BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 2296|
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                                 THIRD READING


          Bill No:  AB 2296
          Author:   Block (D)
          Amended:  8/21/12 in Senate
          Vote:     21

           
           SENATE EDUCATION COMMITTEE  :  7-2, 6/20/12
          AYES:  Lowenthal, Alquist, Hancock, Liu, Price, Simitian, 
            Vargas
          NOES:  Blakeslee, Huff
          NO VOTE RECORDED:  Runner, Vacancy

           SENATE BUSINESS, PROF & ECON. DEVELOP. COMM.  :  6-2, 7/2/12
          AYES:  Price, Corbett, Correa, Hernandez, Negrete McLeod, 
            Vargas
          NOES:  Strickland, Wyland
          NO VOTE RECORDED:  Emmerson

           SENATE APPROPRIATIONS COMMITTEE  :  5-2, 8/6/12
          AYES:  Kehoe, Alquist, Lieu, Price, Steinberg
          NOES:  Walters, Dutton

           ASSEMBLY FLOOR  :  47-26, 5/14/12 - See last page for vote


           SUBJECT  :    California Private Postsecondary Education Act 
          of 2009

           SOURCE  :     Author


           DIGEST  :    This bill expands the requirements to be met by 
          private postsecondary educational institutions subject to 
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          state oversight under the California Private Postsecondary 
          Education Act (CPPEA) by expanding disclosures related to 
          unaccredited programs; expanding disclosure requirements 
          for all regulated institutions; establishing more stringent 
          criteria for determining gainful employment and calculating 
          job placement rates; and, increasing institutional 
          documentation and reporting requirements around completion 
          rates, job placement/license exam passage rates, and 
          salary/wage information for graduates.

           Senate Floor Amendments  of 8/21/12 extend the timeframe for 
          the Bureau, from January 1, 2014 to July 1,2014, to define 
          (by regulation) specific measures and standards for 
          determining whether a student is gainfully employed in a 
          full-time or part-time position for which the institution 
          represents that the program prepares its graduates for 
          purposes of determining the job placement rate of an 
          institution. 

           ANALYSIS  :    Existing law, until January 1, 2016, 
          establishes the CPPEA, which provides for the approval, 
          regulation, and enforcement of private postsecondary 
          educational institutions by the Bureau of Private 
          Postsecondary Education (BPPE). 

          The CPPEA establishes fair business practices which 
          prohibit a private postsecondary educational institution 
          subject to its authority from, among other things, offering 
          an unaccredited doctoral degree program without disclosing 
          to prospective students that the degree program is 
          unaccredited, and require disclosure of known limitations 
          of a degree, such as whether it is recognized for licensure 
          or certification in California and other states, whether a 
          graduate of the degree program will be eligible to sit for 
          the applicable licensure exam in California and other 
          states, that a degree from an unaccredited institution is 
          not recognized for some employment positions, including, 
          but not necessarily limited to, positions with the State of 
          California; and that a student attending an unaccredited 
          institution is not eligible for federal student financial 
          aid programs.

          The CPPEA also establishes requirements regarding 
          enrollment agreements and disclosures including that a 

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          student enroll solely by executing an enrollment agreement 
          and that prospective students be provided with a school 
          catalog and a School Performance Fact Sheet.  The CPPEA 
          establishes minimum requirements and disclosures to be made 
          in these documents.

          Existing law also establishes various disclosure and 
          reporting requirements around completion, placement, 
          licensure and salary of students/graduates and establishes 
          various definitions for this purpose.  Among other things, 
          the CPPEA defines "graduates employed in the field" as 
          graduates gainfully employed within six months of 
          graduation in a position for which the skills obtained 
          through the education and training provided by the 
          institution are required or provided a significant 
          advantage to the graduate in obtaining the position.  It 
          also requires that the information used to substantiate the 
          reported job placement, license passage, and completion 
          rates be documented and maintained by the institution for 
          five years from the date of the publication of the rates 
          and authorizes this information to be retained by the 
          institution in an electronic format.  The CPPEA also 
          requires institutions to submit an annual report to the 
          BPPE that includes specified information.

          This bill expands the requirements to be met by private 
          postsecondary educational institutions subject to state 
          oversight under CPPEA by expanding disclosures related to 
          unaccredited programs; expanding disclosure requirements 
          for all regulated institutions; establishing more stringent 
          criteria for determining gainful employment and calculating 
          job placement rates; and, increasing institutional 
          documentation and reporting requirements around completion 
          rates, job placement/license exam passage rates, and 
          salary/wage information for graduates.

           Comments

          Accreditation  .  Accreditation is a voluntary, 
          non-governmental peer review process utilized for the 
          purpose of determining academic quality of higher education 
          institutions and degree programs.  Under federal law, the 
          United States Department of Education (USDE) is required to 
          publish a list of nationally recognized accrediting 

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          agencies deemed to be 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.  Generally speaking, professions that require 
          certification or licensure as a prerequisite for employment 
          (such as education, health care, or counseling), require 
          degrees from an accredited institution of higher education. 


           Cohort default rates  .  A cohort default rate is the 
          percentage of a school's borrowers who enter repayment on 
          federal loans during a particular fiscal year and default 
          or meet other specified conditions prior to the end of the 
          next fiscal year.  These default rates are "officially" 
          reported by the U.S Department of Education once per year. 
          At the federal level, beginning in 2014, sanctions based 
          upon the three year cohort default rate will begin, and 
          schools meeting specified cohort default rate thresholds 
          will lose eligibility for specified federal loan programs 
          for the remainder of the fiscal year and for the following 
          two fiscal years.  At the state level, SB 70 (Budget 
          Committee, Chapter 7, Statutes of 2011) established, as a 
          condition for voluntary participation in the Cal Grant 
          program, that each institution with more than 40 percent of 
          its undergraduate enrollment borrowing federal student 
          loans must have a three-year 2008 cohort default rate less 
          than 24.6% to be eligible for new and renewal Cal Grant 
          awards in the 2011-12 academic year, and less than 30% for 
          each subsequent year.  The Governor's proposed budget for 
          2012-13 proposes the reduction of the cohort default rate 
          for Cal Grant participation from 30 percent to 15 percent 
          beginning in the 2012-13 academic year. 

           Employment information  .  Current regulations specify that 
          the reported "graduates in the field" must be identified by 
          those who work in the field in a single position that 
          averages more and less than 32 hours per week.   The author 
          is concerned this standard, and the ambiguity in current 
          law about the type of position which qualifies as gainful 
          employment relative to the training received, lack the 
          specificity to ensure accurate job placement, wage, and 
          salary information is provided to prospective students. 

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           Prior Legislation
           
          AB 611 (Gordon), Chapter 103, Statutes of 2011, established 
          certain disclosure requirements pertaining to accreditation 
          status, licensure, and related limitations for unaccredited 
          doctoral programs.

          AB 2393 (Ammiano), 2010, would have required institutions 
          regulated by the Bureau to comply with various placement 
          rate calculations for specified programs. AB 2393 was 
          vetoed by Governor Schwarzenegger whose message read:

               This bill would create varying standards for 
               determining post-graduate placement rates from 
               different vocational fields.  California needs uniform 
               standards in this area of law that can be consistently 
               and fairly applied by the Bureau of Private 
               Postsecondary Education, and that are predictable for 
               consumers and schools.  This bill proposes to put 
               California on the same path to overly confusing 
               statutes and guidelines that existed prior to the new 
               Private Postsecondary Education Act.

          AB 48 (Portantino), Chapter 310, Statutes of 2009, revised 
          and recasts the Private Postsecondary and Vocational 
          Education Reform Act of 1989 into the California Private 
          Postsecondary Education Act of 2009, provided for the 
          transition to the BPPE, outlined its responsibilities, 
          provided for the approval, regulation, and enforcement of 
          private postsecondary educational institutions, established 
          reporting requirements, and repeals the Act on January 1, 
          2016.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Senate Appropriations Committee:

           Potentially significant costs to the BPPE, within the 
            Department of Consumer Affairs depending on the extent to 
            which the BPPE is expected to review and enforce new 
            standards beyond the complaint process.


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           The Department anticipates requiring one additional 
            Associate Governmental Program Analyst position to 
            fulfill this bill's requirements, at a cost of 
            approximately $81,000 per year. This special fund 
            position would be paid from the Private Postsecondary 
            Education Administration Fund.

           SUPPORT  :   (Verified  8/14/12)

          The Advancement Project
          Asian Law Caucus
          California Civil Right Coalition
          California Faculty Association
          California Federation of Teachers 
          California Labor Federation
          California Nurses Association
          California Physical Therapy Association
          California Psychological Association
          California State Commanders Veterans Council
          California State Students Association
          Center for Public Interest Law, University of San Diego 
          School of Law
          Children's Advocacy Institute, University of San Diego 
          School of Law
          Chinese for Affirmative Action
          Consumer Action
          Consumer Federation of California 
          Consumers Union of United States, Inc.
          Institute for College Access and Success
          LAW Project of Los Angeles
          Legal Aid Foundation of Los Angeles
          Public Advocates Inc.
          Veterans of Foreign War, Department of California
          Vietnam Veterans of America, California

           OPPOSITION  :    (Verified  8/14/12)

          American Career Colleges/West Coast University

           ARGUMENTS IN SUPPORT  :    According to the author, this bill 
          is intended to respond to issues raised in a joint hearing 
          of the Assembly Higher Education Committee and the Senate 
          Business, Professions and Economic Development Committee in 
          February 2012.  Specific issues raised included the need to 

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          increase transparency among the private colleges and 
          universities regulated by the BPPE and to ensure that 
          prospective students have all the information necessary to 
          make informed decisions about their pursuit of 
          postsecondary education. 

           ARGUMENTS IN OPPOSITION  :    American Career Colleges/West 
          Coast University states in opposition, "When developing the 
          regulations to implement AB 48 (Portantino) the panel that 
          developed those regulations concluded that dictating hourly 
          and weekly employment standards was not a workable option.  
          Dictating that level of specificity for gainful employment 
          actually hinders gainful employment, because it makes it 
          more difficult for schools to place students.

          "Employers will not work with schools that make it 
          difficult to hire their graduates.  Requiring a school to 
          go after employers and demand specific information about 
          individual employees will create a burden for the employer 
          and discourages them from hiring graduates. Former students 
          will not want to be tracked by their school after 
          graduation. They will not want to continue to provide 
          specific data to their former school.  This will make it 
          very difficult for schools to comply and will hurt students 
          seeking employment. It could actually increase the default 
          rate rather than improve it."  
           

           ASSEMBLY FLOOR  : 47-26, 05/14/12
          AYES: Alejo, Allen, Ammiano, Beall, Block, Blumenfield, 
            Bonilla, Bradford, Brownley, Buchanan, Butler, Charles 
            Calderon, Campos, Carter, Cedillo, Chesbro, Davis, 
            Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani, 
            Gordon, Hall, Hayashi, Roger Hernández, Hill, Huber, 
            Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza, 
            Mitchell, Monning, Pan, V. Manuel Pérez, Skinner, 
            Swanson, Torres, Wieckowski, Williams, Yamada, John A. 
            Pérez
          NOES: Achadjian, Conway, Cook, Donnelly, Beth Gaines, 
            Garrick, Gatto, Gorell, Grove, Hagman, Halderman, Harkey, 
            Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell, 
            Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Wagner
          NO VOTE RECORDED: Atkins, Bill Berryhill, Fletcher, Perea, 
            Portantino, Solorio, Valadao

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          PQ:n  8/22/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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