan and develop instructional
programs and comply with the minimum standards of this chapter.
(j) Compliance with local city, county, municipal, state, and
federal regulations relative to the safety and health of all persons
upon the premises such as fire, building, and sanitation codes.
(k) A business or operational plan that shall include specific
plans and timelines for implementing and improving the requirements
of subdivisions (a) to (h), inclusive, and the following:
(1) Copies of proposed media advertising and promotional
literature.
(2) Copies of proposed student enrollment agreements or contract
forms and instruments of indebtedness, if any.
(3) A catalog or brochure, in draft or published form, containing,
at a minimum, a description of all policies referenced in this
section and a detailed description of at least one instructional
program, as planned to be offered.
94854. An institution seeking initial approval to operate shall
file an application in a manner specified by the bureau, which shall
be sufficient to obtain evidence of the minimum conditions as
provided in Section 94853 and the following items:
(a) The name and California address of a designated agent upon
whom any process, notice, or demand may be served.
(b) The signatures and certifications under oath by the owners of
the institution or, if the institution is incorporated, by the
corporate officers or their designee, or, if the institution is a
limited liability corporation, by all members who own 10 percent or
more of that corporation, attesting to the accuracy of the
information in the application and an acknowledgment that the owners,
directors, and anyone in a position of control of the institution
understands the responsibility to comply with the minimum standards
in this chapter and that those minimum standards will be reviewed at
the time of the initial approval onsite inspection.
94855. An institution may combine all, or some, of its separate
operating sites under one application or may submit separate
applications for each location. The branches or satellites included
in either a combined application or separate applications will be
considered to be part of the main location, and all locations will be
treated as a single institution for purposes of regulation,
approval, and compliance under this chapter.
94856. (a) The bureau shall inform the institution within 30 days
of receipt of an application for initial approval to operate if
additional information is required to complete or substantiate the
application. The bureau shall provide a time period of no less than
30 days for an institution to provide requested information, and may
grant extensions if requested and warranted.
(b) An institution that fails to comply within the time period as
specified or extended by the bureau shall be required to pay
additional fees as provided in Article 10 (commencing with Section
95040).
94857. (a) Following review of an institution's application for
an initial approval to operate, accompanying documentation, and any
other information required by this article, and any investigation of
the applicant as the bureau deems necessary or appropriate, the
bureau shall either approve or deny the institution's application. If
the bureau determines the institution's application and operational
plan are not in compliance with the requirements of this article, the
bureau shall deny the application. If the bureau determines that the
institution's application and operational plan will satisfy the
requirements of this article, that there is no reason to expect that
the institution will not implement its business or operational plan,
and that no grounds for denial of the application exist, the bureau
shall grant the institution an initial approval to operate.
(b) An initial approval to operate shall be for a term of three
years, unless otherwise determined by the bureau.
94858. (a) Within one year of an institution's commencement of
operations, following the bureau's issuance of an initial approval to
operate, the bureau shall commence a qualitative review and
assessment of all operations of an institution and all programs
offered by that institution, and verify the institution's compliance
with this chapter.
(b) The qualitative review and assessment shall include an onsite
inspection of the institution and its operations, and may include
branches and satellites included in the temporary approval to
operate.
(c) The bureau may, pursuant to Article 1 (commencing with Section
94700), impanel a qualified visiting committee for purposes of
conducting the initial onsite inspection of an institution and the
programs offered by that institution as required by subdivision (b).
The visiting committee may include educators and other individuals
from institutions legally operating within this state with expertise
in the areas listed in subdivision (d) or employers with expertise
related to the program being reviewed.
(d) The qualitative review and assessment shall encompass the
required minimum conditions as provided in Section 94853, and shall
include interviews with administrators, faculty, staff, and students,
and inspection of facilities, records, and recordkeeping. If student
or public complaints have been received by the bureau since the time
of initial approval to operate, all issues raised in such complaints
shall be investigated.
(e) The institution being reviewed shall bear the cost of the
onsite review.
(f) The bureau may, upon consultation with the visiting committee,
omit review of any item listed in subdivision (d) if the institution
provides documentation that such an item has been reviewed and found
acceptable in an accreditation process undertaken by an accrediting
agency approved by the United States Department of Education, if the
institution is currently accredited, and if the institution is not
subject to a current negative accreditation action.
(g) The bureau shall, within 60 days of its onsite view, notify
the institution of any deficiency noted in that review that requires
corrective action, and shall notify the institution of the date by
which the institution must provide evidence of that corrective
action, which date shall not exceed 180 days from the date of the
onsite review.
(h) The bureau may conduct followup qualitative reviews and
assessments at any time, with or without empaneling a visiting
committee.
94859. The following are the minimum standards that an
institution shall meet in order receive a full approval to operate if
it is not accredited by a national or regional accrediting body
recognized by the United States Department of Education:
(a) Demonstration of continued institutional compliance with the
minimum conditions for initial approval as provided in Section 94853,
demonstration of reasonable compliance with the institution's own
timeline and plans for implementing its business or operational plan
as provided in Section 94853.
(b) Compliance with this chapter, including evidence that all
disclosures required pursuant to this chapter are provided to
students prior to enrollment.
(c) Development of an ongoing self-evaluation mechanism sufficient
to identify deficiencies and undertake corrective activity.
(d) Demonstration of the development of competencies in staff,
administration, and operations, and sufficient human resources to
comply with this chapter.
(e) Satisfactory provision of at least one instructional program
demonstrating a reasonable and adequate performance toward achieving
the objectives for which the instructional program is offered and
meeting the minimum standards for an instructional program as
provided in this article.
(f) Maintenance of required records.
(g) Evidence that the institution maintains and enforces student
financial and academic policies as provided in Section 94853.
(h) The institution does not exceed enrollment that the facilities
and equipment of the institution can reasonably handle.
(i) Continuing assurance that no member of the administrative
staff or faculty shall have been convicted of, or pled nolo
contendere or guilty to, a crime involving the acquisition, use, or
expenditure of federal or state funds, or who has been judicially or
administratively determined to have committed any violation of this
chapter or of any law involving state or federal funds.
94860. The following are the minimum standards that an
institution shall meet in order to receive a full approval to operate
if it is accredited by an accrediting body recognized by the United
States Department of Education at the time of its application for
full approval:
(a) The institution is in compliance with this chapter, has
developed policies and procedures designed to ensure that compliance,
and can, upon order of the bureau, demonstrate such compliance.
(b) The institution has provided the bureau with a copy of its
most recent accreditation review and provided evidence of corrective
action where deficiencies were noted.
(c) The institution has provided the bureau with copies of its
most recent student financial aid compliance audit and financial
statement audit as required by Title IV of the federal Higher
Education Act of 1965, and provided evidence of corrective action
where deficiencies were noted, if the institution participates in the
federal Title IV student financial aid programs.
94861. (a) At least 90 days before the expiration of its initial
approval, an institution seeking full approval to operate shall file
an application in a manner specified by the bureau, which shall be
sufficient to obtain evidence of the minimum standards as provided in
Article 5 (commencing with Section 94890) and items required
pursuant to subdivisions (c) and (d).
(b) An institution may, at its discretion, within 90 days of the
conclusion of its onsite inspection and successful completion of
correctional activity as provided in Section 94858, file an
application for full approval.
(c) The institution shall provide a statement that contains any
corrections, changes, or additions to the information submitted in
the application for initial approval.
(d) The application shall contain the signatures and
certifications under oath by the owners of the institution or, if the
institution is incorporated, by the corporate officers or their
designee, or, if the institution is a limited liability corporation,
by all members who own 10 percent or more of that corporation.
94862. An institution may combine all, or some, of its separate
operating sites under one application or may submit separate
applications for each location. The branches or satellites included
either in a combined application or in separate applications will be
considered to be part of the main location, and all locations will be
treated as a single institution for purposes of regulation,
approval, and compliance under this chapter.
94863. (a) The bureau shall inform the institution within 30 days
of receipt of an application for a full approval to operate if
additional information is required to complete or substantiate the
application. The bureau shall provide a time period of no fewer than
30 days for an institution to provide requested information, and may
grant extensions if requested and warranted.
(b) An institution that fails to comply within the time period as
specified or extended by the bureau shall be required to pay
additional fees.
94864. Within 90 days of receipt of an application for full
approval to operate, the bureau shall conduct a qualitative review
and assessment of the application and take one or more of the
following actions:
(a) Grant full approval to operate for a period not to exceed five
years.
(b) Notify the institution that the application review period has
been extended for a period not to exceed 90 days, and extend the
institution's initial approval to operate for that time period.
(c) Provide the institution with a corrective action plan to
address deficiencies noted in the qualitative review and assessment
and a time period not to exceed two years for the institution to
undertake corrective action and present evidence of corrective
activity as required, during which time period the institution's
initial approval to operate is extended.
(d) Deny full approval to operate and either impose a plan for
closure of the institution that affords students already enrolled the
opportunity to continue the program of instruction, or order the
institution to cease instruction and provide a refund of tuition and
all other charges to currently enrolled students.
(e) At the expiration of time periods as defined in subdivision
(b) and (c), the bureau shall take action as defined in subdivision
(a) or (d).
94865. The standards for renewal of full approval to operate
shall be the same as those in Sections 94859 and 94860.
94865.5. At least 90 days before the expiration of its full
approval to operate, an institution seeking a renewal of that full
approval to operate shall file an application in a manner specified
by the bureau, which shall be sufficient to obtain evidence of the
minimum standards as provided in Article 5 (commencing with Section
94890) and the following items:
(a) A statement that contains any corrections, changes, or
additions to the information submitted in the most recent application
for full approval to operate.
(b) The signatures and certifications under oath by the owners of
the institution or, if the institution is incorporated, by the
corporate officers or their designee, or, if the institution is a
limited liability corporation, by all members who own 10 percent or
more of that corporation.
94866. (a) An institution may combine all, or some, of its
separate operating sites under one application, or may submit
separate applications for each location. The branches or satellites
included in either a combined application or separate applications
will be considered to be part of the main location, and all locations
will be treated as a single institution for purposes of regulation,
approval to operate, and compliance under this chapter.
(b) An institution's full approval to operate is automatically
continued until its application for renewal of full approval to
operate is acted upon by the bureau.
94867. Within 90 days of receipt of an application for renewal of
full approval to operate, the bureau shall review the application
and take one or more of the following actions:
(a) Grant full approval to operate for a period
not to exceed five years.
(b) Notify the institution that the application review period has
been extended for a period not to exceed 90 days, and extend the
institution's full approval to operate for that time period.
(c) Provide the institution with a corrective action plan to
address deficiencies noted in the review and a time period not to
exceed two years for the institution to undertake corrective action
and present evidence of corrective activity as required, during which
time period the institution's current full approval to operate is
extended.
(d) Deny renewal of the full approval to operate and either impose
a plan for closure of the institution that affords students already
enrolled the opportunity to continue the program of instruction, or
order the institution to cease instruction and provide a refund of
tuition and all other charges to currently enrolled students.
(e) At the expiration of time periods as defined in subdivisions
(b) and (c), the bureau shall take action as defined in subdivision
(a) or (d).
94868. Institutions approved under this chapter shall be subject
to a regulatory structure that shall assign each institution to one
of three tiers, as provided in Article 10 (commencing with Section
95040). Notwithstanding any other requirements of this article, an
institution placed in Tier 3 approval shall be subject to all of the
following requirements:
(a) During the period of Tier 3 approval, the bureau shall work
with the institution to develop a corrective action plan, and the
institution shall be subject to monitoring that may include the
submission of frequent and focused reports, as prescribed by the
bureau, as well as special onsite inspections to determine progress
towards compliance. The onsite inspections may include an inspection
of the institution's facilities and records, interviews of
administrators, instructors, and students, and observation of class
instruction. The bureau shall order the institution to reimburse all
reasonable costs and expenses incurred by the bureau in connection
with this subdivision. The bureau may make the payment of the order
for reimbursement a condition of probation.
(b) The bureau shall notify the institution of the basis for
approval under Tier 3, including a statement that shall explain why
the lack of compliance is not considered minor or technical in
nature.
(c) All institutions operating under Tier 3 approval shall provide
the following disclosure to each current student and prospective
student in writing. Receipt of this disclosure shall be evidenced in
the student's file:
"Warning: As of (date) this institution has been found to be
operating in violation of the statutes, standards, and regulations
that govern private postsecondary educational institutions by the
state Bureau for Private Postsecondary Education (BPPE). This
institution is allowed to operate while the bureau monitors this
institution's corrective efforts to come into compliance with
applicable regulations and statutes. During this period, this
institution is under frequent review by the state Bureau for Private
Postsecondary Education and is subject to closure if corrective
actions are not taken or are not deemed sufficient. For more
information, please go to the BPPE _______ (current Web address) or
contact the BPPE at _______(current physical address)."
(d) If the bureau is not satisfied with the steps undertaken by
the institution to eliminate the violations of this article upon
which the Tier 3 approval was based, the bureau may revoke the
institution's approval to operate upon 30-day notice to the
institution and either impose a plan for closure of the institution
that affords students already enrolled the opportunity to continue
the program of instruction, or order the institution to cease
instruction and provide a refund of tuition and all other charges to
currently enrolled students.
94869. Notwithstanding any other provision of this article, if an
institution loses its accreditation or its eligibility for
participation in student financial aid programs under Title IV of the
federal Higher Education Act of 1965, it shall notify the bureau of
that action within 10 days of receiving notice of that action, and
the bureau shall immediately place that institution in Tier 3
approval and conduct a preliminary investigation to determine the
causes for the action. Within 30 days of placing the institution in
Tier 3 approval status, the bureau shall take one of the following
actions:
(a) Continue the current approval of the institution, but if the
institution was formerly in a Tier 1 approval, place the institution
in a Tier 2 approval to operate as an approved, but unaccredited,
institution.
(b) Continue the institution in Tier 3 approval pursuant to
subdivision (d) of Section 94868.
(c) Either impose a plan for closure of the institution that
affords students already enrolled the opportunity to continue the
program of instruction, or order the institution to cease instruction
and provide a refund of tuition and all other charges to currently
enrolled students.
94870. Except for continuing education programs and programs that
are exclusively avocational or recreational in nature, all programs
offered by the institution shall meet the minimum standards
prescribed by this article.
94871. (a) An institution that is accredited by an accrediting
body recognized by the United States Department of Education with no
current negative actions by that accrediting agency, that is fully in
compliance with the standards set forth in this chapter, that has
been granted a full approval to operate by the bureau, and that has
not been subject to involuntary withdrawal from student financial aid
participation under Title IV of the federal Higher Education Act of
1965, may add a program, a branch, or a satellite at any time. The
institution shall notify the bureau of an addition of a program,
branch, or satellite within 30 days.
(b) An institution that is unaccredited, or operating under
initial approval, or unable to meet the standards set forth in
subdivision (a) shall not add a program, branch, or satellite without
authorization by the bureau, except as noted in paragraph (3). An
institution seeking to add an additional program, a branch, or a
satellite shall apply to do so in a manner specified by the bureau.
(1) The bureau shall review a proposed addition of a program,
branch, or satellite and determine if the institution will continue
to meet the minimum standards set forth in this article if the
program, branch, or satellite is added. If the bureau determines that
the institution will continue to meet those standards after the
addition, and if the program meets the standards set forth in this
article, the bureau shall authorize the addition of the program,
branch, or satellite. If the bureau determines that the institution
will not continue to meet those standards after the addition, the
bureau may not authorize the addition of the program, branch, or
satellite, and the institution may not continue with the addition.
(2) The bureau may first conduct a site visit before acting on an
application to add a new program, branch, or satellite, if the new
program is not substantially related to an existing, approved program
or if the institution has an initial approval to operate and has not
yet been reviewed in the manner specified in Section 94858.
(3) An institution not placed in Tier 3 approval as provided in
Article 10 (commencing with Section 95040) may add a program with a
total direct cost of less than five thousand dollars ($5,000) at any
time, if the new program is substantially related to an existing,
approved program. The institution shall notify the bureau of an
addition of the program within 30 days, and shall refer to this
program as a "registered program" and shall not represent it to
current or prospective students as an "approved program."
(c) An institution placed in Tier 3 approval shall not add a
program, branch, or satellite at any time unless the bureau
determines that the action is acceptable under the institution's
corrective action plan.
94872. An instructional program shall lead to a defined objective
and shall, if an institution represents that a course or program
leads to employment in a particular occupation, evidence quality,
content, and instruction sufficient to ensure that students may
acquire the necessary level of education, training, skill, and
experience to obtain employment in the occupation or job title to
which the course or program of instruction is represented to lead.
94873. A program represented to lead to licensure shall evidence
the quality, content, and instruction sufficient to ensure that
students may acquire the necessary level of education, training,
skill, and experience to obtain the licensure to which the program is
represented to lead.
94874. The program shall have sufficient instruction, breadth,
depth, rigor, sequencing, and time to completion to reasonably meet
its stated learning and training objectives.
94875. The program shall utilize systems and modes of instruction
compatible with the objectives of the curriculum.
94876. A program provided through distance education shall
evidence the technical resources necessary to provide that
instruction for the full duration of the program.
94877. Faculty shall possess adequate academic, experiential, and
professional qualifications to teach the course or to perform the
duties as assigned. A faculty member in a program that leads to a
degree shall possess a degree of equal or higher level in the
occupation for which certification is sought.
94878. No person shall serve as a faculty member if that person
has been convicted of, or has pled nolo contendere or guilty to, a
crime involving the acquisition, use, or expenditure of federal or
state funds, or who has been judicially or administratively
determined to have committed any violation of this chapter or of any
law involving state or federal funds.
94879. The standards for student admission to the program shall
ensure the following:
(a) If an institution represents that the program leads to
employment in a particular occupation, no student shall be enrolled
who cannot perform the duties of that occupation.
(b) If a program is represented to lead to licensure, the
institution shall be responsible for knowing the requirements of that
licensure, and no student shall be enrolled who cannot meet these
requirements for reasons other than lacking the education and
training that shall be provided by successful completion of the
program.
(c) If a student is not a native or fluent speaker of the language
in which the instruction shall be offered, the institution shall
clearly notify the student, in writing, in both the language of
instruction and the student's native language, that lack of language
skills may hamper student success and indicate whether or not the
institution will provide support services in this regard.
94880. Notwithstanding the provisions of this article, an
institution that is not otherwise exempt from this chapter, and
solely offers programs with a total direct cost of less than two
thousand five hundred dollars ($2,500), may apply in a manner
specified by the bureau for an exemption from the provisions of this
article, and shall be deemed to be a registered institution. The
bureau shall annually adjust the two thousand five hundred dollar
($2,500) threshold of this section annually to reflect changes in the
Consumer Price Index for California.
(a) The bureau shall act upon an exemption from approval within 90
days of receipt of a completed application.
(b) The bureau may grant an exemption for a period not to exceed
five years, and shall specify which, if any, of the other provisions
of this article to which the institution shall remain subject.
(c) At least 90 days before the expiration of its exemption from
approval, an institution shall apply for renewal in a manner
specified by the bureau.
(d) The bureau shall act upon an application for renewal of
exemption from approval within 90 days of receipt of a completed
application.
(e) The bureau may grant a renewal under this section for a period
not to exceed five years, and shall specify to which, if any, of the
other provisions of this article the institution shall remain
subject.
(f) The bureau may, prior to granting an exemption, prior to
granting a renewal of an exemption, or upon a determination that an
institution may not be in compliance with the relevant provisions of
this chapter, conduct a review of that institution and, upon
determination of violations of this chapter, provide the institution
with a 90-day time period in which to apply for initial approval to
operate under this article.
94881. An institution registered under this article shall not
represent itself to current or prospective students as an approved
institution.
Article 5. Operating Requirements of Institutions
94890. An institution may not divide or structure a program of
instruction so as to avoid the application of a provision of this
chapter.
94891. An institution approved under this chapter shall be
maintained and operated, or shall demonstrate that it will be
maintained and operated, in compliance with the following minimum
standards:
(a) The institution shall be financially capable of fulfilling its
commitments to its students.
(b) The institution shall, upon satisfactory completion of
training, ensure that each student is given an appropriate degree,
diploma, or certificate by the institution, indicating that the
course or courses of instruction or the program or programs of
instruction or study have been satisfactorily completed by the
student.
(c) The institution shall provide sufficient instruction and
materials pursuant to a planned curriculum appropriate to each
student's educational program.
(d) The institution shall provide each student with sufficient
materials, including current publications and equipment, not later
than the time the materials are appropriate for use in the course of
instruction.
(e) The institution shall maintain sufficient student attendance,
progress, and performance standards to reasonably ensure that
students acquire the education, training, skill, and experience that
the program is represented to provide.
(f) The institution shall comply with all local city, county,
municipal, state, and federal regulations relative to the safety and
health of all persons upon the premises, such as fire, building, and
sanitation codes.
94892. (a) Each owner, director, and administrator of an
institution shall expend or authorize the expenditure of the
institution's assets and funds, including tuition, fees, and other
charges collected from or on behalf of students, in a diligent and
prudent manner to ensure that students receive the education and
student services that were represented to the students and that meet
the requirements of this chapter.
(b) Each owner, director, and administrator of an institution has
the duty to act in the utmost good faith to take all reasonable steps
within his or her capacity to cause the institution to comply with
all applicable law and to correct the effects of noncompliance.
(c) Each owner, director, and administrator of an institution
shall immediately disclose to the bureau evidence that the
institution or any person connected with the institution has engaged
in fraud, misrepresentation, or misappropriation of funds.
94893. (a) An institution shall clearly and conspicuously post on
its Web site a "How Our Students Do" factsheet that discloses the
following information:
(1) If the institution has offered the program for more than one
calendar year, the following information applies:
(A) The number and percentage of students who began the program,
did not cancel within the cancellation period, and were originally
scheduled at the time of enrollment to complete the program during
the completion tracking period, who completed it during that
completion tracking period.
(B) If the institution or a representative of the institution in
any manner represents that the program might lead to employment in an
occupation or job title for which a state licensing examination is
required, the following shall apply:
(i) All licensure or certification requirements established by the
state for the occupation or job title category.
(ii) The number and percentage of students who completed the
program during the completion tracking period who took the required
examination the first time it was available after completion of the
program, and who passed it.
(C) If the institution offers a vocational program, the number and
percentage of students who completed the program during the
completion tracking period who obtained employment, excluding
self-employment, as defined in Section 94792, during the employment
tracking period.
(D) If the institution offers a vocational program, and claims
that any students who completed the program during the completion
tracking period are self-employed, the number and percentage of
students who completed the program during the completion tracking
period who are self-employed and a clear and conspicuous statement to
the effect that the school does not know if any of the persons
listed as self-employed earn enough money to support themselves or
their families.
(E) Any other information necessary to substantiate the truth of
any claim made by the institution as to job placement.
(F) If the institution or a representative of the institution
makes any express or implied claim about the salary that may be
earned after completing a program, such as a claim that the student
may be able to repay a student loan from the salary received at a job
obtained following completion of the program, the following shall
apply:
(i) The percentage of students who completed the program during
the completion tracking period who earned salaries at or above the
claimed level during the employment tracking period.
(ii) The average annual salary earned during the employment
tracking period by the students who completed the program during the
completion tracking period.
(2) If the institution has offered the program of instruction for
one calendar year or less, the following statement: "This program is
new. We are not able to tell you how many students graduate, how many
students find jobs, or how much money you can earn after finishing
this course."
(b) The institution shall document and maintain all the facts
necessary to substantiate the information contained in the "How Our
Students Do" fact sheet as specified in subdivision (a).
94894. (a) An institution shall provide to each prospective
student for a degree, diploma, or certificate program, the following
statement in a separate one page document in at least 12-point type
in substantially the following format, with the heading in at least
14-point type:
"Will Credits You Earn at (Name of Institution) Be Transferable?
1. Credits you earn here MAY NOT be transferable to another
college.
2. Accreditation does not mean credits will be transferable.
3. Whether credits are transferable depends on the college you
wish to transfer to.
4. Even if credits "transfer," they may not count toward
graduation requirements at another college.
5. For example, if you entered our school as a freshman, you may
still be a freshman if you enter another college or university in the
future, even though you earned units here.
6. If you earn a degree, diploma, or certificate in our school, it
MAY NOT serve as a basis for obtaining a higher level degree at
another college or university.
7. Unless the college you may want to transfer to tells you, you
cannot know for sure if credits you earn here will be accepted toward
graduation at that other college."
(b) If the solicitation or negotiation leading to the agreement
for a course of instruction was in a language other than English, the
statement shall be in that other language.
94895. If the bureau grants approval to an institution to offer a
degree or certificate in an emerging field of study, the institution
shall disclose in its catalog and a separate written notice provided
to students before enrollment that the educational service is in an
emerging field and will have limited, if any, transferability to
other institutions because of the nature of an emerging field.
94896. (a) Before a person executes an agreement obligating that
person to pay any money to an institution for a program of
instruction or related equipment, the institution shall:
(1) Provide to that person a copy of the enrollment agreement
containing, at a minimum, the information required by Section 94902.
(2) Provide to that person a clear statement, containing its
refund policy, a written statement set forth in a table of the amount
of the refund to which the student would be entitled if the student
withdrew from the program after completing a period of days or weeks
of instruction equivalent to 10 percent, 25 percent, 50 percent, 60
percent, and 75 percent of the program of instruction, and a
description of the procedures that a student is required to follow to
cancel the contract or agreement and obtain a refund. If the
institution solicited the student or negotiated the agreement in a
language other than English, the statement shall be in that same
language. The institution shall also make its refund policy known to
currently enrolled students.
(3) Provide a copy of a current schedule of all student charges
and a statement of the purpose for those charges. The schedule shall
clearly indicate and differentiate all mandatory and optional student
charges, and shall specify the total costs of attendance which shall
include, but not necessarily be limited to, tuition, fees,
assessments for the Student Tuition Recovery Fund, equipment costs,
housing, transportation, books, necessary supplies, materials, shop
and studio fees, and any other fees and expenses that the student
will incur upon enrollment. However, an institution shall not include
in its schedule of fees, or otherwise advertise, costs that are less
than those recommended by the Student Aid Commission in its annual
statement of recommended student expense budgets, unless the cost as
advertised is reflective of a direct charge by the institution, in
which case the cost shall be advertised as actual. The schedule shall
clearly identify all charges and deposits that are nonrefundable.
The schedule shall also contain both of the following:
(A) A statement, to be provided by the bureau, specifying that it
is a state requirement that a resident California student who pays
his or her own tuition, either directly or through a loan, is
required to pay a state-imposed fee for the Student Tuition Recovery
Fund.
(B) A statement, to be provided by the bureau, describing the
purpose, operation, and eligibility requirements of the Student
Tuition Recovery Fund.
(4) If a state bureau, bureau, department, or agency has
established the minimum number of classes or class hours or the
minimum criteria of a course of instruction necessary for licensure
in an occupation and an institution offers a course of instruction
differing from the state entity's minimum requirements, disclose
orally and in writing the state entity's minimum requirements and how
the course of instruction differs from those criteria.
(5) If the institution provides a specific program of study where
the students will need program approval by a specific authority or
agency for the students to take an examination for certification,
licensure, or other similar approval allowing the student to perform
services in the field of study, or if the institution knows or
reasonably should know that certification, licensure, or other
approval, while not necessarily required to perform services in the
field of study, is widely requested or required by employers,
disclose to the student if the institution is not approved.
(6) Disclose in writing that, if the student obtains a loan to pay
for the course of instruction, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund.
(7) Disclose in writing that, if the student is eligible for a
loan guaranteed or reinsured by the state or federal government and
the student defaults on the loan, either of the following may occur:
(A) The federal or state government or the loan guarantee agency
can take action against the student, including applying any income
tax refund to which the person is entitled to reduce the balance owed
on the loan.
(B) The student may not be eligible for any other federal
financial assistance for education at a different institution or for
government housing assistance until the loan is repaid.
(8) Disclose in writing that the institution is not a public
institution.
(9) Disclose in writing whether or not the institution has filed,
or has had filed against it, a petition in bankruptcy.
(10) Provide orally and in a written "How Our Students Do"
factsheet the information required by subdivision (a) of Section
94893.
(b) The disclosures required by subdivision (a) shall be in
English unless the solicitation or negotiation leading to the
agreement for a course of instruction was in a language other than
English, in which case, the disclosures shall be in that other
language.
(c) Notwithstanding any other provision of this section, an
institution offering a home study or correspondence course need not
orally make the disclosures required by subdivision (a) in connection
with that course if the institution did not orally solicit or
recruit the student for enrollment and the student enrolled by mail.
94897. (a) An institution shall provide to students and other
interested persons, prior to enrollment, a catalog or brochure
containing, at a minimum, all of the following information:
(1) Descriptions of the instruction provided under each course
offered by the institution, including the length of programs offered,
and all of the occupations or job titles, if any, to which the
program of instruction is represented to lead.
(2) The number of credit hours or clock hours of instruction or
training per unit or units required for completion of the educational
degree or certificate program.
(3) The attendance, dropout, and leave-of-absence policies.
(4) The faculty and their qualifications.
(5) The schedule of tuition payments, fees, and all other charges
and expenses necessary for the term of instruction and the completion
of the course of study.
(6) The cancellation and refund policies.
(7) For institutions that participate in federal and state
financial aid programs, all consumer information that the institution
is required to disclose to the student.
(8) A description of a student's rights under the Student Tuition
Recovery Fund.
(9) The institution's admissions policies, including the
institution's policies regarding the acceptance of units of credit
earned by the student at other institutions or through challenge
examinations and standardized tests.
(10) If an institution represents that it provides employment
placement services, a description of the nature and extent of the
placement services and that indicates when they are available to
students.
(11) All other material facts concerning the institution and the
program or course of instruction that are reasonably likely to affect
the decision of the student to enroll, as prescribed by rules and
regulations adopted by the bureau.
(b) The institution shall provide the catalog or brochure to any
person upon request.
(c) A written contract signed by a student is not enforceable
unless the student has first received the institution's catalog or
brochure containing the information required by this section.
94898. An institution shall not require the signature of a person
to an agreement obligating that person to pay any money to the
institution until the person has had at least one business day to
read and review all of the items required to be provided to that
person by this article.
94899. (a) When a person executes an agreement obligating that
person to pay any money to an institution for a course program of
instruction or related equipment, the institution shall provide the
person with a document containing only the following notice:
"NOTICE OF CANCELLATION, REFUND AND OTHER RIGHTS"
"1. You may cancel your contract for school, without any penalty
or obligations prior to or on (insert 'the fifth business day
following your first class session' or 'the first day of class,'
whichever is applicable) as described in the Notice of Cancellation
form that will be given to you (insert 'on your first day of class'
or 'with the first lesson in a distance learning, home study or
correspondence course,' whichever is applicable).
"A different cancellation policy applies for distance learning,
home study or correspondence courses. Read the Notice of Cancellation
form for an explanation of your cancellation rights and
responsibilities. If you have lost your Notice of Cancellation form,
ask the school for another form.
"2. After the end of the cancellation period, you also have the
right to stop school at any time, and you have the right to receive a
refund for the part of the course not taken. Your refund rights are
described in the contract. If you have lost your contract, ask the
school for a description of the refund policy.
"3. If the school closes before you graduate, you may be entitled
to a refund. Contact the Bureau for Private Postsecondary and
Vocational Education at the address and telephone number printed
below for information.
"4. If you have any complaints, questions, or problems that you
cannot work out with the school, write or call the Bureau for Private
Postsecondary Education:
____________________________________________________________________
(insert address and telephone number of the Bureau for
Private Postsecondary and Vocational Education)"
(b) Except as otherwise provided in subdivision (a), the notice
required by subdivision (a) shall be printed in 10-point type in
English and, if any solicitation or negotiation leading to the
agreement for a course of instruction was in a language other than
English, in that other language.
(c) A copy of the notice, in each language in which the notice was
printed pursuant to subdivision (b), shall be posted at all times in
a conspicuous place at the main entrance of the institution, in each
admissions office, and in each room used for instruction. The bureau
may prescribe the size and format of the posted notice. This
subdivision does not apply to an institution that exclusively offers
correspondence or home study courses.
(d) Upon request, the institution shall provide a student with a
copy of a Notice of Cancellation form, a written description of the
student's refund rights, a copy of the contract executed by the
student, a copy of documents relating to loans or grants for the
student, and a copy of any document executed by the student.
(e) The bureau may provide for the inclusion of additional
information in the notice set forth in subdivision (a).
94900. An institution shall provide the student with two
cancellation forms at the first class attended by the student or with
the first lesson in a home study course submitted by the student.
The form shall be completed in duplicate, captioned "Notice of
Cancellation," and shall contain the following statement:
"Notice of Cancellation
______________________________
(Date)
(Enter date of first class, date
first lesson received, or date
first lesson was mailed, whichever
is applicable)
"You may cancel this contract for school, without any penalty or
obligation by the date stated below.
"If you cancel, any payment you have made and any negotiable
instrument signed by you shall be returned to you within 30 days
following the school's receipt of your cancellation notice.
"But, if the school gave you any equipment, you must return the
equipment within 30 days of the date you signed a cancellation
notice. If you do not return the equipment within this 30-day period,
the school may keep an amount out of what you paid that equals the
cost of the equipment.
"The total amount charged for each item of equipment shall be
separately stated. The amount charged for each item of equipment
shall not exceed the equipment's fair market value. The school shall
have the burden of proof to establish the equipment's fair market
value. The school is required to refund any amount over that as
provided above, and you may keep the equipment.
"To cancel the contract for school, mail or deliver a signed and
dated copy of this cancellation notice, or any other written notice,
or send a telegram to:
___________________________, at ________________________________.
(name of institution) (address of institution)
"NOT LATER THAN ____________________________________
(Enter midnight of the date applicable under Section 94939)
"I cancel the contract for school.
__________________________________
(Date)
__________________________________
(Student's signature)
"REMEMBER, YOU MUST CANCEL IN WRITING. You do not have the right
to cancel by just telephoning the school or by not coming to class.
"If you have any complaints, questions, or problems which you
cannot work out with the school, write or call the Bureau for Private
Postsecondary and Vocational Education:
______________________________________________________________________
_
(insert address and telephone number of the Bureau for Private
Postsecondary and Vocational Education)"
94901. (a) In addition to making any other required disclosures,
a representative of an institution who in any manner solicits or
recruits any person in person at any place other than the institution'
s premises, or by telephone, for enrollment in a course of
instruction shall disclose all of the following, orally, and, if the
solicitation is in person, in a correctly dated written document
given to the person and printed in at least 10-point type and signed
by the representative:
(1) That the representative is a paid recruiter for an institution
and the institution is not a public school.
(2) That the representative is not offering a job, making job
referrals, or conducting a survey.
(3) That there is no guarantee of a job after a student graduates
from the course of instruction.
(4) The total charge for the course of instruction or, if the
solicitation or recruitment is for more than one course, the range of
the total charges for the courses offered.
(b) The representative shall make the disclosures required by
paragraphs (1) to (3), inclusive, of subdivision (a) before
attempting to solicit or recruit any person. The representative shall
make the disclosure required by paragraph (4) of subdivision (a)
before the end of a solicitation or attempt to recruit any person.
(c) A representative who solicits or recruits any person as
described in subdivision (a) shall provide the person with a copy of
the institution's current catalog or brochure, containing the
information described Section 94897 which the person may obtain
without charge. The institution or its representative shall provide
the catalog or brochure required by this subdivision at the time of
an in-person solicitation or recruitment or send the catalog brochure
within two days of a telephonic solicitation or recruitment.
(d) No institution shall enter an agreement for a course of
instruction with, or prepare or assist in preparation of a student
loan or grant application for, a person solicited or recruited as
described in subdivision (a) within three days of the date on which
the person was solicited or recruited.
(e) The disclosure of information pursuant to this section shall
not relieve any institution of any obligation to make any disclosure
required under other provisions of this article.
(f) This section does not apply to solicitations or presentations
made at informational public appearances directed to five or more
people or to advertisements in print or broadcast media.
94902. (a) An institution shall not offer a program of
instruction to a person, or receive consideration from a person,
except pursuant to a written contract or agreement that is signed by
both parties, including the student, that meets the requirements of
this section. A written contract or agreement for educational
services with an institution shall include all of the following:
(1) On the first page of the agreement or contract, in 12-point
boldface type or larger, the following statement: "Any questions or
problems concerning this institution which have not been
satisfactorily answered or resolved by the institution should be
directed to the Bureau for Private Postsecondary Education," and
include the current mailing address, Web site address, and telephone
and fax numbers for the bureau.
(2) In underlined capital letters on the same page of the contract
or agreement in which the student's signature is required, the total
amount that the student is obligated to pay for the course of
instruction, including any charges made by the institution for
tuition, room and board, books, materials, supplies, shop and studio
fees, and any other fees and expenses that the student will incur
upon enrollment, separately itemized, and all other services and
facilities furnished or made available to the student by the
institution. The total amount shall appear immediately above the
following notice:
"YOU ARE RESPONSIBLE FOR THIS AMOUNT. IF YOU GET A STUDENT LOAN,
YOU ARE RESPONSIBLE FOR REPAYING THE LOAN AMOUNT PLUS ANY INTEREST."
(3) A schedule of payments and charges, including a list of any
charges and deposits that are nonrefundable, clearly identified as
nonrefundable charges.
(4) The name and address of the institution and the addresses
where instruction will be provided.
(5) The name and description of the program of instruction,
including the total number of credits, classes, hours, or lessons
required to complete the program of instruction.
(6) A clear and conspicuous statement that the agreement or
contract is a legally binding instrument when signed by the student
and accepted by the institution.
(7) A clear and conspicuous caption, "BUYER'S RIGHT TO CANCEL,"
under which the student's right to cancel and obtain a refund under
this article is explained in detail along with a description of the
form and means of notice that the student should use in the event
that he or she elects to cancel the enrollment agreement, and the
title and address of the institution official to whom the notice
should be sent or delivered.
(8) A clear and conspicuous caption, "YOU HAVE A RIGHT TO WITHDRAW
AND OBTAIN A REFUND," under which is placed an explanation of the
student's right to withdraw from the program of instruction and
obtain a refund and of how the amount of the refund will be
determined including a hypothetical example.
(9) The signature of the student under the following statement
that is presented in 12-point boldface or larger type: "My signature
below certifies that I have read, understood, and agreed to my rights
and responsibilities, and that the institution's cancellation and
refund policies have been clearly explained to me."
(10) If the student is not a resident of California or is the
recipient of third-party payer tuition and course costs, such as
workforce investment vouchers or rehabilitation funding, a clear
statement that the student is not eligible for protection under and
recovery from the Student Tuition Recovery Fund.
(11) A statement that the student is responsible for paying the
state assessment amount for the Student Tuition Recovery Fund.
(b) A contract or enrollment agreement signed by a student shall
be written in language that is capable of being easily understood.
Unless otherwise provided in subdivision (a), the institution shall
provide the information required under this section and Section 94900
in at least 10-point type in English and, if any solicitation or
negotiation leading to the agreement for a course of instruction was
in a language other than English, in that other language.
(c) A written contract or agreement signed by a prospective
student may not become operative until the student attends the first
class or session of instruction. This section does not apply to
correspondence institutions or other distance-learning programs.
(d) When a student is a client of a third-party organization and
that organization pays all of the student's tuition and fees, the
institution may substitute for the contract or enrollment agreement
required by subdivision (a) a form provided to the student that
contains the information required by this section. The form shall
also include a statement that students whose entire tuition and fees
are paid by a third-party organization are not eligible for payments
from the Student Tuition Recovery Fund.
(e) A provision in an agreement that purports to require a student
to invoke a grievance dispute procedure established by the
institution before enforcing a right or remedy is void and
unenforceable.
(f) The bureau shall have the authority to standardize the format
of the enrollment agreement by regulation.
94903. (a) No institution shall offer English as a second
language (ESL) instruction without the prior approval of the bureau.
(b) An institution that offers ESL instruction to a student shall
not enroll the student in any educational service presented in the
English language unless the student passes a test indicating that he
or she has attained adequate proficiency in oral and written English
to comprehend instruction in English.
(c) A student who has completed ESL instruction at an institution
shall not be enrolled in any course of instruction presented in the
English language at that institution unless the student passes a test
indicating that he or she has attained adequate proficiency in oral
and written English to be successfully trained by English language
instruction to perform tasks associated with the occupations or job
titles to which the educational program is represented to lead.
(d) If an institution offers ESL instruction to a student to
enable the student to use already existing knowledge, training, or
skills in the pursuit of an occupation, the institution shall test
the student after the student completes the ESL instruction to
determine that the student has attained adequate proficiency in oral
and written English to use his or her existing knowledge, training,
or skills. Before enrolling the student in ESL instruction, the
institution shall document the nature of the student's existing
knowledge, training, or skills and that the ESL instruction is
necessary to enable the student to use that existing knowledge,
training, or skills.
(e) If an institution offers ESL instruction to a student in
connection with a course of instruction leading to employment in any
occupation requiring licensure awarded after the passage of an
examination offered in English, the institution shall test the
student after the student completes the ESL instruction to determine
that the student has attained a level of proficiency in English
reasonably equivalent to the level of English in which the licensure
examination is offered.
(f) If the results of a test administered pursuant to subdivision
(b), (c), (d), or (e) indicate that the student has not attained
adequate English language proficiency after the completion of ESL
instruction, the institution shall offer the student additional
instruction without charge, for a period of up to 50 percent of the
number of hours of instruction previously offered by the institution
to the student, to enable the student to attain adequate English
language proficiency.
(g) This section does not apply to grantees funded under Section
1672 of Title 29 of the United States Code.
(h) The institution, for five years, shall retain an exemplar of
each language proficiency test administered pursuant to this section,
an exemplar of the answer sheet for each test, a record of the score
for each test, the answer sheets or other responses submitted by
each person who took each test, and the documentation required by
subdivision (d).
(i) For the purpose of determining compliance with this article,
ESL instruction shall be deemed a course, and a charge shall be
deemed to be made for ESL instruction if a student is obligated to
make any payment in connection with the educational service,
including, but not necessarily limited to, the ESL instruction that
is offered by the institution.
(j) The tests used by an institution pursuant to this section
shall be tests that are approved by the USDE, or tests such as the
Test of English as a Foreign Language and the Comprehensive Adult
Student Assessment System, that are generally recognized by public
and private institutions of higher learning in this state for the
evaluation of English language proficiency. An institution shall
demonstrate to the bureau that the tests and passing scores that it
uses establish that students have acquired the degree of proficiency
in oral and written English required by subdivision (b), (c), (d), or
(e), whichever is applicable. The required level of proficiency in
oral and written English shall not be lower than the sixth grade
level.
(k) All tests shall be independently administered, without charge
to the student and in accordance with the procedures specified by the
test publisher. The tests shall not be administered by a previous or
current owner, director, consultant, or representative of the
institution or by any person who previously had, or currently has, a
direct or indirect financial interest in the institution other than
the arrangement to administer the test. The bureau shall adopt
regulations that contain criteria to ensure independent tests
administered including
the criteria established by the USDE and set forth on pages 52160 and
52161 of Volume 55 of the Federal Register, dated December 19, 1990.
(l) The bureau shall adopt regulations concerning the manner of
documenting the nature of a student's existing knowledge, training,
and skill and that ESL instruction offered by the institution is
necessary to enable the student to use that existing knowledge,
training, and skill, as prescribed in subdivision (f). The
regulations shall specify all of the following:
(1) Reliable sources of information, independent of the student
and the institution, from which documentation of a student's existing
knowledge, training, and skill shall be obtained.
(2) Circumstances that must be documented by the institution to
establish that information from a designated reliable source of
information cannot reasonably be obtained.
(3) Alternate acceptable sources of information if designated
reliable sources are not available.
(4) The nature of all required types of documentation.
(m) The bureau shall develop and distribute instructions,
informational materials, or forms to assist institutions in
developing the documentation described in this section. These
instructions, materials, and forms shall not be subject to review or
approval by the Office of Administrative Law pursuant to any
provision of the Government Code.
94904. (a) An institution shall maintain adequate and accurate
records for five years, and satisfactory standards shall be enforced
relating to attendance, academic progress, and performance for at
least five years.
(b) An institution shall maintain current records for a period of
not less than five years at its principal place of business in this
state, showing the following:
(1) The programs of study offered by the institution.
(2) The names and addresses of its faculty, together with a record
of the educational qualifications of each.
(3) The degrees or diplomas granted and the date of granting,
together with the curricula upon which the diplomas and degrees were
based.
(4) The records required to be maintained by subdivision (j) of
Section 94945.
(c) Notwithstanding any other provision of this chapter, an
institution may not disclose the personal student records maintained
pursuant to this section unless production of those records is
required by any law or by subpoena or court order.
(d) All records that an institution is required to maintain by
this chapter or that relate to an institution's compliance with this
chapter shall be made immediately available by the institution for
inspection and copying during normal business hours, upon request, by
the bureau, the Attorney General, any district attorney or city
attorney, and the Student Aid Commission.
94905. An institution shall make available to a student, or a
person designated by a student, all of that student's records.
However, an institution may withhold a student's transcript or grades
if that student is in default on a student tuition contract, as
provided in Section 94924.
94906. (a) An institution shall be considered financially
responsible if it has sufficient assets to do all of the following:
(1) Provide the education, training, skills, and experience that
the institution represented in any manner it would provide.
(2) Pay timely refunds as required by Section 94941.
(3) Provide the administrative and financial resources to fully
comply with this article.
(b) An institution shall not be considered financially responsible
under any of the following conditions:
(1) The institution fails to have available sufficient funds and
accounts receivable to pay all operating expenses due within 30 days.
For the purpose of this subdivision, "funds" means cash or assets
that can be converted into cash within seven days.
(2) Under generally accepted accounting principles, the
institution had, at the end of its latest fiscal year, a ratio of
current assets to current liabilities of less than 1.25 to 1. For the
purpose of this subdivision, "current assets" does not include
either of the following:
(A) Intangible assets, including goodwill, going concern value,
organization expense, startup costs, long-term prepayment of deferred
charges, and nonreturnable deposits.
(B) State or federal grant funds that are not the property of the
institution, but are held for future disbursement for the benefit of
students.
(c) Unearned tuition shall be accounted for in accordance with
generally accepted accounting principles. When another government
agency requires an institution to file an annual financial audit
prepared by a certified public accountant, that agency's current
ratio standard may apply in lieu of the ratio specified in this
subdivision if the ratio of current assets to current liabilities
under that standard is 1 to 1 or greater. Institutions shall certify
that they meet the requirements of this section, and incorporate the
certification into their annual report.
(d) In determining compliance with the requirements of this
section the bureau may, at the institution's request, consider the
financial resources of a parent corporation if the parent corporation
files with the bureau, and at all times complies with, an
irrevocable and unconditional agreement approved by its bureau of
directors that satisfies all of the following requirements:
(1) Consent to be sued in California.
(2) Consent to be subject to the administrative jurisdiction of
the bureau and the Student Aid Commission in connection with the
institution's compliance with this chapter.
(3) Appoint an agent for service of process in California and all
notices required by this chapter.
(4) Agree to pay any refund, claim, penalty, or judgment that the
institution is obligated to pay.
(5) File financial statements, maintain financial records, and
permit the inspection and copying of financial records to the same
extent as is required of the institution.
94907. If the bureau determines that an institution is not
financially responsible, the bureau, under terms and conditions
prescribed by the bureau, may require the institution to submit, for
its latest complete fiscal year and its current fiscal year, each of
the following:
(a) A financial audit of the institution conducted by a licensed
certified public accountant, in accordance with generally accepted
auditing standards.
(b) The institution's financial plan for establishing financial
responsibility.
(c) Any other information requested by the bureau.
94908. (a) This section applies to an audit, review, or statement
prepared by an independent accountant and to every financial report
prepared at the request of the bureau to demonstrate an institution's
financial responsibility.
(b) Institutional audits and reviews of financial data, including
the preparation of financial statements, shall comply with all of the
following:
(1) Financial statements shall be prepared in accordance with
generally accepted accounting principles established by the American
Institute of Certified Public Accountants, and audited or reviewed by
an independent certified public accountant who is not an employee,
officer, or corporate director or member of the governing bureau of
the institution.
(2) Financial statements prepared on an annual basis shall include
a balance sheet, statement of operations, statement of cashflow, and
statement of retained earnings or capital. Nonprofit institutions
shall provide this information in the manner required under generally
accepted accounting principles for nonprofit organizations.
(3) The financial statements shall establish whether the
institution complies with the appropriate financial responsibility
requirements of this chapter.
(4) If an audit that is performed to determine compliance with any
federal or state student financial aid program reveals any failure
to comply with the requirements of the program, and the noncompliance
creates any liability or potential liability for the institution,
the financial report shall reflect the liability or potential
liability.
(5) Work papers and the supporting documentation for the financial
statements shall be retained for five years from the date of the
statements, and shall be made available to the bureau upon request.
(c) An audit shall be conducted in accordance with generally
accepted auditing standards, and if an audit is conducted, the
accountant shall obtain an understanding of the institution's
internal financial control structure, assess any risks, and report
any material deficiencies in the internal controls.
(d) An audit or financial report shall contain a statement signed
by the individual who has prepared the report stating that the
institution has paid or has not paid to the bureau all amounts owed
under Section 94983. If the institution is a corporation that is
publicly traded on a national stock exchange, the submission of the
corporation's annual report shall be deemed to comply with this
section. The bureau shall be deemed an intended beneficiary of that
statement in an audit or financial report. An institution that has
not paid all amounts owed to the bureau under Section 94983 shall
report to the bureau within 30 days on its plan to become current in
these payments. This subdivision shall not be construed to require
the institution to prepare a separate audit or report on the Student
Tuition Recovery Fund.
94909. (a) A new institution shall post a bond or letter of
credit, in favor of the State of California, in the amount of ____
dollars ($____), with a term of three years for the indemnification
of any person for any loss, including the loss of prepaid tuition,
suffered as a result of the occurrence of any violation of this
chapter during the period of coverage. This requirement shall not
apply to any institution that has held a full approval for a period
of five years, or is accredited by a state-approved accrediting
agency.
(b) Liability on the bond or letter of credit may be enforced
after a hearing before the bureau, after 30 days' advance written
notice to the principal and surety. This section supplements, but
does not supplant, any other rights or remedies to enforce liability
on the bond or letter of credit.
(c) "New institution," for the purposes of this section, means an
institution that has been operating under a temporary or full
approval to operate in this state for not more than five years.
94910. (a) An institution approved to operate under this chapter
shall report to the bureau, under penalty of perjury, by July 1 of
each year, or another date designated by the bureau, electronically
and in writing, the following information for educational programs
offered in the prior year:
(1) The total number of students enrolled, by level of degree or
type of diploma program.
(2) The number of degrees and diplomas awarded, by level of
degree.
(3) The degree levels offered.
(4) The schedule of tuition and fees required for each term,
program, course of instruction, or degree offered.
(5) Financial information demonstrating compliance with Section
94906.
(6) A statement indicating whether the institution is or is not
current on its payments to the Student Tuition Recovery Fund.
(7) Any additional information that the bureau may prescribe.
(b) An institution approved to operate under this chapter shall
report to the bureau, under penalty of perjury, by October 1 of each
year, or another date designated by the bureau, electronically and in
writing, the following information for the applicable completion
tracking and employment tracking periods:
(1) Completion numbers and rates as set forth in Section 94945.
(2) Employment numbers and rates as set forth in Section 94945.
(3) The information specified under subdivision (j) of Section
94945.
(c) The information required to be submitted by subdivisions (a)
and (b) shall be provided in two electronic formats, one of which may
be a form that cannot be changed, such as in a portable document
format (PDF) file, and one of which shall be in a searchable
modifiable electronic format to be specified by the bureau, or if
none is specified, in a commonly available spreadsheet program with
any necessary narrative provided in a commonly available word
processing program.
(d) Based on the review of information submitted to fulfill the
requirements of this section, the bureau may initiate a compliance
review and may require evidence of financial stability and
responsibility pursuant to this chapter.
94911. (a) An institution shall designate and maintain an agent
for service of process within this state, and provide the name,
address, and telephone number of the agent to the bureau. The bureau
shall furnish the agent's name, address, and telephone number to a
person upon request.
(b) If an institution is not operating in California when it
applies for approval to operate, the institution shall set forth the
name, address, and telephone number of its agent for service of
process in the institution's application.
(c) If an institution fails to designate or maintain an agent for
service of process pursuant to subdivision (a), and if service on the
institution cannot reasonably be effected in the manner provided in
Section 415.10, 415.20, 415.30, or 415.40 of the Code of Civil
Procedure, the institution may be served by leaving a copy of the
process or any other document in an office of the bureau and by
sending, by first-class mail, a notice of the service upon the bureau
and a copy of the process or other document to the institution at
its last address on file with the bureau. Service in this manner
shall be deemed complete on the 10th day after that mailing to the
institution. Proof of service may be made by a declaration showing
compliance with this subdivision.
94912. (a) A person may not act as an agent unless that person
holds a valid authorization issued by the bureau and maintains at all
times a surety bond as described in Section 94913. Administrators or
faculty, or both, who make informational public appearances, but
whose primary task is not to serve as paid recruiters, are exempt
from this section.
(b) An agent representing more than one institution shall obtain a
separate agent's authorization and bond for each institution
represented.
(c) A person may not be issued an authorization if he or she has
been found in a judicial or administrative proceeding to have
violated this chapter, or there exists any of the grounds for denial
set forth in Section 480 of the Business and Professions Code.
(d) An authorization shall be valid for the calendar year in which
it is issued, unless sooner revoked or suspended by the bureau for
fraud or misrepresentation in connection with the solicitation for
the sale of any course of study, for any violation of this chapter,
or for the existence of any condition in respect to the authorized
agent or the institution he or she represents which, if in existence
at the time the authorization was issued, would have been grounds for
denial of the authorization.
(e) An authorized agent shall carry the authorization with him or
her for identification purposes when engaged in the solicitation of
sales and the selling of courses of study away from the premises of
the institution, and shall produce the permit for inspection upon the
request of any person.
(f) The issuance of an authorization pursuant to this section
shall not be interpreted to mean, and it shall be unlawful for any
individual holding any permit to expressly or impliedly represent by
any means whatsoever, that the bureau has made any evaluation,
recognition, accreditation, or endorsement of any course of study
being offered for sale by the individual.
(g) It is unlawful for any individual holding an authorization
under this section to expressly or impliedly represent, by any means
whatsoever, that the issuance of the authorization constitutes an
assurance by the bureau that any course of study being offered for
sale by the individual will provide and require of the student a
course of education or training necessary to reach a professional,
educational, or vocational objective, or will result in employment or
personal earnings for the student.
94913. The application for an authorization of an agent shall
include the following:
(a) A statement signed by the applicant that he or she has read
this chapter and the regulations adopted pursuant thereto.
(b) Evidence of a surety bond issued in favor of the State of
California by an admitted surety insurer making provision for
indemnification of any person for any loss suffered as a result of
the occurrence, during the period of coverage, of any fraud or
misrepresentation used in connection with the solicitation for the
sale or the sale of any program of study, or as a result of any
violation of this chapter. The term of the bond shall extend over the
period of the authorization. The bond may be supplied by the
institution or by the person for whom the issuance of the permit is
sought, and may extend to cover individuals separately or to provide
blanket coverage for all persons to be engaged as representatives of
the institution. The bond shall provide for liability in the penalty
sum of twenty-five thousand dollars ($25,000) for each agent to whom
coverage is extended by its terms. Neither the principal nor the
surety on a bond may terminate the coverage of the bond, except upon
giving 30 days' prior written notice to the bureau, and upon
contemporaneously surrendering the agent's authorization. Liability
on the bond may be enforced after a hearing before the bureau, after
30 days' advance written notice to the principal and surety. This
subdivision supplements, but does not supplant, any other rights or
remedies to enforce liability on the bond.
94914. An agency shall hold a valid authorization issued by the
bureau, except for an agency recruiting solely for a degree granting
institution, which is not required to hold an authorization.
94915. The application for an authorization for an agency shall
include all of the following:
(a) A current financial statement prepared by a California
licensed certified public accountant who is not an employee, officer,
or director of the institution.
(b) Evidence of a surety bond issued in favor of the State of
California by an admitted surety insurer making provision for
indemnification of any person for any loss suffered as a result of
the occurrence, during the period of coverage, of any fraud or
misrepresentation used in connection with the solicitation for the
sale or the sale of any program of study, or as a result of any
violation of this chapter. The term of the bond shall extend over the
period of the authorization. The bond shall provide for liability in
the penal sum of two hundred fifty thousand dollars ($250,000) for
each agency to which coverage is extended by its terms. Neither the
principal nor the surety on a bond may terminate the coverage of the
bond except upon giving 30 days' prior written notice to the bureau,
and upon contemporaneously surrendering the agency's authorization to
operate. Liability on the bond may be enforced after a hearing
before the bureau, after 30 days' advance written notice to the
principal and surety. This subdivision supplements, but does not
supplant, any other rights or remedies to enforce liability on the
bond.
(c) A copy of the student disclosure statement to be read and
signed by all prospective students referred to an institution by the
agency. The student disclosure statement shall include, but shall not
necessarily be limited to, all of the following:
(1) A statement to the effect that no promise of employment has
been made by the agency.
(2) A statement to the effect that repayment of any debt incurred
by a student in connection with his or her education will be the sole
responsibility of the student.
(3) The amount and terms of any fee to be paid by the student to
the agency.
(4) The following statement: "Any questions or problems concerning
this agency should be directed to the Bureau for Private
Postsecondary Education," including the current address and telephone
number for the bureau.
(5) A statement to the effect that the institution or institutions
to which the prospective student is referred by the agency have the
obligation to make available to the student a catalog or brochure
containing information describing all of the following:
(A) The courses offered.
(B) Program objectives.
(C) Length of program.
(D) The faculty and their qualifications.
(E) A schedule of tuition, fees, and all other charges and
expenses necessary for the completion of the course of study.
(F) The cancellation and refund policies.
(G) The total cost of tuition over the period needed to complete
the student's education.
(H) For occupational training, placement data, including program
completion rates, employment rates, and starting salaries.
(I) Other material facts concerning the institution and the
program or course of instruction that are reasonably likely to affect
the decision of the student to enroll in the institution.
(d) Identification of all employees of the agency and their
titles, and of all agents with whom the agency contracts.
(e) Identification of all owners, and if the entity is a
corporation, the identification of all persons possessing an interest
equal to, or in excess of, 10 percent.
(f) Identification of all vendors of educational services for
which the agency provides recruitment services.
(g) A signed statement by the applicant that all employees engaged
in recruitment activities will be required to read and comprehend
Article 5 (commencing with Section 94890).
94916. Within 30 days of receipt of a person's completed
application for authorization as an agency, and prior to issuance of
that authorization, the bureau may inspect the applicant and verify
the application. Within 30 days of the inspection, the bureau shall
either issue an authorization for a one-year period, subject to
annual renewal at the end of that period, or deny the application for
authorization. The bureau shall deny the authorization if the
applicant or any owner, officer, or director of the applicant
previously has been found in a judicial or administrative proceeding
to have violated this chapter, or if there exists any of the grounds
for denial set forth in Section 480 of the Business and Professions
Code.
94917. An agent, an agency, or an employee of an agency shall not
make an untrue or misleading statement in the course of a
solicitation or recruitment activity or engage in the sales,
collection, credit, or other practices of any type that are false,
deceptive, misleading, or unfair.
94918. An agency or an employee of an agency shall provide a
prospective student with the disclosure statement described in
subdivision (c) of Section 94915, and shall allow the prospective
student a sufficient opportunity to read it before soliciting or
recruiting that prospective
student for enrollment or referring that prospective student to an
institution. That disclosure statement shall be printed in 10-point
type in English and, if the solicitation, recruitment, or referral is
to be conducted in a language other than English, in that other
language.
94919. No institution shall pay any consideration to an agent or
agency subject to Sections 94913 to 94923, inclusive, whichever are
applicable, that has not complied with those sections, or enter into
an enrollment agreement with any person who was recruited or
solicited to enroll in that institution by an agent, agency, or by an
agent employed by or under contract with an agency if the agent or
agency was not in compliance with Sections 94913 to 94923, inclusive,
whichever are applicable, at the time of the recruitment or
solicitation.
94920. An institution approved under this chapter shall cease all
recruitment activities involving an agent or agency if the bureau
takes action to revoke or deny that agent or agency's authorization.
The failure of the institution to do so upon presentation of notice
of the bureau's action shall be cause to deny or revoke any approval
held by that institution.
94921. The bureau shall maintain records for five years of each
application for an authorization, each verification by the bureau of
an application, each bond, and each denial, issuance, or revocation
of an authorization.
94922. A student may bring an action for an agent's, agency's, or
agency employee's violations of this chapter or any fraud or
misrepresentation and, upon prevailing, is entitled to the recovery
of damages, reasonable attorney's fees, and costs. If a court finds
that the violation was willfully committed, the court shall, in
addition to the award of damages, award a civil penalty of up to two
times the amount of damages sustained by the student.
94923. Any person who violates Sections 94913 to 94922,
inclusive, willfully is guilty of a misdemeanor punishable by
imprisonment in a county jail not exceeding six months, by a fine not
to exceed five thousand dollars ($5,000), or by both that
imprisonment and fine.
94924. (a) The governing bureau or other governing authority of
an institution shall adopt rules providing for the withholding of
institutional services from students or former students who have been
notified, in writing, at the student's or former student's last
known address, that the student is in default on a loan or loans
under either of the following loan programs:
(1) The Stafford Student Loan program.
(2) The Supplemental Loans for Students program.
(3) Any program directly or indirectly financed by the California
Educational Facilities Authority.
(b) The rules adopted pursuant to subdivision (a) shall provide
that the services withheld may be provided during a period when the
facts are in dispute and when the student or former student
demonstrates to either the governing bureau or other appropriate
governing authority of the institution, or the Student Aid Commission
and the appropriate entity or its designee, that reasonable progress
has been made to repay the loan or that there exists a reasonable
justification for the delay as determined by the institution. The
rules shall specify the services to be withheld from the student,
which may include the following, except that the rules may not
include the withholding of registration privileges:
(1) The provision of grades.
(2) The provision of transcripts.
(3) The provision of diplomas.
(c) When it is determined that an individual is in default on a
loan or loans under either of the loan programs specified in
subdivision (a), the Student Aid Commission shall give notice of the
default to all institutions through which that individual acquired
the loan or loans.
(d) Guarantors, or those who act as their agents or act under
their control, who provide information to institutions pursuant to
this section, shall defend, indemnify, and hold harmless the
governing bureau or other governing authority of the institutions
from an action resulting from compliance with this section when the
action arises as a result of incorrect, misleading, or untimely
information provided to the institution by the guarantors, their
agents, or those acting under the control of the guarantors.
94925. (a) (1) An institution extending credit or lending money
to a person for tuition, fees, or other charges for educational
services to be rendered or furnished shall cause any note,
instrument, or other evidence of indebtedness taken in connection
with that loan or extension of that credit to be conspicuously marked
on the face thereof with the following notice:
"NOTICE
"ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL
CLAIMS AND DEFENSES THAT THE DEBTOR COULD ASSERT AGAINST THE SELLER
OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS
HEREOF, RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS
PAID BY THE DEBTOR HEREUNDER."
(2) An institution that fails to comply with paragraph (1) shall
be liable for any damage or loss suffered or incurred by any
subsequent assignee, transferee, or holder of that evidence of
indebtedness on account of the absence of that notification.
(b) Notwithstanding the presence or absence of the notification
required in subdivision (a), and notwithstanding an agreement in
which a student waives the right to assert a claim or defense, an
institution making a loan or extending credit and the transferee,
assignee, or holder of that evidence of indebtedness, are subject to
all defenses and claims that could be asserted against the
institution that was to render or furnish those educational services
by a party to that evidence of indebtedness or by the person to whom
these educational services were to be rendered or furnished up to the
amount remaining to be paid thereon.
(c) An institution that participates in a federal student
assistance program and that complies with the financial disclosure
and notification requirements for those programs is in compliance
with the standards prescribed by this section.
94926. (a) A note, or other instrument of indebtedness, or
contract relating to payment for educational services is not
enforceable by an institution within or outside this state governed
by this chapter unless, at the time of execution of that note, other
instrument of indebtedness, or contract, the institution has a valid
approval to operate pursuant to this chapter.
(b) No note, other instrument of indebtedness, or contract
relating to payment for educational services shall be enforceable by
any institution within or outside this state governed by this chapter
unless the agent or agency that enrolled persons, to which
educational services were to be rendered or to which degrees or
diplomas were to be granted pursuant to this chapter, held a valid
agent or agency authorization at the time of execution of the note,
other instrument of indebtedness, or contract.
94927. A student may not waive a provision of this chapter. A
waiver or limitation of a substantive or procedural right or remedy
is in violation of this section, and is void and unenforceable.
94928. A person who files a proper application and complies with
this chapter and each standard and regulation pertaining to this
chapter is qualified to receive an approval to operate. The approval
to operate shall be issued to the owners or governing body, and shall
be nontransferable, unless approved by the bureau.
94929. (a) A shift in control or change in ownership of an
institution may not be made until that institution submits an
application for approval to operate under the changed ownership or
control and that application is approved by the bureau. This
application shall be submitted at least 20 days prior to the shift in
control or change in ownership.
(b) An application filed pursuant to this section shall be
approved if that application is filed properly and complies with all
applicable standards and regulations pursuant to this chapter. Upon
approval of a change in ownership, the bureau shall give written
notice to the Student Aid Commission.
(c) An application filed pursuant to this section shall include a
fee pursuant to Article 10 (commencing with Section 95040).
(d) An application filed pursuant to this section may include
pertinent portions of the institution's previous application prepared
in connection with programs or courses of instruction that remain
unchanged or unaffected by the change in ownership.
(e) An application filed pursuant to this section may not be
approved for an applicant that has been found previously in a
judicial or administrative proceeding to have violated this chapter,
or if there exists any of the grounds for denial set forth in Section
480 of the Business and Professions Code or Section 95005 of this
code.
(f) If an application for a new approval to operate is not timely
filed by an institution, as required by this section, that
institution's approval to operate shall terminate.
(g) For the purposes of this section, a change in ownership occurs
when there is a change of control of the institution, or where a
person who previously did not own at least 25 percent of the stock or
controlling interest of an institution or its parent corporation,
acquires ownership of at least 25 percent of the stock of the
institution or its parent corporation, or when a for-profit business
converts to nonprofit corporation status or forms a nonprofit
corporation as a subsidiary to provide the educational services for
which the for-profit business is approved to operate.
94930. The enrollment, course completion, and employment data
used to determine compliance with this chapter and for the purposes
of disclosures under Section 94893 shall continue to apply to an
institution notwithstanding a change in the institution's ownership,
name, or identification number.
94931. An institution or representative of an institution shall
not do any of the following:
(a) Operate in this state a postsecondary educational institution
not exempted from this chapter.
(b) Offer in this state, as or through an agent, enrollment or
instruction in, or the granting of educational credentials from, an
institution not exempted from this chapter, whether that institution
is within or outside this state, unless that agent is a natural
person and has a currently valid agent's permit issued pursuant to
this chapter, or accept contracts or enrollment applications from an
agent who does not have a current permit as required by this chapter.
(c) Instruct or educate, or offer to instruct or educate,
including soliciting for those purposes, enroll or offer to enroll,
contract or offer to contract with any person for that purpose, or
award any educational credential, or contract with any institution or
party to perform any act, in this state, whether that person, agent,
group, or entity is located within or without this state, unless
that person, agent, group, or entity observes and is in compliance
with the minimum standards set forth in this article.
(d) Use, or allow the use of, any reproduction or facsimile of the
Great Seal of the State of California on a diploma.
(e) Promise or guarantee employment.
(f) Advertise concerning job availability, degree of skill, or
length of time required to learn a trade or skill unless the
information is accurate and in no way misleading.
(g) Advertise, or indicate in a promotional material, that
correspondence instruction or correspondence courses of study are
offered, without including in all advertising or promotional material
the fact that the instruction or programs of study are offered by
correspondence or home study.
(h) Advertise, or indicate in a promotional material, that
resident instruction or programs of study are offered, without
including in all advertising or promotional material the location
where the training is given or the location of the resident
instruction.
(i) Solicit students for enrollment by causing an advertisement to
be published in "help wanted" columns in a magazine, newspaper, or
publication, or use "blind" advertising that fails to identify the
institution.
(j) Advertise, or indicate in a promotional material, that the
institution is accredited, unless the institution has been recognized
or approved as meeting the standards established by an accrediting
agency recognized by the United States Department of Education or the
Committee of Bar Examiners for the State of California.
(k) Fail to comply with federal requirements relating to the
disclosure of information to students regarding vocational and career
training programs, as described in Section 94894.
(l) (1) Fail to comply with Part 433 (commencing with Section
433.1) of Title 16 of the Code of Federal Regulations, as it existed
on January 1, 2007, and as it is amended from time to time
thereafter.
(2) For each student who enters into a consumer credit contract
that is subject to Part 433 (commencing with Section 433.1) of Title
16 of the Code of Federal Regulations, as it existed on January 1,
2007, and as it is amended from time to time thereafter, the
institution shall include the following statement in any written
contract or agreement for educational services or, in the
alternative, shall provide the student with a separate written notice
containing the following statement:
"YOU MAY ASSERT AGAINST THE HOLDER OF THE PROMISSORY NOTE YOU
SIGNED IN ORDER TO FINANCE THE COST OF INSTRUCTION ALL OF THE CLAIMS
AND DEFENSES THAT YOU COULD ASSERT AGAINST THIS INSTITUTION, UP TO
THE AMOUNT YOU HAVE ALREADY PAID UNDER THE PROMISSORY NOTE."
(3) The statement set forth in paragraph (2) shall be printed in
boldface print of at least 12-point type.
94932. An institution or representative of an institution may not
do any of the following:
(a) No institution or representative of an institution shall make
or cause to be made any statement that is in any manner untrue or
misleading, either by actual statement, omission, or intimation.
(b) No institution or representative of an institution shall
engage in any false, deceptive, misleading, or unfair act in
connection with any matter, including the institution's advertising
and promotion, the recruitment of students for enrollment in the
institution, the offer or sale of a program of instruction, course
length, course credits, the withholding of equipment, educational
materials, or loan or grant funds from a student, training and
instruction, the collection of payments, or job placement.
(c) Induce a person to enter into an agreement for a program of
instruction by offering to compensate that person to act as the
institution's representative in the solicitation, referral, or
recruitment of others for enrollment in the institution.
(d) Offer to pay or pay any consideration to a student or
prospective student to act as a representative of the institution
with regard to the solicitation, referral, or recruitment of any
person for enrollment in the institution in either of the following:
(1) During the 60-day period following the date on which the
student began the program.
(2) At a subsequent time, if the student has not maintained
satisfactory academic progress in acquiring the necessary level of
education, training, skill, and experience to obtain employment in
the occupation or job title to which the program is represented to
lead. The institution shall have the burden of proof to establish
that the student has maintained satisfactory academic progress.
(e) Pay any consideration to a person to induce that person to
sign an agreement for a program of instruction.
(f) Use a misleading name in any manner implying any of the
following:
(1) The institution is affiliated with any governmental agency,
public or private corporation, agency, or association.
(2) The institution is a public institution.
(3) The institution grants degrees.
(g) In any manner make an untrue or misleading change in, or
untrue or misleading statement related to, a test score, grade,
record of grades, attendance record, record indicating student
completion or employment, or financial information, including any of
the following:
(1) A financial report required to be filed pursuant to Sections
94906 to 94910, inclusive.
(2) Information or records relating to the student's eligibility
for financial assistance or attendance at the institution.
(3) Any other record or document required by this chapter or by
the bureau.
(h) Falsify, destroy, or conceal any record or other item while
that record or item is required to be maintained by this chapter or
by the bureau.
(i) Use the terms "approval," "approved," "approval to operate,"
or "approved to operate" without stating clearly and conspicuously
that approval to operate means compliance with state standards as set
forth in this chapter. If the bureau has granted an institution
approval to operate, the institution or its representative may
indicate that the institution is "licensed" or "licensed to operate,"
but may not state or imply any of the following:
(1) The institution or its programs of instruction are endorsed or
recommended by the state or by the bureau.
(2) The bureau's grant to the institution of approval to operate
indicates that the institution exceeds minimum state standards as set
forth in this chapter.
(3) The bureau or the state endorses or recommends the
institution.
(j) Direct a representative to perform any unlawful act, to
refrain from complaining or reporting unlawful conduct to the bureau
or another government agency, or to engage in any unfair act to
persuade a student not to complain to the bureau or another
government agency.
(k) An institution offering programs or courses of instruction
represented to lead to occupations or job titles requiring licensure
shall not enter into an agreement for a course of instruction with a
person who the institution knows or, by the exercise of reasonable
care, should know, would be ineligible to obtain licensure in the
occupation or job title to which the course of instruction is
represented to lead, at the time of the scheduled date of course
completion, for reasons such as age, physical characteristics, or
relevant past criminal conviction.
(l) An institution may not compensate a representative involved in
recruitment, enrollment, admissions, student attendance, or sales of
equipment to students on the basis of a commission, commission draw,
bonus, quota, or other similar method except as follows:
(1) If the program of instruction is scheduled to be completed in
90 days or less, the institution shall pay compensation related to a
particular student only if that student completes the course.
(2) If the program of instruction is scheduled to be completed in
more than 90 days, the institution shall pay compensation related to
a particular student as follows:
(A) Compensation shall not be paid for at least 90 days after that
student has begun the program.
(B) Up to one-half of the compensation may be paid before the
student completes the program only if the student has made
satisfactory academic progress, documented by the institution in the
student's file, for more than 90 days.
(C) The remainder of the compensation shall be paid only after the
student's completion of the program. This subdivision shall not
prevent the payment at any time of an hourly, weekly, monthly, or
annual wage or salary.
94933. An institution is liable in a civil or administrative
action or proceeding for a violation of this article committed by a
representative of the institution. To the extent permitted by law, an
institution is liable in a criminal action for violations of this
article committed by a representative of the institution.
94934. An institution that willfully violates a provision of this
article, Article 5 (commencing with Section 94890), or Article 6
(commencing with Section 94960), may not enforce any contract or
agreement arising from the transaction in which the violation
occurred, and shall refund to the student any fees that it has
collected from the student.
94935. (a) If a program of instruction is based on a sequence of
classes, class sessions, or lessons, and the learning experience to
be derived from any class, class sessions, or lesson within the
sequence is based in any manner on a student's attendance at or
completion of a prior class, class session, or lesson, an institution
shall not enroll a student in that program of instruction unless the
instruction begins with the first class, class session, or lesson
and proceeds in the appropriate sequence.
(b) (1) If a program of instruction is based on a series of
modules composed of class sessions or lessons, and the learning
experience to be derived from any module is based in a manner on a
student's attendance at, or completion of, any class sessions or
lessons in any other module, an institution shall not enroll a
student in that course of instruction unless the student begins and
proceeds in the appropriate sequence.
(2) If a program of instruction is based on a series of modules
composed of class sessions or lessons, and the learning experience to
be derived from any module is not based on a student's attendance
at, or completion of, any classes or lessons in any other module, an
institution shall only enroll a student in the program of instruction
if the student begins with the first class, class session, or lesson
in a module.
(c) Notwithstanding subdivisions (a) and (b), if a class or a
module consists of more than 60 days of instruction, the institution
may enroll a student to begin no later than the fifth class session
of the first class or the fifth class session in the appropriate
module.
(d) An institution shall not merge classes unless all of the
students have received the same amount of instruction and training.
This subdivision does not prevent the placement of students, who are
enrolled in different programs of instruction, in the same class if
that class is part of each of the courses and the placement in a
merged class will not impair the students' learning of the subject
matter of the class.
(e) After a student has enrolled in a program of instruction, the
institution shall not do any of the following:
(1) Make any unscheduled suspension of any class unless caused by
circumstances beyond the institution's control.
(2) Change the day or time in which any class is offered to a day
when the student is not scheduled to attend the institution or to a
time that is outside of the range of time that the student is
scheduled to attend the institution on the day for which the change
is proposed, unless at least 90 percent of the students who are
enrolled consent to the change and the institution offers full
refunds to the students who do not consent to the change. For the
purposes of this paragraph, "range of time" means
the period beginning with the time at which
the student's first scheduled class session for the day is set to
start and ending with the time the student's last scheduled class
session for that day is set to finish.
(f) If an institution enrolls a student in a program of
instruction that is not offered or designed as a home study or
correspondence course at the time of enrollment, the institution
shall not convert the program of instruction from classroom
instruction to a home study or correspondence course.
(g) An institution shall not move the class instruction to a
location more than five miles from the location of instruction at the
time of enrollment unless any of the following occur:
(1) The institution discloses orally, and clearly and
conspicuously in writing, to each student before enrollment in the
program that the location of instruction will change after the
program begins and the address of the proposed location.
(2) The institution applies for, and the bureau grants, approval
to change the location. The bureau shall grant the application within
30 days if the bureau, after notice to affected students and after
offering an opportunity for them to be heard as prescribed by the
bureau, concludes that the change in location would not be unfair or
unduly burdensome to students. The bureau may grant approval to
change the location, and may make that approval subject to reasonable
conditions, such as requiring the institution to provide
transportation, transportation costs, or refunds to adversely
affected students.
(3) The institution offers a full refund to students enrolled in
the program of instruction who do not voluntarily consent to the
change.
94936. A bond ordered by the bureau pursuant to this chapter
shall be issued by an admitted surety insurer in an amount
established at the discretion of the bureau that is sufficient to
protect students from the potential consequences of the violation.
The following shall also be required:
(a) The bond shall be in favor of the State of California for the
indemnification of a person for a loss, including the loss of prepaid
tuition, suffered as a result of the occurrence of a violation of
this chapter during the period of coverage.
(b) Liability on the bond may be enforced after a hearing before
the bureau, after 30 days' advance written notice to the principal
and surety. The bureau shall adopt regulations establishing the
procedure for administrative enforcement of liability. This
subdivision supplements, but does not supplant, any other rights or
remedies to enforce liability on the bond.
(c) The bureau may order the institution to file reports at an
interval the bureau deems necessary to enable the bureau to monitor
the adequacy of the bond coverage and to determine whether further
action is appropriate.
94937. An institution shall establish specific written standards
for student admissions for each educational program. These standards
shall be related to the particular educational program. The
institution shall not admit any student who is obviously unqualified.
Each institution shall specify the maximum number of credits it will
accept from another institution for each educational program and the
basis upon which the transfer of experiential credit will be
awarded.
94938. (a) An institution shall not enter into an agreement for a
program of instruction with a student unless the institution first
administers to the student, and the student passes, a test as
provided in subdivision (b).
(b) (1) The test required by subdivision (a) shall be a
standardized test that is designed to measure, and that reliably and
validly measures, the student's ability to be successfully trained to
perform the tasks associated with the occupations or job titles to
which the program of instruction is represented to lead. The student'
s performance on the test shall demonstrate that ability.
(2) Nothing in paragraph (1) precludes an institution from using
additional tests to determine a student's ability to be trained to
perform tasks associated with the occupations and job titles for
which training is offered as described in paragraph (1).
(3) (A) If no standardized test is available that satisfies
paragraph (1), the institution shall use other appropriate tests to
determine the student's ability to be trained to perform the tasks
associated with the occupations and job titles for which training is
offered as described in paragraph (1). Within 30 days of determining
that no standardized test satisfies paragraph (1), the institution
shall so inform the bureau and shall describe and, if possible,
furnish the bureau with the test to be used in lieu of the test
required by paragraph (1).
(B) Upon reasonable notice to the institution, the bureau may
order the institution to demonstrate to the reasonable satisfaction
of the bureau that the test and passing score are an appropriate
measure of the student's ability to be trained to perform the tasks
associated with the occupations or job titles to which the course is
represented to lead. If the bureau determines that the test is not an
appropriate measure, the bureau, after notice, and if requested, a
hearing, shall order that the institution cease administering the
test.
(c) The institution shall have the burden of proof that the test
complies with subdivision (b). If no minimum passing score is
established by the test developer or if the minimum passing score
used by the institution is below the minimum passing score
established by the test's developer, the institution shall have the
burden of proof that the student's achievement of the minimum passing
score reasonably measures the student's ability to be successfully
trained to perform the tasks associated with the occupations and job
titles to which the course of instruction is represented to lead. The
test shall be administered in accordance with the test's
instructions, rules, and time limits.
(d) (1) The test shall be completed solely by the student.
(2) (A) No institution or any person in any manner associated with
the institution shall do any of the following:
(i) Answer any of the test questions.
(ii) Read any of the test questions to the student.
(iii) Provide any assistance whatsoever to the student in
answering test questions.
(B) Nothing in this paragraph prevents an institution from
providing nonsubstantive assistance to accommodate the disability of
a handicapped person otherwise qualified to take the test.
(3) The test shall be given by the institution on its premises or
by an independent testing service. The site requirement does not
apply to an institution offering a home study or correspondence
course.
(4) If a prospective student has failed a test, the institution or
the testing service that administered the test shall not administer
another test to that prospective student for at least the period
specified by the test developer or one week, whichever is longer. Any
subsequent test administered by an institution to the same
prospective student shall be a substantially different form of the
same test or a substantially different test than the preceding test,
and shall satisfy the requirements of paragraph (1) or, if
applicable, paragraph (3) of subdivision (b).
(e) An institution's application for approval to operate shall do
all of the following:
(1) Identify the test used to comply with this section.
(2) State the minimum score, if any, that the test's developer
indicates a prospective student must achieve to demonstrate an
ability to be successfully trained to perform the tasks associated
with the occupations or job titles to which the course is represented
to lead.
(3) State the minimum passing score used by the institution.
(4) If the institution accepts a lower minimum passing score than
is indicated by the test's developer, state an explanation of why the
institution accepts a lower minimum passing score.
(f) The institution shall, for five years, retain an exemplar of
each test administered by the institution pursuant to this section,
an exemplar of the answer sheet for each test, a record of the
passing score for each test, and the answer sheets or other responses
submitted by each person who took each test.
94939. (a) A student shall have the right to cancel an agreement
for a program of instruction, including any equipment, as follows:
(1) For degree programs, the student shall have the right to
cancel prior to or on the first day of instruction.
(2) For nondegree programs in excess of 50 days, the student shall
have the right to cancel until midnight of the fifth business day
after the day on which the student did any of the following,
whichever is later:
(A) Attended the first class of the program of instruction that is
the subject of the agreement.
(B) Received a copy of the notice of cancellation as provided in
Section 94899.
(C) Received a copy of the enrollment agreement and the
disclosures as required by Section 94893.
(3) For nondegree programs of 50 or fewer days, the student shall
have the right to cancel the agreement until midnight of the date
that is one business day for every 10 days of scheduled program
length, rounded up for any fractional increments thereof.
(4) For distance learning programs, if the first lesson is sent to
the student by mail, the institution shall send it by first-class
mail, postage prepaid, documented by a certificate of mailing, and
the student shall have a right to cancel until midnight of the eighth
business day after the first lesson was mailed. If the first lesson
is sent to the student electronically, the student shall have the
right to cancel until midnight of the third business day after the
first lesson was electronically received by the student.
(b) Cancellation shall occur when the student gives written notice
of cancellation to the institution at the address specified in the
agreement.
(c) The written notice of cancellation, if given by mail, is
effective when deposited in the mail properly addressed with postage
prepaid.
(d) The written notice of cancellation need not take a particular
form and, however expressed, is effective if it indicates the student'
s desire not to be bound by the agreement.
(e) Except as provided in subdivision (g) of Section 94941, if the
student cancels the agreement, the institution shall refund, without
penalty or obligation, 100 percent of the amount paid to that
institution by or on behalf of the student, less a reasonable deposit
or application fee not to exceed one hundred fifty dollars ($150),
within 10 days after the institution receives notice of the
cancellation.
(f) If the institution gave the student any equipment, the student
shall return the equipment within 10 days following the date of the
notice of cancellation. If the student fails to return the equipment
within this 10-day period, the institution may retain that portion of
the consideration paid by the student equal to the documented cost
to the institution of the equipment, and shall refund the portion of
the consideration exceeding the documented cost to the institution of
the equipment within 10 days after the period within which the
student is required to return the equipment. The student may retain
the equipment without further obligation to pay for it.
94940. (a) If a student withdraws from a program of instruction
after the applicable period described in Section 94939, the
institution shall remit a refund as provided in Section 94941 within
30 days following the student's withdrawal.
(b) If any portion of the tuition was paid from the proceeds of a
loan, the refund shall be sent to the lender or, if appropriate, to
the state or federal agency that guaranteed or reinsured the loan.
Any amount of the refund in excess of the unpaid balance of the loan
shall be first used to repay any student financial aid program from
which the student received benefits, in proportion to the amount of
the benefits received, and any remaining amount shall be paid to the
student.
(c) Within 10 days of the day on which the refund is made, the
institution shall notify the student in writing of the date on which
the refund was made, the amount of the refund, the method of
calculating the refund, and the name and address of the entity to
which the refund was sent. The following statement shall be placed at
the top of the notice in at least 10-point boldface type: "This
Notice is Important. Keep It For Your Records."
(d) Except for subdivision (a), this section shall not apply to a
student if both of the following occur:
(1) All of that student's tuition and fees are paid by a
third-party organization, such as a Job Training Partnership Act
agency, a regional occupational program or regional occupational
center, a private industry council, or a vocational rehabilitation
program, if the student is not obligated to repay the third-party
organization or does not lose time-limited educational benefits.
(2) The third-party organization and the institution have a
written agreement, entered into on or before the date the student
enrolls, that no refund will be due to the student if the student
withdraws prior to completion. The institution shall provide a copy
of the written agreement to the bureau. The institution shall
disclose to any student whose refund rights are affected by this
agreement, in all disclosures required to be given to the student by
this chapter, that the student is not entitled to a refund. It is the
intent of the Legislature that this paragraph not apply to any
student whose tuition and fees are paid with funds provided to the
third-party organization for the student's benefit as part of any
program that provides funds for training welfare recipients or that
is related to welfare reform.
94941. (a) An institution shall refund the unused portion of
tuition fees and other charges if a student does not register for the
period of attendance, withdraws at any time prior to completion of
the course, or otherwise fails to complete the period of enrollment
as provided in this section.
(b) For students enrolled in a degree program, the institution
shall provide a pro rata refund to students who completed 60 percent
or less of the course of instruction.
(c) Except as provided in subdivision (d), the refund shall be
calculated as follows:
(1) Deduct a registration fee not to exceed one hundred fifty
dollars ($150) from the total tuition charge.
(2) Divide this figure by the number of hours in the program.
(3) The quotient derived in paragraph (2) is the hourly charge for
the program.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total hours attended by the
hourly charge for instruction and adding to that product the amount
of the registration fee specified in paragraph (1).
(5) The refund shall be any amount in excess of the figure derived
in paragraph (4) that was paid by the student.
(6) The refund amount shall be adjusted as provided in subdivision
(f) or (g) for equipment and as provided in subdivision (h) for
resident instruction, if applicable.
(d) For an educational service offered by distance learning, home
study, or correspondence, the refund shall be calculated as follows:
(1) Deduct a registration fee not to exceed one hundred dollars
($100) from the total tuition charge.
(2) Divide this figure by the number of lessons for which the
student has paid, but which the student has not completed and
submitted.
(3) The quotient derived in paragraph (2) is the per lesson
charge.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total number of lessons for
which the student has paid by the per lesson charge calculated in
paragraph (3) and adding to that product the amount of the
registration fee specified in paragraph (1).
(5) The refund shall be any amount in excess of the figure derived
in paragraph (4) that was paid by the student.
(6) For the purposes of this section, an institution may specify
in an enrollment agreement the time limits within which a student is
required to complete the requirements of a course in a distance
learning program.
(e) Notwithstanding any provision in any agreement, all of the
following shall apply:
(1) All amounts that the student has paid, however denominated,
shall be deemed to have been paid for instruction, unless the student
has paid a specific charge for equipment set forth in the agreement
for the program of instruction.
(2) In the case of an educational service offered by home study or
correspondence, all amounts that the student has paid, however
denominated, shall be deemed to have been paid for lessons unless the
student has paid a specific charge for equipment or resident
instruction as set forth in the agreement for the educational
service.
(3) The total number of hours necessary to complete each lesson of
home study or correspondence instruction shall be substantially
equivalent to each other lesson unless otherwise permitted by the
bureau.
(4) An equal charge shall be deemed to have been made for each
hour of instruction or each lesson.
(f) If the institution specifies in the agreement a separate
charge for equipment that the student actually obtains and the
student returns that equipment in good condition, allowing for
reasonable wear and tear, within 30 days following the date of the
student's withdrawal, the institution shall refund the charge for the
equipment paid by the student. If the student fails to return that
equipment in good condition, allowing for reasonable wear and tear,
within 30 days following the date of the student's withdrawal, the
institution may offset against the refund calculated under
subdivision (a) the documented cost to the institution of that
equipment. The student shall be liable for the amount, if any, by
which the documented cost for equipment exceeds the refund amount
calculated under subdivision (a). For the purposes of this
subdivision, equipment cannot be returned in good condition if the
equipment cannot be reused because of clearly recognized health and
sanitary reasons and this fact is clearly and conspicuously disclosed
in the agreement.
(g) If the institution specifies in the agreement a separate
charge for equipment, which the student has not obtained at the time
of the student's withdrawal, the refund also shall include the amount
paid by the student that is allocable to that equipment.
(h) If an agreement for educational service offered by distance
learning, home study, or correspondence includes a separate charge
for resident instruction, which the student has not begun at the time
of the student's withdrawal, the institution shall refund the charge
for the resident instruction paid by the student. If the student
withdraws from the educational service after beginning the resident
instruction, the institution shall pay a refund equal to the amount
the student paid for the resident instruction multiplied by a
fraction, the numerator of which is the number of hours of resident
instruction which the student has not received but for which the
student has paid, and the denominator of which is the total number of
hours of resident instruction for which the student has paid.
(i) For the purpose of determining a refund under this section, a
student shall be deemed to have withdrawn from a program of
instruction when any of the following occurs:
(1) The student notifies the institution of the student's
withdrawal or of the date of the student's withdrawal, whichever is
later.
(2) The institution terminates the student's enrollment as
provided in the agreement.
(3) The student has failed to attend classes for a three-week
period. For the purpose of determining the amount of the refund, the
date of the student's withdrawal shall be deemed the last date of
recorded attendance. For the purposes of determining when the refund
must be paid pursuant to subdivision (a) of Section 94940, the
student shall be deemed to have withdrawn at the end of the
three-week period.
(4) The student has failed to submit three consecutive lessons, or
has failed to submit a completed lesson within 60 days of its due
date as set by an educational service offered by distance learning,
home study, or correspondence. For the purposes of this paragraph,
the date of the student's withdrawal shall be deemed to be the date
on which the student submitted the last completed lesson.
(j) An institution shall have the burden of proof to establish the
validity of the amount of every refund. The institution shall
maintain records for five years of all the evidence on which the
institution relies for the determination of refund amounts.
94942. A degree granting institution offering an educational
program for which the refund calculations set forth in this article
cannot be utilized because of the unique way in which the program is
structured may petition the bureau for an alternative method of
calculating tuition refunds. The bureau shall determine the details
of an alternative refund policy, by regulation, and shall take into
consideration the contract for educational services entered into with
the student, as well as the length and character of the educational
program in determining standards for refunds. The decision of the
bureau shall be final.
94943. If any person willfully violates this article and the
violation results in the closure of an institution, that person shall
pay to all students of the closed institution full refunds or full
compensation for actual damages resulting from the closure that were
not paid by the closed institution.
94944. A student may not waive a provision of this article. A
waiver or limitation of a substantive or procedural right or remedy
is in violation of this section, and is void and unenforceable.
94945. (a) (1) Every institution shall meet the following
completion performance standard for each program offered at a site
during the applicable completion tracking period described in
subdivision (b):
(2) Sixty percent or more of the students who began the program,
did not cancel within the cancellation period, and were originally
scheduled at the time of enrollment to complete the program during
that completion tracking period, shall complete it during that
completion tracking period.
(b) (1) Every institution shall meet the following employment
performance standard for each vocational program offered at a site
during the applicable completion tracking period described in
paragraph (2):
(2) Seventy percent or more of the students who completed the
program within that completion tracking period, regardless of when
they were scheduled to complete, shall obtain employment, as defined
in Section 94792.
(c) For the purposes of subdivisions (a) and (b), students who, as
documented by the institution, have been prevented from completing
the program or obtaining
employment due to death, disability, pregnancy, military service,
incarceration, or participation in the Peace Corps or domestic
volunteer service, shall be excluded from the computations used to
determine whether an institution has met the performance standards
prescribed by those subdivisions.
(d) (1) This subdivision applies only to an institution in which
15 or fewer students started a program, did not cancel during the
cancellation period, and were originally scheduled at the time of
enrollment to complete the program during that completion tracking
period.
(2) If an institution described in paragraph (1) fails to meet any
of the performance standards in subdivision (a) or (b), but would
have met the standard if one more student had completed or obtained
employment, then the institution shall be deemed to have complied
with this section in connection with that program.
(e) Any institution which has a site at which the majority of the
programs failed the completion performance standard, or the majority
of the vocational programs failed the employment performance
standard, shall be classified as a Tier 3 institution.
(f) (1) The following applies to any program about which either of
the following is true:
(A) It fails to meet either or both of the performance standards
in subdivision (a) or (b) by 10 percent or less.
(B) It fails to meet either or both of the performance standards
in subdivision (a) or (b) by more than 10 percent, but has an overall
employment rate as described in subdivisions (a), (b), and (c) of 40
percent or higher.
(2) If any institution fails to demonstrate by February 28 of the
third year, or by February 28 of the fourth year if the licensing
examination exception of subdivision (b) of Section 94812 applies,
after the completion of the tracking period in which a program failed
the completion performance standard, that 60 percent of the students
who started at that site, did not cancel during the cancellation
period, and who were originally scheduled to complete in the prior
year, completed the program in that year, the bureau shall order the
institution to stop enrolling any students in that course for two
years from that date.
(3) If any institution fails to demonstrate by February 28 of the
fourth year, or by February 28 of the fifth year if the licensing
examination exception of subdivision (b) of Section 94812 applies,
after the completion tracking period for a program that failed the
employment performance standard, that 70 percent of the students who
completed the program at that site in the most recent completion
tracking period obtained employment, the bureau shall order the
institution to stop enrolling any students in that course for two
years from that date.
(4) No action shall be taken pursuant to this subdivision without
notice, and if requested by the institution, a hearing.
(5) In taking action pursuant to paragraph (3), the bureau shall
consider the impact, if any, of changes in the employment rate of the
area served by the site.
(g) (1) This subdivision applies to either of the following:
(A) Any program that fails to meet either performance standard in
subdivision (a) or (b) by more than 10 percent, or any vocational
program which fails to meet either performance standard in
subdivision (a) or (b) by more than 10 percent if the institution
cannot demonstrate that the vocational program has an overall
employment rate as described in subdivisions (a), (b), and (c) of 40
percent or higher.
(B) Any site at which the majority of the programs fail to meet
either performance standard in subdivision (a) or (b) by more than 10
percent, or any site at which the majority of the programs fail to
meet either performance standard in subdivision (a) or (b) by more
than 10 percent and the institution cannot demonstrate that the
majority of the vocational programs have an overall employment rate
as described in subdivisions (a), (b), and (c) of 40 percent or
higher.
(2) If either of the situations described in paragraph (1) occurs:
(A) The bureau shall order the institution to stop offering that
program.
(B) The bureau shall revoke the approval of the institution to
operate that site.
(3) No action shall be taken pursuant to this subdivision without
notice, and if requested by the institution, a hearing.
(h) (1) The institution shall have the burden of complying with
this section.
(2) The bureau shall investigate an institution whenever the
bureau deems it appropriate to verify the institution's compliance
with this section. The investigation shall include an examination of
the institution's records and contacts with students and employers.
(3) If an institution willfully falsifies, alters, destroys,
conceals, or provides false or misleading information relating to
compliance with this section, including, but not necessarily limited
to, records maintained pursuant to subdivision (j), the bureau shall
revoke the institution's approval to operate. No action shall be
taken pursuant to this subdivision without notice, and if requested
by the institution, a hearing.
(4) The remedies provided in this section supplement, but do not
supplant, any other penalty or remedy provided by law.
(i) A determination (1) that a program or programs failed to meet
any completion or employment performance standard, (2) of the
percentage by which an institution failed to meet that standard, (3)
of the classification of an institution as Tier 3, or (4) that a
program or programs met or failed to meet the overall employment
rate, shall be effective on the date an institution reports any
completion or employment rate that does not meet the performance
standard completion or employment performance standards or overall
employment rate or rates to the bureau, or if not based on the
institution's reporting, then when an order is entered determining
the fact.
(j) For each program an institution has offered at each location,
the institution shall maintain all records necessary to substantiate
its completion and employment performance numbers and rates,
including all of the following:
(1) An electronic list or spreadsheet showing all of the
following:
(A) For each student who enrolled in the program, the student's
name, address, electronic mail address if available, and telephone
number; the date the student enrolled; whether the student canceled
within the cancellation period; the date the student was scheduled at
the time of enrollment to complete the program; whether the student
completed the program; and the date the student left the program or
completed the program.
(B) The identity of each student the institution counts as having
taken the first available state examination after the student
completed the program, if the examination is required by the state
for particular employment, whether the student passed the examination
or not, and the date the examination results were first made
available.
(C) The identity of each student the institution counts as having
obtained employment; for that employment, the employer's name,
address, electronic mail address if available, and telephone number;
the name, address, electronic mail address if available, and
telephone number of the person who provided the information to the
institution regarding the student's employment; the name, title, or
description of the job; the date the student obtained the job; the
number of hours per week the student worked at the job; the duration
of the student's employment; and the amount of the student's salary,
if the institution makes any salary claims.
(2) For each student the institution counts as having obtained
part-time employment, a handwritten statement completed by the
student at the beginning of the program and at the end of the program
which states that the student's educational objective is part-time
employment. The institution shall not require the student to complete
the statement or provide any incentive, financial or otherwise, to
any student for signing the statement.
(3) For each student the institution counts as having obtained
employment based on being self-employed, reliable indices of self
employment such as contracts, checks for payment, tax returns, social
security contribution records, records of accounts receivable or
customer payments, invoices for business supplies, rent receipts,
appointment book entries, or business licenses, or a statement signed
by the student at least 60 days after the student completed the
course stating that the student considers himself or herself
self-employed, that the student has earned money from the
self-employment, and the identity of one or more of the documents
listed above which the student has to document the self-employment.
(4) For each student the institution excludes from the computation
of performance standards under this subdivision, documentation of
the date or dates and fact of the applicable death, disability,
pregnancy, military service, incarceration, or participation in the
Peace Corps or as a Domestic Volunteer.
94946. A person may not own or operate an institution, or give
instruction, for the driving of motortrucks of three or more axles
that are more than 6,000 pounds unladen weight unless all of the
following conditions are met:
(a) The institution has been approved by the bureau.
(b) The institution, at the time of application and thereafter,
maintains both of the following:
(1) Proof of compliance with liability insurance requirements that
are the same as those established by the Department of Motor
Vehicles for a driving institution owner, pursuant to Section 11103
of the Vehicle Code, unless the bureau deems it necessary to
establish a higher level of insurance coverage.
(2) A satisfactory safety rating by the Department of the
California Highway Patrol is established pursuant to Division 14.8
(commencing with Section 34500) of the Vehicle Code.
(c) The institution, at all times, shall maintain the vehicles
used in driver training in safe mechanical condition. The institution
shall keep all records concerning the maintenance of the vehicles.
(d) The driving instructions meet the requirements set forth in
Section 11104 of the Vehicle Code.
(e) Any other terms and conditions required by the bureau to
protect the public safety or to meet the requirements of this
chapter.
94947. The Legislature finds and declares that private lending is
an appropriate and sometimes necessary function to enable students
to finance their direct and indirect costs of attendance at private
postsecondary institutions, and that this lending benefits both the
students and the economy; however, neither the students nor the
economy are served by usurious instruments of debt, by lack of
student counseling regarding loan rights and obligations, or by
undisclosed financial relationships between institutions and lending
entities.
94948. (a) All institutions subject to the approval requirements
of this chapter shall identify each student who makes an application
for, and receives, loan moneys other than loans provided under a
governmental student financial aid program, to the extent that this
information is reasonably available to the institution, including,
but not necessarily limited to, students for whom the institution
makes a referral to a lender, students for whom the institution acts
as lender, students receiving loan proceeds from a lending entity in
which the institution has a financial interest, or students for whom
loan proceeds are received by the institution on behalf of the
student.
(b) The institution shall ensure, either by providing the service
or by documenting that the service has been provided by the lending
entity, that each student has received information regarding the
student's rights and obligations related to loans at the time of
signing a promissory note, and at the end of a student's academic
program. If a student leaves a program prior to completion of the
program, the institution shall make an attempt to contact that
student at the last known student address to ensure the student has
received information from the lending entity or to provide
information to the student itself, and shall keep evidence of its
attempt to do so.
(c) (1) An institution shall disclose to the student any formal or
informal relationship between the institution and the lender,
including, but not necessarily limited to, an agreement between the
institution and lender to make referrals, to place that lender in a
preferred status for students of that institution, or to provide any
benefit, financial or otherwise, to the institution as a result of
referral or student borrowing, and shall disclose any financial
interest of the institution in the lending entity.
(2) Disclosure under this subdivision shall be made, prior to the
loan proceeds being received by the student, whenever the institution
has a reasonable opportunity to know of the student's application
for the loan.
(3) Disclosure under this subdivision shall be included in the
information and materials provided to the student at the time of
negotiation of the enrollment contract, whenever the institution has
a reasonable opportunity to know of the student's application for
that loan.
(4) A gift or other consideration of below one hundred dollars
($100) in total value exchanged between an institution and a lender
in a calendar year shall not be considered to create a financial
relationship.
(d) The institution shall keep records of each student making an
application for and receiving loans, including evidence of the
requirements in subdivision (b) and sufficient information to comply
with the reporting requirements of subdivision (e) and evidence of
required disclosure to each student, in accordance with the
recordkeeping provisions of this chapter.
(e) The institution shall provide, in its annual report to the
bureau as required in this chapter, a summary of loan activity in the
most recently concluded fiscal year, which shall not include the
individual identity of any student borrower at the institution.
(1) The report shall include, but not necessarily be limited to,
the number and percentage of students receiving loans in each
approved program and the total volume of those loans in each approved
program, aggregated by the interest rate on the loans in categories
to include all of the following:
(A) Zero to 5.0, inclusive, percent annual interest.
(B) 5.1 to 10.0, inclusive, percent annual interest.
(C) 10.1 to 15.0, inclusive, percent annual interest.
(D) 15.1 to 20.0, inclusive, percent annual interest.
(E) 20.1 or greater percent annual interest.
(F) Variable rate of annual interest.
(2) The report shall provide the names and addresses of all
lending entities providing loans to students where the institution
has a reasonable opportunity to know of that entity's lending
relationship with a prospective student or a student enrolled in the
institution. The report shall also specify whether or not the
institution has a financial interest in, or financial relationship
with, each entity included in the report.
(f) If it is determined that an institution failed to disclose a
financial relationship with, or a financial interest in, a lending
entity that provided a loan to a student at that institution as
required by this chapter, that loan shall be considered paid in full.
(g) The bureau shall consult with the Enforcement Advisory Board
established pursuant to Article 1.5 (commencing with Section 94730)
prior to December 31, 2009, and shall include recommendations in its
required December 31, 2009, report to the Legislature and Governor,
relating to the advisability of enacting legislation to require
students who do not possess a high school diploma or its equivalent
to demonstrate, by means of an independently administered
examination, their ability to benefit from the education offered by
the institution prior to receiving loan proceeds. The report shall
include, but not necessarily be limited to, information on the
adequacy and relevance of the federally approved ability-to-benefit
testing instruments and policies that apply in this manner to
federally guaranteed student loans.
(h) Where federal statutes and regulations conflict with or exceed
the disclosure provisions of this chapter, the federal statutes and
regulations shall take precedence for institutions subject to
approval under this chapter that are eligible to participate in
student financial aid programs under Title IV of the federal Higher
Education Act of 1965.
Article 6. Operating Requirements for Institutions Regardless
of Exemption Status
94960. (a) Notwithstanding any exemption from this chapter under
Article 3 (commencing with Section 94840), an institution that
provides medical training providing for students to interact with
health care patients, and that is required to provide criminal
background checks, medical blood tests, or drug tests on its
students, shall keep complete, accurate, and up-to-date files of
these checks and test results.
(b) Records kept under this section shall be available for review
by the medical facility in which the students are obtaining their
clinical rotation work, by law enforcement personnel, and by the
bureau.
(c) An institution shall implement procedures to ensure that
records kept under this article are safeguarded and that the privacy
rights of students are protected.
94961. Notwithstanding any exemption from this chapter under
Article 3 (commencing with Section 94840), no private postsecondary
institution providing instruction in California shall design its
public Web site in a manner that requires a student to register,
identify themselves, provide electronic or other personal contact
information, or agree to be contacted by an admission representative,
in order to access information regarding the institution's program
or programs, cost of attendance, student financial aid information,
accreditation or approval status, faculty qualifications, facilities,
location, admissions policies, or any item required under the
consumer information requirements of Title IV of the federal Higher
Education Act of 1965.
94962. (a) With the exception of institutions accredited by the
Accrediting Commission for Senior Colleges and Universities of the
Western Association of Schools and Colleges, and past or present
students attending those institutions, this section applies only to
institutions otherwise exempt from provisions of this chapter under
Article 3 (commencing with Section 94840), and past or present
students enrolling in those programs.
(b) An action may be brought under this section if the institution
or its representative makes an oral or written statement in
connection with an enrollment agreement or a student enrollment that
misrepresents or conceals relevant information regarding any of the
following:
(1) The transferability of the credits earned at the institution.
(2) The nature and specifics of the educational program or course
of instruction at the institution, including, but not necessarily
limited to, the following:
(A) Admissions standards.
(B) The nature, availability, and quality of instruction, training
devices, equipment, software, and supplies to fit or prepare the
student for the job or occupation to which the training was
represented to lead.
(C) Whether the successful completion of the course allows the
student to sit for a licensing exam.
(3) The nature of the financial charges, including, but not
necessarily limited to, the following:
(A) The educational loans or financial aid available to the
student.
(B) The amount of the total periodic loan payments for all loans.
(C) The ability to repay loans from probable earnings from a job
after graduation.
(D) The annual percentage rate on each educational loan.
(E) The refund policy of the school.
(F) The student's ability or likely ability to make the minimum
payments on the educational loans used to pay for the instruction
upon graduation, even if employment is obtained as a result of the
course of instruction.
(G) The total costs of the program.
(4) The institution's completion and placement statistics,
including, but not necessarily limited to, all of the following:
(A) The completion rates and statistics of former students and the
placement rates and statistics of graduates.
(B) Counting as a placement any job which required no prior
training.
(C) Counting as a placement a job for which the student did not
receive training.
(D) The passage rate on any licensing examination related to the
course of instruction.
(5) The employability of the institution's graduates, including,
but not necessarily limited to, all of the following:
(A) Job placement services provided by the institution.
(B) Job availability in the area for jobs which the student is
receiving training.
(C) Probable starting salary or salary range for student graduates
in the occupation for which they are receiving training.
(c) If an institution violates any provision of subdivision (b),
the enrollment agreement shall be unenforceable and the institution
shall refund to the student all consideration paid by or on behalf of
the student.
(d) If an institution violates any provision of subdivision (b), a
court shall order the recovery of damages and equitable relief.
Reasonable attorney's fees and costs shall be awarded to a prevailing
student or former student.
(e) The remedies provided in this section supplement, and do not
supplant, any other remedies available to a student, a former
student, or a consumer under the law.
(f) If the court finds that a violation was either willfully
committed, or if the institution failed to refund all the tuition and
costs when requested, the court, in addition to the return of
tuition and other damages and relief, may award a civil penalty of up
to two times the amount of the tuition and the other damages
sustained by the student.
(g) All claims under this section shall be brought within three
years from the date of the violation.
(h) Any provision in any agreement that purports to require a
student to invoke any grievance dispute procedure before enforcing
any right or remedy, or which in any way limits the student's right
to sue, is void and unenforceable. A student may voluntarily elect to
avail himself or herself of a nonbinding grievance dispute procedure
available to students after the student's grievance has arisen, but
prior to enforcing any right or remedy under law or filing a judicial
action.
Article 7. Student Tuition Recovery Fund
94970. The Student Tuition Recovery Fund is continued in
existence. All assessments and fees collected pursuant to this
article shall be credited to this fund, along with any interest on
the moneys, for the administration of this article. Notwithstanding
Section 13340 of the Government Code, the moneys in the fund are
continuously appropriated to the bureau without regard to fiscal
years for the purposes of this chapter.
94971. The fund shall consist of assessments from all institutions
approved or registered under this chapter, and non-WASC regionally
accredited for-profit institutions, that charge each enrolled student
a total charge. A California resident who is a student of an
approved or registered institution and who meets either of the
following conditions is eligible for reimbursement from the fund:
(a) (1) The student was enrolled in an institution, prepaid
tuition, and suffered economic loss as a result of the closure of the
institution.
(2) For the purposes of this section, "closure" means the closure
of a branch or satellite campus, the termination of either the
correspondence or residence portion of a home study or correspondence
course, and the termination of a course of instruction for some or
all of the students enrolled in the course before the time these
students were originally scheduled to complete it, or before a
student who has been continuously enrolled in a course of instruction
has been permitted to complete all the educational services and
classes that comprise the course.
(b) The student obtained a final judgment against the institution
for a violation of this chapter, and the student certifies that the
judgment cannot be collected after diligent collection efforts. A
court judgment obtained under this subdivision shall be paid in
accordance with subdivision (a) of Section 94975, unless the judgment
indicates that a lesser amount is due.
94972. A student's claim shall be initiated within three years of
the closure of the institution.
94973. (a) A student filing a claim for payment from the Student
Tuition Recovery Fund shall submit an application indicating each of
the following:
(1) The student's name, address, telephone number, and social
security number.
(2) If a portion of the tuition was paid from the proceeds of a
loan, the name of the lender, and any state or federal agency that
guaranteed or reinsured the loan.
(3) The amount of the paid tuition, the amount and description of
the student's loss, and the amount of the student's claim.
(4) The date the student started and ceased attending the
institution.
(b) The bureau may require additional information designed to
facilitate payment to entitled students. The bureau shall waive the
requirement that a student provide all of the information required by
this subdivision if the bureau has the information or the
information is not reasonably necessary for the resolution of a
student's claim.
(c) If the student is filing an application after receiving a
final judgment against an institution for a violation of this
chapter, the application shall include the amount of the judgment
obtained against the institution, a statement that the judgment
cannot be collected, and a description of the efforts attempted to
enforce the judgment. The application shall be accompanied by a copy
of the judgment and any other documents indicating the student's
efforts made to enforce the judgment, and shall be filed within two
years after the date upon which the judgment became final.
(d) Notwithstanding any other provision of law, if a student fails
to file a completed application, including providing any information
required by this section, within one year after filing an initial
application, that application shall be deemed abandoned. An
application submitted subsequent to the abandonment of a former
application shall be treated as a new application.
94974. Within 60 days of the bureau's receipt of a completed
application for payment in accordance with this article, the bureau
shall pay the claim from the Student Tuition Recovery Fund or deny
the claim. The bureau may extend the time period for up to an
additional 90 days to investigate the accuracy of the claim.
94975. (a) If the bureau pays a claim in accordance with this
article, the amount of the payment shall be (1) the greater of either
(A) the total guaranteed student loan debt incurred by the student
in connection with attending the institution, or (B) the total of the
student's tuition and the cost of equipment and materials related to
the course of instruction, less (2) the amount of any refund,
reimbursement, indemnification, restitution, compensatory damages,
settlement, debt forgiveness, discharge, cancellation, or compromise,
or any other benefit received by, or on behalf of, the student
before the bureau's payment of the claim in connection with the
student loan debt or cost of tuition, equipment, and materials. The
payment also shall 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. However, if the claim is based solely on a
final judgment being awarded, the amount of the payment shall be the
amount of the loss suffered by the student. In addition to the
amount determined under this subdivision, the amount of the payment
shall include all interest and collection costs on all student loan
debt incurred by the student in connection with attending the
institution.
(b) The bureau may reduce the total amount specified in
subdivision (a) by the value of the benefit, if any, of the education
obtained by a student before the closure of an institution. If the
bureau makes a reduction pursuant to this subdivision, the bureau
shall notify the claimant in writing, at the time the claim is paid,
of the basis of its decision and provide a brief explanation of the
reasons upon which the bureau relied in computing the amount of the
reduction.
(c) Upon payment of a claim, all of a student's rights against an
institution shall be deemed assigned to the bureau to the extent of
the amount of the payment.
94976. If the bureau denies a student's claim, or reduces the
amount of a claim, the bureau shall notify the student of the denial
or reduction and of the student's right to request a hearing within
60 days or any longer period permitted by the bureau. If a hearing is
not requested within 60 days or any additional period reasonably
requested by the student, the bureau's decision shall be final. If a
hearing is requested, Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code shall apply.
94977. The bureau may deny any application for any or all of the
following reasons:
(a) Failure to provide any information required by this article or
that is required by the bureau that is necessary to process the
application or pay the claim.
(b) Fraud or misrepresentation on the part of the applicant.
(c) Failure to make a diligent effort to collect a judgment from
the institution.
(d) Receipt of third-party payer benefits for his or her
institutional charges.
(e) The institution attended by the student was exempt from this
chapter.
(f) Any other grounds for denial established through regulation by
the bureau.
94978. (a) The bureau shall negotiate with a lender, holder,
guarantee agency, or the United States Department of Education for
the full compromise or writeoff of student loan obligations to
relieve students of loss, and thereby reduce the amount of student
claims.
(b) In the case of a student who was a recipient of a loan to
attend an institution, payment from the Student Tuition Recovery Fund
shall first be made to the lender of financial aid funds to that
student, to repay the student's indebtedness that pertains to tuition
and fees related to attendance at the institution.
94979. (a) It is the intent of the Legislature that, when a
student is enrolled in an institution that closes prior to the
completion of the student's program, the student shall have the
option for a teach-out at another institution approved by the bureau.
The bureau shall seek to promote teach-out opportunities wherever
possible, and shall inform the student of his or her rights,
including payment from the fund, transfer opportunities, and
available teach-out opportunities, if any.
(b) Under a teach-out, the student incurs no involuntary
additional tuition expenses for coursework successfully completed at
the closing institution. The closing institution, or in the case of a
closed institution, a third-party institution interested in
providing a teach-out, shall provide the bureau a proposed teach-out
plan. The plan should be provided within 30 days of the proposed
teach-out to allow the bureau sufficient time to review it. The
bureau shall review the plan to determine if it is in the best
interest of the students, and may make recommendations or
modifications prior to approval or denial. If a teach-out is not
viable, the institution shall provide a list of transfer institutions
to students and to the bureau 30 days prior to any actual transfers.
The list shall provide the name and address of the institution, and
the contact person and telephone number. The student information
requested shall be provided in hardcopy, and in electronic format if
available.
94980. In the event of the closure of an institution or a
teach-out, the bureau shall give priority, for payments from the
fund, to a student who transfers to another institution to complete a
course of study.
94981. Once the bureau has determined that a student claim is
eligible for payment under this article and intends to use the
Student Tuition Recovery Fund, in whole or in part, to satisfy the
eligible claim, the bureau shall document its negotiations with the
relevant lender, holder or guarantee agency, the United States
Department of Education, or the applicable state agency. The bureau
shall prepare a written summary of the parties and results of the
negotiations, including the amounts offered and accepted, the
discounts requested and granted, and any other information that is
available to any party that files a request for this information with
the bureau.
94982. The bureau shall assess an institution, except for an
institution that receives all of its students' total charges from
third-party payers, for the purpose of compliance with the provisions
of this chapter that are related to the Student Tuition Recovery
Fund. A "third-party payer," for the purposes of this article, means
an employer, government program, or other payer that pays a student's
total charges directly to the institution when no separate agreement
for the repayment of that payment exists between the third-party
payer and the student. A student who receives third-party payer
benefits for his or her institutional charges is not eligible for
benefits from the Student Tuition Recovery Fund.
94983. (a) (1) The amount assessed each institution shall be
calculated only for those students who are California residents and
who are eligible to be reimbursed from the fund. It shall be based on
the actual amount charged each of these students for total tuition
cost, regardless of the portion that is prepaid. The amount of the
assessment on an institution shall be determined in accordance with
subdivisions (b) and (c).
(2) Each institution shall collect the amount assessed by the
bureau in the form of a Student Tuition Recovery Fund fee from its
new students, and remit these fees to the bureau during the quarter
immediately following the quarter in which the fees were collected
from the students, or from loans funded on behalf of the students,
except that an institution may waive collection of the Student
Tuition Recovery Fund fee and assume the fee as a debt of the
institution. The fees collected by the institution shall be placed in
a separate bank or trust account and not commingled with any other
moneys until the institution remits those fees to the bureau. If the
institution assumes the fee, this need not be placed in a separate
account. The student's subsequent disenrollment shall not relieve the
institution of the obligation to pay the fee to the bureau, nor be
the basis for refund of the fee to the student. An institution may
not charge a fee of any kind for the collection of the Student
Tuition Recovery Fund fee. An institution shall refuse to enroll a
student who has not paid, or made provisions to pay, the appropriate
Student Tuition Recovery Fund fee.
(b) A Student Tuition Recovery Fund fee shall be collected from
students upon enrollment and in its entirety at the rate of two
dollars and fifty cents ($2.50) per thousand dollars of tuition
charged, rounded to the nearest thousand dollars.
(c) If, at any time, the balance in the Student Tuition Recovery
Fund is more than five million dollars ($5,000,000), net of the
estimated liability associated with any pending claims, the bureau
may reduce the amount of the assessment collected from new students
to a level less than two dollars and fifty cents ($2.50) per thousand
dollars of tuition charged, rounded to the nearest thousand dollars,
or suspend collection of the fee for a period determined by the
bureau, so as to maintain a fund balance of between five million
dollars ($5,000,000) and ten million dollars ($10,000,000). Prior to
any reduction in the assessment, the bureau shall demonstrate that
amounts in the fund would be reasonably sufficient to pay any pending
or future claims.
(d) The bureau may by regulation levy additional reasonable
special assessments on an institution under this section only if
these assessments are required to ensure that sufficient funds are
available to satisfy the anticipated costs of paying student claims.
(e) The bureau may not levy a special assessment unless the
balance in the Student Tuition Recovery Fund falls below two hundred
fifty thousand dollars ($250,000), as certified by the Secretary of
the State and Consumer Services Agency.
(f) The assessments, fees, and special assessments shall be paid
into the Student Tuition Recovery Fund, and the deposits shall be
allocated, except as otherwise provided for in this chapter, solely
for the payment of valid claims to students. Unless additional
reasonable assessments are required, no assessment may be levied
during any fiscal year if, as of June 30 of the prior fiscal year,
the balance in the fund exceeds ten million dollars ($10,000,000).
However, regardless of the balance in the fund, assessments shall be
made on a newly approved institution.
94984. Moneys deposited in the Student Tuition Recovery Fund are
exempt from execution and may not be the subject of litigation or
liability on the part of creditors of those institutions or students.
94985. (a) On or before December 31, 2010, the bureau shall adopt
a procedure allowing for payments to the fund to be made through
online transactions and other electronic means.
(b) The bureau shall adopt audit and accounting procedures to
ensure that institutions fully pay the amounts that are due to the
fund.
94986. The bureau's costs of administration of the Student
Tuition Recovery Fund authorized by this article shall not be paid
from the fund, but shall be paid from the Private Postsecondary
Education Fund.
94987. In the event of a closure by any approved institution
under this chapter, any assessments that have been made against those
institutions, but have not been paid into the fund, shall be
recovered. Any payments from the fund made to students on behalf of
any institution shall be recovered from that institution.
94988. In addition to civil remedies, the bureau may order an
institution to remit or collect previously unpaid Student Tuition
Recovery Fund fees or to reimburse the bureau for any payments made
from the fund in connection with the institution. Before any order is
made pursuant to this section, the bureau shall provide written
notice to the institution and notice of the right to request a
hearing within 30 days of the service of the notice. If a hearing is
not requested within 30 days of the service of the notice, the bureau
may order payment. If a hearing is requested, Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code shall apply, and the bureau shall have all powers
prescribed in that chapter. Within 30 days after the effective date
of the issuance of the order, the bureau may enforce the order in the
same manner 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.
94989. In addition to any other action that the bureau may take
under this chapter, the bureau may suspend or revoke an institution's
approval to operate because of the institution's failure to collect
or remit Student Tuition Recovery Fund fees when due or failure to
pay reimbursement for any payments made from the fund within 30 days
of the bureau's demand for payment.
Article 8. Enforcement
95000. The bureau, with the assistance and guidance of, and in
cooperation with, the Attorney General and the board, shall develop
an enforcement program. The enforcement program shall include, but
not necessarily be limited to, all of the following:
(a) Initial and periodic training of bureau staff.
(b) The enforcement process shall ensure that all institutions
subject to this chapter are in compliance with this chapter and that
institutions not in compliance are appropriately disciplined.
(c) Site visits that include a review of student files.
(d) Audits and site visits that are triggered by complaints and
events that would cause reasonable concern, which may include random
audits and site visits.
95001. A person claiming damage or loss as a result of an act or
practice by an institution, its agent, its employee or
representative, or any combination thereof, that is a violation of
this chapter or of the regulations adopted pursuant to this chapter,
may file with the bureau, electronically or in writing, a complaint
against that institution. The complaint shall set forth the alleged
violation, and shall contain any other information as may be required
by the bureau.
95002. (a) A copy of a complaint received by the bureau
pertaining to an institution accredited by the Accrediting Commission
for Senior Colleges of the Western Association of Schools and
Colleges shall be forwarded to the association. The bureau shall
notify the complainant that the complaint has been forwarded and that
the bureau will not take any other action due to its lack of
jurisdiction. An action by the bureau relating to a complaint against
these institutions shall be limited to the transmittal of this
information to the Accrediting Commission for Senior Colleges of the
Western Association of Schools and Colleges and notification to the
complainant.
(b) A complaint received by the bureau pertaining to an
institution accredited by a state recognized accrediting agency shall
be forwarded to the accrediting agency that accredited that
institution. The bureau shall notify the complainant that the
complaint has been forwarded. The bureau may also pursue action
against that institution for any violation of this chapter.
(c) A complaint received by the bureau pertaining to an
institution or program that is accredited by an accrediting body that
is not a state recognized accrediting agency shall be referred to
the accrediting body, in addition to whatever other action the bureau
may take.
95003. (a) If a person commits an act constituting grounds for
discipline, the bureau may do any or all of the following:
(1) Revoke or suspend the license.
(2) Place the license on probation.
(3) Issue an administrative citation with an administrative fine,
order of abatement, or both, pursuant to Section 95007 of this code
or Section 125.9, 146, 147, or 148 of the Business and Professions
Code. A citation shall be in writing, and shall describe the nature
of the violation and the specific provision of law determined to have
been violated. A citation may contain an order of abatement, an
assessment of an administrative fine, or both. The order of abatement
may include, but is not necessarily limited to, any of the following
provisions:
(A) An order to cease operating without a license.
(B) An order prohibiting the enrollment of new students.
(C) An order to cease entering into new agreements for one or more
courses of instruction.
(D) An order to cease offering a class or program. This order may
permit the licensee to complete the class or course of instruction
only for those students enrolled, or may order the licensee to
immediately cease instruction and provide a refund of tuition and all
other charges to students.
(E) Requiring posting of a bond.
(F) Other remedial measures intended to address the acts
constituting grounds for discipline.
(4) Order reimbursement of the costs of an investigation and any
enforcement action taken in accordance with Section 125.3 of the
Business and Professions Code. A licensee may not be required to pay
the same costs and expenses to more than one investigating entity.
(5) If the bureau has probable cause to believe that a person has
violated this chapter, order the person to notify all telephone
companies furnishing services to the person to disconnect all
telephone services and that subsequent telephone calls not be
referred by the telephone company to any new telephone number or
numbers obtained by that person. If the person fails to comply after
the order is final, the bureau may inform the Public Utilities
Commission of the violation, and the Public Utilities Commission
shall require the telephone company to disconnect the telephone
service furnished to the person. The good faith compliance by the
telephone company with an order of the Public Utilities Commission
pursuant to this section shall constitute complete defense to any
civil or criminal action brought against the telephone company
arising from the termination of service.
(b) Any enforcement proceeding may be referred to mediation or
nonbinding arbitration with the consent of both the bureau and the
licensee.
95004. Notwithstanding any other provision of law, the bureau
shall cite any person operating without proper approval to operate
issued by the bureau pursuant to this chapter, and that person shall
be subject to a fine not to exceed fifty thousand dollars ($50,000).
In addition, the bureau may take additional steps to prevent
unauthorized activity, which may include, but is not necessarily
limited to, either of the following:
(a) Notify a telephone corporation to disconnect the person's
telephone as authorized by Section 149 of the Business and
Professions Code.
(b) Issue a cease and desist order.
95005. For purposes of this chapter, grounds for discipline
include a violation of this chapter or the regulations adopted
pursuant to it, or any other conduct substantially related to the
qualifications, responsibilities, and duties of the licensee. These
grounds include, but are not necessarily limited to, the following:
(a) Furnishing false, misleading, or incomplete information to the
bureau, or the failure to furnish information requested by the
bureau or required by this chapter.
(b) An owner, a person in
control, a director, or an officer of an institution violated this
chapter while serving as an owner, person in control, director, or
officer of an institution or licensee within the previous five-year
period.
(c) A signatory to an application for licensure was responsible
for the closure of an institution or licensee in which there were
unpaid liabilities to a state or federal government, or uncompensated
pecuniary losses suffered by students without restitution.
(d) An applicant, owner, or person in control has been found
previously in any judicial or administrative proceeding to have
violated this chapter or admitted to having violated this chapter.
(e) Failing to maintain the minimum standards prescribed by this
chapter, or to maintain standards that are the same as, or
substantially equivalent to, those represented in the institution or
licensee's applications and advertising.
(f) Presenting to prospective students information that is false
or misleading relating to an institution, to employment
opportunities, or to enrollment opportunities in institutions of
higher learning, after entering into or completing courses offered by
the institution.
(g) Failing to maintain financial resources as required by this
chapter.
(h) Failing to provide refunds to students timely and accurately,
as required by this chapter, or failing to satisfy, within 30 days of
its issuance, a final judgment obtained by a student against the
institution.
(i) Paying a commission or other consideration to a person for an
act or service in violation of this chapter.
(j) Attempting to confer a degree, diploma, or certificate to a
student in violation of this chapter.
(k) Misrepresenting to a student or prospective student that the
student is or will be qualified, upon completion of a course, for
admission to a professional examination under a state occupational
licensing provision.
(l) Failing to correct a deficiency or act of noncompliance under
this chapter, or the standards, rules, regulations, and orders
established and adopted under this chapter, within reasonable time
limits set forth in the notice from the bureau.
(m) Conducting business or instructional services at a location
not approved by the bureau.
(n) Failing to comply with a provision of law or regulation
governing sanitary conditions as specified in Section 94891.
(o) Failing to pay any fee assessment, costs, or penalty duly
required by this chapter.
(p) The institution or an owner, person in control, director, or
officer of the institution is, or has been, found in any criminal,
civil, or administrative proceeding, after notice and an opportunity
to be heard, to have violated any law regarding the obtaining,
maintenance, or disbursement of state or federal funds, or to have
unpaid financial liabilities involving the refund or unlawful
acquisition, use, or expenditure of state or federal funds.
(q) All of the following are, or have been, found in any criminal,
civil, or administrative proceeding:
(1) A person in control of the institution was a person in control
of another institution within one year before that institution's
closure.
(2) While the person was acting as a person in control of the
other institution, the person knew or, by the exercise of reasonable
care, should have known, that the institution violated this chapter.
(3) That the violation was a cause of that institution's closure
or of damage to students.
(4) That institution did not pay to all students refunds owed as a
result of the closure and full compensation for actual damages from
that violation.
95006. (a) The bureau chief, or his or her designee, may issue an
order of correction to a licensee directing the licensee to comply
with this chapter or regulations adopted pursuant to this chapter.
(b) The order of correction shall be in writing, and shall
describe in detail the nature and facts of the violation, including a
reference to the statute or regulations violated.
(c) The order of correction shall inform the licensee that within
30 days of service of the order of correction, the licensee may do
any of the following:
(1) Submit a written request for an office conference with the
bureau chief to contest the order of correction.
(A) Upon a timely request, the bureau chief, or his or her
designee, shall hold an office conference with the licensee or the
licensee's legal counsel or authorized representative. Unless so
authorized by the bureau chief, or his or her designee, no individual
other than the licensee's legal counsel or authorized representative
may accompany the licensee to the office conference.
(B) Prior to or at the office conference, the licensee may submit
to the bureau chief declarations and documents pertinent to the
subject matter of the order of correction.
(C) The office conference is intended to be an informal
proceeding, and shall not be subject to the provisions of the
Administrative Procedure Act (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).
(D) The bureau chief, or his or her designee, may affirm, modify,
or withdraw the order of correction. Within 14 calendar days from the
date of the office conference, the bureau chief, or his or her
designee, shall personally serve or send by certified mail to the
licensee's address of record with the bureau a written decision. This
decision shall be deemed the final administrative decision
concerning the order of correction.
(E) Judicial review of the decision may be had by filing a
petition for a writ of mandate in accordance with Section 1094.5 of
the Code of Civil Procedure within 30 days of the date the decision
was personally served or sent by certified mail. The judicial review
shall extend to the question of whether or not there was a
prejudicial abuse of discretion in the issuance of the order of
correction.
(2) Comply with the order of correction, and submit a written
corrective action plan to the bureau chief, or his or her designee,
documenting compliance. If an office conference is not requested
pursuant to this section, compliance with the order of correction
shall not constitute an admission of the violation noted in the order
of correction.
(3) Request a hearing under the procedures set forth in Article 9
(commencing with Section 95030).
(d) The order of correction shall be served upon the licensee
personally or by certified mail at the licensee's address of record
with the bureau. If the licensee is served by certified mail, service
shall be effective upon deposit in the United States mail.
(e) The licensee shall maintain, and have readily available on the
licensee's premises, a copy of the order of correction and
corrective action plan for at least three years from the date of
issuance of the order of correction.
(f) Nothing in this section shall in any way limit the bureau's
authority or ability to take any other enforcement action authorized
by this chapter.
(g) Unless a writ of mandate is filed, a citation issued, a
hearing is requested, or a disciplinary proceeding instituted, an
order of correction shall not be considered a public record and shall
not be disclosed pursuant to a request under the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code).
95007. (a) An administrative fine assessed with a citation may
not exceed five thousand dollars ($5,000) for each violation. The
bureau shall base its assessment of the administrative fine on the
nature and seriousness of the violation, the persistence of the
violation, the good faith of the institution or licensee, the history
of previous violations, and the extent to which the violation
undermined the purposes of this chapter.
(b) The citation shall inform the institution or licensee of a
right to request a hearing pursuant to this chapter, in writing,
within 15 days of the date that the citation was issued. If a hearing
is not requested, payment of the administrative fine shall not
constitute an admission of the violation charged. If a hearing is
requested, the bureau shall provide a hearing pursuant to Article 9
(commencing with Section 95030). Payment of the administrative fine
is due 15 days after the citation was issued if a hearing is not
requested, or when a final order is entered if a hearing is
requested. The bureau may enforce the administrative fine as if it
were a money judgment pursuant to Title 9 (commencing with Section
680.10) of Part 2 of the Code of Civil Procedure.
(c) The citation shall also inform the licensee of its right to
submit a written request for an office conference with the bureau
chief to contest the citation.
(1) Upon a timely request, the bureau chief, or his or her
designee, shall hold an office conference with the licensee or the
licensee's legal counsel or authorized representative. Unless so
authorized by the bureau chief, or his or her designee, no individual
other than the licensee's legal counsel or authorized representative
may accompany the licensee to the office conference.
(2) Prior to or at the office conference, the licensee may submit
to the bureau chief declarations and documents pertinent to the
subject matter of the order of correction.
(3) The office conference is intended to be an informal
proceeding, and shall not be subject to the provisions of the
Administrative Procedure Act (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).
(4) The bureau chief, or his or her designee, may affirm, modify,
or withdraw the order of correction. Within 14 calendar days from the
date of the office conference, the bureau chief, or his or her
designee, shall personally serve, or send by certified mail to the
licensee's address of record with the bureau, a written decision.
This decision shall be deemed the final administrative decision
concerning the order of correction.
(d) Failure to pay a fine within 30 days of the date of
assessment, unless the citation is being appealed, may result in
disciplinary action taken by the bureau, and the full amount of the
assessed fine shall be added to the fee for renewal of the license. A
license shall not be renewed without payment of the renewal fee and
fine.
(e) All administrative fines shall be deposited in the Private
Postsecondary and Vocational Education Administration Fund or its
successor fund.
95008. (a) If the bureau places a licensee on probation, it shall
articulate the terms and conditions of the probation. The terms and
conditions of probation may include the required submission of
periodic reports and documents, and unannounced inspections by bureau
representatives to determine compliance with the terms of probation.
The onsite inspections may include an inspection of the licensee's
facilities and records, interviews of administrators, faculty, and
students, and observation of class instruction.
(b) The licensee shall reimburse the bureau for all reasonable
costs and expenses incurred in connection with this section. Payment
of the reimbursement shall be a condition of probation.
(c) If the licensee fails to comply with the terms of probation,
the bureau may suspend or revoke the license, or may take other
action pursuant to this article.
(d) In addition to any other terms of probation, the bureau may
assess a penalty of up to ten thousand dollars ($10,000) as part of a
probation order for violations of this chapter. In determining the
amount of that penalty, the bureau shall consider the number, nature
and seriousness of the violations, the persistence of the violations,
the degree of the licensee's good faith or culpability, the history
of the licensee's previous violations, the licensee's ability to pay,
and the extent to which the violation undermined the purposes of
this chapter. If the licensee fails to pay a penalty within the time
prescribed by the bureau, in addition to any other remedies, the fine
shall be added to the renewal fee as provided for in subdivision (d)
of Section 95007.
95009. (a) If the bureau determines that immediate action is
necessary to protect students or prevent the loss of public funds,
tuition, or other money paid by students, the bureau may institute an
emergency action to suspend the approval of an institution to
operate, or the approval to operate a branch or satellite campus, for
not more than 30 days unless the bureau initiates a proceeding to
suspend or revoke the approval to operate within that period.
(b) (1) The bureau shall provide notice of an emergency action to
the institution by either (A) certified mail, in which case the
effective date of the emergency action shall be not less than 10
working days after mailing, or (B) personal service, in which case
the effective date of the emergency action shall be not less than
five days after service.
(2) The notice shall specify all of the following:
(A) The violations upon which the emergency action is based.
(B) The nature and grounds of the emergency action, including
whether the action applies to the continuation of instruction to
enrolled students or to the enrollment of new students.
(C) The effective date of the action.
(D) The institution's right to show cause that the emergency
action is unwarranted by submitting to the bureau, at least two days
before the effective date of the emergency action, declarations,
documentary evidence, and written arguments demonstrating that the
violations did not occur or that immediate action is not required.
(E) The right of the institution to request, in writing, within 30
days of the service of the notice, a hearing.
(c) At any time, the bureau may (1) continue the effective date of
an emergency action or (2) terminate an emergency action if the
bureau concludes that the institution has shown cause that the
emergency action is unwarranted or that the grounds for instituting
the emergency action no longer remain. The bureau shall provide
written notice of a continuance or termination of an emergency action
to the institution.
(d) (1) If an institution does not take the opportunity to show
cause why an emergency action is unwarranted, the emergency action
shall become effective on the date specified in the notice or notice
of continuance.
(2) If an institution takes the opportunity to show cause why an
emergency action is unwarranted, and the bureau decides, after a
consideration of the declarations, documentary evidence, and written
arguments submitted by the institution, that the emergency action
should become effective, the emergency action shall be effective on
the date specified in the notice or notice of continuance. The bureau
shall notify the institution of the decision at least one day before
the effective date, and the institution may thereafter seek judicial
relief upon notice to the bureau and the Attorney General.
(e) (1) If an institution requests a hearing to contest an
emergency action within the 30-day period specified in subdivision
(b), the bureau shall set a date for a hearing within 20 days after
receipt of the request.
(2) If an institution does not request a hearing to contest an
emergency action within the 30-day period specified in subdivision
(b), or if the bureau concludes after a hearing requested by the
institution that grounds exist for the suspension or revocation of
the institution's approval to operate or approval to operate a branch
or satellite campus, the bureau may extend the action or take
another disciplinary action, as the bureau deems appropriate.
(f) During the pendency of an emergency action, the bureau may
investigate the institution's compliance with this chapter, including
an onsite inspection, and may take another disciplinary action as
the bureau deems appropriate.
(g) This section supplements, but does not supplant, the authority
of the bureau to seek judicial relief, including a temporary
restraining order and injunction, to redress any violation of this
chapter.
95010. (a) An institution, the approval to operate of which has
been revoked or suspended or that has been placed on probation, may
petition the bureau for reinstatement or modification of penalty,
including modification or termination of probation, after not less
than the following minimum periods have elapsed from the effective
date of the decision ordering disciplinary action:
(1) At least three years for reinstatement of a revoked license.
(2) At least two years for early termination of probation of three
years or more.
(3) At least one year for modification of a condition, or
reinstatement of a license revoked for termination of probation of
less than three years.
(b) The petition shall state any facts required by the bureau. The
petition shall be accompanied by a reinstatement processing fee of
____dollars ($____).
(c) In considering reinstatement or modification of penalty, the
bureau may consider factors including, but not necessarily limited
to, all of the following:
(1) The petitioner's activities since the disciplinary action was
taken.
(2) The offense for which the petitioner was disciplined.
(3) The petitioner's activities during the time the license was in
good standing.
(4) The petitioner's documented rehabilitative efforts, including
repayment of restitution.
(5) The petitioner's business reputation in the community.
(d) No petition under this section shall be considered while the
petitioner is under sentence for any criminal offense, including any
period during which the petitioner is on court-imposed probation or
parole. No petition shall be considered while there is an accusation
or petition to revoke probation pending against the person. The
bureau may deny without a hearing or argument any petition filed
pursuant to this section within a period of two years from the
effective date of the prior decision following a hearing under this
section.
(e) The bureau may investigate any and all matters pertaining to
the petition and documents submitted with, or in connection with, the
application.
95011. (a) The bureau may bring an action for equitable relief
for any violation of this chapter in addition to, or instead of, any
other remedy or procedure. The equitable relief may include
restitution, a temporary restraining order, the appointment of a
receiver, or a preliminary or permanent injunction. The action may be
brought in the county in which the defendant resides, or in which
any violation has occurred, or may occur.
(b) The suspension or revocation of an institution's approval to
operate also may be embraced in any action brought by the Attorney
General, a district attorney, or city attorney otherwise proper in
any court involving the institution's compliance with this chapter or
performance of its legal obligations.
95012. (a) An institution or licensee that willfully violates
Article 5 (commencing with Section 94890), Article 6 (commencing with
Section 94960), or Article 7 (commencing with Section 94970) is
guilty of a crime, and shall be subject to separate punishment for
each violation by either of the following:
(1) Imprisonment in a county jail not to exceed one year, by a
fine not to exceed ten thousand dollars ($10,000), or by both that
imprisonment and fine.
(2) Imprisonment in state prison, by a fine not to exceed fifty
thousand dollars ($50,000), or by both that imprisonment and fine.
(b) Notwithstanding any other provision of law, any prosecution
under this section shall be commenced within three years of the
discovery of the facts constituting grounds for commencing the
prosecution.
(c) In addition to any other fines or penalties imposed pursuant
to this section, an institution or licensee found guilty of a crime
as described in subdivision (a) shall be ordered to pay the Attorney
General, a district attorney, or a city attorney all of their costs
and expenses in connection with an investigation pursuant to that
prosecution. An institution or licensee shall not be required to pay
the same costs and expenses to more than one investigating agency.
95013. (a) The Attorney General, a district attorney, or a city
attorney may make investigations as may be necessary to carry out
this chapter, including investigations of complaints. The bureau may
jointly bring actions as necessary to enforce this chapter, including
civil actions for injunctive relief.
(b) Nothing in this section or this chapter precludes the Attorney
General, a district attorney, or a city attorney from taking any
action each is otherwise lawfully authorized to take.
95014. (a) If an institution or licensee violates any provision
of Article 5 (commencing with Section 94890) or Article 6 (commencing
with Section 94960), or commits an act as described in Section 95005
in connection with an agreement for a course of instruction, that
agreement shall be unenforceable, and the institution shall refund
all consideration paid by or on behalf of the student.
(b) Notwithstanding any provision to the contrary in an agreement,
a student may bring an action for a violation of any provision of
Article 5 (commencing with Section 94890) or committing any act as
described in Section 95005 in connection with an agreement for a
course of instruction, or for an institution's failure to perform its
legal obligations. Upon prevailing in an action brought under this
subdivision, a student shall be entitled to the recovery of damages,
equitable relief, any other relief authorized by this article, and
reasonable attorney's fees and costs.
95015. A person entitled to bring an action for the recovery of
damages or other relief shall not be required to file a complaint
pursuant to this article, or to pursue or exhaust any administrative
process or remedy before bringing the action.
95015.5. Any provision in any agreement that purports to require
a student to invoke any grievance dispute procedure before enforcing
any right or remedy, or which in any way limits the student's right
to sue, is void and unenforceable. A student may voluntarily elect to
avail himself or herself of a nonbinding grievance dispute procedure
available to students after the student's grievance has arisen but
prior to enforcing any right or remedy under law or filing a judicial
action.
95016. A student may assign his or her cause of action for a
violation of this article to the bureau, or to any state or federal
agency that guaranteed or reinsured a loan for the student, or that
provided any grant or other financial aid.
95017. The remedies provided in this article supplement, but do
not supplant, the remedies provided under any other provision of law.
95018. This article supplements, but does not
supplant, the authority granted the Division of Labor Standards
Enforcement under Chapter 4 (commencing with Section 79) of Division
1 of the Labor Code to the extent that placement activities of
institutions are subject to regulation by the division under the
Labor Code.
95019. The bureau shall proactively identify unlicensed
institutions that are operating in violation of this chapter, and
take all appropriate legal enforcement action against those
institutions.
95021. (a) Each institution, including regionally accredited
institutions that qualify for exemption under Article 3 (commencing
with Section 94840), shall be deemed to have authorized the
accrediting agency that accredited the institution to provide to the
Attorney General, any district attorney or city attorney, or the
Student Aid Commission, within 30 days of written notice, copies of
all documents and other material concerning the institution that is
maintained by the accrediting agency.
(b) Within 30 days of receiving written notice from the Attorney
General, any district attorney or city attorney, or the Student Aid
Commission, an accrediting agency shall provide, free of charge, the
requesting official with all documents or other material concerning
an institution accredited by that accrediting agency that are
designated specifically or by category in the written notice.
(c) If the Attorney General, any district attorney or city
attorney, or the Student Aid Commission is conducting a confidential
investigation of an institution and so informs the accrediting
agency, the accrediting agency shall not inform that institution of
the investigation.
(d) If an accrediting agency willfully fails to comply with this
section, the accrediting agency shall be liable for a civil penalty
of not less than two thousand five hundred dollars ($2,500) or more
than twenty-five thousand dollars ($25,000) for each violation.
Penalties awarded pursuant to this section shall be deposited in the
Private Postsecondary and Vocational Education Administration Fund or
any successor fund.
Article 9. Hearings
95030. A proceeding in connection with the denial of an
application to operate or the revocation of an approval to operate
shall be conducted in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code, and the bureau shall have all of the powers granted in that
chapter. An action by the bureau to place an institution on probation
shall be subject to appeal, and the bureau shall establish
procedures that provide the institution with adequate notice and an
opportunity to be heard and to present evidence as to why the action
recommended by staff or by a visiting committee shall not be taken.
95031. Upon taking an action to suspend or revoke an institution'
s approval to operate, or to deny an application for renewal of an
approval to operate, the bureau shall provide written notice to the
Student Aid Commission, the United States Department of Education,
and to any appropriate accrediting association.
95032. Except as otherwise provided in this chapter, the
following procedures may be used in lieu of other notice or hearing
requirements provided in this chapter.
(a) If notice of administrative action is required by this
chapter, the bureau shall serve notice stating all of the following:
(1) The action, including the penalties and administrative
sanctions sought.
(2) The grounds for the action, with sufficient particularity to
give notice of the transactions, occurrences, violations, or other
matters on which the action is based.
(3) The right to a hearing and the time period within which the
party subject to the notice may request a hearing in writing. The
time period shall not be less than 15 days after service of the
notice unless a longer period is provided by statute.
(4) The right to be present at the hearing, to be represented by
counsel, to cross-examine witnesses, and to present evidence.
(5) That, if the party subject to the notice does not request a
hearing in writing within the time period expressed in the notice, he
or she will waive or forfeit his or her right to an administrative
hearing and the action will become final.
(b) If a party subject to a notice provided pursuant to
subdivision (a) requests a hearing in writing within the time period
specified in paragraph (3) of subdivision (a), then within 30 days of
receiving this request, the bureau shall schedule a hearing. The
hearing shall be held in a location determined pursuant to Section
11508 of the Government Code. The bureau shall serve reasonable
notice of the time and place for the hearing at least 10 days before
the hearing. The bureau may continue the date of the hearing upon a
showing of good cause.
(c) (1) A party, including the bureau, may submit a written
request to another party before a hearing to obtain the name and
address of any person who has personal knowledge, or who the party
receiving the request claims to have personal knowledge, of any of
the transactions, occurrences, violations, or other matters that are
the basis of the administrative action. In addition, the requesting
party shall have the right to inspect and copy a written statement
made by that person or a writing, as defined by Section 250 of the
Evidence Code, or thing that is in the custody, or under the control,
of the party receiving the request and that is relevant and not
privileged. This subdivision shall constitute the exclusive method
for prehearing discovery. However, nothing in this paragraph shall
affect the bureau's authority, at any time, to investigate, inspect,
monitor, or obtain and copy information under any provision of this
chapter.
(2) The written request described in paragraph (1) shall be made
before the hearing and within 30 days of the service of the notice
described in subdivision (a). Each recipient of a request shall
comply with the request within 15 days of its service by providing
the names and addresses requested and by producing at a reasonable
time at the bureau's office, or other mutually agreed reasonable
place, the requested writings and things. The bureau may extend the
time for response upon a showing of good cause.
(3) Except as provided in this paragraph, a party may not
introduce the testimony or statement of a person or a writing or
thing into evidence at the hearing if that party failed to provide
the name and address of the person or to produce the writing or thing
for inspection and copying as provided by this subdivision. A party
may introduce the testimony, statement, writing, or thing that was
not identified or produced as required herein only if all of the
following are true:
(A) There is no objection, or the party establishes that the
person, writing, or thing was unknown at the time when the response
was made to the written request.
(B) The party could not have informed other parties within a
reasonable time after learning of the existence of the person,
writing, or thing.
(C) No party would be prejudiced by the introduction of the
evidence.
(d) Before a hearing has commenced, the bureau shall issue
subpoenas at the written request of a party for the attendance of
witnesses or the production of documents or other things in the
custody or under the control of the person subject to the subpoena.
Subpoenas issued pursuant to this section are subject to Section
11510 of the Government Code.
(e) (1) The bureau shall designate an impartial hearing officer to
conduct a hearing. The hearing officer may administer oaths and
affirmations, regulate the course of the hearing, question witnesses,
and otherwise investigate the issues, take official notice according
to the procedure provided in Division 4 (commencing with Section
450) of the Evidence Code of any technical or educational matter in
the bureau's special field of expertise and of any matter that may be
judicially noticed, set the time and place for continued hearings,
fix the time for the filing of briefs and other documents, direct any
party to appear and confer to consider the simplification of issues
by consent, and prepare a statement of decision.
(2) A hearing officer and a person who has a direct or indirect
interest in the outcome of the hearing may not communicate directly
or indirectly with each other regarding an issue involved in the
hearing while the proceeding is pending without notice and
opportunity for all parties to participate in the communication. A
hearing officer who receives an ex parte communication shall
immediately disclose the communication to the bureau and all other
parties. The bureau may disqualify the hearing officer, if necessary,
to eliminate the effect of the ex parte communication. If the bureau
finds that a party willfully violated, or caused a violation of,
this paragraph, the bureau shall enter that party's default and
impose the administrative sanction set forth in the notice provided
pursuant to subdivision (a).
(f) (1) Each party at a hearing shall be afforded an opportunity
to present evidence, respond to evidence presented by other parties,
cross-examine, and present written argument or, if permitted by the
hearing officer, oral argument on the issues involved in the hearing.
The bureau may call a party as a witness who may be examined as if
under cross-examination.
(2) Each party may appear through its representative or through
legal counsel.
(3) The technical rules relating to evidence and witnesses shall
not apply. However, only relevant evidence is admissible.
(4) Oral evidence shall be taken only upon oath or affirmation. A
hearing shall be conducted in the English language. The proponent of
any testimony to be offered by a witness who is not proficient in
English shall provide, at the proponent's cost, an interpreter
proficient in English and the language in which the witness will
testify.
(5) A hearing shall be recorded by tape recording or other
phonographic means unless all parties agree to another method of
recording the proceedings.
(6) (A) At any time 10 or more days before a hearing, a party may
serve on the other parties a copy of a declaration that the party
proposes to introduce in evidence.
(B) A declaration provided pursuant to subparagraph (A) shall be
accompanied by a notice indicating the date of service of the notice
and stating that the declarations will be offered into evidence, the
declarants will not be called as witnesses, and there will be no
right of cross-examination unless the party receiving the notice
requests the right to cross-examine, in writing, within seven days of
the service of the declarations and notice.
(C) If no request for cross-examination is served within seven
days of the service of the declarations and notice described in
subparagraph (B), the right to cross-examination is deemed waived and
the declaration shall have the same effect as if the declarant
testified orally. Notwithstanding this subparagraph, a declaration
may be admitted as hearsay evidence without cross-examination.
(7) Disposition of an issue involved in a hearing may be made by
stipulation or settlement.
(8) If a party fails to appear at a hearing, that party's default
shall be taken and the party shall be deemed to have waived the
hearing and agreed to the administrative action and the grounds for
that action described in the notice given pursuant to subdivision
(b). The bureau shall serve the party with an order of default
including the administrative action ordered. The order shall be
effective upon service or at any other time designated by the bureau.
The bureau may relieve a party from an order of default if the party
applies for relief within 15 days after the service of an order of
default and establishes good cause for relief. An application for
relief from default shall not stay the effective date of the order
unless expressly provided by the bureau.
(g) (1) At any time before a matter is submitted for decision, the
bureau may amend the notice provided pursuant to subdivision (a) to
set forth any further grounds for the originally noticed
administrative action or any additional administrative action and the
grounds therefor. The statement of the further grounds for the
originally noticed administrative action, or of the grounds for any
additional administrative action, shall be made with sufficient
particularity to give notice of the transactions, occurrences,
violations, or other matters on which the action or additional action
is based. The amended notice shall be served on all parties. All
parties affected by the amended notice shall be given reasonable
opportunity to respond to the amended notice as provided in this
section.
(2) The bureau may amend a notice provided pursuant to subdivision
(b) after a case is submitted for decision. The bureau shall serve
each party with notice of the intended amendment, and shall provide
the party with an opportunity to show that the party will be
prejudiced by the amendment unless the case is reopened to permit the
party to introduce additional evidence. If prejudice is shown, the
bureau shall reopen the case to permit the introduction of additional
evidence.
(h) (1) Within 30 days after the conclusion of a hearing, or at
another time established by the bureau, a hearing officer shall
submit a written statement of decision setting forth a recommendation
for a final decision and explaining the factual and legal basis for
the decision as to each of the grounds for the administrative action
set forth in the notice or amended notice. The bureau shall serve the
hearing officer's statement of decision on each party and its
counsel within 10 days of its submission by the hearing officer.
(2) The director shall make the final decision, which shall be
based exclusively on evidence introduced at the hearing. The final
decision shall be supported by substantial evidence in the record.
The director also shall issue a statement of decision explaining the
factual and legal basis for the final decision as to each of the
grounds for the administrative action set forth in the notice or
amended notice. The director shall issue an order based on its
decision, and that order shall be effective upon service or at any
other time designated by the director. The director, or his or her
agent, shall serve a copy of the final decision and order, within 10
days of their issuance, on each party and its counsel.
(3) The bureau shall serve a certified copy of the complete record
of the hearing, or any part thereof designated by a party, within 30
days after receiving the party's written request and payment of the
cost of preparing the requested portions of the record. The complete
record shall include all notices and orders issued by the bureau, a
transcript of the hearing, the exhibits admitted or rejected, the
written evidence and any other papers in the case, the hearing
officer's statement of decision, and the final decision and order.
(i) The bureau shall serve all notices and other documents that
are required to be served by this section on each party by personal
delivery, by certified mail, return receipt requested, or by other
means designated by the bureau.
(j) (1) A party aggrieved by the director's final decision and
order may seek judicial review by filing a petition for a writ of
mandate, pursuant to Section 1085 of the Code of Civil Procedure,
within 30 days of the issuance of the final decision and order. If
review is not sought within that period, the party's right to review
shall be deemed waived.
(2) An aggrieved party shall present the complete record of the
hearing or all portions of the record necessary for the court's
review of the director's final decision and order. The court shall
deny the petition for a writ of mandate if the record submitted by
the party is incomplete. The court may not consider a matter not
contained in the record. The director's findings of fact and legal
conclusions supporting the final decision shall be conclusive if
supported by substantial evidence on the record considered as a
whole.
(3) A final order may not be stayed or enjoined during review
except upon the court's grant of an order on a party's application
after due notice to the director and the Attorney General. The order
shall be granted only if the party establishes the substantial
likelihood that it will prevail on the merits and posts a bond
sufficient to protect fully the interests of the students, the
bureau, and the fund from any loss.
(k) The bureau may adopt regulations establishing alternative
means of providing notice and an opportunity to be heard in
circumstances in which a full hearing is not required by law.
(l) For the purposes of this section, "good cause" shall require
sufficient ground or reason for the determination to be made by the
bureau.
Article 10. Fees, Costs, and Regulatory Structure
95040. There is hereby enacted a tiered structure of approvals to
operate that shall reflect the resources necessary for the bureau to
perform its regulatory duties and functions, based upon the
regulatory requirements to which institutions are subjected during
approval and by other actions of the bureau.
(a) A Tier 1 approval signifies that an institution is accredited
by an accrediting body recognized by the USDE with no current
negative actions by that accrediting agency, is fully in compliance
with the standards set forth in this chapter, has been granted a full
approval to operate by the bureau, and has not been subject to
involuntary withdrawal from student financial aid participation under
Title IV of the federal Higher Education Act of 1965, or that an
institution has received an exemption from the bureau that allows it
to operate as a registered institution.
(b) A Tier 2 approval signifies that an institution is
unaccredited, or operating under initial approval, or unable to meet
the standards set forth in subdivision (a). Under a Tier 2 approval,
an institution may be subject to special monitoring by the bureau.
The conditions for the approval may include the required submission
of frequent and focused reports, as prescribed by the bureau, and
special visits by authorized representatives of the bureau to
determine progress toward total compliance, if the institution's
placement in Tier 2 approval was based upon its failure to fully
comply with the standards set forth in this chapter.
(c) A Tier 3 approval signifies that the institution is not in
compliance with one or more provisions of this chapter that are not
technical or minor in nature, and is subject to a period of
evaluation and possible termination of approval. Under a Tier 3
approval, an institution shall be subject to monitoring that may
include the submission of frequent and focused reports, as prescribed
by the bureau, as well as special onsite inspections to determine
progress towards compliance.
95041. (a) The annual fee for a calendar year for an institution
placed under Tier 1 approval as provided in Section 95040 shall be
____ percent of its gross revenues as evidenced in its most recent
audited financial statement.
(b) The annual fee for an institution placed under Tier 2 approval
as provided in subdivision (b) of Section 95040 shall be 200 percent
of the fee provided in ____.
(c) The annual fee for an institution placed under Tier 3 approval
as provided in subdivision (b) of Section 95040 shall be 500 percent
of the fee provided in ____.
(d) Where an institution is placed in one or more tiers during a
calendar year, the annual fee shall be assessed at the highest fee
level that would apply.
95042. It is the intent of the Legislature that the measure that
adds this section not be adopted by a fiscal committee unless and
until this article is amended to add all of the following provisions:
(a) A percentage now represented by a blank line in subdivision
(a) of Section 95041.
(b) Clarity regarding the specific revenues and documentation
thereof that shall constitute the basis for the assessment in
subdivision (a) of Section 95041.
(c) Creation, in the State Treasury, of the Private Postsecondary
Education Administration Fund, as referenced elsewhere in this
chapter.
(d) Establishment of a one-time assessment to the fund referred to
in subdivision (c) to assist with the costs of the Legislative
Analyst's Office study required in paragraph (1) of subdivision (c)
of Section 94841, including a justification for the decision as to
which institutions shall be assessed this fee.
(e) Authority for the bureau to adjust, by regulation, the fees
and costs included in this article.
(f) Application fees, of specified amounts, for application for
initial approval, full approval, renewal of approval, and registered
institution approval, for the addition or a branch or satellite
campus, for change of ownership, for program approval including
registered programs, for agent and agency authorization, for
exemption where required, and for failure to make a timely
application where required.
(g) Authority for the bureau to assess an institution for cost
recovery for investigations not sufficiently funded by an institution'
s placement in a tier as provided in Sections 95040 and 95041,
including a statement of reasons as to why the annual fee levied
under Sections 95040 and 95041 is insufficient, including notice and
hearing rights.
Article 11. Transition
95050. (a) An institution that had a valid approval to operate on
June 30, 2007, issued by the Bureau for Private Postsecondary and
Vocational Education pursuant to Chapter 7 (commencing with Section
94700) of Part 59 of Division 10 of Title 3, as it existed on June
30, 2007, which was not revoked, shall maintain that approval under
this chapter. For the purposes of this chapter, the approval shall be
valid until two calendar years after the expiration date of the
approval, as it existed on June 30, 2007.
(b) Applications for reapproval that had been pending action
before the Bureau for Private Postsecondary and Vocational Education
on June 30, 2007, shall be deemed processed as follows:
(1) Applications received prior to January 1, 2006, shall be
granted a reapproval until 2009 to coincide with the anniversary date
of the current approval day.
(2) Applications received after January 1, 2006, shall be granted
a reapproval until 2010 to coincide with the anniversary date of the
current approval.
95051. (a) Each regulation in Division 7.5 (commencing with
Section 70000) of Title 5 of the California Code of Regulations in
effect on June 30, 2007, shall be in full force and effect on and
after January 1, 2008, to the extent the regulation is consistent
with the relevant provisions in this chapter.
(b) The bureau may, by emergency regulation, designate which
existing regulations are consistent with this chapter and which are
not and may replace inconsistent regulations. The bureau
may adopt emergency
regulations, as required, to allow for the immediate implementation
of this chapter as this chapter succeeds the Private Postsecondary
and Vocational Education Reform Act of 1989 ( former Chapter 7
(commencing with Section 94700), as it existed on June 30, 2007).
95052. The bureau shall succeed to any and all rights and claims
of the former Bureau for Private Postsecondary and Vocational
Education and that may have been asserted in a judicial or
administrative action pending on July 1, 2007, and shall take any
action reasonably necessary to assert and realize those rights and
claims in its own name. The functions and responsibilities of the
former Bureau for Private Postsecondary and Vocational Education for
the administration of former Chapter 7 (commencing with Section
94700) on June 30, 2007, are transferred to the bureau, effective
July 1, 2007, as provided by this chapter.
95053. The bureau shall have possession and control of all
records, papers, offices, equipment, supplies, or other property,
real or personal, held for the benefit or use by the former Bureau
for Private Postsecondary and Vocational Education in the performance
of the duties, powers, purposes, responsibilities, and jurisdictions
that are vested in the bureau.
95054. If an institution is placed in Tier 2 or Tier 3 based upon
its failure to comply with one or more provisions of this chapter,
the bureau shall restore the institution's previous level of tier
approval under Article 10 (commencing with Section 95040) within 30
days of the bureau's determination that the institution has
undertaken satisfactory corrective action related to those
violations, or by the end of the calendar year, whichever is sooner.
Article 12. Severability and Construction
95060. The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
95061. This chapter shall be liberally construed to effectuate
its intent and achieve its purposes.
Article 13. Repeal
95070. This act shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
SEC. 5. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B 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 XIII B of the
California Constitution.