BILL ANALYSIS Ó
AB 2296
Page 1
ASSEMBLY THIRD READING
AB 2296 (Block)
As Amended April 9, 2012
Majority vote
HIGHER EDUCATION 5-2 BUSINESS & PROFESSIONS 6-0
-----------------------------------------------------------------
|Ayes:|Block, Atkins, Fong, |Ayes:|Hayashi, Allen, Butler, |
| |Galgiani, Lara | |Eng, Hill, Ma |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Olsen, Miller | | |
| | | | |
-----------------------------------------------------------------
APPROPRIATIONS 10-5
-----------------------------------------------------------------
|Ayes:|Fuentes, Blumenfield, | | |
| |Bradford, Charles | | |
| |Calderon, Campos, Davis, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Harkey, Donnelly, Gatto, | | |
| |Nielsen, Wagner | | |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires institutions regulated by the Bureau for
Private Postsecondary Education (Bureau) to provide additional
disclosures to prospective students. Specifically, this bill :
1)Requires institutions regulated by the Bureau for Private
Postsecondary Education (Bureau) to provide additional
disclosures, specifically regarding the following:
a) Whether the institution offers an unaccredited
associate, baccalaureate, or master's degree and whether a
graduate will be able to sit for any applicable licensure
exam, that the degree is not recognized for some employment
positions, including positions with the State of
California, and that a student will not be eligible for
federal financial aid;
AB 2296
Page 2
b) That the school catalog state whether the institution,
or any of its programs, are accredited, and if unaccredited
to disclose the limitations of any degree program as in 1);
c) That all institutions disclose salary and wage data, and
in a manner that the bureau deems sufficient to
independently determine salary and wage information for
each graduate of each education program;
d) That the School Performance Fact Sheet and the annual
report disclose the institution's most recent three-year
cohort default rate and the percentage of students
receiving federal student loans;
e) That an institution maintaining a Web site to provide
the school catalog, School Performance Fact Sheet for each
educational program, any brochures offered to students, a
link to the bureau's Web site in the institution's most
recent annual report; and,
f) That specified information used to substantiate the
Student Performance Fact Sheet data be documented and
maintained by the institution for five years.
2)Establishes a new definition of "graduates employed in the
field" to mean graduates gainfully employed in a position for
at least 13 weeks and working at least 17.5 hours per week in
an occupation identified by the institution.
EXISTING LAW establishes the Private Postsecondary Education Act
(Act) which, among its numerous provisions, requires numerous
program performance and student outcome data disclosures and
prohibits certain conduct on the part of private postsecondary
education institutions. The Act establishes the Bureau within
the Department of Consumer Affairs (DCA) to provide oversight
and regulation of private postsecondary institutions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable costs to the Bureau to modify
enforcement procedures consistent with the new disclosure
requirements on institutions.
COMMENTS : California has a long and arduous history of
AB 2296
Page 3
attempted oversight of the private postsecondary education
sector. On January 1, 2007, the former law authorizing the
regulation of the private postsecondary education sector was
allowed to sunset. Between 2007 and 2009, several attempts to
establish a new regulatory structure failed. AB 48
(Portantino), Chapter 310, Statutes of 2009, established a new
Bureau with the Department of Consumer Affairs to enforce the
provisions of the new Act, which are scheduled to sunset on
January 1, 2015.
On February 14, 2012, the Assembly Higher Education Committee
conducted a joint legislative oversight hearing with the Senate
Business, Professions and Economic Development Committee to
evaluate California's regulatory structure for private
postsecondary education. This hearing included a discussion of
the Act and the Bureau's implementation of its provisions.
According to the author, this bill is intended to respond to
several of the concerns raised in the committee oversight
hearing.
Unaccredited degrees . Existing law requires institutions
offering unaccredited doctoral degrees to disclose to students
that the degree is unaccredited, along with any known
limitations of the degree, including whether the degree is
recognized for licensure in California or other states.
This bill would require institutions to disclose to students
whether the institution is accredited and the various
limitations of unaccredited degrees. Accreditation is a
voluntary, non-governmental peer review process utilized for the
purpose of determining academic quality of higher education
institutions and programs. Unaccredited degrees can limit a
student's career options. Some career fields and employers
require degrees from accredited colleges; this is especially
true in professions like education and health care, where
certification or licensure is a pre-requisite for employment.
Degrees from unaccredited institutions are not recognized for
employment with the State of California. Further, students
attending unaccredited institutions are not eligible to
participate in federal and state financial aid programs.
This bill would establish the following specific disclosure
requirements:
1)Whether the degree is recognized for licensure or
AB 2296
Page 4
certification in California and other states and whether a
graduate of the program will be eligible to sit for the
applicable licensure exam in California and other states.
These provisions may be somewhat duplicative for California,
as it appears that all licensure programs require passage of
an examination. However, it is unclear if licensure programs
that require an accredited degree, but not passage of a
licensure examination, exist in other states.
2)That a degree from an unaccredited institution is not
recognized for some employment positions, including positions
with the State of California. The Assembly Higher Education
Committee staff understands that it is the policy of the state
to require that, for positions that require a degree, the
degree be from an accredited institution.
3)That a student attending an unaccredited institution is not
eligible for federal financial aid programs. Both federal and
state financial aid programs require eligible institutions to
be accredited by a recognized United States Department of
Education (USDE) accreditation agency. The author may wish to
consider an amendment to clarify that students are ineligible
for both state and federal aid.
Student Performance Fact Sheet . Existing law requires
institutions covered by the Act to provide prospective students
with a Student Performance Fact Sheet. The Fact Sheet includes
data on graduation rates, job placement, salary and wage
information, and licensure examination passage rates. The Fact
Sheet is designed to give students the information necessary to
help make informed educational choices. This bill would make
several changes to the Fact Sheet.
1)Job placement. Existing law and regulation require placement
rates to be calculated for each program that is designed to
lead to, or prepare students for, a specific career or
occupation. To be counted as a placement, students must
self-identify as gainfully employed within six months of
graduation in a position for which the skills obtained through
their education "provided a significant advantage to the
student in obtaining the position." Institutions must report
placements for a) graduates working less than 34 hours per
week in a single position; and, b) graduates working more than
34 hours per week in a single position. Institutions are
AB 2296
Page 5
required to make available to students a list of the
employment positions used to calculate the job placement
rates.
This bill would make several changes to the way placement
rates are calculated and reported:
a) Institutions would be required to identify the specific
occupations for which each program is designed to lead,
using the United States Department of Labor's Standard
Occupational Classification codes. Only graduates who
obtain positions in these occupations could be counted in
the educational program placement rates. The Assembly
Higher Education Committee staff understands this change is
in response to concerns that placement rates that count
occupations that are unrelated to an education program may
be misleading to a prospective student;
b) Institutions would be required to only count placements
for graduates employed in a single position for at least 13
weeks, working at least 17.5 hours per week in one of the
identified occupations. The Assembly Higher Education
Committee staff understands that the 13 week requirement is
consistent with the recently enacted federal regulations
governing gainful employment and placement data. The
author notes that the 17.5 hour per week requirement was
contained in the former law governing private postsecondary
education. The single position requirement is consistent
with current regulations; and,
c) In response to concerns from institutions that delays in
the availability of licensure examinations affects a
student's ability to find employment within six months of
graduation, this bill would clarify that for occupations
requiring a licensing examination, placements must begin
employment within six months after the announcement of the
examination results for the first examination available
after graduation.
2)Cohort default rate. This bill would require institutions to
disclose on the Fact Sheet a) the percentage of students
receiving federal loans; and, b) the percentage of student
loan defaults (three-year cohort default rate, as reported by
the USDE). According to the author, federal loan defaults are
AB 2296
Page 6
a key indicator of institutional quality used by the federal
government. This information is readily available from the
USDE. This change appears in line with recent legislative
actions (SB 70 (Budget and Fiscal Review Committee), Chapter
7, Statutes of 2011) to link Cal Grant institutional
participation to loan default rates.
3)Salary and wage data. Existing law requires salary data to be
disclosed only if an institution makes a claim regarding the
potential salary of a graduate. This bill would require all
institutions to disclose salary and wage data. Supporters of
this bill argue that nearly all schools suggest to prospective
students that they will 'earn a good living' upon graduation,
but few make specific salary representations, yet under
existing law these institutions would not be required to
disclose salary data. This bill would also require salary and
wage disclosures to be based on the actual salary and wage
data reported by graduates.
4)Data collection and reporting. This bill would require the
collection and documentation of specific data that justifies
the information contained in the Student Performance Fact
Sheet. Institutions would be required to provide these
records to the Bureau upon request. These provisions appear
consistent with regulations recently adopted by the Bureau.
Web site disclosure . Existing law requires the Bureau to post
institutional information such as School Performance Fact Sheets
and school catalogs on the Bureau Web site. However, supporters
of this bill argue that many students look to institutional Web
sites for information regarding programs and performance data.
This bill would require institutions to post on their Web sites
specific school and program performance data.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960
FN: 0003562
AB 2296
Page 7