BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 12, 2016 


                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION


                                 Jose Medina, Chair


          AB 1996  
          (Gordon) - As Amended March 15, 2016


          SUBJECT:  Private postsecondary education:  exemptions


          SUMMARY:  Provides an exemption from the California Private  
          Postsecondary Education Act (Act) for a nonprofit institution  
          that is accredited by the Accrediting Commission for Schools,  
          Western Association of Schools and Colleges, 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.


          EXISTING LAW:  Establishes the Bureau for Private Postsecondary  
          Education (BPPE), under the California Private Postsecondary  
          Education Act (Act), until January 1, 2017; and, provides for  
          the oversight and regulation of private postsecondary  
          educational institutions (institutions) to ensure protection of  
          the public and students.  (Education Code Section 94800 et seq.)


          FISCAL EFFECT:  Unknown.


          COMMENTS:  Background.  BPPE is responsible for oversight of  
          private postsecondary educational institutions operating with a  
          physical presence in California.  Established by Assembly Bill  








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          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 contained numerous exemptions to state-level oversight,  
          including for avocational or recreational programs, educational  
          programs offered for members of a business or professional  
          association, preapprenticeship programs offered by specific  
          types of organizations, test preparation providers, religious  
          institutions, low-cost programs that do not receive public  
          funds, WASC-accredited institutions, specified nationally  
          accredited nonprofit institutions, and flight schools.  


          An exempt institution is not regulated by the BPPE.  Students  
          enrolled in exempt institutions are not protected by the Act,  
          including the Student Tuition Recovery Fund (STRF) which  
          provides reimbursement to students for BPPE-regulated  
          institutions that violate the law or close abruptly.  For  
          example, Heald College, which was owned by Corinthian Colleges,  
          Inc. (CCI), enjoyed an exemption from BPPE oversight due to its  
          WASC-accreditation.  When initially granted exemption, Heald  
          College was a non-profit institution.  It was subsequently  
          purchased by CCI, and the accreditation-based exemption was not  
          affected by the change in ownership.  When Heald closed abruptly  
          and filed bankruptcy in 2015, students enrolled in the  
          institution were not eligible to make tuition recovery claims  
          against the STRF.    


          Purpose of this bill.  According to the author, JobTrain is a  
          50-year old nonprofit training and career development support  
          center serving low income individuals in the Bay Area.  JobTrain  
          offers middle income job pathways for people who are often  
          working two to three minimum wage jobs and who cannot afford to  








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          personally pay for college or other training.  According to the  
          author, JobTrain had been previously granted an exemption from  
          oversight by BPPE based on its accreditation from the  
          Accrediting Commission for Schools, Western Association of  
          Schools and Colleges (WASC).  JobTrain was notified by BPPE that  
          its exemption expired on December 31, 2015.  According to the  
          author, in order to remain eligible to receive public funding  
          under the Workforce Investment and Opportunity Act (WIOA) the  
          institution must remain on the Eligible Training Provider List  
          (ETPL).  To be placed on the ETPL, an institution must either  
          have an exemption or approval from the BPPE. 


          Exemption vs. approval.  As previously noted, to remain on the  
          ETPL and be eligible to receive public funds, JobTrain must be  
          either exempt or approved by BPPE.  The author has provided the  
          following rationale for JobTrain's need for exemption, rather  
          than regulation and approval, from BPPE:


          1)Ability-to-Benefit (ATB) Examination.  The Act requires, prior  
            to enrollment, students without a high school diploma or  
            equivalent to take and pass an ATB examination.  The intent of  
            the test is to measure, before a student has agreed to  
            payment, whether the student has the basic skills needed to  
            benefit from higher education and succeed in the institution.   
            According to the author, upon BPPE approval "JobTrain would  
            need to stop serving a significant minority of the students  
            they serve; these are individuals who cannot pass the  
            ability-to-benefit test (grade 7 level reading and writing)  
            yet have been among the most successful in obtaining higher  
            wage jobs through JobTrain's program."  


            In response to similar concerns, AB 752 (Salas, Chapter 560,  
            Statutes of 2015) required BPPE to review, by July 1, 2016,  
            the examinations for ATB students prescribed by USDE and, if  
            appropriate, publish a list of alternative examinations for  
            working adults that do not have high school diplomas and are  








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            seeking to enroll in job and skills training programs, but are  
            having difficulty passing the USDE-approved ATB examinations.


          2)Accredited by WASC-ACS.  The author notes that JobTrain has  
            been accredited by the reputable WASC-ACS since 2001.  


            WASC-ACS is not recognized by the United States Department of  
            Education for purposes of participation in federal financial  
            aid programs.  According to its website, WASC-ACS provides  
            accreditation of 189 postsecondary institutions.  Committee  
            staff was unable to determine how many of these institutions  
            would meet the other criteria of this bill (does not award  
            degrees or diplomas, and receives state or financial aid funds  
            for fewer than 20% of its students who receive vocational  
            training).  Committee staff was also unable to determine which  
            of these institutions meet the same outcome and quality  
            standards of JobTrain.  


          3)Limited financial aid.  According to the author, financial aid  
            is a small portion of JobTrain's revenues, further reducing  
            the risk of misuse of public educational funds. Aside from  
            WIOA, JobTrain student tuition is funded by donations, grants,  
            and fee for service contracts, but not by student financial  
            aid.  WIOA funds can only be paid for training programs  
            approved by the Local Workforce Development Board and meeting  
            performance requirements set by Employment Development  
            Department, which currently requires a 70% placement rate  
            measured using the BPPE methods.


          BPPE Sunset Review of exemptions.  The BPPE is currently  
          undergoing Sunset Review by the Legislature.  Among the issues  
          raised in the Sunset Report is the issue of exemptions from BPPE  
          oversight.  According to the Sunset Report, "Licensing laws  
          exist to protect the public from potentially harmful services  
          rendered by unqualified businesses and individuals.  The intent  








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          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."  

          Rather than provide an exemption to JobTrain, the author and  
          committee could instead, consistent with the action taken in AB  
          1835 (Holden), approved by this committee on April 5, 2016,  
          provide a limited-term exemption to the ATB examination  
          requirements while JobTrain works with BPPE to ensure that the  
          ATB requirements do not negatively impact students. 

          Alternatively, if the author and committee desire to provide an  
          exemption to Job Train, to avoid unintended consequences that  
          may result from other institutions qualifying for the exemption  
          outlined in this bill, the author has indicated willingness to  
          accept an amendment to limit the scope of this exemption solely  
          to JobTrain.  In addition, JobTrain would be required to  
          continue to meet the accreditation, funding, and certificate  
          requirements, as outlined. 
          


          REGISTERED SUPPORT / OPPOSITION:




          Support









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          Acrobat Outsourcing


          California State Council of Laborers


          Canada College


          Community Legal Services in East Palo Alto


          JobTrain


          Laborers' International Union of North America


          Nova Workforce Development


          San Mateo County Board of Supervisors


          Sequoia District Adult School


          12 Individuals




          Opposition


          None on File










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          Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960