BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 2099
AUTHOR: Frazier
AMENDED: May 23, 2014
FISCAL COMM: Yes HEARING DATE: June 25, 2014
URGENCY: No CONSULTANT:Daniel Alvarez
SUBJECT : Postsecondary education: Title 38 awards.
SUMMARY
This bill establishes minimum student outcome requirements
for postsecondary institutions approved by the California
State Approving Agency for Veterans Education (CSAAVE) in
order to participate in federal veteran's education benefits.
BACKGROUND
Current law establishes the California Department of Veterans
Affairs (CalVet) to provide support to veterans living in
California by ensuring that veterans and their families
receive the state and federal benefits and services to which
they are entitled. The California State Approving Agency for
Veterans Education (CSAAVE) operates under contract with the
U.S. Department of Veteran Affairs. Under the authority of
federal law, Title 38 US Code, the CSAAVE operates as part of
the government of the State of California to approve or
disapprove veterans' education and training programs, prevent
abuses, and promote quality veterans' education by evaluating
and monitoring education and training programs.
Current law also establishes the Bureau for Private
Postsecondary Education (BPPE) to provide oversight of
private postsecondary educational institutions operating in
California. Established by AB 48 (Portantino), Chapter 310,
Statutes of 2009, which became effective January 1, 2010,
made many substantive changes that created a foundation for
oversight and gave the new BBPE an array of enforcement tools
to ensure schools comply with the law.
ANALYSIS
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This bill establishes minimum student outcome requirements
for postsecondary institutions approved by the California
State Approving Agency for Veterans Education (CSAAVE) to
participate in federal veteran's education benefits.
Specifically, this bill:
1) Establishes the Title 38 Funding Program and establishes
CSAAVE as responsible for approving courses at
qualifying institutions seeking to enroll veterans or
others eligible for Title 38 awards in accordance with
federal law, the provisions of this bill, and any other
reasonable criteria established by CSAAVE.
2) Requires CSAAVE to do all of the following:
a) Notify initial Title 38 recipients seeking to
attend, or attending, an institution that is
ineligible for initial and renewal Title 38 awards
that the institution is ineligible for initial
Title 38 awards for the academic year for which the
student received an initial award.
b) Provide initial and renewal Title 38
recipients seeking to attend, or
attending an institution that is ineligible with a
complete list of all California postsecondary
educational institutions at which the student would
be eligible to receive a Title 38 award.
3) Defines a qualifying institution to mean an institution
that complies with the following:
a) Provides information on where to access
California license examination passage rates for
undergraduates enrolled in programs for which
licensure is required, if that data is
electronically available through the licensure
agency. Requires the institution to certify
compliance to CSAAVE;
b) Provides evidence of accreditation to CSAAVE
from an accrediting agency recognized by the United
States Department of Education (USDE).
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Unaccredited degree granting institutions are
authorized to remain Title 38 eligible if they
receive pre-accreditation status by January 1,
2016, and accreditation status by January 1, 2017;
c) Provides to CSAAVE evidence of compliance with
the federal Principles of Excellence program; and
d) Meets one of the following requirements:
i) CSAAVE certifies the institution
maintains a three-year Cohort Default Rate
(CDR) of less than 15.5 percent and a
graduation rate of greater than 30 percent, as
specified; or, the institution maintains a CDR
of less than 10 percent and a graduation rate
of above 20 percent (eligible until 2018-19),
as specified; or, less than 40 percent of
undergraduate students borrow federal loans,
as specified.
ii) The institution is a private
postsecondary institution issued an approval
to operate from the BPPE.
4) Specifies that compliance with this measure shall not be
construed as satisfying the requirements for
participation in programs authorized by the federal
Higher Education Act, as specified.
STAFF COMMENTS
1) Need for the bill. According to the author's office,
California is home to more veterans and military members
than any other state in the country. There are over two
million veterans currently residing in California.
Current federal law, commonly known as the "90/10 rule"
allows for-profit colleges to receive 90 percent of
their revenue from government funded financial aid
programs authorized under Title IV of the Higher
Education Act. The other 10 percent must come from
private funds to ensure that schools are not counting on
taxpayer dollars as their sole source of revenue.
Unfortunately there is a loophole in the law that counts
GI Bill financial aid dollars as private dollars. This
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loophole has led to for-profit colleges aggressively
marketing and recruiting service members and veterans to
enroll in their programs. This bill will tighten
requirements that colleges must meet in order to be
approved by CSAAVE to enroll Title 38 recipients,
providing additional protection to veterans from
unscrupulous colleges that often leave students with
high debt and without a degree or certificate of any
value.
2) The GI Bill, Title 38 of the United States Code ,
provides for educational awards for eligible active duty
members and veterans of the Armed Forces of the United
States. Existing law requires an institution
headquartered or operating in California desiring to
enroll Title 38 recipients in accredited courses to make
application for approval of these courses, in this
instance, to the CSAAVE and authorizes CSAAVE to approve
the application of the school when the school and its
accredited courses satisfy specified criteria.
CSAAVE, housed within CalVet, is federally funded and
operates under an annual reimbursement contract with the
United States Department of Veterans Affairs (VA). In
its role as the approval agency, the primary function of
CSAAVE is to review, evaluate and approve quality
educational and training programs for veteran's
benefits. CSAAVE is intended to approve colleges and
universities, vocational schools, business schools,
professional schools, and licensing and certification
training and tests, all of which must lead to an
educational, professional or vocational objective.
There is no current requirement for CSAAVE to provide
recourse for students attending approved institutions
and in the event that a student was misled or unable to
become employed following enrollment at a program.
According to the CSAAVE Web site, the CSAAVE conducts
on-site supervisory visits to approved institutions and
schools seeking approval, provides technical assistance
to all interested parties and are engaged in outreach
activities to encourage eligible individuals to use the
benefits provided by the GI Bill. The programs that can
be approved by the CSAAVE are institutions of higher
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education (colleges and universities), non-degree
institutions (vocational and technical schools),
apprenticeship or on-the-job training, and licensing and
certification exams.
3) Accreditation is required to receive state
appropriations (funding) and to be eligible for federal
and state financial aid programs. Accreditation is a
method used in this country to generally: (1) assure
quality, (2) provide access to government funding, (3)
generate stakeholder support, and (4) facilitate credit
transfer for and to educational institutions.
Accreditation is a voluntary, non-governmental peer
review process used to determine academic quality.
Accrediting agencies are private organizations that
establish operating standards for educational or
professional institutions and programs, determine the
extent to which the standards are met, and publicly
announce their findings. Under federal law, the U.S.
Department of Education (USDE) establishes the general
standards for accreditation agencies and is required to
publish a list of recognized accrediting agencies that
are deemed reliable authorities on the quality of
education provided by their accredited institutions.
There are three basic types of accreditation:
a) Regional Accreditation: There are six
USDE-recognized regional accrediting agencies. Each
regional accreditor encompasses public, the vast
majority of non-profit private (independent), and
some for-profit postsecondary educational
institutions in the region it serves. California's
regional accrediting agency is separated into two
commissions: the Accrediting Commission for
Community and Junior Colleges (ACCJC) and the
Senior College and University Commission
(WASC-Sr.).
b) National Accreditation: National
accreditation is not based on geography, but more
focused to evaluate specific types of schools and
programs. National accreditation is designed to
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allow nontraditional colleges (trade schools,
religious schools, certain online schools) to be
compared against similarly designed institutions.
Different standards and categories are measured,
depending on the type of institution.
c) Specialized/Programmatic Accreditation:
Offered by accrediting agencies that represent
specific fields of study, these agencies do not
accredit entire colleges but instead accredit the
programs within colleges that prepare students for
the specific field or industry. In most cases,
specialized accreditation alone does not enable
participation in state and federal financial aid
programs.
Accreditation is regulated by the federal government;
institutional accreditation is a requirement for
participation in federal financial aid programs. Under
federal regulations, accrediting agencies are required
to meet general outlined standards, but specific
processes and quality standards are left to each
accrediting agency to determine.
1) Multiple reports and hearings on veteran experiences .
According to the Assembly Higher Education Committee,
there have been multiple reports and hearings focused on
the experience of veterans at private for-profit
institutions. For example, according to a 2010 report
issued by the U.S. Senate Health, Education, Labor and
Pensions (HELP) Committee, between 2009 and 2010,
revenue from military educational benefits at 20
for-profit education companies increased 211 percent.
The report found that four of the five for-profit
schools receiving the most Post-9/11 GI Bill funding in
the first year had loan repayment rates of 31 percent to
37 percent. The report further found that the same four
of five schools receiving the most Post-9/11 GI funding
had at least one campus with a student default rate
above 24 percent over three years.
For-profit schools have come under particular scrutiny
for practices used to recruit military veterans.
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Recently, California State Attorney General Kamala
Harris filed suit against Corinthian Colleges, Inc.
(CCI) for false and predatory advertising, intentional
misrepresentations to students, securities fraud and
unlawful use of military seals in advertisements.
According to the complaint, CCI included official
military seals in mailings and on Web sites.
Staff recommends the following amendments to provide
clarity and technical corrections to this measure as
follows:
a) On page 3, line 7, strike "courses" and
insert:
institutions and programs
b) On page 3, line 14, strike "school" and
insert:
accredited institutions
c) On page 3, line 30 strike "courses at"
d) On page 4, strike lines 22 to 25, and insert:
(3) The institution shall provide evidence
of accreditation of the institution and of all
degree programs to CSAAVE. The institutional
regional accrediting agency shall be recognized
by the United States Department of Education.
Unaccredited institutions participating in
a) On page 5, line 9 after "paragraph" insert:
or is a Cal Grant participating institution
that meets the requirements of Section 69432.7
SUPPORT
American Legion, Department of California
AMVETS
California Association of County Veterans Service Officers
California Labor Federation
California State Commanders Veterans Council
Children's Advocacy Institute
Military Officers Association of America, California Council
of Chapters
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The Center for Public Interest Law
University of California
Veteran's Legal Clinic, University of San Diego
Veterans of Foreign Wars, Department of California
Vietnam Veterans of America, California State Council
OPPOSITION
None received.