BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 1835 Hearing Date: June 13,
2016
-----------------------------------------------------------------
|Author: |Holden |
|----------+------------------------------------------------------|
|Version: |April 25, 2016 |
-----------------------------------------------------------------
----------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
----------------------------------------------------------------
-----------------------------------------------------------------
|Consultant|Sarah Mason |
|: | |
-----------------------------------------------------------------
Subject: California Private Postsecondary Education Act of
2009: minimum operating standards: exemptions
SUMMARY: Provides an exemption for five years from minimum operating
standards and accreditation requirements for approval by the
Bureau for Private Postsecondary Education (BPPE), to
institutions that grant doctoral degrees in psychoanalysis, if
all of the institution's students hold master's or doctoral
degrees before they enroll in the institution and if all of the
institution's students, other than research students regulated
by the Medical Board of California, hold a valid professional
license authorizing the individual to practice psychotherapy.
Existing law:
1)Establishes the Act January 1, 2017, and requires BPPE within
the Department of Consumer Affairs to, among other things, to
review, investigate and approve private postsecondary
institutions, programs and courses of instruction pursuant to
the Act and authorizes BPPE to take formal actions against an
institution/school to ensure compliance with the Act and even
seek closure of an institution/school if determined necessary.
The Act also provides for specified disclosures and
enrollment agreements for students, requirements for
cancellations, withdrawals and refunds, and that BPPE shall
administer the Student Tuition Recovery Fund (STRF) to provide
refunds to students affected by the possible closure of an
institution/school. (Education Code (EC) § 94800 et seq.)
AB 1835 (Holden) Page 2
of ?
2)Exempts the following from oversight by the Bureau:
a) An institution that offers solely avocational 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 bona fide organization, association or council that
offers preapprenticeship training programs on behalf of one
or more Division of Apprenticeship Standards-approved
labor-management or apprenticeship programs that is not on
the Eligible Training Provider List (ETPL) currently but
has met requirements for placement on the list, that is on
the ETPL and that has not been removed from the ETPL for
failure to meet performance standards.
d) A postsecondary educational institution established,
operated, and governed by the federal government or by this
state or its political subdivisions.
e) An institution offering either test preparation for
examinations required for admission to a postsecondary
educational institution or continuing education or license
examination preparation, if the institution or the program
is approved, certified, or sponsored by a government
agency, other than BPPE, that licenses persons in a
particular profession, occupation, trade, or career field,
a state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a
particular profession, occupation, trade, or career field
or a bona fide trade, business, or professional
organization
f) An institution owned, controlled, and operated and
maintained by a religious organization lawfully operating
as a nonprofit religious corporation whose instruction is
limited to the principles of that religious organization
and the diploma or degree granted is limited to evidence of
completion of that education. The institution is only
eligible to offer degrees and diplomas in the beliefs and
practices of the church, religious denomination, or
AB 1835 (Holden) Page 3
of ?
religious organization and shall not award degrees in any
area of physical science. Any degree or diploma granted by
an institution owned, controlled, and operated and
maintained by a religious organization lawfully operating
as a nonprofit religious corporation shall contain on its
face, in the written description of the title of the degree
being conferred, a reference to the theological or
religious aspect of the degree's subject area. The degree
must reflect the nature of the degree title, such as
"associate of religious studies," "bachelor of religious
studies," "master of divinity," or "doctor of divinity."
g) 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.
h) 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.
i) 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.
j) An institution that is accredited by the Accrediting
Commission for Senior Colleges (ACSC) and Universities,
Western Association of Schools and Colleges (WASC), or the
Accrediting Commission for Community and Junior Colleges
(ACCJC).
aa) 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); has operated
continuously in this state for at least 25 years and has
not filed for bankruptcy protection pursuant to Title 11 of
the United States Code during its existence; has a cohort
AB 1835 (Holden) Page 4
of ?
default rate on guaranteed student loans does not exceed 10
percent for the most recent three years, as published by
the USDE; maintains a composite score of 1.5 or greater on
its equity, primary reserve, and net income ratios, as
provided under Section 668.172 of Title 34 of the Code of
Federal Regulations; provides a pro rata refund of unearned
institutional charges to students who complete 75 percent
or less of the period of attendance; provides to all
students the right to cancel the enrollment agreement and
obtain a refund of charges paid through attendance at the
second class session, or the 14th day after enrollment,
whichever is later; submits to the BPPE copies of its most
recent IRS Form 990, the institution's Integrated
Postsecondary Education Data System Report of the USDE, and
its accumulated default rate; and is incorporated and
lawfully operates as a nonprofit public benefit corporation
and is not managed or administered by an entity for profit.
bb) Flight instruction providers or programs that provide
flight instruction pursuant to Federal Aviation
Administration (FAA) regulations and do not require
students to enter into written or oral contracts of
indebtedness and do not require or accept prepayment of
instruction-related costs in excess of $2,500. (EC §
94874)
1)Also provides an exemption from the Act and oversight by BPPE
for an institution that is accredited by the ACSC and WASC, or
ACCJC that has been accredited by a USDE recognized
accrediting agency for at least 10 years and has not been
placed on probation or on monitoring or sanctioned; is
headquartered in California and has operated continuously for
at least 25 years; is privately held and was previously
granted an approval to operate by the BPPE or the former
Bureau and has not changed ownership since its last approval;
has not filed for bankruptcy protection; maintains an equity
ratio composite score of at least 1.5; derives at least 12.5
percent of its revenues from sources other than state or
federal student assistance like Title 38 and CalGrant monies;
does not have a cohort default rate over 13 percent for the
most recent 3 years; has a graduation rate that exceeds 60
percent; has not been subject to any legal or regulatory
actions by a state AG that resulted in monetary settlement,
fines or other documented violations; provides a pro rata
AB 1835 (Holden) Page 5
of ?
refund of unearned institutional charges to students who
complete 75 percent or less of the period of attendance;
complies with other reasonable criteria established by the
California State Approving Agency for Veterans Education
(CSAAVE); and verifies its exemption with BPPE. (EC § 94947)
2)Requires an institution seeking BPPE approval to operate and
to offer a degree to either:
a) Be accredited by an accrediting agency recognized by
USDE to offer the degree(s); or
b) Have an accreditation plan, approved by BPPE, for the
institution to become fully accredited within five years of
the BPPE issuance of a provisional approval to operate. An
institution in this category must comply with specified
student disclosure, visiting committee review and degree
limitation requirements.
(EC § 94885)
1)Requires an unaccredited institution that is approved to
operate and to offer degree programs by BPPE prior to January
1, 2015, to submit an accreditation plan to BPPE, to obtain
pre-accreditation by July 1, 2017, to obtain accreditation by
July 1, 2020, and to comply with various student disclosure
and visiting committee review requirements. (EC § 94885.1)
2)Under the Medical Board of California (MBC) authorizes
graduates of the Southern California Psychoanalytic Institute,
the Los Angeles Psychoanalytic Society and Institute, the San
Francisco Psychoanalytic Institute, the San Diego
Psychoanalytic Center or institutes deemed equivalent by MBC
who have completed clinical training in psychoanalysis to
engage in psychoanalysis as an adjunct to teaching, training,
or research and hold themselves out to the public as
psychoanalysts. Provides that students in those institutes
may engage in psychoanalysis under supervision, if the
students and graduates do not hold themselves out to the
public by any title or description of services incorporating
the words "psychological," "psychologist," "psychology,"
"psychometrists," "psychometrics," or "psychometry," or that
they do not state or imply that they are licensed to practice
psychology. Authorizes those students and graduates seeking
to engage in psychoanalysis to register with MBC presenting
AB 1835 (Holden) Page 6
of ?
evidence of their student or graduate status. (Business and
Professions Code § 2529)
This bill:
1) Provides an exemption for five years from minimum operating
standards and accreditation requirements for approval by the
BPPE, to institutions that grant doctoral degrees in
psychoanalysis, if all of the institution's students hold
master's or doctoral degrees before they enroll in the
institution and if all of the institution's students, other
than research students regulated by the Medical Board of
California, hold a valid professional license authorizing the
individual to practice psychotherapy.
2) Requires the institution's students to hold a professional
license throughout the period of enrollment at the
institution and carry malpractice insurance in their
respective fields.
3) Specifies that an institution can be exempt so long as the
institution does not accept federal student aid, is a
nonprofit entity and has obtained accreditation from, or has
submitted a self-study application to the Accreditation
Council for Psychoanalytic Education on or before July 1,
2018.
FISCAL
EFFECT: This bill is keyed "fiscal" by Legislative Counsel.
According to the Assembly Committee on Appropriations analysis
dated May 11, 2016, the bill will have negligible fiscal impact.
COMMENTS:
1. Purpose. The Author is the sponsor of this bill. According
to the Author, the bill is an attempt to assist credible,
nonprofit graduate level psychoanalysis programs that were
inadvertently caught up in prior Legislative reforms
AB 1835 (Holden) Page 7
of ?
targeting for-profit, low-quality, degree-granting
institutions by providing a narrow exception to the
accreditation requirements contained in SB 1247 for
institutions offering qualified students doctoral degrees in
psychoanalysis, provided that the institution seeks
accreditation from the Accreditation Council for
Psychoanalytic Education before July 1, 2018.
2. Background.
a) The Act and BPPE. The Bureau for Private Postsecondary
Education (BPPE or Bureau) is responsible for oversight of
private postsecondary educational institutions operating
with a physical presence in California. Established by
AB 48 (Portantino, Chapter 310, Statutes of 2009) after
numerous legislative attempts to remedy the laws and
structure governing regulation of private postsecondary
institutions, the bill took effect January 1, 2010, to make
many substantive changes that created a foundation for
oversight and gave the BPPE enforcement tools to ensure
schools comply with the law.
AB 48 established BPPE's authority to regulate private
postsecondary institutions and enforce the provisions of the new
California Private Postsecondary Education Act (Act) and to
respond to the major problems with the former laws governing the
industry in California. The Act provides for prohibitions on
false advertising and inappropriate recruiting and requires
disclosure of critical information to students such as program
outlines, graduation and job placement rates, and license
examination information, and ensures colleges justify those
figures. The Act also provides BPPE with enforcement powers
necessary to protect consumers. The Act directs BPPE to:
Create a structure that provides an
appropriate level of oversight, including approval of
private postsecondary educational institutions and
programs;
Establish minimum operating standards for
California private postsecondary educational
institutions to ensure quality education for students;
Provide students a meaningful opportunity to
AB 1835 (Holden) Page 8
of ?
have their complaints resolved;
Ensure that private postsecondary educational
institutions offer accurate information to prospective
students on school and student performance; and,
Ensure that all stakeholders have a voice and
are heard in the operations and rulemaking process of
BPPE.
BPPE is also tasked with actively investigating and
combatting unlicensed activity, administering STRF and
conducting outreach and education activities for students
and private postsecondary educational institutions within
the state.
a) Exemptions in the Act. The Bureau has oversight of all
of the non-exempt, private postsecondary institutions
located in California. AB 48 contained numerous exemptions
to state-level oversight, the most notable of which is an
exemption from BPPE authority and regulation under the Act
granted to for-profit and nonprofit regionally accredited
institutions.
The Act was amended through SB 1247 (Lieu, Chapter 840, Statutes
of 2014) to prohibit an institution, beginning January 1, 2016,
from claiming an exemption from the Act if the institution is
approved to participate in Title 38 veterans financial aid
programs. The Committees were concerned about multiple reports
and hearings focused on the experience of veterans at private
for-profit institutions, false and predatory advertising to
veterans and the potential lack of accountability for the
millions of dollars administered by the federal Veterans
Administration (VA) and Department of Defense (DOD) spent at
private postsecondary education institutions in California if
schools are not regulated. Because neither DOD nor VA benefits
originate through federal student financial aid, Title IV, money
that institutions received through these programs was not
counted as federal financial aid, thus not subject to a key
federal regulatory requirement governing for-profit schools that
no more than 90 percent of revenues come from federal financial
aid.
The Bureau has verified exemptions for 617 institutions, denied
AB 1835 (Holden) Page 9
of ?
exemptions for 363 institutions and is in the process of
reviewing almost 90 more exemption requests. However, in order
to remain eligible to continue receiving Title IV monies, a
number of institutions previously verified as exempt under the
Act have now sought voluntary approval by BPPE.
The exemptions in the Act, and attempts to create additional
exemptions, have been an ongoing source of consideration for the
Legislature. It was not until a hearing in the Senate that AB
48 was amended to include a "good schools" exemption, as
institutions pushing for this exemption (based on criteria like
length of operation under one owner and nonprofit status) argued
that a similar recognition had been included in all legislation
related to private postsecondary institution regulation since
1991 and should be continued. During the discussion surrounding
SB 1247 in 2014, the Author submitted a letter to the Senate
Journal requesting that the Legislature strike the exemption
outlined above for WASC accredited institutions to remain exempt
and asked that all exemptions provided for in the Act be
thoroughly examined by the Legislature to determine the merits
of their continuation. Current pending legislation seeks to
clarify that law schools approved by the Committee on Bar
Examiners, which were exempt from the Act but would now have to
receive Bureau approval in order to receive Title 38 monies, can
still receive these monies without BPPE approval. Law schools
in particular have been the source of scrutiny based on high
rates of student debt, misleading employment figures and low
state bar passage rates.
The Act, as created by AB 48, attempted to correct many of the
prior laws' structural problems, most especially the former
acts' different standards and requirements for different
categories of institutions that created complexities. The Act
has one single category of institution and establishes the same
standards and requirements for all of the institutions under the
Bureau's oversight. Yet many of the institutions supportive of
exemptions were exempt under the prior Bureau regulatory
framework and seek to continue operating as they always have:
subject to oversight by accreditors and state and federal
oversight agencies responsible for approving the expenditure of
public monies but not the BPPE.
Licensing laws exist to protect the public from potentially
harmful services rendered by unqualified businesses and
AB 1835 (Holden) Page 10
of ?
individuals. The intent of licensure is not to punish good
actors or impose punitive requirements on businesses and
individuals but rather to establish a baseline of licensee
quality and competency and corresponding enforcement provisions
for consequences of violating the regulatory framework.
Professionals and businesses required to be licensed are not
able to justify a lack of disciplinary action or sanctions to
then skirt their licensure requirement. Exemptions in the Act
may serve as an artificial measure of quality and in some cases,
while the intention may have been to ensure that the Bureau's
workload is focused on those schools that require attention, may
not benefit the public and provide accountability for public
monies utilized at these institutions.
1. Psychoanalysis Institutions, Studies and Accreditation.
According to the Accrediting Council for Psychoanalytic
Education (ACPE), "psychoanalysis is a specific form of
individual psychotherapy that aims to bring unconscious
mental elements and processes into awareness in order to
expand an individual's self-understanding, enhance adaptation
in multiple spheres of functioning, alleviate symptoms of
mental disorder, and facilitate character change and
emotional growth." According to the Author, "beginning in
the early 1990's the field of psychoanalysis began to develop
within the mental health community. Several non-profit
educational institutions were established to provide medical
professional post-graduate, continuing education training in
the emerging field."
SB 1247 required institutions offering degrees in California
to obtain accreditation from a USDE-recognized accrediting
agency. USDE recognition ensures that the accrediting agency
meets outlined criteria to ensure educational quality.
According to the Author, because of the relatively small
nature of psychoanalytic training programs, there is no
USDE-recognized programmatic accreditation agency. In order
to comply with the requirements of SB 1247, institutions
would likely need to seek regional accreditation from WASC.
According to the Author and supporters of this measure,
WASC-accreditation is an expensive and lengthy process that
is unattainable for these small, narrow nonprofit
institutions. ACPE is not a USDE-recognized accrediting
agency.
AB 1835 (Holden) Page 11
of ?
Psychoanalysis institutions serve students who are already
licensed as clinical psychologists, licensed clinical social
workers, marriage and family therapists, research
psychoanalysts, nurses and physicians and surgeons.
2. Arguments in Support. Supporters of this bill,
psychoanalysis institutions that would likely be exempt under
the measure's provisions, believe that this bill is an
important response to the BPPE's regulatory efforts which
would force these schools to undergo "the expensive and
lengthy accreditation required for large undergraduate
research universities". These institutions note that the
Legislature prudently passed legislation to crackdown on
so-called diploma mills, for-profit, typically unaccredited
institutions that offer undergraduate degrees to young
students while leaving graduates saddled with high debt loads
and few meaningful job prospects. These institutions note
that this narrowly crafted measure provides them with the
flexibility to develop innovative curriculum while protecting
younger students from costly diploma mills. The institutions
note that they offer degree programs to "qualified
individuals that prepare them to provide the most
sophisticated contemporary mental health treatment for
children and adults available today" and state that the
articles published by Doctor of Psychoanalysis candidates of
these institutions benefit the patient population and the
professional sphere through adding to the body of knowledge
about the human mind and the ways in which it can be
traumatized and then treated successfully.
3. Related Legislation This Year. SB 1059 (Monning) exempts law
schools accredited by the State Bar of California Committee
on Bar Examiners from requirements that they be accredited by
an accrediting agency recognized USDE in order to receive
Title 38 veteran benefits if the institution complies with
specified disclosure and compliance requirements. ( Status:
The bill is pending in the Assembly Committee on Higher
Education.)
SB 1192 (Hill) is the sunset bill for BPPE and makes various
changes to the Act intended to improve the effectiveness of
BPPE and opportunities for student success, including
authority for BPPE to give extensions on the timeline for
unaccredited degree granting institutions to become
AB 1835 (Holden) Page 12
of ?
accredited according to certain evidence provided by the
institution. ( Status: The bill is pending in the Assembly
Committee on Higher Education.)
SB 1194 (Hill) is the sunset bill for the Board of Psychology
(Board) and makes various changes to the Psychology Act and
Board operations, including requiring that applicants for
licensure after January 1, 2020 graduate from a college or
institution of higher education that is accredited by a
regional accrediting agency recognized by USDE and authorizes
the Board until January 1, 2020, to accept an applicant who
possesses a doctorate degree from an institution that is not
accredited by an accrediting agency recognized by USDE but is
approved to operate by BPPE. ( Status: The bill is pending
in the Assembly.)
AB 1996 (Gordon) exempts JobTrain, Inc., from the Act and
BPPE oversight if it maintains its status as a nonprofit
institution that is WASC accredited and does not award
degrees or diplomas, and is paid from state or federal
student financial aid programs for fewer than 20 percent of
its students who receive vocational training. ( Status: The
bill is also pending before this committee on June 13, 2016.)
4. Prior Related Legislation. SB 410 (Beall, Chapter 258,
Statutes of 2015) changed the definition of graduates for
purposes of reporting student information as required under
the Act.
AB 509 (Perea, Chapter 558, Statutes of 2015) provided an
exemption from the Act and BPPE oversight for a bona fide
organization, association, or council that offers
preapprenticeship training programs on behalf of one or more
Division of Apprenticeship Standards -approved
labor-management apprenticeship programs, provided that the
entity meets the requirements for the ETPL and has not been
removed from the ETPL for failure to meet performance
standards.
SB 1247 (Lieu, Chapter 840, Statutes of 2014) extended the
operation of the Bureau until January 1, 2017; and, among
other changes, set forth requirements for accreditation for
institutions offering degrees.
AB 1835 (Holden) Page 13
of ?
SB 71 (Committee on Budget and Fiscal Review, Chapter 28,
Statutes of 2013) enacted various budget-related items,
including a provision allowing exempt institutions to
voluntarily seek operating approval from the Bureau. The
bill provided a temporary delay in those institutions
reporting certain information on the Student Performance Fact
Sheet.
SB 619 (Fuller, Chapter 309, Statutes of 2011) exempted
flight instructors and flight schools that do not require
students to enter into contracts of indebtedness and do not
require prepayment of fees in excess of $2,500 from
regulation by the Act and BPPE.
NOTE : Double-referral to Senate Committee on Education, second.
SUPPORT AND OPPOSITION:
Support:
Institute of Contemporary Psychoanalysis
Newport Center for Psychoanalytic Studies
Psychoanalytic Center of California
United States House of Representatives Member Ted Lieu
Opposition:
None on file as of June 7, 2016.
-- END --