BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 2099 (Frazier) - Postsecondary Education: Title 38 (G.I.
Bill) Awards
Amended: July 2, 2014 Policy Vote: Education 6-0
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Jacqueline Wong-Hernandez
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2099 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.
Fiscal Impact: This bill places new requirements on both public
and private entities, relative to their interaction with Title
38 awards and institutions that participate in the program.
CSAAVE: Likely minor, but potentially significant
workload for CSAAVE to verify that institutions seeking to
participate in Title 38 awards meet all of the new
requirements. Likely minor costs to provide notifications
to Title 38 award recipients.
Bureau of Private Postsecondary Education (BPPE): In
2015-16, approximately $93,000 in net revenue ($200,000 in
gross revenue, off-set by 1 PY at $106,000) from
application fees ($5,000 per institution) paid by any
private postsecondary institution that is currently exempt
from BPPE oversight, but will now need to seek an "approval
to operate" certification from the BPPE. Ongoing, this
would also require those institutions to pay an annual fee
of 0.75% of their annual revenue, not to exceed $25,000.
The BPPE estimates annual revenue of $1 million from these
fees.
California State University (CSU): Potentially
significant costs at each of the 15 CSU campuses that do
not fully comply with the requirements of the voluntary
federal Principle of Excellence Program. See staff
comments.
California Community Colleges (CCC): Unknown, but
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potentially substantial costs, in aggregate, to the CCC for
each district and campus to comply with the requirements of
the voluntary federal Principle of Excellence Program.
Background: The California Department of Veterans Affairs
(CalVet) provides 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
CSAAVE operates under contract with the U.S. Department of
Veteran Affairs. Under the authority of federal law, Title 38 US
Code, the CSAAVE has the authority to approve or disapprove
veterans' education and training programs, prevent abuses, and
promote quality veterans' education by evaluating and monitoring
education and training programs.
Proposed Law: This bill establishes minimum student outcome
requirements for postsecondary institutions approved by the
CSAAVE to participate in federal veteran's education benefits.
Specifically, this bill:
1) 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: a) Notify initial Title 38
recipients seeking to attend, or attending, an institution
that is ineligible for Title 38 awards that the institution
is ineligible and, b) provide Title 38 recipients seeking
to attend, or attending an institution that is ineligible
with a 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;
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b) Provides evidence of accreditation to CSAAVE from an
accrediting agency recognized by the United States
Department of Education, as specified;
c) Provides to CSAAVE evidence of compliance with the
federal Principles of Excellence program; and
d) Meets one of the following requirements: 1) CSAAVE
certifies the institution maintains a three-year cohort
default rate of less than 15.5% and a graduation rate of
greater than 30%, as specified; or, the institution
maintains a cohort default rate of less than 10% and a
graduation rate of above 20% (eligible until 2018-19), as
specified; or, less than 40% of undergraduate students
borrow federal loans, as specified; or, 2) the
institution is a private postsecondary institution issued
an approval to operate from the BPPE.
Staff Comments: This bill places new requirements on all
postsecondary institutions seeking to enroll veterans who are
using Title 38 awards to pay for their education. Those new
requirements are detailed above in #3 (a-d). Institutions that
do not meet the requirements must either change current policies
and practices in order to meet them, or become ineligible to
participate in Title 38 awards (just as some institutions are
ineligible to participate in Cal Grant awards).
One of those requirements, is for a campus to "provide to CSAAVE
evidence of compliance with the federal Principles of Excellence
program." The Federal Principles of Excellence is a voluntary
federal program that campuses elect to become signatory to, in
order to be recognized nationally as a "Principles of Excellence
School." The guidelines are as follows:
1) Provide students with a personalized form covering the total
cost of an education program.
2) Provide educational plans for all military and Veteran
education beneficiaries.
3) End fraudulent and aggressive recruiting techniques and
misrepresentations.
4) Accommodate Servicemembers and Reservists absent due to
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service requirements.
5) Designate a point of contact to provide academic and
financial advice.
6) Ensure accreditation of all new programs prior to enrolling
students.
7) Align institutional refund policies with those under Title
IV, which governs the administration of federal student
financial aid programs.
The requirement for institutions to "provide evidence of
compliance" with the program to CSAAVE in order to be eligible
for Title 38 award participation could generate significant
workload at CSAAVE, depending on how it is interpreted. If
CSAAVE is to simply verify that an institution has signed the
federal pledge, that work (along with the other verifications)
would be minor and absorbable. If, however, CSAAVE has to
receive and evaluate "evidence" that the institution is actually
complying with each of the seven guidelines, that could drive
significant additional workload.
The CSU has indicated that 15 of its campuses do not comply with
all of the voluntary Principles of Excellence guidelines.
Specifically, campuses may not have a designated point of
contact to provide veterans with academic and financial advice,
and may not provide all "military and veteran education
beneficiaries" (which can include nonveteran spouses, and other
dependents) with educational plans. Complying with the seven
Principles of Excellence guidelines, and providing evidence of
compliance, could result in significant additional workload at
each CSU campus that does not currently comply. The CSU
estimates costs of $50,000 per campus.
The CCC Chancellor's office has indicated that, based on a
campus survey, at least 27 CCCs are not in compliance with the
Principles of Excellence guidelines. Those campuses could
require additional staff to meet the guidelines. The University
of California has indicated that its campuses meet all of the
requirements of this bill.
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