Amended in Senate August 31, 2015

Amended in Senate August 18, 2015

Amended in Senate July 9, 2015

Amended in Senate June 2, 2015

Amended in Assembly May 11, 2015

Amended in Assembly May 7, 2015

Amended in Assembly May 4, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 573

Introduced by Assembly Members Medina and McCarty

(Principal coauthor: Senator Block)

(Coauthors: Assembly Members Alejo, Atkins, Baker, Bonilla, Brown, Calderon, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Eggman, Frazier, Gipson, Hadley, Kim, O’Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Santiago, Thurmond, and Ting)

(Coauthors: Senators Gaines, Galgiani, Hill, Runner, and Wieckowski)

February 24, 2015

An act to amend Sections 76300, begin delete 94923, 94924, end delete 94925, and 94926 of, to amend the heading of Article 15 (commencing with Section 94926) of Chapter 8 of Part 59 of Division 10 of Title 3 of, and to add Sections 69433.61, 69999.19, 94051, and 94926.5 to, the Education Code, relating to higher education, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 573, as amended, Medina. Higher education: campus closures: Corinthian Colleges.

(1) Existing law establishes the California Community Colleges under the administration of the Board of Governors of the California Community Colleges, and establishes community college districts throughout the state that operate community colleges and provide instruction to students. Existing law requires community college districts to charge each student a fee of $46 per unit per semester. Existing law requires the waiver of this fee for students meeting prescribed requirements.

This bill would, until July 1, 2018, require the board of governors to waive the fee for students who meet prescribed requirements, were enrolled at a California campus of a Corinthian Colleges, Inc., institution, and were either unable to complete an educational program offered by the campus due to the campus’s closure on April 27, 2015, or withdrew from an educational program offered by a Corinthian Colleges campus begin delete within 120 days of that date, end delete begin insert after the earlier of either (A) 120 days before the closure end insert begin insert , or an earlier date as may determined by the Bureau for Private Postsecondary Education, or (B) the date set by the United States Department of Education for closed school loan discharge eligibility, end insert and have demonstrated begin insert financial end insert need, as determined by the enrolling campus. To the extent this provision would impose additional duties on community college districts, it would constitute a state-mandated local program.

(2) The California Private Postsecondary Education Act of 2009 provides for the regulation of private postsecondary educational institutions by the Bureau for Private Postsecondary Education in the Department of Consumer Affairs. The act requires an institution subject to its provisions to follow certain requirements prior to closing.

This bill would provide that, until January 1, 2020, begin delete there end delete begin insert the Governor end insert shall begin delete be established end delete begin insert establish end insert a single point of contact to respond to begin delete the end delete begin insert each end insert closure of begin delete institutions end delete begin insert an institution end insert that begin delete do end delete begin insert does end insert not comply with these begin insert closure and related end insert requirements prior to closing. The bill would require the single point of contact to assist the students who were enrolled at, or in an online program offered by, an institution that closes in, among other things, begin insert receiving information on end insert obtaining refunds, loan discharges, and tuition recovery. begin delete The bill would, upon the unlawful closure of an institution, require the Attorney General, or a qualified entity under contract with the Attorney General, to provide timely grant funds to eligible local nonprofit community service organizations to assist students of that institution with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. end delete

begin delete

(3) This bill would appropriate the sum of $1,300,000 from the Private Postsecondary Education Administration Fund to the Bureau of Private Postsecondary Education for the purposes of providing financial grants to eligible local nonprofit community service organizations, as described above, for students affected by the closure of Corinthian Colleges, Inc., as specified, thereby making an appropriation.

end delete begin delete

(4)

end delete

begin insert (3) end insert  The act also establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes. The act caps the amount that may be in the fund at any time at $25,000,000.

This bill would begin delete deem a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution, or a California student who was enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, to be eligible for recovery from the fund under specified circumstances. By expanding the purpose for which moneys in the Student Tuition Recovery Fund may be used, this bill would make an appropriation. The bill would end delete raise the cap for the fund to $50,000,000. begin insert The bill would, upon the unlawful closure of an institution, require the Attorney General, or a qualified entity under contract with the Attorney General, to provide timely grant funds to eligible nonprofit community service organizations, as defined, to assist students of that institution with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. The bill would provide that the aggregate amount of these grants and the reasonable administrative costs to the Attorney General’s office related to the grants would be made available from the Student Tuition Recovery Fund, thereby making an appropriation. end insert

begin delete

The bill would authorize a private postsecondary institution to submit Student Tuition Recovery Fund assessments to the bureau for its students who are enrolled at the institution, would prohibit the institution from advertising or marketing this as a benefit it provides for its students, and would establish additional requirements related to the fund, as specified.

end delete begin insert

(4) This bill would appropriate the sum of $1,300,000 from the Student Tuition Recovery Fund to the Bureau of Private Postsecondary Education for the purposes of providing grants to eligible nonprofit community service organizations to assist students affected by the closure of Corinthian Colleges, Inc., as defined, with loan discharge and other student loan-related requests and tuition recovery-related claims, and to pay for the reasonable administrative costs of the Attorney General’s office related to these grants, as specified, thereby making an appropriation. The bill would require the bureau to ensure that these grant funds are made available within 30 days of its enactment.

end insert

(5) The Cal Grant Program prohibits an applicant from receiving Cal Grant awards totaling in excess of the amount equivalent to the award level for a total of four years of full-time attendance in an undergraduate program, except as provided.

This bill would partially exempt from this limitation on Cal Grant awards a student who was enrolled and received a Cal Grant award at a California campus of Heald College, and who was unable to complete an educational program offered by the campus due to its closure.

(6) The California National Guard Education Assistance Award Program authorizes the renewal of California National Guard Education Assistance Awards, for a maximum of the greater of either four years of full-time equivalent enrollment or the duration for which the qualifying member would otherwise be eligible pursuant to the Cal Grant Program, if specified conditions are met.

This bill would partially exempt from this limitation on California National Guard Education Assistance Awards a student who was enrolled and received a California National Guard Education Assistance Award at a California campus of Heald College, and who was unable to complete an educational program offered by the campus due to its closure.

(7) This bill would appropriate $100,000 from the General Fund to the Chancellor of the California Community Colleges for allocation to a community college district for the purpose of conducting a statewide media campaign to inform students affected by the closure of Corinthian Colleges, Inc., of the education opportunities available at community colleges, thereby making an appropriation.

Funds appropriated by this bill to a community college district would be applied toward the minimum funding requirements for school districts and community college districts imposed by Section 8 of Article XVI of the California Constitution.

(8) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

(9) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

(a) It is the intent of the Legislature that the
California Community Colleges shall utilize available resources
to provide matriculation services, including, but not limited to,
assessments, counseling, and academic planning, to students who
were enrolled at a California campus of a Corinthian Colleges,
Inc., institution, including Heald College, and California students
enrolled in one or more online programs offered by an out-of-state
campus of a Corinthian Colleges, Inc., institution who were harmed
by the closure of Corinthian Colleges, Inc., that took place on April
27, 2015.

(b) (1) The sum of one hundred thousand dollars ($100,000)
is hereby appropriated from the General Fund to the Chancellor
of the California Community Colleges for allocation to a
community college district to conduct a statewide media campaign
to inform students affected by the closure of Corinthian Colleges,
Inc., of education opportunities available at community colleges.

(2) For purposes of making the computations required by Section
8 of Article XVI of the California Constitution, the funds
appropriated pursuant to this section shall be deemed to be
“General Fund revenues appropriated for community college
districts,” as defined in subdivision (d) of Section 41202 of the
Education Code, for the 2014-15 fiscal year, and included within
the “total allocations to school districts and community college
districts from General Fund proceeds of taxes appropriated pursuant
to Article XIII B,” as defined in subdivision (e) of Section 41202
of the Education Code, for the 2014-15 fiscal year.

SEC. 2.  

It is the intent of the Legislature that unencumbered
restitution funds awarded to the state from a lawsuit involving
Corinthian Colleges, Inc., and its affiliate institutions, including
Heald College, shall be used to repay any funds provided to those
students pursuant to this act.

SEC. 3.  

Section 69433.61 is added to the Education Code, to
read:

69433.61.  

(a) Notwithstanding any other law, a student who
was enrolled and received a Cal Grant award in the 2013-14 or
2014-15 academic year at a California campus of Heald College,
and was unable to complete an educational program offered by
the campus due to the campus’s closure on April 27, 2015, shall
not have the award years used at a Heald College campus
considered for purposes of the limitation on the number of years
of Cal Grant award eligibility. This restoration of award years for
Cal Grant eligibility shall not exceed two years.

(b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Heald College on April
27, 2015, or begin delete had withdrawn end delete begin insert withdrew end insert from enrollment begin delete within 120
days of that date. end delete begin insert between July 1, 2014, and April 27, 2015. end insert The
Bureau for Private Postsecondary Education shall provide the
commission with confirmation of student enrollment for purposes
of this section.

(c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award
years provided under this section and to enroll in an institution
eligible for initial and renewal Cal Grant awards to be eligible for
that restoration.

SEC. 4.  

Section 69999.19 is added to the Education Code, to
read:

69999.19.  

(a) Notwithstanding any other law, a student who
was enrolled and received a California National Guard Education
Assistance Award in the 2013-14 or 2014-15 academic year at a
California campus of Heald College, and was unable to complete
an educational program offered by the campus due to the campus’s
closure on April 27, 2015, shall not have the award years used at
a Heald College campus considered for purposes of the limitation
on the number of years of California National Guard Education
Assistance Award eligibility. This restoration of award years for
California National Guard Education Assistance Award eligibility
shall not exceed two years.

(b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Heald College on April
27, 2015, or begin delete had withdrawn end delete begin insert withdrew end insert from enrollment begin delete within 120
days of that date. end delete begin insert between July 1, 2014, and April 27, 2015. end insert The
Bureau for Private Postsecondary Education shall provide the
commission with confirmation of student enrollment for purposes
of this section.

(c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award
years provided under this section and to enroll in an institution
eligible for initial and renewal California National Guard Education
Assistance Awards to be eligible for that restoration.

SEC. 5.  

Section 76300 of the Education Code is amended to
read:

76300.  

(a) The governing board of each community college
district shall charge each student a fee pursuant to this section.

(b) (1) The fee prescribed by this section shall be forty-six
dollars ($46) per unit per semester, effective with the summer term
of the 2012 calendar year.

(2) The board of governors shall proportionately adjust the
amount of the fee for term lengths based upon a quarter system,
and also shall proportionately adjust the amount of the fee for
summer sessions, intersessions, and other short-term courses. In
making these adjustments, the board of governors may round the
per unit fee and the per term or per session fee to the nearest dollar.

(c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750.5, the board of
governors shall subtract, from the total revenue owed to each
district, 98 percent of the revenues received by districts from
charging a fee pursuant to this section.

(d) The board of governors shall reduce apportionments by up
to 10 percent to any district that does not collect the fees prescribed
by this section.

(e) The fee requirement does not apply to any of the following:

(1) Students enrolled in the noncredit courses designated by
Section 84757.

(2) California State University or University of California
students enrolled in remedial classes provided by a community
college district on a campus of the University of California or a
campus of the California State University, for whom the district
claims an attendance apportionment pursuant to an agreement
between the district and the California State University or the
University of California.

(3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course, including
administrative costs, is paid by the public or private agency,
corporation, or association with which the district is contracting
and if these students are not included in the calculation of the
full-time equivalent students (FTES) of that district.

(f) The governing board of a community college district may
exempt special part-time students admitted pursuant to Section
76001 from the fee requirement.

(g) (1) The fee requirements of this section shall be waived for
any student who meets all of the following requirements:

(A) Meets minimum academic and progress standards adopted
by the board of governors, which fulfill the requirements outlined
in this paragraph and paragraphs (2) to (5), inclusive. Any
minimum academic and progress standards adopted pursuant to
this section shall be uniform across all community college districts
and campuses. These standards shall not include a maximum unit
cap, and community college districts and colleges shall not impose
requirements for fee waiver eligibility other than the minimum
academic and progress standards adopted by the board of governors
and the requirements of subparagraph (B).

(B) Meets at least one of the following criteria:

(i) At the time of enrollment, is a recipient of benefits under the
Temporary Assistance for Needy Families program, the
Supplemental Security Income/State Supplementary Payment
Program, or a general assistance program.

(ii) Demonstrates eligibility according to income standards
established by regulations of the board of governors.

(iii) Demonstrates financial need in accordance with the
methodology set forth in federal law or regulation for determining
the expected family contribution of students seeking financial aid.

(iv) Was enrolled at a California campus of a Corinthian
Colleges, Inc., institution, was unable to complete an education
program offered by the campus due to the campus’s closure on
April 27, 2015, and has demonstrated begin insert financial end insert need, as determined
by the enrolling campus. This clause shall become inoperative on
July 1, 2018.

(v) Was enrolled at a California campus of a Corinthian
Colleges, Inc., institution, withdrew from an education program
offered by the campus begin delete within 120 days, or a greater period end delete begin insert after
the earlier of either (1) 120 days before the April 27, 2015, closure,
or an earlier date as may be end insert determined by the Bureau for Private
Postsecondary Education pursuant to Section 94923, begin delete of the
campus’s closure on April 27, 2015, end delete begin insert or (2) the date set by the
United States Department of Education for closed school loan
discharge eligibility, end insert and has demonstrated begin insert financial end insert need, as
determined by the enrolling campus. This clause shall become
inoperative on July 1, 2018.

(2) (A) The board of governors, in consultation with students,
faculty, and other key stakeholders, shall consider all of the
following in the development and adoption of minimum academic
and progress standards pursuant to subparagraph (A) of paragraph
(1):

(i) Minimum uniform academic and progress standards that do
not unfairly disadvantage financially needy students in pursuing
their education.

(ii) Criteria for reviewing extenuating circumstances and
granting appeals that, at a minimum, take into account and do not
penalize a student for circumstances outside his or her control,
such as reductions in student support services or changes to the
economic situation of the student.

(iii) A process for reestablishing fee waiver eligibility that
provides a student with a reasonable opportunity to continue or
resume his or her enrollment at a community college.

(B) To ensure that students are not unfairly impacted by the
requirements of subparagraph (A) of paragraph (1), the board of
governors shall establish a reasonable implementation period that
commences no sooner than one year from adoption of the minimum
academic and progress standards, or any subsequent changes to
these standards, pursuant to subparagraph (A) of paragraph (1)
and that is phased in to provide students adequate notification of
this requirement and information about available support resources.

(3) It is the intent of the Legislature that minimum academic
and progress standards adopted pursuant to subparagraph (A) of
paragraph (1) be implemented only as campuses develop and
implement the student support services and interventions necessary
to ensure no disproportionate impact to students based on ethnicity,
gender, disability, or socioeconomic status. The board of governors
shall consider the ability of community college districts to meet
the requirements of this paragraph before adopting minimum
academic and progress standards, or any subsequent changes to
these standards, pursuant to subparagraph (A) of paragraph (1).

(4) It is the intent of the Legislature to ensure that a student shall
not lose fee waiver eligibility without a community college campus
first demonstrating a reasonable effort to provide a student with
adequate notification and assistance in maintaining his or her fee
waiver eligibility. The board of governors shall adopt regulations
to implement this paragraph that ensure all of the following:

(A) Students are provided information about the available
student support services to assist them in maintaining fee waiver
eligibility.

(B) Community college district policies and course catalogs
reflect the minimum academic and progress standards adopted
pursuant to subparagraph (A) of paragraph (1) and that appropriate
notice is provided to students before the policies are put into effect.

(C) A student does not lose fee waiver eligibility unless he or
she has not met minimum academic and progress standards adopted
pursuant to subparagraph (A) of paragraph (1) for a period of no
less than two consecutive academic terms.

(5) The board of governors shall provide notification of a
proposed action to adopt regulations pursuant to this subdivision
to the appropriate policy and fiscal committees of the Legislature
in accordance with the requirements of paragraph (1) of subdivision
(a) of Section 70901.5. This notification shall include, but not be
limited to, all of the following:

(A) The proposed minimum academic and progress standards
and information detailing how the requirements of paragraphs (1)
to (4), inclusive, have been or will be satisfied.

(B) How many students may lose fee waiver eligibility by
ethnicity, gender, disability, and, to the extent relevant data is
available, by socioeconomic status.

(C) The criteria for reviewing extenuating circumstances,
granting appeals, and reestablishing fee waiver eligibility pursuant
to paragraph (2).

(h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. “Active service of the state,” for
the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of
the Military and Veterans Code.

(i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.

(j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate
program, who is the dependent of any individual killed in the
September 11, 2001, terrorist attacks on the World Trade Center
and the Pentagon or the crash of United Airlines Flight 93 in
southwestern Pennsylvania, if that dependent meets the financial
need requirements set forth in Section 69432.7 for the Cal Grant
A Program and either of the following applies:

(1) The dependent was a resident of California on September
11, 2001.

(2) The individual killed in the attacks was a resident of
California on September 11, 2001.

(k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 of Division 5 for determining
nonresident and resident tuition.

(l) (1) “Dependent,” for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as
a result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV
(commencing with Section 401) of Public Law 107-42).

(2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.

(3) A dependent who is the surviving child, natural or adopted,
of an individual killed in the terrorist attacks of September 11,
2001, is entitled to the waivers under subdivision (j) until that
person attains 30 years of age.

(4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board,
is also entitled to the waivers provided in this section until January
1, 2013.

(m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g)
to (j), inclusive.

(2) From funds provided in the annual Budget Act, the board
of governors shall allocate to community college districts, pursuant
to this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the board of governors shall allocate to
community college districts, pursuant to this subdivision, an
amount equal to ninety-one cents ($0.91) per credit unit waived
pursuant to subdivisions (g) to (j), inclusive. It is the intent of the
Legislature that funds provided pursuant to this subdivision be
used to support the determination of financial need and delivery
of student financial aid services, on the basis of the number of
students for whom fees are waived. It also is the intent of the
Legislature that the funds provided pursuant to this subdivision
directly offset mandated costs claimed by community college
districts pursuant to Commission on State Mandates consolidated
Test Claims 99-TC-13 (Enrollment Fee Collection) and 00-TC-15
(Enrollment Fee Waivers). Funds allocated to a community college
district for determination of financial need and delivery of student
financial aid services shall supplement, and shall not supplant, the
level of funds allocated for the administration of student financial
aid programs during the 1992-93 fiscal year.

(n) The board of governors shall adopt regulations implementing
this section.

(o) This section shall become operative on May 1, 2012, only
if subdivision (b) of Section 3.94 of the Budget Act of 2011 is
operative.

SEC. 6.  

Section 94051 is added to the Education Code, to read:

94051.  

Notwithstanding any provision of law, for a period not
to exceed two years from the date of the closure of Corinthian
Colleges, Inc., a state agency that provides certification,
registration, or licensure necessary to promote the safety and
protection of the public may, on a case-by-case basis, consider for
certification, registration, or licensure students who were enrolled
in a program of Corinthian Colleges, Inc., that provided education
or training aimed towards these students receiving certification,
registration, or licensure from the state agency, and who did not
receive that certification, registration, or licensure due to the closure
of Corinthian Colleges, Inc. This consideration shall be provided
at the discretion of the state agency in accordance with its public
protection mandate and applicable criteria established by the
agency for consumer safety.

begin delete

SEC. 7.  

Section 94923 of the Education Code is amended to
read:

94923.  

(a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
educational program, as defined in Section 94837, at a campus or
through a distance education program offered by an institution
with a physical presence in this state, including any affiliates of
that institution, except at an independent institution of higher
education, as defined in Section 66010, that is exempt from this
chapter pursuant to subdivision (i) of Section 94874, who, at the
time of his or her enrollment, was a California resident or was
enrolled in a California residency program, prepaid tuition, and
suffered economic loss.

(b) The bureau shall adopt by regulation procedures governing
the administration and maintenance of the Student Tuition
Recovery Fund, including requirements relating to assessments
on students and student claims against the Student Tuition
Recovery Fund. The regulations shall provide for awards to
students who suffer economic loss.

The regulations shall ensure that the following students, and any
other students deemed appropriate, are eligible for payment from
the Student Tuition Recovery Fund:

(1) Any student who was enrolled at an institution, at a location
of the institution, or in an educational program offered by the
institution, at the time that institution, location, or program was
closed or discontinued, as applicable, who did not choose to
participate in a teach-out plan approved by the bureau or did not
complete a chosen teach-out plan approved by the bureau.

(2) Any student who was enrolled at an institution or a location
of the institution within the 120-day period before the closure of
the institution or location of the institution, or who was enrolled
in an educational program within the 120-day period before the
program was discontinued, if the bureau determines there was a
significant decline in the quality or value of that educational
program during that time period.

(3) Any student who was enrolled at an institution or a location
of the institution more than 120 days before the closure of the
institution or location of the institution, in an educational program
offered by the institution as to which the bureau determines there
was a significant decline in the quality or value of the program
more than 120 days before closure.

(4) A student to whom an institution has been ordered to pay a
refund by the bureau but has failed to do so.

(5) A student to whom an institution has failed to pay or
reimburse loan proceeds under a federal student loan program as
required by law, or has failed to pay or reimburse proceeds received
by the institution in excess of tuition and other costs.

(6) A student who has been awarded restitution, a refund, or
other monetary award by an arbitrator or court, based on a violation
of this chapter by an institution or representative of an institution,
but who has been unable to collect the award from the institution.
The bureau shall review the award or judgment and shall ensure
the amount to be paid from the fund does not exceed the student’s
economic loss.

(7) Notwithstanding the requirement of subdivision (a) that the
institution not be exempt from this article, a student who was
enrolled at a California campus of a Corinthian Colleges, Inc.,
institution or was a California student enrolled in an online program
offered by an out-of-state campus of a Corinthian Colleges, Inc.,
institution, who also meets all of the other eligibility requirements,
if the student was enrolled as of April 27, 2015, or withdrew within
120 days of that date or any greater period determined by the
bureau pursuant to this section.

(c) Any student who is required to pay a Student Tuition
Recovery Fund assessment who pays tuition equal to or greater
than the required assessment shall be deemed to have paid the
required assessment, whether or not his or her enrollment
agreement specifies collection of the required assessment, and
whether or not the institution identifies any money collected from
the student as a Student Tuition Recovery Fund assessment.

(d) The bureau shall establish regulations ensuring, as
permissible under California law, that a student who suffers
educational opportunity losses, whose charges are paid by a
third-party payer, is eligible for educational credits under the fund.

(e) The bureau may seek repayment to the Student Tuition
Recovery Fund from an institution found in violation of the law
for which a student claim was paid. An institution shall not be
eligible to renew its approval to operate with the bureau if the
repayment is not made to the bureau as requested.

(f) The bureau shall, by regulation, define “economic loss.” The
regulation shall ensure that the definition of “economic loss”
includes, but is not necessarily limited to, pecuniary loss, which
is the sum of the student’s tuition, all other institutional charges
as defined in Section 94844, the cost of equipment and materials
required for the educational program as defined in Section 94837,
interest on any student loan used to pay for such charges, collection
costs, penalties, and any license or examination fees the student
paid to the institution but is unable to recover. Economic loss shall
also include the amount the institution collected and failed to pay
to third parties on behalf of the student for license fees or any other
purpose. Economic loss does not include Student Tuition Recovery
Fund assessments, unless the student is entitled to a full refund
under Section 94919 or 94920, room and board, supplies,
transportation, application fees, or nonpecuniary damages such as
inconvenience, aggravation, emotional distress, or punitive
damages. Economic loss does not include legal fees, attorney fees,
court costs, or arbitration fees. Nothing in this subdivision shall
prevent the bureau from further defining economic loss to include
loss of educational opportunity.

(g) A representation or agreement made by a person not to
collect on a student loan shall not lessen a student’s eligibility to
recover from the Student Tuition Recovery Fund or reduce the
amount of the student’s economic loss unless the loan has been
forgiven, discharged, or canceled in accordance with this section.

SEC. 8.  

Section 94924 of the Education Code is amended to
read:

94924.  

(a) The bureau shall determine the amount of Student
Tuition Recovery Fund assessments to be collected for each
student.

(b) An institution may submit Student Tuition Recovery Fund
assessments to the bureau for its students who are enrolled at the
institution, but shall not advertise or market this as a benefit it
provides for its students.

(c) All assessments collected pursuant to this article shall be
credited to the Student Tuition Recovery Fund, along with any
accrued interest, for the purpose of this article. Notwithstanding
Section 13340 of the Government Code, the moneys in the Student
Tuition Recovery Fund are continuously appropriated to the bureau,
without regard to fiscal year, for the purposes of this article.

(d) Except when an institution provides a full refund pursuant
to Section 94919 or Section 94920, the Student Tuition Recovery
Fund assessment is nonrefundable.

(e) The bureau shall collect Student Tuition Recovery Fund
assessments from an institution for all of the institution’s enrolled
students as follows:

(1) For an institution that is not approved to operate as of the
date this subdivision becomes operative, the bureau shall collect
assessments from the institution upon issuance of the institution’s
approval to operate.

(2) For an institution that is approved to operate as of the date
this subdivision becomes operative, the bureau shall collect
assessments from the institution for its enrolled students for whom
an assessment has not been collected, including assessments for
students enrolled in distance education programs.

end delete

begin delete SEC. 9. end delete
begin insert SEC. 7. end insert   

Section 94925 of the Education Code is amended to
read:

94925.  

(a) The amount in the Student Tuition Recovery Fund
shall not exceed fifty million dollars ($50,000,000) at any time.

(b) If the bureau has temporarily stopped collecting the Student
Tuition Recovery Fund assessments because the fund has
approached the fifty million dollar ($50,000,000) limit in
subdivision (a), the bureau shall resume collecting Student Tuition
Recovery Fund assessments when the fund falls below begin delete forty-five end delete
begin insert forty end insert million dollars begin delete ($45,000,000). end delete begin insert ($40,000,000). end insert

(c) An otherwise eligible student who enrolled during a period
when institutions were not required to collect Student Tuition
Recovery Fund assessments is eligible for Student Tuition
Recovery Fund payments despite not having paid any Student
Tuition Recovery Fund assessment.

begin delete

(d) A student who is eligible for recovery from the Student
Tuition Recovery Fund pursuant to paragraph (7) of subdivision
(b) of Section 94923 shall be eligible for payments despite not
having paid any Student Tuition Recovery Fund assessment.

end delete

begin delete SEC. 10. end delete
begin insert SEC. 8. end insert   

The heading of Article 15 (commencing with Section
94926) of Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code is amended to read:

 

Article 15.  Institutional Closure and Teach-outs

 

begin delete SEC. 11. end delete
begin insert SEC. 9. end insert   

Section 94926 of the Education Code is amended to
read:

94926.  

(a) At least 30 days prior to closing, the institution
shall notify the bureau in writing of its intention to close. The
notice shall be accompanied by a closure plan, which shall include,
but not necessarily be limited to, all of the following:

(1) A plan for providing teach-outs of educational programs,
including any agreements with any other postsecondary educational
institutions to provide teach-outs.

(2) If no teach-out plan is contemplated, or for students who do
not wish to participate in a teach-out, arrangements for making
refunds within 45 days from the date of closure, or for institutions
that participate in federal student financial aid programs
arrangements for making refunds and returning federal student
financial aid program funds.

(3) If the institution is a participant in federal student financial
aid programs, it shall provide students information concerning
these programs and institutional closures.

(4) A plan for the disposition of student records.

(b) Until January 1, 2020, begin delete there end delete begin insert the Governor end insert shall begin delete be
established end delete begin insert establish end insert a single point of contact to respond to begin delete the end delete
begin insert each end insert closure of begin delete institutions end delete begin insert an institution end insert that begin delete do end delete begin insert does end insert not comply
with begin insert closure and related end insert requirements established under state and
federal law. The goal of the point of contact shall be to ensure that
students who were enrolled at, or in an online program offered by,
an institution that has closed receive accurate and timely
information regarding the school closure process and the students’
rights and responsibilities under federal and state law. The point
of contact’s begin insert primary duty shall be to advocate on behalf of and
represent the interest of California students who attended the
closed institutions; other end insert duties shall include, but not begin insert necessarily end insert
be limited to, all of the following:

(1) Coordinating and working in consultation with state and
federal agencies, including, but not limited to, the Bureau for
Private Postsecondary Education, the Student Aid Commission,
begin insert the Attorney General’s Office, end insert the Office of the Chancellor of the
California Community Colleges, the Department of Veterans
Affairs, the federal Consumer Financial Protection Bureau, and
the United States Department of Education to determine both of
the following:

(A) Options and resources available to students.

(B) Criteria which indicate additional steps are necessary for
state agencies to take to ensure the protection of the public from
school closures.

(2) Establishing and maintaining an Internet Web site to provide
information to students about options available in the event of a
school closure, including information necessary to help a student
make an informed decision about whether to seek a loan discharge
or to transfer credits. The Internet Web site shall list the names of
institutions that are on the United States Department of Education’s
list for heightened cash monitoring.

(3) Assisting students in obtaining important documentation
from a closed institution, including, but not limited to, their
enrollment agreements, records, transcripts, and loan information.

(c) (1)  begin delete Consideration end delete begin insert For unlawful closures of large institutions
regarding which the Attorney General has a pending investigation
or ongoing litigation, consideration end insert should be given to establishing
the single point of contact within the Attorney General’s office.

(2) The Legislature finds that the Attorney General’s office has
expertise in complex legal situations such as those facing students
impacted by the sudden and abrupt closure of their educational
institutions and has established an online tool for students to receive
a personalized resource sheet regarding the types of relief available
to them.

(3) The Legislature finds begin delete that, among the involved agencies, end delete
begin insert that end insert the Attorney General’s office is begin delete the best end delete situated to continue
playing a begin delete central, coordinating end delete begin insert central end insert role in the effort to assist
students of an institution that has begin insert unlawfully end insert closed.

(4) This subdivision shall not be construed to authorize the
Attorney General’s office to breach any of its responsibilities or
to provide individual legal assistance or representation to students
of an institution that has closed. If the single point of contact is
established within the Attorney General’s office, the responsibilities
of the single point of contact shall be separate and distinct from
the office’s efforts to uphold state law, represent state agencies,
and undertake related actions.

begin delete SEC. 12. end delete
begin insert SEC. 10. end insert   

Section 94926.5 is added to the Education Code, to
read:

94926.5.  

(a) Upon the unlawful closure of an institution, grant
funds shall be timely provided in accordance with this section to
eligible begin delete local end delete nonprofit community service organizations, including,
but not limited to, legal aid begin delete organizations, end delete begin insert organizations and end insert
organizations offering free services for counseling on student
begin insert financial aid and end insert loan debt problems, begin delete and organizations assisting
with the arrangement of debt management and settlement plans, end delete
to assist the students of that closed institution, including veterans,
for no less than one year following the closure of the institution,
begin insert by relieving or mitigating the economic and educational
opportunity loss associated with the closure of the institution.
Services provided by eligible nonprofit community services
organizations shall include assistance end insert with loan discharge and
other student begin insert financial aid, veterans education benefits, end insert loan-related
begin delete requests end delete begin insert relief, end insert and tuition recovery-related claims. Assistance
begin delete shall end delete begin insert may end insert include, but is not limited to, outreach and education,
screening requests for assistance, referring students for additional
legal assistance through pro bono referral programs, and legal
services. begin insert The terms and conditions of the grant funds may permit
recipients to use excess grant funds to provide assistance to other
clients related to school closure or student debt. end insert For purposes of
this section, an “eligible begin delete local end delete nonprofit community service
organization” is an organization that satisfies begin delete both end delete begin insert all end insert of the
following conditions:

(1) The organization is a 501(c)(3) tax-exempt organization in
good standing with the Internal Revenue Service and in compliance
with all applicable laws and requirements.

(2) The organization demonstrates expertise in assisting students
with, and currently provides begin insert free end insert direct legal services to students
for, begin insert or will work in partnership with or under the supervision of
an attorney or a nonprofit legal services organization that has
demonstrated expertise in assisting students with, end insert student loan begin insert and
tuition recovery- end insert begin insert related end insert matters.

begin insert

(3) The organization does not charge students for services,
including services provided pursuant to this section.

end insert

(b)  begin insert (1) end insert begin insert   end insert The begin insert aggregate end insert amount of begin insert these end insert grant begin delete funds end delete begin insert funds, which
shall be made available from the Student Tuition Recovery Fund, end insert
shall be calculated by multiplying the number of students affected
by the institution’s closure by one hundred dollars ($100).

begin insert

(2) The reasonable administrative costs of the Attorney
General’s office pursuant to this section shall be made available
from the Student Tuition Recovery Fund.

end insert

(c) (1) The bureau shall notify the Attorney General of all
unlawful school closures within 15 days of the closure.

(2) The notification shall include the name and location of the
school, the programs, and the number of students affected at each
site of the school, as appropriate. The bureau shall provide the
Attorney General with all additional information that the Attorney
General may request.

(3) The Attorney General shall, within 90 days of receipt of the
notification, solicit grant applications from eligible begin delete local end delete nonprofit
community service organizations as described in subdivision (a),
select one or more of these organizations from among the
applicants who are deemed to be qualified by the Attorney General,
begin insert set additional terms and conditions of the grants as necessary, end insert and
notify the bureau and the recipient organization or organizations
of the selection. The Attorney General may enter into a contract
with another qualified entity to perform the Attorney General’s
duties under this subdivision.

(d) An eligible begin delete local end delete nonprofit community service organization
that receives funds pursuant to this section shall enter into a grant
agreement with the Attorney General, or a qualified entity entrusted
with this authority pursuant to paragraph (3) of subdivision (c), as
applicable, and shall use grant funds exclusively for the purposes
set forth in this section in accordance with the agreement. Any
unused funds shall be returned to the Attorney General unless the
parties of the agreement enter into a new agreement authorizing
the organization to expend the unused funds. The Attorney General,
or a qualified entity, may terminate the agreement for material
breach. However, the Attorney General, or a qualified entity, shall
provide the grantee with written notice of the breach and a
reasonable opportunity of not less than 30 days to resolve the
breach.

(e) An eligible begin delete local end delete nonprofit community service organization
that receives a grant may give priority to low-income students if
demand exceeds available grant funds. Otherwise, the organization
may provide assistance regardless of student income level.

(f) An eligible begin delete local end delete nonprofit community service organization
that receives a grant shall report to the Attorney General, or a
qualified entity pursuant to paragraph (3) of subdivision (c), as
applicable, quarterly through the grant period on the number of
students served from the date funds are distributed.

(g) Funds shall be distributed begin delete by the Attorney General, or a
qualified entity pursuant to paragraph (3) of subdivision (c), as
applicable, end delete to preapproved begin delete local end delete nonprofit community service
organizations as follows:

(1) For a school closure involving fewer than 250 students, 100
percent of the grant funds shall be distributed within 30 days of
the begin delete selection of one or more recipient organizations. end delete begin insert grantee
entering into a grant agreement. end insert

(2) For a school closure involving 250 or more students:

(A) Fifty percent shall be distributed within 30 days of the begin delete date
of the institution’s unlawful closure. end delete begin insert grantee entering into a grant
agreement. end insert

(B) Twenty-five percent shall be distributed upon the submission
of the begin delete eligible local nonprofit community service organization’s end delete
begin insert grantee’s end insert second quarterly report.

(C) Twenty-five percent shall be distributed upon the submission
of the begin delete eligible local nonprofit community service organization’s end delete
begin insert grantee’s end insert third quarterly report.

begin delete

(h) This section shall become inoperative on July 1, 2020, and,
as of January 1, 2021, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2021, deletes or
extends the date on which it becomes inoperative and is repealed.

end delete

begin delete SEC. 13. end delete
begin insert SEC. 11. end insert   

(a) The sum of one million three hundred thousand
dollars ($1,300,000) is hereby appropriated from the begin delete Private
Postsecondary Education Administration end delete begin insert Student Tuition Recovery end insert
Fund to the Bureau of Private Postsecondary Education for the
purposes of providing begin delete financial end delete grants begin delete pursuant to Section 94926.5
of the Education Code end delete to eligible begin delete local end delete nonprofit community
service organizations begin delete for end delete begin insert to assist eligible end insert students affected by the
closure of Corinthian Colleges, begin delete Inc. end delete begin insert Inc., and to pay for the
reasonable administrative costs of the Attorney General’s office
related to these grants, as provided in subdivision (b). end insert Eligible
begin delete local end delete nonprofit community service organizations may use grant
funds received pursuant to begin delete Section 94926.5 of the Education Code end delete
begin insert this section end insert for affected students begin insert who have been end insert served from the
date of closure. begin delete Notwithstanding subdivision (g) of Section
94926.5, the end delete

begin insert (b) end insert begin insert   end insert begin insert Grants shall be issued consistent with the procedures
specified in Section 94926.5 of the Education Code, except that
the end insert Bureau of Private Postsecondary Education shall ensure that
these grant funds are made available within 30 days of the
enactment of this section. begin delete The end delete

begin insert (c) end insert begin insert   end insert begin insert The end insert adoption of any regulation pursuant to this begin delete subdivision end delete
begin insert section end insert shall be deemed to be an emergency and necessary for the
immediate preservation of the public, health, and safety, or general
welfare.

begin insert

(d) For purposes of this section the following definitions shall
apply:

end insert begin insert

(1) “Eligible nonprofit community service organization” shall
have the same meaning as specified in subdivision (a) of Section
94926.5 of the Education Code.

end insert begin insert

(2) “Eligible students affected by the closure of Corinthian
Colleges, Inc.” means either of the following:

end insert begin insert

(A) A student who was enrolled at a California campus of a
Corinthian Colleges, Inc., institution and was unable to complete
an education program offered by the campus due to the campus’s
closure on April 27, 2015.

end insert begin insert

(B) A student who was enrolled at a California campus of a
Corinthian Colleges, Inc., institution and withdrew from an
education program offered by the campus after the earlier of either
(i) 120 days before the April 27, 2015, closure, or an earlier date
as may be determined by the Bureau for Private Postsecondary
Education pursuant to Section 94923, or (ii) the date set by the
United States Department of Education for closed school loan
discharge eligibility.

end insert begin delete

(b) The amount appropriated in subdivision (a) may include
revenues derived from the assessment of fines and penalties
imposed, and expenditures of these funds is specifically authorized
for purposes of Section 13332.18 of the Government Code.

(c) The Private Postsecondary Education Administration Fund
reserve limit of six months of operating expenses pursuant to
subdivision (b) of Section 94930 of the Education Code shall be
suspended until July 1, 2016.

end delete

begin delete SEC. 14. end delete
begin insert SEC. 12. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

begin delete SEC. 15. end delete
begin insert SEC. 13. end insert   

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to provide immediate educational and economic relief
to the thousands of students harmed by the closure of Corinthian
Colleges, Inc., it is necessary for this act to take effect immediately.