BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 410 Hearing Date: April 27,
2015
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|Author: |Beall |
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|Version: |April 6, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Mason |
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Subject: California Private Postsecondary Education Act of
2009.
SUMMARY: Changes the definition of graduates for purposes of
reporting student information as required under the California
Private Postsecondary Education Act.
NOTE: This bill was referred to the Senate Committee on
Education, first, and was passed out of that Committee on April
22, 2015 by a vote of 9-0.
Existing law:
1)Establishes the California Private Postsecondary Education Act
(Act) of 2009 until January 1, 2015, and requires the Bureau
of Private Postsecondary Education (Bureau) within the
Department of Consumer Affairs (DCA) to, among other things,
to review, investigate and approve private postsecondary
institutions, programs and courses of instruction pursuant to
the Act and authorizes the Bureau 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 the Bureau shall administer the Student Tuition Recovery
Fund (STRF) to provide refunds to students affected by the
possible closure of an institution/school. (Education Code
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(EC) § 94800 et seq.)
2)Defines "graduate" as an individual who has been awarded a
degree or diploma. (EC § 94842)
3)Requires the Bureau to institute training to ensure that the
staff are equipped to review and verify the accuracy of the
data contained in consumer disclosures required by schools
under the Bureau's oversight, including, but not limited to,
the School Performance Fact Sheet. (EC § 94877 (c))
4)Specifies requirements regarding enrollment agreements and
disclosures including that a student enroll solely by
executing an enrollment agreement and that prospective
students be provided with a school catalog and a School
Performance Fact Sheet (Fact Sheet). The Act establishes
minimum requirements and disclosures to be made in these
documents. (EC §§ 94902-94912)
5)Specifies various disclosure and reporting requirements around
completion, placement, licensure and salary of
students/graduates and establishes various definitions for
this purpose. Requires that the information used to
substantiate the reported job placement, license passage, and
completion rates be documented and maintained by the
institution for five years from the date of the publication of
the rates and authorizes this information to be retained by
the institution in an electronic format. Requires
institutions to submit an annual report to the Bureau that
includes specified information. (EC §§ 94928-94929.9)
6)For purposes of calculating completion, placement, licensure,
and salary disclosure requirements, defines "Graduates" as the
number of students who complete a program within 100 percent
of the published program length. An institution may
separately state completion information for students
completing the program within 150 percent of the original
contracted time, but that information may not replace
completion information for students completing within the
original scheduled time. Completion information shall be
separately stated for each campus or branch of the
institution. (EC § 94928 (c))
7)For purposes of calculating completion, placement, licensure,
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and salary disclosure requirements, defines "Graduates
employed in the field" as graduates who are gainfully employed
in a single position for which the institution represents the
program prepares its graduates within six months after a
student completes the applicable educational program. For
occupations for which the state requires passing an
examination, the period of employment shall begin within six
months of the announcement of the examination results for the
first examination available after a student completes an
applicable educational program. (EC § 94928 (e)(1))
8)Requires an institution to annually report to the Bureau, as
part of the annual report, and publish in its Fact Sheet, the
completion rate for each program. Authorizes an institution
to report graduation data reported to, and calculated by, the
Integrated Postsecondary Education Data System of the United
States Department of Education in lieu of calculating the
completion rate. Also requires reporting of an institution's
job placement rate, license examination passage rates for the
immediately preceding two years for programs leading to
employment for which passage of a state licensing examination
is required, salary and wage information, if applicable, the
most recent official three-year cohort default rate reported
by the United States Department of Education for the
institution and the percentage of enrolled students receiving
federal student loans. States that the Bureau is not limited
from being authorized to collect information from an
institution to ensure that the information is useful to
students, useful to policymakers, based upon the most credible
and verifiable data available and that does not impose undue
compliance burdens on an institution. (EC §§ 94929 and
94929.5)
9)Requires information used to substantiate the rates and
information calculated above to be documented and maintained
by the institution for five years from the date of the
publication of the rates and information and be retained in an
electronic format and made available to the bureau upon
request. (EC § 94929.7)
10)Requires the Bureau to consider the graduate salary and other
outcome data and reporting requirements that are utilized by
the United States Department of Education, the Student Aid
Commission, accrediting agencies, and student advocate
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associations. Requires the Bureau to consider the reporting
requirements of public postsecondary institutions in
California to evaluate the feasibility of adopting these
reporting requirements for private postsecondary institutions
and to make recommendations to the Legislature, on or before
December 31, 2016, on how reporting requirements under this
Act should be altered to ensure accurate, useful, and
consistent reporting by private postsecondary institutions to
the Bureau and students. (EC § 94929.9)
This bill:
1) Replaces "Graduates" with "On-time graduates" in the
definition above for the number of students who complete a
program within 100 percent of the published program length in
lieu of classifying this group as "graduates" for the purpose
of making a distinction between those who graduate on-time
and all other graduates as defined in EC § 94842 in #2 above.
2) Requires an institution to use "on-time graduates" for
calculating completion rates for each program.
3) Makes one technical change.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Center for Employment
Training (CET) and Children's Advocacy Institute . According
to the Author, this bill aims to capture the total number of
students who graduated in a reporting year, for purposes of
reporting to the Bureau. The Author states that currently
there is a distinction between disclosure requirements and
placement rate calculation and this bill is addressing a
placement rate miscalculation that is impacting vocational
training programs. According to the Author, this change will
not interfere with disclosure requirements.
The Author notes that "besides meeting disclosure
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requirements, vocational training programs also must meet
certain criteria from the Employment Development Department
(EDD) to be listed on the Eligible Training Provider List
(ETPL)." The Center for Employment Training (CET) in the
Author's district has been struggling in obtaining EDD
referrals because of the calculation. According to the
Author, if CET is able to count all their graduating students
in a reporting year, their placement rate numbers will be
accurately calculated. The Author notes that currently, only
students that graduate in the 100% program length are
accounted for, but not those that graduate past the 100%
which includes students who need more time in their
coursework. According to the Author, the majority of these
students who are not captured experience barriers such as
poverty, limited English proficiency, a lack of access to
childcare and disabilities which mean they then graduate at a
much later pace. According to the Author, vocational
training programs that are eligible to be listed for referral
on the ETPL are able to receive funds through the federal
Workforce Investment Act. The Author states that these WIA
funds are used to pay for tuition, coursework materials,
instructors and improvement of facilities, among other items.
According to the Author, CET has been losing out on between
two and three hundred thousand dollars in federal funding as
a result of not being able to meet the EDD requirements.
2. Background.
a) The California Private Postsecondary Education Act and
Bureau for Private Postsecondary Education. After numerous
legislative attempts to remedy the laws and structure
governing regulation of private postsecondary institutions
in California, AB 48 (Portantino, Chapter 310, Statutes of
2009), established the Act and created the Bureau within
DCA for the purpose of regulating private postsecondary
educational institutions that provide educational services
in California. The Act made many substantive changes that
both created a new, solid foundation for oversight and
responded to the major problems with the Former Act. The
Act requires all unaccredited colleges in California to be
approved by the Bureau, sets timelines by which
unaccredited schools offering degrees shall become
accredited, and requires all nationally accredited colleges
to comply with numerous student protections. It is
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important to note that not all private institutions are
covered by the provisions of the Act; full and partial
exemptions are provided for low-cost programs, recreational
schools, schools accredited by regional accrediting
agencies, among other types of institutions. The Act
establishes 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 guarantees students can complete their
educational objectives if their institution closes its
doors while providing 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
have their complaints resolved;
Ensure that private postsecondary educational
institutions offer accurate information to prospective
students on school and student performance, thereby
promoting competition between institutions that
rewards educational quality and employment success;
and,
Ensure that all stakeholders have a voice and
are heard in the operations and rulemaking process of
BPPE.
The Bureau is required to actively investigate and combat
unlicensed activity, administer the STRF, and conduct
outreach and education activities for private postsecondary
educational institutions and students within the state.
The Act establishes processes for penalties for
non-compliance, providing the Bureau authority to perform
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site visits and investigations, order fines and student
tuition refunds, and ultimately suspend or revoke an
institution's approval to operate.
a) Disclosures. As noted above, the Act requires a number
of disclosures aimed at providing students with the
information and tools to make an informed decision about
their education. Job placement numbers, license exam
passage rates, salary information and cohort default rates
are some of the items institutions are required to provide
to students as they evaluate whether or not to attend a
particular school. (CDR is the percentage of a school's
borrowers who enter repayment on federal loans during a
particular fiscal year and default or meet other specified
conditions prior to the end of the next fiscal year and
provided to USDE in draft form, offering schools two
appeals before the information becomes "official".) The
Act also requires a series of disclosures about
unaccredited programs offering degrees, such as whether the
degree is issued in a field that requires licensure in
California, whether or not a graduate of the degree program
will be eligible to sit for the applicable licensure exam
in California and other states, information acknowledging
that a degree from an unaccredited institution is not
recognized for some employment positions and a statement
that students attending an unaccredited institution are
ineligible for federal financial aid programs.
The Act also specifies requirements regarding enrollment
agreements and requirements that students be provided a
school catalog and a School Performance Fact Sheet (Fact
Sheet), including minimum requirements and disclosures
required in these documents such as information about
program completion, placement, licensure and salary of
students/graduates. The Act outlines formulas for
calculating rates reported on the Fact Sheet, including a
job placement rate (calculated by dividing the number of
graduates employed in the field by the number of graduates
available for employment in each program), completion rate
(calculated by dividing the number of graduates by the
number of students available for graduation, the very rate
this bill seeks to change by requiring an institution to
use "on-time" graduates rather than "graduates"), license
examination passage rate (calculated for the immediately
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preceding two years by dividing the number of graduates who
pass an exam by the number of graduates who take an
licensing exam the first time after completing an
educational program and salary and wage information
(consisting of the total number of graduates employed in
the field and the annual wages or salaries of those
graduates).
Under the Act, institutions are also required to submit the
most recent three-year cohort default rate reported by the
United States Department of Education for the institution
and the percentage of enrolled students receiving federal
student loans. The Bureau is also authorized to ensure
that information is useful to students, useful to
policymakers, based on the most credible and verifiable
data available but also does not impose undue compliance
burdens on an institution.
b) Workforce Innovation and Opportunity Act (WIOA). The
federal Workforce Innovation and Opportunity Act (WIOA),
formerly known as the federal Workforce Investment Act
(WIA) of 1998, provides for workforce investment
activities, including activities in which states may
participate and also contains various programs for job and
employment investment, including work incentive programs,
as specified. WIOA was signed into law in 2014 and
generally takes effect July of this year. WIOA supersedes
WIA and also authorizes the Job Corps, YouthBuild, Indian
and Native Americans, and Migrant Seasonal Farmworker
programs, in addition to the core programs. The new
federal WIOA aims to modernize our workforce development
system bringing together and enhancing several key
employment, education, and training programs. WIOA also
seeks to make the workforce system more comprehensive in
its approach to service delivery and more responsive to the
demands of our economy.
Following passage of the federal WIA in 1998, the state
established the California Workforce Investment Board (CWIB) and
charged the board with the responsibility of developing a
unified, strategic planning process to coordinate various
education, training, and employment programs into an integrated
workforce development system that supports economic development.
Local chief elected officials in a local workforce development
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area were required to form, pursuant to specified guidelines, a
Local Workforce Investment Board (Local WIB) to plan and oversee
the workforce investment system at the local level. Under WIA,
funds were distributed to the states based on formulas that
consider unemployment rates and other economic and demographic
factors. WIA required that 85 percent of federal funds go to
the Local WIBs, with the remainder allocated for state
discretionary purposes. Local WIBs created one or more One-Stop
Centers in the local workforce area, which provide access to
career information, counseling, funding for education, training
and supportive services. Job training programs include
classroom training, customized training, and on-the-job training
(also known as incumbent worker training). Training funds are
often distributed through vouchers to job seekers to enroll in
eligible training programs. Local WIBs determine which training
programs are eligible to receive the vouchers.
California's ETPL was established in compliance with WIA for the
purpose of providing customer-focused employment training for
adults and dislocated workers. Training providers who are
eligible to receive Individual Training Accounts (ITAs) through
WIA Title I-B funds are listed on the ETPL. EDD is responsible
for accepting information on training providers from local
boards, compiling a single statewide list of eligible training
providers and disseminating the statewide ETPL to local boards
for distribution to their One-Stop Career Centers. Programs are
required to be periodically determined as eligible to continue
on the ETPL. This determination is to be made within 18 to 24
months of their initial listing and annually thereafter.
EDD's policy and procedure document on the ETPL provides
additional background and sets out requirements for approval
that includes, among other things, the following:
In order to be listed on the ETPL,
training providers must submit an application to the
local board in any Local Workforce Investment Area
in which the training provider desires to offer
programs and services.
It is important to note that initial
eligibility is determined based on criteria that
relates to a provider/program's approval authority
and/or authorization to operate. Performance is not
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considered in making initial eligibility
determinations. Providers are encouraged to submit
information on performance outcomes to facilitate
customer choice but this is not a requirement and
the information provided cannot be used to determine
their initial eligibility for listing.
Local boards are responsible for reviewing
and verifying applications submitted by training
providers, determining if the applicant meets the
State's criteria for initial eligibility and
forwarding the information to EDD for those training
providers and programs that meet the criteria.
EDD will accept applications for the ETPL
from local boards on any working day of the year.
Approved applications will appear on the list within
30 days of their submission by the local board to
the State. The local boards are responsible for
submitting changes to EDD for programs or training
providers already listed on the statewide ETPL to
ensure that the information remains current.
1. Related Legislation This Year. SB 634 (Block) authorizes DCA
to enter into a
regional state authorization reciprocity agreement with other
states through a compact on behalf of this state. The compact
would provide that an entity regulated in one member state
would be able to provide distance education in other member
states. The bill would require the Bureau, before entering
into a compact, to establish a process to ensure that certain
educational institutions that are exempt from the Act may
participate in the state authorization reciprocity agreement
without impacting their exempt status. The bill would require
the Bureau to enter into a memorandum of understanding with
certain educational officials for the purpose of establishing
and implementing the state authorization reciprocity
agreement, as specified. The bill would authorize the Bureau
to establish a reasonable fee to be paid to the Department of
Consumer Affairs by a participating postsecondary
institution, as specified. ( Status: The bill is currently
pending in the Senate Committee on Education.)
AB 752 (Salas) requires, if the Bureau publishes a list of
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relevant occupational ability-to-benefit examinations and
passing scores, the list shall include the Comprehensive
Adult Student Assessment System examination. ( Status: The
bill is currently pending in the Assembly Committee on Higher
Education.)
AB 509 (Perea) exempts from the Act and related oversight by
the Bureau a bona fide organization, association, or council
that offers pre-apprenticeship training programs, on behalf
of one or more Division of Apprenticeship Standards approved
apprenticeship programs. ( Status: The bill is currently
pending in the Assembly Committee on Higher Education.)
2. Prior Related Legislation. SB 1247 (Lieu, Chapter 840,
Statutes of 2014) extended the operation of the Bureau until
January 1, 2017; and, provided statutory changes to the
protections provided to students and the requirements placed
on private postsecondary educational institutions under the
Act.
AB 2296 (Block, Chapter 585, Statutes of 2012) expanded the
disclosure requirements for institutions under the Bureau
related to unaccredited programs; expanded disclosure
requirements for all regulated institutions; established more
stringent criteria for determining gainful employment and
calculating job placement rates; and increased institutional
documentation and reporting requirements around completion
rates, job placement/license exam passage rates, and
salary/wage information for graduates.
AB 611 (Gordon, Chapter 103, Statutes of 2011) set forth
certain disclosure requirements pertaining to accreditation
status, licensure, and related limitations for unaccredited
doctoral programs.
AB 1889 (Portantino) of 2010 contained provisions regarding
doctoral degrees offered by unaccredited institutions, the
calculation of placement rates, and Bureau employment
requirements. ( Status: The bill was vetoed by the Governor
due to concerns over Bureau employment requirements.)
AB 2393 (Ammiano) of 2010 would have altered the definition
of "graduates employed in the field" for apprenticeship and
nursing programs. ( Status: The bill was vetoed by the
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Governor, who indicated that it put the state on the same
path to overly confusing statutes and guidelines that existed
prior to the new Act.)
3. Arguments in Support. Supporters like the Center for
Employment Training (CET) (Co-Sponsor), Central Valley
Opportunity Center, Inc. , La Cooperativa , and Proteus, Inc. ,
recognize barriers faced by students in "hard to serve
populations" in being able to graduate within 100% of the
scheduled training time. The organizations note that these
individuals face challenges like "limited English language,
disabilities, legal issues, lack of resources for child care,
transportation, housing, medical and others." They believe
that under this bill, these "special population students
would not be excluded from the count of graduates during a
reporting period" and training programs would continue their
open door policies of providing quality training to
hard-to-serve populations in low income communities.
The Children's Advocacy Institute , Center for Public Interest
Law and Veterans Legal Clinic at the University of California
San Diego Law School (Co-Sponsors) note that the current
definition of graduate as one who graduates within 100% of
the originally scheduled completion time of a program, when
applied for job placement, salary and licensing data, skews
the results because it only includes those graduates who
graduated within 100% of the scheduled time period, not all
graduates. According to these organizations, the simple
change proposed in this bill corrects this issue by using the
term "on-time" graduates to tell how many graduated on time
during a given reporting year but "graduates" to report job
placement, salaries and license passage for all graduates
during the given reporting year.
According to Public Advocates , current law does not give a
full and complete picture of the success of for-profit and
other private institutions. Public Advocates notes that
application of the current definition results in misleading
job placement rates, salary and licensing data, as well as
less accurate and confusing information for students.
SUPPORT AND OPPOSITION:
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Support:
Center for Employment Training (CET) (Co-Sponsor)
Central Valley Opportunity Center, Inc.
Center for Public Interest Law (Co-Sponsor)
Children's Advocacy Institute (Co-Sponsor)
La Cooperativa
Proteus, Inc.
Public Advocates
Veterans Legal Clinic at the University of San Diego School of
Law (Co-Sponsor)
Opposition:
None on file as of April 22, 2015.
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