BILL ANALYSIS
AB 48
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Date of Hearing: March 31, 2009
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Anthony Portantino, Chair
AB 48 (Portantino) - As Amended: March 23, 2009
SUBJECT : Private postsecondary education: Private
Postsecondary Education Act of 2009.
SUMMARY : Renames the Bureau for Private Postsecondary and
Vocational Education (Former Bureau) as the Bureau for Private
Postsecondary Education (Bureau) within the Department of
Consumer Affairs (DCA) and provides for Bureau oversight and
regulation of private postsecondary institutions operating in
California. Specifically, this bill :
1)Requires the Bureau to disclose on its internet website
information on suspensions and revocations of an institution's
approval to operate, as well as any enforcement action,
including the issuance of a notice to comply, taken against an
institution by the Bureau.
2)Authorizes the Bureau to take specified action to cease
unlawful advertising including disconnecting the telephone
services of an institution if the Bureau finds that the
institution is advertising in a telephone directory without an
approval to operate issued by the Bureau.
3)Removes the Former Bureau from provisions of law requiring
ongoing review by the Joint Committee on Boards, Commissions,
and Consumer Protection.
4)Establishes the California Private Postsecondary Education Act
of 2009 (Act) and provides that any statutory or regulatory
reference to the Private Postsecondary and Vocational
Education Reform Act (Former Act) or Former Bureau shall be
construed as referring to the Act and Bureau.
5)Makes various findings and declarations regarding the
importance of private postsecondary institutions, previous
failures to regulate these institutions, the importance of
Bureau oversight of private postsecondary institutions, and
the need for ongoing review of Bureau activities by the
Legislature.
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6)Provides for a transition to the provisions of the Act,
including:
a) Any institution approved to operate by the Former Bureau
on June 30, 2007, shall maintain that approval for three
years after the expiration date of the approval.
b) An institution that had an application to renew an
approval to operate pending before the Former Bureau prior
to January 1, 2006, shall be granted approval until 2012,
and an institution that submitted an application to renew
an approval to operate after January 1, 2006, shall be
granted approval to operate until 2013; students enrolling
in these institutions are required to be notified in
writing by the institution that the institution's renewal
application was not reviewed by the Bureau.
c) The Bureau shall adopt emergency regulations that
conform to the provisions of the Act, including repealing
provisions no longer relevant, by February 1, 2010, and
these regulations shall become permanent through the
regular rulemaking process within one year of the date of
enactment of the Act.
d) The Bureau shall have possession and control of all
records, supplies, and real property used by the Former
Bureau.
e) The Private Postsecondary and Vocational Education
Administration Fund be continued and renamed to the Private
Postsecondary Education Administration Fund (PPEAF).
f) The Student Tuition Recovery Fund (STRF) be continued
and provides that processing of claims pending before STRF
that were received prior to July 1, 2007, or any claims
received between July 1, 2007, and December 31, 2009.
Provides that a student's right to recover from STRF shall
be based on the law that was in effect at the time the
student enrolled in the institution and paid a STRF fee.
g) An institution that had an application for an approval
to operate pending before the Former Bureau on July 1,
2007, and an institution that did not have a pending
application filed with the Former Bureau on June 30, 2007,
that began operations on or after July 1, 2007, may
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continue to operate but must comply with the Act and submit
an application for approval to operate within six months of
the application becoming available; students enrolling in
these institutions must be notified in writing by the
institution during the enrollment process that the
institution's application for approval to operate was not
reviewed by the Bureau; and these institutions shall not
use the terms "approval," "approved," "approval to
operate," or "approved to operate" without clearly stating
that the application for approval to operate has not yet
been reviewed by the Bureau.
h) Any matter, except a STRF claim, submitted to the Former
Bureau prior to July 1, 2007, shall remain pending, and
with respect to deadlines, no time shall be deemed elapsed
from July 1, 2007 through January 1, 2010. Provides that
student complaints received from July 1, 2007 through
December 31, 2008, shall continue to be duly recorded and
investigated by the Bureau.
i) For any claim or cause of action that arose prior to
June 30, 2007, notwithstanding the inoperative status or
repeal of the Former Act, final judgments and/or legal
remedies available under the Former Act will be continued.
7)Provides definitions for various terms used in the Act.
8)Provides that the Bureau shall adopt a process whereby an
institution exempt under this article may request and obtain
verification of their exempt status and allows the Bureau to
charge a fee to the institution to cover any costs associated
with the Bureau verifying the exemption. Exempts from the
requirements of the Act and from the oversight of the Bureau:
a) Institutions offering solely vocational or recreational
educational programs.
b) Institutions offering programs sponsored by trade,
business, professional, or fraternal organizations solely
for that organization's members.
c) Institutions operated by the federal or state government
or their subdivisions.
d) Institutions offering test preparation for examinations
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required for admission to postsecondary institutions and
continuing education or license and examination preparation
where the institution or program is certified or sponsored
by a government agency licensing persons in a particular
field, a state-recognized professional licensing body, or a
trade, business, or professional organization.
e) Institutions owned, controlled, and operated and
maintained by a church or religious institution that meets
several other outlined requirements.
f) Institutions that provide solely educational programs
for total charges of $2500 or less, with no part of the
charges paid by state or federal student financial aid
programs. Allows the Bureau to adjust this cost threshold
based upon the California Consumer Price Index.
g) Institutions that offer solely educational programs in
law leading to a Juris Doctor, Master of Laws, Doctor of
Jurisprudence degree or similar degrees in law.
9)Provides the Bureau with the following powers and duties:
a) In regulating private postsecondary educational
institutions, directs the Bureau to make protection of the
public the highest priority, and whenever protection of the
public is inconsistent with other interests, the protection
of the public shall be paramount.
b) Provides the Director of DCA (Director) with the powers
set forth in the Act; allows the Director to delegate the
duties to a bureau chief, appointed by the Governor and
exempt from the State Civil Service Act; provides that the
bureau chief may delegate any powers and duties to a
designee; and provides that the Director may, in accordance
with the State Civil Service Act, appoint and fix
compensation of personnel.
c) Requires the Bureau to, in accordance with the
Administrative Procedures Act, adopt regulations by January
1, 2010 necessary to implement the Act in accordance with
existing law; requires the Bureau to develop and implement
an enforcement program to implement the Act, including a
plan for investigating complaints filed with the Bureau;
and requires the Bureau to develop a program to proactively
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identify unlicensed institutions and take all appropriate
legal action.
d) Requires the Bureau to maintain a website, to be kept
current, with information provided by the institutions and
establishes that the website shall include a directory of
all approved institutions, the status of the institution's
approval to operate, the information provided by the
institution in the annual report and the Student
Performance Fact Sheet, the disciplinary history of the
institution, a notice to students that they may receive a
summary of all complains within the last five years against
the institution upon request, and an explanation of the
Bureau's transition plan and scope of authority.
e) Requires the Bureau to conduct outreach to secondary and
postsecondary school students about how to make informed
decisions when selecting an institution.
f) Requires the Bureau to appoint an advisory committee
consisting of representatives of institutions, student
representatives, and employers who hire students.
g) Allows the Bureau to conduct workshops to assist
institutions in complying with the provisions of the Act.
h) Allows the Bureau to empanel visiting committees to
assist in evaluating institutional applications, requires
visiting committee members to serve at no expense to the
state, establishes that the Bureau may facilitate
reimbursements from an institution under evaluation to
cover travel and per diem, and entitles visiting committee
members to defense and indemnification.
i) Provides that, for complaints against an institution
that have reached final disposition, the Bureau shall make
a summary of the nature and disposition of complaints
within the last five years available to the public upon
request.
10)Provides that, except for any institutions exempt from the
Act, all private postsecondary institutions operating in
California must have the approval of the Bureau, as follows:
a) Requires the Bureau, by January 1, 2011, to establish
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minimum operating standards for institutions, and specifies
that the standards shall reasonably ensure:
i) Educational program content can achieve its stated
goal, including ensuring that the institution maintains
written standards for student admissions for each
educational program and that those standards are related
to the particular educational program;
ii) Facilities, equipment, and materials are sufficient
to achieve educational program goals;
iii) Adequacy of withdrawal and refund policies;
iv) Qualifications of administrators, directors, and
faculty;
v) Institutional financial stability;
vi) That, upon completion of a program, a student is
awarded a document signifying the degree or diploma
awarded, and adequate handling of records and
transcripts; and,
vii) That the institution is maintained and operated in
compliance with applicable ordinances and laws.
b) Requires institutions to present sufficient evidence to
the Bureau of meeting the operating standards outlined by
the Bureau, and requires the Bureau to independently verify
the information provided before granting an approval to
operate. Provides that institutions not meeting the
criteria shall be denied.
c) Requires the Bureau to establish, by January 1, 2011, a
process whereby institutions can seek an approval to
operate, a process that the Bureau will follow in approving
or denying an application, and a process where an applicant
whose application has been denied may appeal the denial.
d) Establishes that approvals to operate shall be for
five-year terms.
e) Requires the Bureau to, by January 1, 2011, establish a
process whereby an institution that is accredited may apply
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for and obtain approval to operate by means of
accreditation, requires that the term of the approval to
operate coincide with the term of accreditation, and that
the institution comply with all other applicable
requirements of the Act.
f) Requires the Bureau, by January 1, 2011, to adopt
regulations covering the renewal of an approval to operate,
and requires that the renewal coincide with the institution
demonstrating continued capacity to meet minimum standards.
g) Provides that an approval from any other state agency to
offer an educational program may be sufficient to satisfy
the requirements of the Bureau, and allows the Bureau to
incorporate that educational program into the institution's
approval to operate when the Bureau receives documentation
signifying the conferral of the approval by the agency.
11)Requires prior authorization from the Bureau for institutions
wishing to make substantive changes, such as a change in
ownership or educational objectives, among other outlined
changes. Provides that the institution's approval may be
suspended or revoked for failing to obtain prior approval.
Requires the Bureau to adopt regulations by January 1, 2011,
establishing a process for reviewing requests for
authorization to make substantive changes. Provides that an
institution granted approval to operate by means of its
accreditation shall make substantive changes in accordance
with accreditation standards and shall notify the Bureau of
the changes.
12)Establishes the following fair business practices:
a) Prohibits institutions from: using the seal of the state
on a diploma, promising employment or otherwise overstating
the availability of jobs in the local economy upon
graduation, presenting or advertising specified information
including inaccurate information, failing to include
distance education information in advertisements,
inaccurately advertising approval or accreditation status,
using "help wanted" ads to solicit students, compensating
or providing gifts to students for recruitment activities,
making untrue or misleading statements, willfully
falsifying or destroying documents, improperly implying
approval or licensure or failing to completely disclose
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what approval or licensure means, directing an individual
to violate the Act or persuading a student not to file a
complaint, compensating an employee by bonus or commission
for recruitment or student assistance except as specified,
and requiring prospective students to provide personal
contact information before being granted access to
educational program information via the institution's
internet website, among other outlined prohibited
practices.
b) Prohibits institutions from merging classes unless
students receive the same amount of instruction; prohibits
institutions from, after a student has enrolled, making
unscheduled suspensions of classes unless caused by
circumstances beyond institutional control; and prohibits,
during the period of attendance, changing the day or time
of the class unless certain other requirements are met;
prohibits institutions from moving the location of classes
more than 25 miles without meeting certain requirements;
and prohibits converting the means of delivery of
instruction.
c) Provides that, for career fields that require licensure
by the state, institutions offering educational programs
must have approval to conduct that educational program.
d) Allows institutions, when offering courses with a term
of four months or less, to require payment of all tuition
and fees on the first day of instruction; prohibits an
institution from requiring more than one term (up to four
months) of advance payment at a time until 50% of
coursework has been completed; provides exemptions from the
aforementioned requirements for the purposes of federal and
state financial aid payments; and allows, under certain
conditions, students to choose to pay all fees and tuition
upon enrollment. Requires that institutions providing
private loan funding ensure that a student is not obligated
for indebtedness that exceeds the total cost of the current
term of enrollment.
13)Requires an institution to maintain specified student and
educational program records for not less than five years.
Provides that the recordkeeping requirements do not apply to
accredited institutions so long as the institution is required
to abide by similar recordkeeping requirements under the
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accreditation.
14)Requires recruiters to be employees of the institution, with
identification from the institution, and requires recruiters
to physically possess the identification when recruiting.
15)Provides for the following in regards to disclosures and
enrollment agreements:
a) Students shall enroll solely by signing an enrollment
agreement; an enrollment agreement is not enforceable
unless the student has first received the institution's
catalog and School Performance Fact Sheet and, at the time
of execution of the enrollment agreement, the institution
had a valid approval to operate; a student must receive a
copy of the signed enrollment agreement, regardless of
whether total charges are paid by the student; and an
enrollment agreement shall become operative when the
student attends the first class session.
b) Students may not waive any term or receipt of any
disclosure required by the Act.
c) An "ability to benefit student" (defined as a student
without a certificate of graduation from a school providing
secondary education) is required to take a U.S. Department
of Education prescribed examination and achieve a score
specified by USDE showing that the student may benefit from
the training offered before executing an enrollment
agreement.
d) Requires institutions offering programs in professions
that require licensure to, during enrollment, exercise
reasonable care to determine if a student will be eligible
to obtain licensure by providing the student with a written
copy of the requirements for licensure established by this
state. Prohibits the institution from executing an
enrollment agreement with a student that is known to be
ineligible for licensure unless the student's stated
objective is other than licensure; and allows an
institution to discuss internships or student job
availability during the enrollment process with certain
limitations and disclosure requirements.
e) Requires an enrollment agreement to be written in a
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language that is easily understood, and if English is not
the student's primary language and the student is unable to
understand the terms and conditions of the agreement, then
the student is entitled to a clear explanation of the terms
in his/her primary language. Provides that if recruitment
was conducted in a language other than English, the
enrollment agreement and related disclosures shall be in
that language.
f) Prohibits an enrollment agreement from containing a
provision that requires a student to invoke internal
institutional dispute procedures before enforcing any
contractual or other legal rights or remedies.
g) Provides that all information or statements required by
the Act to be included in the catalog, School Performance
Fact Sheet, or enrollment agreement shall be printed in at
least the same size font as the majority of the text in
that document.
h) Requires an institution to provide to a student prior to
enrollment, and make content available on the institution's
website, a school catalog that includes at least the
following:
i) Name, address, telephone number, and website of the
institution;
ii) A statement that the institution is a private
institution and that it is approved to operate by the
Bureau;
iii) Specified statements with the contact information
for the Bureau that encourages the student to review all
catalog information and the School Performance Fact Sheet
before signing an enrollment agreement;
iv) Address where class sessions will be held;
v) A description of the programs offered and specified
information regarding completion requirements for each
program;
vi) If the educational program is designed to lead to a
position in a profession, occupation, trade, or career
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field requiring state licensure, a notice to that effect
and a list of the qualifications required by this state
for licensure;
vii) Information regarding faculty and their
qualifications;
viii) A detailed description of institutional admission
and acceptance of credits policies, cancellation,
withdrawal and refund policies, probation and dismissal
policies, attendance policies, leave-of-absence policies,
and existing transfer or articulation agreements;
ix) The total schedule of charges for tuition, fees, and
other expenses;
x) A statement reporting whether the institution
participates in federal and state financial aid programs,
and if so, a statement concerning student eligibility;
xi) A statement specifying a student's responsibility to
repay any student loan obtained by the student;
xii) A statement specifying whether the institution has a
pending petition in bankruptcy or has had a petition in
bankruptcy filed against it within the preceding five
years;
xiii) If an institution provides placement services, a
description of the nature of those services;
xiv) A description of the student's rights and
responsibilities with respect to STRF; and,
xv) A specified statement notifying the student that the
transferability of credits or degree earned at the
institution is at the discretion of the institution to
which the student seeks to transfer.
i) Requires an institution to provide a prospective
student, prior to enrollment, a School Performance Fact
Sheet containing completion rates, placement rates, license
examination passage rates, if applicable, and starting
salaries if the school makes claims regarding starting
salaries. Provides that if an institution is too new to
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provide the Student Performance Fact Sheet data, an
institution shall state so. Provides that an institution
shall include a description of how the data was calculated
or a statement informing the reader where a description may
be obtained.
j) Requires an enrollment agreement to include the
following:
i) The name and specified information regarding the
educational program;
ii) The schedule of total charges, including a list of
non-refundable charges, the student's obligations to STRF
clearly identified as nonrefundable charges, and on the
same page as where the student will sign, underlined and
in capital letters, the total charges;
iii) A clear and conspicuous statement that the
enrollment agreement is legally binding when signed by
the student and accepted by the institution;
iv) A notice of the buyer's right to cancel, including
an explanation that a student has the right to cancel up
until the first day of class or the seventh day after
enrollment, whichever is later; a notice of the refund
policy and a statement that if the student has received
federal financial aid funds the student is entitled to a
refund of moneys not paid from federal financial aid
program funds; and, a description of the procedures the
student must follow to cancel the enrollment agreement or
withdraw from the institution;
v) A statement specifying that if the student obtains a
loan to pay for the educational program, the student is
responsible for repaying the full amount of the loan plus
interest, less the amount of any refund;
vi) A statement specifying that if the student defaults
on a state or federally guaranteed loan, the state or
federal government or loan guarantee agency may take
certain action against the student, and the student may
not be eligible for any other financial aid or government
assistance until the loan is repaid;
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vii) Specified statements with the contact information
for the Bureau, and encouraging the student to review all
catalog information and the School Performance Fact Sheet
before signing an enrollment agreement; and,
viii) Specified disclosure language regarding a student's
understanding of rights and responsibilities, requiring
the student's signature.
16)Requires an institution extending credit or lending money for
educational costs to a student, to place a notice in the
lending documents informing the student that they may assert
against the holder of the promissory note all of the claims
and defense that could be asserted against the institution up
to the amount already paid under the promissory note; provides
that such a lending note is not enforceable unless the
institution held an approval to operate at the time of
execution; and provides that institutional loans to students
must comply with the Federal Truth in Lending Act.
17)Establishes the following requirements for cancellations,
withdrawals, and refunds:
a) Requires an institution that participates in and
complies with federal student aid program regulations under
Title IV of the Higher Education Act of 1965 to advise
students that cancellation notices must be in writing and
that a withdrawal may be noticed by a student in writing or
by the student not attending courses; and requires the
institution to provide a pro rata refund to students who
completed 60% or less of the period of attendance.
b) Provides for the following for institutions not
participating in the federal student financial aid program:
i) Requires the institution to advise students that
cancellation notices must be in writing and that a
withdrawal may be noticed by a student in writing or by
the student's conduct including lack of attendance.
ii) Requires the institution to refund 100% of the
amount paid less a reasonable deposit not to exceed $250
if notice of cancellation is made through attendance at
the first class or the seventh class day after
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enrollment, whichever is later.
iii) Allows the Bureau to adopt regulations
establishing a different method of calculating refunds
for instruction delivered by other means such as distance
education.
iv) Requires the institution to establish a refund
policy and entitles students who have completed 60% or
less of the period of attendance to a pro rata refund.
v) Requires the institution to pay or credit refunds
within 45 days of a student's cancellation or withdrawal.
vi) Allows an institution offering educational
programs for which the aforementioned refund calculations
cannot be utilized to petition the Bureau for alternative
methods of calculating tuition refunds.
c) Provides that a student may not waive any of the
aforementioned provisions.
18)Provides that the Bureau shall adopt regulations governing
the administration and maintenance of STRF, including
requirements related to assessments on students and student
claims against STRF; provides that STRF monies are continually
appropriated to the Bureau; and provides that STRF may not
exceed $25 million at any time.
19)Establishes the following requirements for institutional
closures and teach-outs:
a) Requires an institution to notify the Bureau in writing
at least 30 days prior to closing, and requires the notice
to include a closure plan that speaks to, at least,
providing teach-outs of educational programs or
arrangements for making appropriate refunds, a plan for
providing students information on federal financial aid
programs and institutional closures if the institution is a
participant in these programs, and a plan for the
disposition of student records.
b) Provides that an institution will be in default of an
enrollment agreement if an institution closes prior to
completion of the program. If the Bureau finds that the
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institution has made arrangements for the student to
complete their program at another institution for the same
cost to the student, the student's institutional charges
may be refunded on a pro rata basis; if the institution
does not make such a provision, the student is entitled to
receive a total refund of all institutional charges.
c) Requires an institution to provide the Bureau with
information including student records and transcripts.
20)Establishes the following requirement regarding completion
and placement rates:
a) Establishes definitions for the various terms used in
this section.
b) Requires an institution to annually report to the
Bureau, as part of the annual report, and publish in its
School Performance Fact Sheet:
i) Completion rates for each program and that the
completion rate is calculated by dividing the number of
graduates by the number of students available for
graduation. Provides that an institution may substitute
for the aforementioned calculation requirement the
graduation data as reported to and calculated by the
Integrated Postsecondary Education Data System of the
USDE.
ii) Job placement rates, calculated by dividing the
number of graduates employed in the field by the number
of graduates available for employment for each program
that is either (a) designed or advertised to lead to a
particular career or (b) advertised or promoted with any
claim regarding job placement rates.
iii) The total number of graduates employed in the field
and the percentage of those who earned salaries at or
above the claimed level, if the institution or
representative of the institution makes any express or
implied claim about the salary that may be earned after
completing a program.
c) Provides that the information used to substantiate job
placement and salary rates shall be documented and
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maintained by the institution, and an institution must
provide a list of employment positions determined to be
within the field for which a student received education and
training for the calculation of placement rates.
21)Establishes a fee schedule and leaves undefined the specific
fee levels. Provides that all fees collected are to be, upon
appropriation by the Legislature, used for Bureau expenditure
to cover the cost of administering the Act. Provides that the
Bureau may change fee amounts under specified circumstances.
Provides for late payment penalties to be assessed against
institutions failing to submit fee payments within the
Bureau-specified timeline.
22)Establishes the following processes and penalties in regards
to compliance with and enforcement of the Act:
a) Establishes that the Bureau shall determine any
institution's compliance with the Act, and that the Bureau
shall have the authority to require additional reports be
filed by an institution, to send staff for institutional
site visits, and to require documents and responses from
any institution in order to monitor compliance. Provides
that when the Bureau has reason to believe that an
institution is out of compliance, it shall conduct an
investigation of that institution, and if the Bureau finds
the institution has violated any applicable law or
regulation, requires the Bureau to take appropriate action.
b) Provides that the Bureau shall perform announced and
unannounced inspections of institutions.
c) Provides that the Bureau shall impose penalties,
including mandating a specified timetable for remedying
noncompliance, imposing fines, placing the institution on
probation, or suspending or revoking approval, as deemed
appropriate by the Bureau and depending on the severity of
the violation.
d) Requires the Bureau to seek to resolve instances of
noncompliance to the extent possible, including the use of
alternative dispute resolution procedures.
e) Requires an institution to submit an annual report by
July 1 to the Bureau, in a format prescribed by the Bureau,
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that includes: the total number of students enrolled,
degrees awarded, of degrees offered, educational program
completion rates, and the total charges for each
educational program, including a statement indicating
whether the institution is current in remitting STRF
assessments, along with any other information deemed
necessary by the Bureau.
f) Requires Bureau staff who detect a minor violation of
the Act during inspection, to issue a notice to comply
before leaving the institution; establishes a process for
the issuance of a notice to comply, and requires the Bureau
to take administrative enforcement action against an
institution that fails to correct the issues raised in a
notice to comply within the specified time period.
g) Requires, as a consequence of an investigation and upon
a finding that the institution has committed a violation,
the Bureau to issue a citation for noncompliance of the Act
or regulations found during an investigation, and provides
that the citation may contain an order of abatement that
may require the demonstration of future compliance, or an
administrative fine not to exceed $10,000 per violation.
Provides specific criteria for the Bureau to consider when
assessing the amount of administrative fines. Provides
that the citation shall be in writing and shall contain
specified information regarding the violation and the
institution's right to a hearing within 30 days. Provides
that an administrative fine is due either 30 days from
citation or 30 days from the final judgment following a
hearing. Provides that all administrative fines are to be
deposited into PPEAF.
h) Allows the Bureau to suspend or revoke an institution's
approval to operate for fraud or for repeated violations of
the Act that have caused harm to students. Provides that
the Bureau shall adopt regulations governing probation and
suspension of an approval to operate and that the Bureau
may seek reimbursement for the costs of an investigation.
Provides that an institution shall not be responsible for
paying the cost of an investigation to more than one
agency.
i) Provides that if the Bureau determines the need to make
an emergency decision to protect students, prevent
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misrepresentation to the public, or prevent the loss of
public funds or monies paid by students, it may do so
pursuant to an outlined process and in accordance with
Bureau-adopted regulations.
j) Provides that the Bureau may bring an action for
equitable relief for violations of the Act, including
restitution, a temporary restraining order, the appointment
of a receiver, and a preliminary or permanent injunction,
and that the action may be brought in the county in which
the defendant resides or in the county in which any
violation has occurred or may occur; and provides that
these remedies supplement and do not supplant any other
remedies and penalties provided under law.
aa) Provides that in the case of adverse administrative
action by the Bureau, an institution may request a hearing
in accordance with law.
bb) Provides any individual who believes an institution has
violated the Act or subsequent regulations may file a
complaint with the Bureau and that the Bureau shall take
action to verify the complaint, and provides the Bureau
with authority to take appropriate administrative
enforcement action upon discovering the facts in regards to
the complaint.
cc) Provides that if the Bureau finds that an institution's
violation of the Act or subsequent regulations has caused
damage or loss to a student or group of students, the
Bureau may order the institution to pay appropriate refunds
or restitution to that student or group of students.
dd) Establishes that knowingly operating an institution
without approval or knowingly providing false information
to the Bureau on an application shall be considered
infractions and are public offenses.
ee) Requires an institution to maintain an agent for service
of process within the state and provide the agent's name
and contact information to the Bureau; makes the
aforementioned information available to the public upon
request.
ff) Provides that the Bureau may not subject any person to a
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fine exceeding $50,000 for operating an institution without
Bureau approval.
gg) Provides that each institution subject to the Act shall
be deemed to have authorized the Bureau or accrediting
agency to provide the Attorney General (AG), district
attorney, or city attorney copies of all documents and
other materials concerning the institution. Requires an
accrediting agency to provide such materials free of charge
within 30 days of receiving written notice to share
documents.
hh) Provides that nothing in the Act shall preclude the
enforcement of rights or remedies under any other
applicable statute, or limit or preclude the AG, a district
attorney, or a city attorney from taking any action
otherwise authorized under any other applicable statute or
law.
23)Provides for severability of the Act, in that, if any
provisions in this Act are held as invalid, that invalidity
shall not affect other provisions, so long as those provisions
do not require the invalid provisions in order to be applied.
24)Requires the Bureau to provide annual progress updates to the
Legislature, in the form of oversight hearings by the
committee(s) with jurisdiction, regarding the enforcement of
the Act and subsequent regulations, and requires the
Legislative Analyst's Office (LAO) to provide the Legislature
and the Governor by July 1, 2012, a comprehensive review on
the extent to which the Bureau has implemented the provisions
of the Act, and the appropriateness of the exemptions provided
in the Act.
25)Repeals the Act on January 1, 2016, unless a later statute is
enacted to extend this date.
26)Appropriates $580,000 from the Former Act to the Bureau for
the purpose of funding five education administrator positions,
and provides that these positions shall be included in the
annual budget for the Bureau.
EXISTING LAW relating to the regulation of private postsecondary
education is inoperative. Recently inoperative statute
expressed the intent of the Legislature to provide for the
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protection and interests of students and institutions that have
matters pending under the Former Act, which became inoperative
on July 1, 2007; provided for the continuation of all matters
pending before the Former Bureau on July 1, 2007, until July 1,
2008; and allowed, until July 1, 2008, limited state oversight
of private postsecondary schools by the DCA. The statutes
became inoperative on July 1, 2008.
FISCAL EFFECT : Unknown
COMMENTS : Purpose of this bill : According to information from
DCA, there are approximately 1,500 private postsecondary
institutions that had been approved by the Former Bureau to
operate in California. This includes approximately 1,200
vocational training schools and 300 branch satellites, as well
as, approximately 300 degree-granting institutions with an
estimated student enrollment of approximately 400,000. The
Former Bureau also registered approximately 700 private
institutions providing short-term career/seminar training,
continuing education, intensive English language programs, and
license exam preparation courses. The author intends for this
bill to establish the Bureau's authority to regulate private
postsecondary institutions and enforce the provisions of the
Act.
Overview of previous private postsecondary regulatory attempts :
During the late 1980s, when regulation of the private
postsecondary education industry was carried out by a division
within the State Department of Education, the state developed a
reputation as the "diploma mill capital of the world." As a
result of concerns over the integrity and value of the degrees
issued by these institutions, the Former Act was enacted to
overhaul the state's regulatory program, transferring oversight
responsibility for the program to a 20-member Council.
Concurrently, the Maxine Waters School Reform and Student
Protection Act (Waters Act) was enacted. The regulatory
framework established by the merging of the Waters Act and the
Former Act led to duplicative and conflicting statutory
provisions, plaguing California's oversight of these
institutions with problems that continued through the sunset of
the law on January 1, 2007.
In 2004, in response to the persistent problems with the Former
Bureau, the Legislature enacted SB 1544 (Figueroa), Chapter 740,
Statutes of 2004, which required the appointment of an
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Enforcement Monitor (Monitor) to provide an in-depth and
impartial examination of the Former Bureau's operations. The
Monitor's report, presented to the Joint Committee on Boards,
Commissions and Consumer Protection on December 7, 2005,
outlined a "twenty-year record of repeatedly identified,
fundamental problems in every one of the Bureau's key
operations." The Report found that the Former Bureau both
inadequately protected consumers and impeded the expansion of
quality postsecondary and vocational educational opportunities.
The concerns and recommendations raised by the Monitor were
generally consistent with concerns raised by the California
Postsecondary Education Commission (CPEC) in 1995, an
independent report from Price Waterhouse in 1997, a Bureau of
State Audit's report in 2000, and the DCA's own internal
investigation in 2002. The Former Bureau, by the time of its
sunset, had not addressed many of its fundamental problems with
oversight and enforcement; however, as the Monitor's report
identifies, many of the root causes of enforcement and oversight
failures can be traced back to deficiencies within the Former
Act.
Does this bill meet overall goals for the regulation of private
postsecondary education ? In determining the overall degree to
which the regulatory design proposed in this bill responds to
the problems of the Former Bureau, there are several overriding
policy issues that the author and the Legislature should
consider:
1)Sufficient student protections : The paramount goal of any
such law is the protection of students, both to prevent abuse
and to ensure quality. This bill contains an array of
requirements aimed at protecting students, including:
a) Requiring an institution to obtain an approval to
operate issued by the Bureau, and requiring the Bureau to
determine, prior to granting an approval to operate to
examine educational program content, qualifications of
faculty, institutional financial stability, among other
specified criteria.
b) Establishes numerous "fair business practices" that
institutions are required to follow, including: prohibiting
an institution from promising employment or otherwise
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overstating the availability of jobs in the local economy
upon graduation; using "help wanted" ads to solicit
students; requiring prospective students to provide
personal contact information before being granted access to
educational program information via the institution's
internet website; requiring that, for career fields that
require licensure by the state, institutions offering
educational programs must have approval to conduct that
educational program; and numerous other outlined "fair
business practices."
c) Requiring institutions to provide the school catalog,
school performance fact sheet, and enrollment agreement to
students prior to enrollment, and specifying numerous
specific disclosures to students regarding educational
program content, transferability of credits, refundable and
non-refundable charges, graduation, placement and license
examination passage rates, and information regarding the
buyer's right to cancel, among others.
d) Establishing standards that institutions must abide by
that guarantee students the right to cancel, withdraw, and
receive refunds.
e) Establishing Bureau enforcement procedures that provide
for a student complaint process and, among other
provisions, a process whereby the Bureau may order an
institution to pay appropriate restitution to a student or
group of students that suffered loss due to an
institution's violation of the Act.
While this bill outlines numerous specific student
protections, a majority of oversight and enforcement
activities are left to Bureau discretion and reliant upon the
adoption of implementing regulations by the Bureau. Until
those regulations are implemented, it is difficult to know how
well students will be protected and how adequately
institutions will be monitored. The degree to which these
outlined protections will result in sufficient protection for
students will depend largely on the degree to which the Bureau
and the students themselves can and do take action to ensure
institutional compliance with the Act.
2)Appropriate exemptions for accredited institutions: A major
challenge is deciding which institutions need state oversight
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and which do not. This policy question facing the author and
the Legislature is whether it is appropriate to exempt
institutions based on their accreditation.
Accreditation is a voluntary, non-governmental peer review
process utilized for the purpose of determining academic
quality of higher education institutions and programs. Under
federal law, USDE is required to publish a list of recognized
accrediting agencies deemed reliable authorities on the
quality of education or training provided by their accredited
institutions. Only those institutions accredited by a
USDE-recognized accrediting organization are eligible to
participate in the federal student financial assistance
programs. The USDE recognizes both regional and national
accrediting agencies.
The Former Act, at the time of its sunset, provided a full
exemption for institutions accredited by the Western
Association of Schools and Colleges (WASC), one of 6 regional
accrediting agencies. The Former Act also partially exempted
non-WASC regionally accredited institutions from the Bureau's
approval process. This bill currently allows institutions
that are accredited by a USDE-approved accrediting agency to
be granted approval to operate via their accreditation but
does not provide full exemptions for institutions based on
their accreditation.
One of the principal arguments made for not exempting
accredited institutions from the Act is that the Bureau's
roles and responsibilities are complementary to those of
accrediting agencies; the Bureau provides for operating
standards and student protections, while the accrediting
agency generally reviews educational program content.
Additionally, accrediting agencies have no legal control over
educational institutions or programs. Proponents of exempting
accredited institutions argue that accredited institutions are
subject to more rigorous oversight by USDE and the accrediting
agency, and the Bureau's efforts should be focused on
institutions that are not being fully reviewed by any other
accrediting or regulatory agency.
Several reports previously prepared on the issue of whether or
not accrediting agencies provide a sufficient level of
protection in the state's interest in ensuring that students
are treated fairly have not definitively answered this
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question. The author has indicated intent to continue
examining the accreditation process in order to determine
which institutions should be granted an exemption based on
accreditation.
3)Adequate Bureau oversight and enforcement : The degree to
which the student protections outlined in this bill will
result in greater protection for students will depend largely
on the degree to which the Bureau takes action to ensure
institutional compliance with this Act. This bill attempts to
provide a clear and concise law for the Bureau to enforce,
strong authority for the Bureau to pursue unapproved schools,
requires reporting to the Legislature and the Governor on the
progress of the Bureau's enforcement program, and requires the
LAO to provide the Legislature and the Governor a
comprehensive review on the extent to which the Bureau has
implemented the provisions of the Act, and the appropriateness
of the exemptions provided in the Act by January 1, 2012.
Does this bill respond to specific prior findings and
recommendations ? The Monitor's report included various specific
findings and recommendations for overhauling the Former Act;
this bill attempts to address many of those findings and
recommendations as follows:
1)Licensing: The Monitor found that numerous schools operated
for years under "temporary" licenses; in 2005, over a quarter
(75) of approved degree-granting schools were operating on
temporary approvals, and of those 29 operated on such
approvals for more than two years, and seven for more than
four years.
This bill responds to licensing problems by requiring the
Bureau to establish a process whereby an application for
approval to operate is either approved or denied by the
Bureau. If the Bureau denies an application, the Bureau is
required to establish a process whereby the institution may
appeal the denial.
2)Enforcement: The Monitor found that the Former Bureau did not
conduct unannounced site visits as required by law, never
revoked the license of a school, and had never placed a school
on probation. The Monitor further found that the fine amounts
for unapproved schools ($2,500) were too low to promote
compliance, and fines were rarely assessed. The Monitor noted
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that inadequate staffing levels led to complaints that
unapproved schools were not being investigated, and when
investigated, the investigations largely relied on documents
generated by the schools themselves. The Monitor noted that
even with better investigative resources, the remedies at the
Former Bureau's disposal were inadequate; the Former Bureau
did not have the power to order refunds or restitution to a
student or group of students.
This bill establishes a compliance and enforcement program
that directs the Bureau to take specified actions for
violations of the Act, requiring the Bureau to cite unapproved
schools with fines of up to $50,000, take specified
investigative actions, and provides the Bureau with the power
to order refunds and restitution to a student or group of
students.
3)Reporting: The Monitor found that a significant number of the
reports required from schools by law, including reports
showing how many students actually obtain jobs six months
after graduation, were past due and chronically late, and the
Former Bureau never verified the data.
This bill requires that the institution submit the annual
report to the Bureau under penalty of perjury, and requires
the report be submitted by July 1 of each year. To ensure the
accuracy of reported data, the author may wish to consider the
Monitor's recommendation that the Bureau review all reports
for completeness and validate the data provided for a
significant random sample of institutions and programs each
year.
4)STRF Program: The Monitor reported that claims for payment
sometimes lingered for more than two years; the Former Bureau
rarely ensured that institutions were paying the right amount
of fees, and the staff believed that only about half of the
legally required fees were being paid. Due to these STRF
shortages, the Former Bureau routinely used fees paid by
degree-granting institutions to pay claims of students from
non-degree granting schools.
This bill requires an institution to report annually to the
Bureau regarding the status of STRF remittances. This bill
requires the Bureau to establish regulations regarding STRF
oversight and functions; therefore, it is unknown at this time
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how the Bureau regulations will respond to the Monitor's
recommendations. This bill requires the Bureau to provide
regular updates to the Legislature regarding the adoption and
implementation of Bureau regulations; theoretically, this
would provide the Legislature with the information necessary
to determine if statutory revisions and updates to STRF
provisions are necessary.
5)Bureau Insolvency: The Monitor's report identified
significant problems with the fee structure; the
statute-imposed study found that revenue was "insufficient to
support ongoing operations," but the Former Bureau failed to
recommend raising fees.
This bill establishes a fee structure but has left blank fee
amounts. The author has indicated intent to place fee amounts
in statute and provide the Bureau with the authority to adjust
fee amounts through regulation if necessary. The author
indicates that he is working with DCA on specific fee amounts
to be amended into the bill at a later date.
6)Regulatory Burden and Arbitrary Practices: The Monitor found
that the Former Bureau's regulatory practices were
unpredictable; creating a financially risky environment for
schools seeking to open in California that potentially impeded
educational opportunities. Specifically, the Monitor found
that the Former Bureau assessed fees on schools without the
statutory or regulatory authority to do so. Due to the gross
deficiencies in the enforcement program, the Former Bureau
attempted to pursue enforcement by forcing schools to agree to
conditions before granting approval and the Former Bureau
inappropriately required schools to submit re-approval
applications beyond what was required by law.
This bill attempts to provide a clear directive to the Bureau,
while providing the Bureau with appropriate discretion over
specific regulations and processes. History has proven that
without rules and regulations students will be mistreated;
therefore, the goal of any such Act must be to provide for
strong regulation and oversight of institutions while
preventing excessive burden. This bill attempts to improve
upon the Former Act by creating a more clear and concise law,
easing the approval process, providing clear deadlines for the
adoption of regulations so that schools know exactly the rules
they will be expected to follow, and allowing for workshops to
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be conducted by the Bureau to help schools navigate the
approval process and requirements of the Act.
The Monitor's report identified three major structural
deficiencies within the Former Act and made recommendations for
addressing those deficiencies:
1)The Monitor indicated that the Former Act's different
standards and requirements for different categories of
institutions were inherently complex and recommended a
consolidated system that would apply to all institutions.
This bill provides for the creation of a single category of
institution and establishes the same standards and
requirements for all institutions.
2)The Monitor noted the 9 to 12 month time frame for granting
approval to new institutions was insufficient, leading the
Former Bureau to heavily relying on temporary approvals. The
Monitor recommended establishing an approval process for
institutions similar to the process for institutions to obtain
accreditation, lasting two to three years, and allowing the
Bureau to monitor the institution as it matures and
demonstrates its ability to comply with the state's standards
and requirements.
This bill establishes overall areas for the Bureau to examine
when reviewing an application for approval to operate but
leaves many of the details regarding the approval to operate
process to Bureau regulations; therefore it is unknown whether
the Bureau will respond to the Monitor's recommendations
regarding the approval to operate process. As noted above,
this bill requires the Bureau to provide regular updates to
the Legislature. Theoretically, this would provide the
Legislature with the information necessary to determine if
statutory revisions and updates to the approval to operate
provisions are necessary.
3)The Monitor found that the Former Act's sanctions and
penalties were insufficient to deter future misconduct by
industry participants and recommended providing the Bureau
with the authority to issue formal warning notices, increase
fine amounts, and separate enforcement and renewal processes.
This bill increases penalties, provides the Bureau with the
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authority to issue a notice to comply, and generally separates
the enforcement process from the renewal process.
The Monitor made several other recommendations, which this bill
seeks to include, such as: allowing consumers to access
enforcement and other public documents via the Bureau's website;
establishing a proactive enforcement program to target
unapproved schools; revising the annual reporting statutes to
more clearly outline the Legislature's expectations of the
Bureau; requiring unannounced inspections; and allowing public
access to school complaint information via the Bureau's website.
Positions of interested and affected parties : Numerous
individuals and organizations are not in support or opposition
of the current version of the bill but have concerns and have
submitted comments to the author and committee staff. Below is
a sampling of those comments:
WASC argues that they have provided accreditation services to
institutions operating in California for over 40 years through
periodic reviews, annual monitoring, substantive change
procedures, processing complaints, handling third-party
comments, and more, which has led to the exemption of WASC
institutions from Former Bureau oversight. WASC believes this
exemption should be continued but takes no position on the
treatment of non-WASC regionally accredited institutions.
The Board of Psychology and the Association of State and
Provincial Psychology Boards believe that California should
require licensed psychologists to have a doctoral education
from a regionally accredited school or university and have
recommended an amendment to require regional accreditation as
the standard for individuals to sit as candidates for
psychology licensure in California. Several graduates of the
Graduate Center for Child Development and Psychology have
written in direct opposition to this recommendation.
Committee staff notes that this bill provides that an
institution must have approval from the state licensing board
if they offer programs that require licensing. Committee
staff notes that it may be more appropriate for the Board of
Psychology to pursue separate legislation in the Business and
Professions Code if they seek to change psychology licensure
requirements.
The Board of Barbering and Cosmetology in conjunction with the
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Professional Beauty Federation of California , the association
representing the industry, have approached the author and
committee staff regarding the desire to have barbering and
cosmetology institutions regulated by the Board, rather than
the Bureau.
Goodwill Industries provides private post-secondary education
training courses in California that fall under the purview of
the Act. Goodwill organizations are non-profit, accredited
entities. Goodwill argues that, because of the populations
they serve and their non-profit status, their organizations
would struggle with the fee and reporting requirements of the
Act and, therefore, should be exempt from the Act so long as
they meet other specified criteria.
Consumers Union (CU) and the Consumer Federation of California
have taken "oppose unless amended" positions. CU argues that
no other state is known to lodge the regulation of trade
institutions in a consumer/business agency rather than an
education agency. CU believes that DCA's failed regulation of
the Former Bureau highlight the need to move the regulation to
an education agency. CU believes that institutions should not
be granted approval to operate by means of accreditation, that
many accredited institutions have perpetrated some of the most
egregious examples of fraud and deception. CU believes the
disclosures to students are inadequate, particularly regarding
job placement and transferability of credits earned. CU
argues that the Bureau's enforcement authority is confusing
and potentially too constraining.
The Center for Public Interest Law (CPIL) has taken an "oppose
unless amended" position and generally agrees with the
comments of CU. CPIL states that the recent amendments and
ongoing efforts of the author and staff to discuss the bill
with consumer groups hopefully foreshadow a bill that will
fully protect students.
The California Association of Private Postsecondary Schools
(CAPPS) has taken a "support if amended" position and have
submitted several amendments to the author, including removing
the preservation clause for the private right of action under
the Former Act, removing the requirement that institutions
post specific information on their websites, and removing the
requirement for a 3-day cooling off period before a student
may sign an enrollment agreement, among other suggested
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amendments.
The Accredited Out of State Colleges and Universities in
California (AOCUC) have taken an "oppose unless amended"
position. AOCUC has expressed concern about which accredited
institutions will be exempt under the bill, believing that if
WASC accredited schools are exempt then all regionally
accredited schools should be exempt from the Act. AOCUC notes
that the current version of the bill leaves the exemption for
accredited schools open-ended.
Current Legislation: SB 489 (Liu) states legislative intent
regarding the regulation of private postsecondary education and
is currently pending referral in the Senate Rules Committee.
2007-08 Legislation: SB 823 (Perata) of 2008, which was vetoed
by the Governor, was similar to this bill and would have
re-established the Bureau with specified functions and student
protections. AB 2746 (Niello) of 2008, which was held in the
Assembly Appropriations Committee, was similar to this bill. AB
1897 (Emmerson) Chapter 489, Statutes of 2008, requires the
Board of Behavioral Sciences to recognize marriage and family
therapist applicants with degrees from institutions that were
approved by the Former Bureau on June 30, 2007. AB 1182
(Niello) of 2007, which was not heard in committee, was similar
to this bill. AB 1525 (Cook), Chapter 67, Statutes of 2007,
stated legislative intent regarding the protection of students,
allowed for the continuation of matters pending before the
Former Bureau, and provided for minimal oversight of
institutions by DCA until February 1, 2008. SB 45 (Perata),
Chapter 635, Statutes of 2007, extended limited state oversight
of private postsecondary schools from February 1, 2008 to July
1, 2008.
2005-06 Legislation : AB 2381 (Dymally) of 2006, which was not
heard in the Senate Business and Professions Committee, would
have provided that an institution that willfully violated
minimum requirements of the Former Act would be required to
refund all tuition and fees paid by a student. AB 2810 (Liu) of
2006, which was vetoed by the Governor, in its final form, would
have extended the sunset date of the Former Act for one year and
established a working group to develop recommendations for
changes in the Former Act. SB 1473 (Figueroa) of 2006, which
was held in the Senate Appropriations Committee, would have
revised and recast the provisions of the Former Act based on the
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Monitor's recommendation. SB 1568 (Dunn), Chapter 534, Statutes
of 2006, transferred the regulation and oversight of
unaccredited law schools from the Former Bureau to the Committee
of Bar Examiners. AB 827 (Goldberg), Chapter 815, Statutes of
2006, enacted consumer loan protections for students attending
private institutions. SB 767 (Romero) of 2005 would have
eliminated the exemption from the Former Act for WASC accredited
vocational schools in response to media coverage of those
schools committing misrepresentation about starting salaries and
job placement to students. SB 767 was subsequently amended to
address a different topic.
2003-2004 Enacted Legislation : SB 1544 (Figueroa), Chapter 740,
Statutes of 2004, required the Director of DCA to appoint the
Monitor. SB 967 (Burton), Chapter 340, Statutes of 2003,
exempted degree-granting institutions accredited by regional
accrediting agencies from specific programmatic and
institutional review and approval by the Former Bureau. SB 364
(Figueroa), Chapter 789, Statutes of 2003, required the Former
Bureau to report to the Legislature regarding corrective actions
to resolve deficiencies found in the Former Bureau operations.
2001-2002 Enacted Legislation : AB 2967 (Wright), Chapter 581,
Statutes of 2002, was primarily technical clean-up to the Former
Act. AB 201 (Wright), Chapter 621, Statutes of 2001, made
various changes to address concerns regarding administration and
solvency of STRF. AB 1720 (Committee on Higher Education),
Chapter 399, Statutes of 2001, specified that the Joint
Legislative Sunset Review Committee cooperate with CPEC in
evaluating and reviewing the Former Bureau. AB 1898 (Wright),
Chapter 273, Statutes of 2000, exempted private security guard
training schools that met certain specified requirements from
Former Bureau oversight.
Pre-2001 Major Legislation : AB 71 (Wright), Chapter 78,
Statutes of 1997, transferred administration of the Former Act
from a Council for Private Postsecondary and Vocational
Education (Council) to the Former Bureau. AB 190 (Morgan),
Chapter 1307, Statutes of 1989, established the Former Act and
established the Council to oversee private postsecondary
institutions operating in California. AB 1402, Chapter 1239,
Statutes of 1989, established the Waters Act.
Technical and Clarifying Amendments :
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1)Article 2. Transition Provisions
a) Section 94809.5 (Page 13, Lines 28-40) provides that any
claim that a student had based on the Former Act shall be
adjudicated based on the law that was in effect at the time
the violation occurred and excludes the period of time from
June 30, 2007 through December 31, 2009 from determining
the deadline or statute of limitation for filing a claim or
lawsuit. However, Section 94809.6 (Page 14, Lines 1-23)
appears to require that action to have been commenced by
June 30, 2007. The two sections are in conflict, to
clarify based on the author's intent, the language should
read:
94809.6. (a) Notwithstanding any other provision of law,
any claim or cause of action in any manner based on a
violation of the former Private Postsecondary and
Vocational Education Reform Act of 1989 that arose on or
before June 30, 2007, shall have been commenced on or
before June 30, 2007. Notwithstanding the inoperative
status or repeal of the act on or after July 1, 2007, any
claim or cause of action in any manner based on the act
that was commenced 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 . Any claim or cause of
action in any manner based on a violation of the former
Private Postsecondary and Vocational Education Reform Act
of 1989 that arose on or before June 30, 2007,
notwithstanding the inoperative status or repeal of the act
on or after July 1, 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. If a final judgment was obtained in an action
commenced on or after July 1, 2007, under the authority of
Chapter 635 of the Statutes of 2007, the final judgment and
any legal remedy that was or could be maintained on or
after July 1, 2007, under that statute, shall be preserved
and maintained thereafter . If a final judgment was
obtained in an action commenced on or after July 1, 2007,
under the authority of Chapter 635 of the Statutes of 2007,
the final judgment and any legal remedy that was or could
be maintained on or after July 1, 2007, under that statute,
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shall be preserved and maintained thereafter.
2)Article 3. Definitions
a) Section 94864 (Page 19, Lines 3-4) should be amended as
follows:
94864. " Shift Change in control" means a change in the
ownership of an institution where a person who previously
did not own at least 25 percent of the stock or interest in
an institution or its parent company acquires ownership of
at least 25 percent of the stock or interest in the
institution or its parent company. Shift in control does
not include an ownership change between family members
involving less than 51 percent of the stock or interest in
the institution.
b) Section 94820.5 (Page 15, Lines 23-26), the definition
of "certified" should be deleted as the term is not used in
this context in the bill.
3)Article 4. Exemptions
a) Section 94874(a)(7) (Page 21, Lines 7-10) should be
amended to clarify the author's intent that only those
institutions wholly regulated by the Committee of Bar
Examiners are exempted:
94874 (7) An institution that solely offers educational
programs in law leading to a Juris Doctor (J.D.), Master of
Laws (LL.M.), or Doctor of Jurisprudence (J.S.D.) degree,
or similar degrees signifying the award of a bachelor's,
master's, or doctorate in law.
(A) A law school or institution that solely offers
educational programs in law leading to a Juris Doctor
(J.D.) degree, Bachelor of Laws (LL.B.) degree, or other
law study degree that is regulated by the Committee of Bar
Examiners pursuant to Business and Professions Code 6046.7.
(B) If a law school or institution not exempt under
subdivision (a) offers educational services other than
Juris Doctor (J.D.) degree, Bachelor of Laws (LL.B.)
degree, or other law study degree that is regulated by the
Committee of Bar Examiners, the law school or institution
and its nonlaw degree programs shall be subject to this
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chapter.
4)Article 8: Fair Business Practices
a) Section 94897, line 32, for clarity, the "may" should be
changed to "shall" as the section talks about a prohibition
on institution activity.
5)Article 11. Enrollment Agreements and Disclosures
a) Section 94902(d) (Page 33, Lines 6-7) provides that an
enrollment agreement shall become operative when the
student attends the first class session. This provision is
in conflict with other provisions in the bill and should be
deleted.
b) Section 94910 (c) and (d) (Page 37, Lines 14 and 18)
reference Section 949228 and should be amended to reference
Section 94928.
c) Section 94911(c) (Page 38, Lines 15-18) should be
amended to conform the provision with other provisions of
the bill, as follows:
(c) In underlined capital letters on the same page of the
enrollment agreement in which the student's signature is
required, the total charges for the current period of
attendance that the student is obligated, upon enrollment,
to pay for the , the estimated total charges for the entire
educational program , and the total charges the student is
obligated to pay upon enrollment.
6)Article 16. Completion and Placement Requirements
a) On Page 43, Line 8, to conform the title with the
function, the article should be renamed:
Article 16. Completion and Placement Requirements ,
Placement, Licensure, and Salary Disclosure Requirements "
b) 94928(g) (Page 43, Lines 36-37) should be amended:
(g) "Students available for graduation" means the cohort
population minus the number of students un available for
graduation.
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7)Section 7 should be amended to read:
(a) Notwithstanding any other provision of law, and
notwithstanding the repeal of the former Private Postsecondary
and Vocational Education Reform Act of 1989, the sum of five
hundred eighty thousand dollars ($580,000) is hereby
appropriated from the Private Postsecondary and Vocational
Education Administration Fund to the Bureau for Private
Postsecondary Education, for the purpose of funding five
private postsecondary education administrator specialist and
senior specialist positions.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
Faculty Association of California Community Colleges
Opposition
Legal Aid Foundation of Los Angeles
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960