BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 834
AUTHOR: Williams
AMENDED: March 3, 2014
FISCAL COMM: Yes HEARING DATE: April 30, 2014
URGENCY: Yes CONSULTANT:Kathleen Chavira
NOTE : This bill, an urgency measure, has been referred to
the Committees on Business, Professions, and Economic
Development and Education. This bill was heard in
Business, Professions, and Economic Development on July 1,
2013.
SUBJECT : School Performance Fact Sheet.
SUMMARY
This bill, an urgency measure, exempts a law school that
meets specified conditions from having to submit a School
Performance Fact Sheet to the Bureau for Private
Postsecondary Education (BPPE).
BACKGROUND
Current law, until January 1, 2015, establishes the
California Private Postsecondary Education Act (Act) of
2009, which provides for the approval, regulation, and
enforcement of private postsecondary educational
institutions by the Bureau for Private Postsecondary
Education (BPPE) within the Department of Consumer Affairs
(DCA). (Education Code § 94800-94950)
Among other things, the Act requires a regulated
institution to provide a prospective student with a School
Performance Fact Sheet containing information on completion
rates, placement rates, license examination passage rates,
salary or wage information, the most recent three-year
cohort default rate and the percentage of enrolled students
receiving federal student loans (if the institution
participates in federal financial programs) and other
specified information. (EC § 94910)
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Current law exempts the following entities from the Act:
a) An institution that offers solely vocational or
recreational educational programs.
b) An institution offering educational programs
sponsored by a bona fide trade, business,
professional, or fraternal organization, solely for
that organization's membership.
c) A postsecondary educational institution
established, operated, and governed by the federal
government or by this state or its political
subdivisions.
d) An institution offering either test preparation for
examinations required for admission to a postsecondary
educational institution or continuing education or
license examination preparation, as specified.
e) An institution owned, controlled, and operated and
maintained by a religious organization, as specified.
f) An institution that does not award degrees and that
solely provides educational programs for total charges
of two thousand five hundred dollars ($2,500) or less
when no part of the total charges is paid from state
or federal student financial aid programs.
g) A law school that is accredited by the Council of
the Section of Legal Education and Admissions to the
Bar of the American Bar Association or a law school or
law study program that is subject to the approval,
regulation, and oversight of the Committee of Bar
Examiners.
h) A nonprofit public benefit corporation that is
qualified under Section 501(c)(3) of the United States
Internal Revenue Code, is organized specifically to
provide workforce development or rehabilitation
services and is accredited by an accrediting
organization for workforce development or
rehabilitation services recognized by the Department
of Rehabilitation.
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i) An institution that is accredited by the
Accrediting Commission for Senior Colleges and
Universities, Western Association of Schools and
Colleges, or the Accrediting Commission for Community
and Junior Colleges, Western Association of Schools
and Colleges.
j) An institution that has been accredited, for at
least 10 years, by an accrediting agency that is:
recognized by the United States Department of
Education (USDE) and that meets other specified
criteria.
aa) Flight instruction providers or programs that
provide flight instruction pursuant to Federal
Aviation Administration (FAA) regulations, as
specified.
bb) An institution that is accredited by a regional
accrediting agency recognized by the USDE so long as
the institution complies with requirements related to
student tuition recovery. (EC § 94871)
ANALYSIS
This bill, an urgency measure :
1) Exempts law schools from having to comply with the
requirements of the School Performance Fact Sheet, if
the school is:
a) Accredited by the Council of the
Section of Legal Education and Admissions to the
Bar of the American Bar Association (ABA).
b) Owned by an institution authorized
to operate by the Bureau for Private and
Postsecondary Education (BPPE).
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c) Reporting graduate salary
information and other information to the National
Association for Law Placement (NALP).
d) Approved to operate by the BPPE
pursuant to statutes outlining the provisions
applicable to otherwise exempt institutions.
2) Provides that notwithstanding any other law, a law
school that meets the criteria above shall be deemed
to satisfy the Fact Sheet requirements by doing all of
the following:
a) Complying with Standard 509 of the
American Bar Association's Standards and Rules of
Procedure for Approval of Law Schools, as that
standard may be amended.
b) Providing completion, placement,
bar passage, and salary and wage information of
graduates to prospective students prior to
enrollment through the law school application
process administered by the Law School Admission
Council (LSAC).
c) Providing prospective students any
additional information required on a Fact Sheet
not already reported via (a) and (b) including,
but not limited to:
i) The most recent
three-year cohort default rate for the law
school as reported by the US Department of
Education, and if applicable, requires that
the rate be disaggregated from the parent
institution's reported rate.
ii) The percentage of enrolled
students receiving federal student loans.
d) Provide the required information
to prospective students, at minimum, by reporting
it on the law school's Internet Web site.
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STAFF COMMENTS
1) Clarification of the bill's intent . This bill is
sponsored by the Education Management Corporation
(EDMC). According to the author, the U.S. Department
of Education (USDE) requirement that an institution
have "state authorization" in order to be eligible for
Title IV federal student financial aid is prompting at
least one law school in California, exempt from the
BPPE approval, to seek the BPPE approval to maintain
Title IV eligibility. As a result, that school will
be subject to the BPPE Student Performance Fact Sheet
(Fact Sheet) requirements. This bill is specifically
designed to address an issue for the Western State
College of Law, owned by EDMC.
This bill proposes an exemption for a school which is
voluntarily coming under the California Private
Postsecondary Education Act of 2009 in order to meet
the requirements for state authorization and be
allowed to participate in federal financial aid
programs. According to the author, EDMC is planning
to apply for BPPE approval in the near future, and is
seeking to ensure this statutory change is in effect
prior to the USDE implementation of state
authorization requirements (July 1, 2014).
2) State authorization . Federal regulations, among other
things, require that, in order to participate in Title
IV federal financial aid programs, an institution must
be legally authorized by a state to operate
educational programs beyond secondary education and
have a process to review and act appropriately on
complaints concerning postsecondary institutions. Many
private postsecondary institutions exempt from
oversight of the BPPE were unable to satisfy these
requirements.
Schools were initially required to be in compliance
with the "state authorization" rule by July 1, 2011,
however U.S. Department of Education granted
extensions for compliance if an institution was able
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to demonstrate that it was making progress toward
obtaining the necessary state authorization. In the
case of California, affected private institutions
submitted a letter from the Administration supporting
a request for an extension from having to comply with
the new rules while a process for securing state
authorization by these institutions was considered.
Extensions were authorized, however indications from
the U.S. Department of Education (USDE) were that no
further extensions would be granted and institutions
would have to meet the requirements by July 1, 2013.
However, in May 2013, the USDE announced that it would
extend the deadline for complying with a rule
requiring states to authorize colleges within their
borders by a year (July 1, 2014).
On Friday, June 7, 2013, the Bureau for Private and
Postsecondary Education (BPPE) notified the USDE of
its support for an additional one-year extension of
the implementation date of the changes to "state
authorization" regulations until July 1, 2014, for the
purpose of allowing the BPPE to review licensing
applications for otherwise exempt institutions that
choose to seek State authorization through the BPPE,
and to conduct compliance inspections for institutions
approved by the BPPE by means of accreditation.
3) Related budget action . In response to concerns from
institutions exempt from the California Private
Postsecondary Education Act (Act), on June 27, 2013,
as part of the 2013-14 Budget Act, Governor Brown
signed legislation (AB 76, Committee on Budget,
Statutes of 2013) authorizing an institution currently
exempt from the BPPE's oversight to waive its exempt
status and voluntarily opt into the BPPE's oversight.
Under the new statutes (EC 94878.8), once an
institution chooses the oversight, the institution is
no longer authorized to claim an exemption from the
BPPE and is subject to regulation through the full set
of power and duties that would apply to an institution
that was otherwise exempt from the Act. Institutions
that voluntarily waive exemption are able to satisfy
the federal "state authorization" requirements and
therefore, participate in and access Title IV federal
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financial aid programs to assist their students in
meeting their costs for attendance at those
institutions.
4) School Performance Fact Sheets . This bill exempts law
schools that meet the specified criteria from having
to submit a School Performance Fact Sheet (Fact Sheet)
to the BPPE. As law schools are generally exempt from
the Act, this requirement would only apply to a law
school that voluntarily chooses to come under the
BPPE's oversight. Recognizing that exempt
institutions may not have this information available,
the new law does not require the first Fact Sheet to
report any data from the period prior to the date of
the issuance of the approval to operate, but does
require the institution to disclose that the
information is not available on all documents required
by the Act. In addition, the institution is still
required to report available data collected and
calculated in accordance with the California Private
Postsecondary Education Act (Act) of 2009, regardless
of the purpose for which the data was collected. Upon
receiving an approval to operate, however, an
institution is required to begin collection and
calculation of all information required by the Act for
the School Performance Fact Sheets (Fact Sheets). The
Fact Sheet must be provided to prospective students,
filed with the Bureau for Private and Postsecondary
Education (BPPE), and posted on the institution's Web
site no later than the first August 1 after the
institution is approved to operate and by August 1
each year thereafter.
5) Is alternate reporting sufficient ? Under the American
Bar Association (ABA) Standard 509, the ABA accredited
law schools are required to provide detailed student
enrollment and graduate outcome information to
prospective students and to the general public. Law
schools also report employment and salary outcomes for
graduates to the National Association for Law
Placement. Prospective students access this data
through the law school application process
administered by the Law School Admission Council
(LSAC), a nonprofit organization whose members include
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more than 200 law schools throughout the United
States, Canada and Australia.
Through the Law School Admission Council (LSAC)
website, students are provided a single point of entry
to access this data in order to make comparative
analysis of the law schools to which they are
considering applying. According to the author, the
Fact Sheet requirements would require different
calculations than those established by the American
Bar Association (ABA) and National Association for Law
Placement (NALP) and may ultimately provide less data
to students than they are already provided through the
LSAC application process.
As amended, the bill would require the provision of
any additional information required on the Fact Sheet
that is not already available through the existing law
school disclosure processes, including but not limited
to, cohort default rates and the percentage of
enrolled students receiving federal student loans.
6) More prominent disclosure necessary . This bill
requires that the law school, at a minimum, provide
the required information to prospective students on
the law school's website.
To ensure students are readily able to access this
information, staff recommends the bill be amended to:
a) Require that the information be clearly
posted in a conspicuous location on the law
school's internet website.
b) Require that the information be provided to
the BPPE annually, and additionally be posted on
the BPPE website pursuant to the requirements
outlined in EC § 94878.
7) Sunset Review. The Senate Business and Professions
Committee is currently undertaking a comprehensive
review of the Act and the BPPE as a part of the Sunset
Review Process. The Committee reviewed the Sunset
Report prepared by the BPPE and the background paper
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prepared by Committee staff at an informational
hearing on Monday, November 21, 2014. One issue
highlighted in the background paper was specifically
in regard to law school disclosures. The relevant
staff recommendation read:
The Committee may wish to amend the Act to authorize a
law school accredited by the ABA, and owned by an
institution operating under the BPPE, to satisfy the
current disclosure requirements of the Fact Sheet by
instead doing the following: complying with ABA
disclosure requirements; reporting to the National
Association for Law Placement; and making completion,
Bar passage, placement, and salary and wage data
available to prospective students prior to enrollment
through the application process administered by the
Law School Admission Council. The Committees may wish
to ensure that any specific information required on
the Fact Sheet that may help students make informed
decisions is also disclosed by a law school under the
BPPE's authority.
The provisions of AB 834 are generally consistent with
this recommendation.
8) Double joining of related legislation ? SB 1247
(Lieu), also on the committee's agenda today, extends
the California Private Postsecondary Education Act
(Act) of 2009 by four years, until January 1, 2019.
As an urgency measure, the provisions of AB 834, if
enacted, should be incorporated into the Act prior to
its sunset, and the extension should include these
provisions. However, the author may want to consider
whether double joining is necessary in the event that
the extension of the Act as it currently exists
becomes law prior to the enactment of AB 834.
SUPPORT
Education Management Corporation
Public Advocates
OPPOSITION
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None received.