BILL ANALYSIS Ó
AB 1996
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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