BILL NUMBER: SB 1192 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 6, 2016
INTRODUCED BY Senator Hill
( Principal coauthors:
Assembly Members Medina and Salas )
FEBRUARY 18, 2016
An act to amend Section 94885 of Sections
94809, 94848, 94874.2, 94878, 94879, 94885, 94885.1, 94885.5, 94899,
94905, 94909, 94923, and 94944 of, to amend the heading of Article 14
(commencing with Section 94923) of Chapter 8 of Part 59 of Division
10 of Title 3 of, to add Sections 94922.5, 94923.5, and 94935.5 to,
to add Chapter 8.1 (commencing with Section 94952) to Part 59 of
Division 10 of Title 3 of, and to add and repeal Article
20.5 (commencing with Section 94949.5) to Chapter 8 of Part 59 of
Division 10 of Title 3 of, the Education Code, relating to
private postsecondary education. education,
and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1192, as amended, Hill. Private postsecondary education:
California Private Postsecondary Education Act of 2009.
Existing law, the California Private Postsecondary Education Act
of 2009, provides, among other things, for student protections and
regulatory oversight of private postsecondary institutions in the
state. The act is enforced by the Bureau for Private Postsecondary
Education within the Department of Consumer Affairs. The act
requires, except as provided, institutions covered by the act that
offer a degree to receive accreditation by an accreditation agency
recognized by the United States Department of Education or have an
accreditation plan, approved by the bureau, for the institution to
become fully accredited within 5 years of the bureau's issuance of a
provisional approval to operate to the institution, as specified.
The act exempts an institution from its provisions if
any of a list of specific criteria are met. Existing law
repeals the act on January 1, 2017.
This bill would recast and revise various provisions of the act.
The bill would authorize bureau staff who, during an inspection of an
institution, detect a violation of the act, or regulations adopted
pursuant to the act, to issue the institution a citation before
leaving the institution, as specified. The bill would require the
Director of Consumer Affairs to appoint an enforcement monitor, no
later than March 1, 2017, to, among other duties, monitor and
evaluate the bureau's enforcement of the act and submit written
reports to the department and the Legislature on his or her findings
and conclusions, as specified. The bill would increase the amount of
a fine that may be issued to a person for operating an institution
without proper approval to operate from $50,000 to $100,000. The bill
would, to the extent authorized by federal law, require a private
postsecondary institution that does not maintain a physical presence
in California and offers distance education to California students to
register with the bureau and file a surety bond, as specified.
The act 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.
This bill would make a California student of a Corinthian
Colleges, Inc., institution, who meets all of the other eligibility
requirements, eligible for recovery from the fund. To the extent that
the bill expands the purposes of the fund, the bill would make an
appropriation. The bill would establish the Office of Student
Assistance and Relief, which would, among other duties, administer
the fund, serve as a point of contact to address the needs of private
postsecondary students, establish an Internet Web site that contains
specified information for the benefit of these students, and work,
in consultation with specified state and federal agencies, to
determine the extent of resources available for these students and
what actions state agencies need to take to ensure the protection of
the public from the closure of private postsecondary educational
institutions.
This bill would correct an inaccurate cross-reference in that
provision relating to accreditation and would make other technical
nonsubstantive changes.
Vote: majority. Appropriation: no yes
. Fiscal committee: no yes .
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 94809 of the
Education Code is amended to read:
94809. (a) An institution that had an application for an approval
to operate pending with the former Bureau for Private Postsecondary
and Vocational Education on June 30, 2007, may continue to operate
until a decision is made in regard to the institution regarding the
application for approval to operate, but shall comply with, and is
subject to, this chapter.
(b) An institution that did not have a valid approval to operate
issued by, and did not have an application for approval to operate
pending with, the former Bureau for Private Postsecondary and
Vocational Education on June 30, 2007, that began operations between
July 1, 2007, and January 1, 2010, may continue to operate unless a
denial of approval to operate has been issued and has become final,
but shall comply with, and is subject to, this chapter.
(c) Students seeking to enroll in institutions operating under
subdivisions (a) and (b) shall be notified by the institution, in
writing and prior to executing an enrollment agreement, that the
institution's application for approval to operate has not been
reviewed by the bureau.
(d) (1) An institution that is denied an approval to operate
pursuant to subdivision (a) or (b) may file an appeal pursuant to the
procedures established in Section 94888.
(2) An institution that has filed an appeal pursuant to
paragraph (1) may continue to operate during the appeal process
but must disclose in a written statement approved by the bureau, to
all current and prospective students, that the institution's
application for approval to operate was denied by the bureau because
the bureau determined the application did not satisfy the
requirements to operate in California, that the institution is
appealing the bureau's decision, and that the loss of the appeal may
result in the institution's closure.
(3) If the bureau determines that the continued operation of an
institution poses a significant risk of harm to students, the bureau
shall make an emergency decision pursuant to Section 94938.
SEC. 2. Section 94848 of the Education
Code is amended to read:
94848. "Licensure" includes any license, certificate, permit, or
similar credential that a person must hold to lawfully engage in a
profession, occupation, trade, or career field. "Licensure"
shall also include required certification or registration that a
person must hold to lawfully engage in a profession, occupation,
trade, or career field.
SEC. 3. Section 94874.2 of the
Education Code is amended to read:
94874.2. Beginning January 1, 2016, an institution that is
approved to participate in veterans' financial aid programs pursuant
to Section 21.4253 of Title 38 of the Code of Federal Regulations
that is not an independent institution of higher education, as
defined in subdivision (b) of Section 66010, may not claim
an exemption from this chapter. shall not be exempt
from this chapter.
SEC. 4. Section 94878 of the Education
Code is amended to read:
94878. (a) The bureau shall establish an Internet Web site that
includes at least all of the following information:
(1) An explanation of the bureau's scope of authority.
(2) (A) A directory of approved institutions, and a link, if
feasible, to the Internet Web site of each institution.
(B) For each institution, the directory shall be developed in a
manner that allows the user to search by institution and shall
include all of the following information:
(i) The status of the institution's approval to operate.
(ii) The information provided by the institutions, including, but
not limited to, the annual report, as required by Section 94934,
including the school catalog and the School Performance Fact Sheet.
The School Performance Fact Sheet shall be maintained on the
directory for at least five years after the date of its submission to
the bureau.
(iii) If a law school satisfies the requirements of this chapter
regarding a School Performance Fact Sheet by complying with the
requirements of Section 94910.5, the bureau shall include the
information provided by the institution pursuant to Section 94910.5
on its Internet Web site and shall maintain the information in the
same manner as required by clause (ii).
(iv) The disciplinary history of the institution, which shall
include, but shall not be limited to, all of the following:
(I) Pending formal accusations filed by the bureau.
(II) Suspensions, revocations, citations, fines, infractions,
probations, pending litigation filed by the bureau, and final
judgments resulting from litigation filed by the bureau.
(III) Pending or final civil or criminal cases filed by the
Attorney General, a city attorney, or a district attorney in this
state, or filed in any state by an attorney general or a federal
regulatory or prosecutorial agency if the case would be
actionable under California or federal law, of which the
bureau has received notice.
(IV) Final administrative actions by the United States Department
of Education, including orders requiring restitution to students.
(V) All disciplinary actions ordered by an accreditation agency,
including any order to show cause, of which the bureau has received
notice pursuant to Section 94934 or other information otherwise
publicly available of which the bureau has received notice.
(b) The bureau shall maintain the Internet Web site described in
subdivision (a). The bureau shall ensure that the information
specified in subdivision (a) is kept current. The bureau shall update
the Internet Web site at least annually, to coincide with the
submission of annual reports by the institutions pursuant to Section
94934.
(c) (1) The bureau shall post on its Internet Web site a list of
all institutions that were denied approval to operate, after the
denial is final, and describe in clear and conspicuous language the
reason the institution was denied approval. The bureau shall include
with this list the statement provided in paragraph (2) on its
Internet Web site.
(2) "The following institutions were denied approval to operate by
the Bureau for Private Postsecondary Education for failing to
satisfy the standards relating to educational quality, or consumer
protection, or both. These unlicensed institutions are not operating
in compliance with the law, and students are strongly discouraged
from attending these institutions."
SEC. 5. Section 94879 of the Education
Code is amended to read:
94879. The bureau shall conduct an outreach program to secondary
school pupils students as well as
prospective and current private postsecondary students, to provide
them with information on how to best select a private postsecondary
institution, how to enter into enrollment agreements, how to make
informed decisions in the private postsecondary education
marketplace, and how to contact the bureau for assistance. The bureau
may accomplish the purposes of this section in cooperation with
other federal, state, or local entities, or any combination of these
entities.
SEC. 6. Section 94885 of the Education
Code is amended to read:
94885. (a) The bureau shall adopt by regulation minimum operating
standards for an institution that shall reasonably ensure that all
of the following occur:
(1) The content of each educational program can achieve its stated
objective.
(2) The institution maintains specific written standards for
student admissions for each educational program and those standards
are related to the particular educational program.
(3) The facilities, instructional equipment, and materials are
sufficient to enable students to achieve the educational program's
goals.
(4) The institution maintains a withdrawal policy and provides
refunds.
(5) The directors, administrators, and faculty are properly
qualified.
(6) The institution is financially sound and capable of fulfilling
its commitments to students.
(7) That, upon satisfactory completion of an educational program,
the institution gives students a document signifying the degree or
diploma awarded.
(8) Adequate records and standard transcripts are maintained and
are available to students.
(9) The institution is maintained and operated in compliance with
this chapter and all other applicable ordinances and laws.
(b) Except as provided in Section 94855.1,
94885.1, an institution offering a degree must satisfy one of
the following requirements:
(i)
(1) Accreditation by an accrediting agency recognized
by the United States Department of Education, with the scope of that
accreditation covering the offering of at least one degree program by
the institution.
(ii)
(2) An accreditation plan, approved by the bureau, for
the institution to become fully accredited within five years of the
bureau's issuance of a provisional approval to operate to the
institution. The provisional approval to operate to an unaccredited
degree-offering institution shall be in compliance with Section
94885.5.
SEC. 7. Section 94885.1 of the
Education Code is amended to read:
94885.1. (a) An institution that is not accredited by an
accrediting agency recognized by the United States Department of
Education and offering at least one degree program, and that has
obtained an approval to operate from the bureau on or before January
1, 2015, shall be required to satisfy at least one of the following
no later than July 1, 2015:
(1) Accreditation by an accrediting agency recognized by the
United States Department of Education, with the scope of that
accreditation covering the offering of at least one degree program by
the institution.
(2) Compliance with subdivision (b).
(b) The bureau shall identify institutions that are subject to
subdivision (a) and notify those institutions by February 1, 2015, of
the accreditation requirements pursuant to this section and that the
institution is required provide the following information to the
bureau if the institution plans to continue to offer a degree program
after July 1, 2015:
(1) An accreditation plan that, at a minimum, identifies an
accrediting agency recognized by the United States Department of
Education from which the institution will seek accreditation, with
the scope of that accreditation covering the offering of at least one
degree program, and outlines the process by which the institution
will achieve accreditation candidacy or pre-accreditation by July 1,
2017, and full accreditation by July 1, 2020.
(2) Evidence of having achieved accreditation candidacy or
pre-accreditation by July 1, 2017.
(3) Evidence of having obtained full accreditation by July 1,
2020.
(4) Any additional documentation the bureau deems necessary.
(c) An institution that satisfies the requirements of subdivision
(b) shall comply with all of the following:
(1) Notify students seeking to enroll in the institution, in
writing, prior to the execution of the student's enrollment
agreement, that the institution's approval to offer a degree program
is contingent upon the institution being subsequently accredited.
(2) A visiting committee, empaneled by the bureau pursuant to
Section 94882, shall review the institution by January 1, 2017, and
determine if the institution is likely to achieve full accreditation
by July 1, 2020. If the visiting committee finds the institution
deficient in its accreditation plan, the bureau may prohibit the
institution from enrolling new students in its degree program or
programs, and require the execution of a teach-out plan for its
enrolled students.
(d) (1) The bureau may, upon the submission of sufficient evidence
that an unaccredited institution is making strong progress toward
obtaining accreditation, grant an institution's request for an
extension of time, not to exceed two years, to obtain
pre-accreditation, accreditation candidacy, or accreditation.
(2) Evidence submitted to the bureau pursuant to paragraph (1)
shall include, but is not limited to, an amended accreditation plan
identifying why pre-accreditation, accreditation candidacy, or
accreditation outlined in the original plan submitted to the bureau
was not achieved, steps the institution is taking to comply with this
section, and documentation from an accrediting agency demonstrating
the institution's ability to achieve pre-accreditation, accreditation
candidacy, or accreditation.
(d)
( e) Any institution that fails to comply
with the requirements of this section by the dates provided, as
required, shall have its approval to operate automatically suspended
on the applicable date. The bureau shall issue an order suspending
the institution and that suspension shall not be lifted until the
institution complies with the requirements of this section. A
suspended institution shall not enroll new students in any of its
degree programs, and shall execute a teach-out plan for its enrolled
students.
(e)
( f) The bureau shall adopt emergency
regulations for purposes of implementing this section. The adoption
of these regulations shall be deemed to be an emergency and necessary
for the immediate preservation of the public peace, health and
safety, or general welfare for purposes of Sections 11346.1 and
11349.6 of the Government Code. These emergency regulations shall
become law through the regular rulemaking process within one year of
the enactment of this section.
(f)
( g) This section shall remain in effect
until January 1, 2021, and as of that date is repealed, unless a
later enacted statute, that is enacted before January 1, 2021,
deletes or extends that date.
SEC. 8. Section 94885.5 of the
Education Code is amended to read:
94885.5. (a) If an institution that has not been accredited by an
accrediting agency recognized by the United States Department of
Education seeks to offer one or more degree programs, the institution
shall satisfy the following requirements in order to be issued a
provisional approval to operate from the bureau:
(1) The institution may not offer more than two degree programs
during the term of its provisional approval to operate.
(2) The institution shall submit an accreditation plan, approved
by the bureau, for the institution to become fully accredited within
five years of issuance of its provisional approval to operate. The
plan shall include, at a minimum, identification of an accreditation
agency recognized by the United States Department of Education, from
which the institution plans to seek accreditation, and outline the
process by which the institution will achieve accreditation candidacy
or pre-accreditation within two years, and full accreditation within
five years, of issuance of its provisional approval.
(3) The institution shall submit to the bureau all additional
documentation the bureau deems necessary to determine if the
institution will become fully accredited within five years of
issuance of its provisional approval to operate.
(b) If an institution is granted a provisional approval to operate
pursuant to subdivision (a), the following is required:
(1) Students seeking to enroll in that institution shall be
notified in writing by the institution, prior to the execution of the
student's enrollment agreement, that the institution's approval to
operate is contingent upon it being subsequently accredited.
(2) Within the first two years of issuance of the provisional
approval, a visiting committee, empaneled by the bureau pursuant to
Section 94882, shall review the institution's application for
approval and its accreditation plan, and make a recommendation to the
bureau regarding the institution's progress to achieving full
accreditation.
(3) The institution shall provide evidence of accreditation
candidacy or pre-accreditation within two years of issuance of its
provisional approval, and evidence of accreditation within five years
of issuance of its provisional approval, with the scope of that
accreditation covering the offering of at least one degree program.
(c) An institution required to comply with this section that fails
to do so by the dates provided, as required, shall have its
provisional approval to operate automatically suspended on the
applicable date. The bureau shall issue an order suspending the
institution and that suspension shall not be lifted until the
institution complies with the requirements of this section. A
suspended institution shall not enroll new students in any of its
degree programs and shall execute a teach-out plan for its enrolled
students.
(d) The bureau may grant an institution's request for an extension
of time, not to exceed two years, to obtain pre-accreditation,
accreditation candidacy, or accreditation pursuant to the
requirements outlined in subdivision (d) of Section 94885.1.
(d)
( e) An institution issued a provisional
approval under this section is required to comply with all other laws
and regulations.
(e)
( f) The bureau shall adopt emergency
regulations for purposes of implementing this section. The adoption
of these regulations shall be deemed to be an emergency and necessary
for the immediate preservation of the public peace, health and
safety, or general welfare for purposes of Sections 11346.1 and
11349.6 of the Government Code. These emergency regulations shall
become law through the regular rulemaking process within one year of
the enactment of this section.
SEC. 9. Section 94899 of the Education
Code is amended to read:
94899. If an institution offers an educational program in a
profession, occupation, trade, or career field that requires
licensure in this state, licensure, including
required certification or registration, in this state, the
institution shall have an educational program approval from the
appropriate state licensing licensing,
certifying, or registration agency to conduct that educational
program in order that a student who completes the educational
program, except as provided in Section 94905, is eligible to sit for
any required licensure examination.
examination or meet the requirements for certification or
registration.
SEC. 10. Section 94905 of the Education
Code is amended to read:
94905. (a) During the enrollment process, an institution offering
educational programs designed to lead to positions in a profession,
occupation, trade, or career field requiring licensure
licensure, including required certification or
registration, in this state shall exercise reasonable care to
determine if the student will not be eligible to obtain
licensure licensure, including required certification
or registration, in the profession, occupation, trade, or
career field at the time of the student's graduation and shall
provide all students enrolled in those programs with a written copy
of the requirements for licensure licensure,
including required certification or registration, established
by the state, including any applicable course requirements
established by the state. An institution shall provide all
students enrolled in these educational programs with information
about voluntary certification or registration being the preferred
industry practice. If the minimum course requirements of the
institution exceed the minimum requirements for state
licensure, licensure, as defined in Section 94848,
the institution shall disclose this information, including a
list of those courses that are not required for state
licensure. licensure, as defined in Section 94848.
The institution shall not execute an enrollment agreement with
a student that is known to be ineligible for licensure, as
defined in Section 94848, unless the student's stated objective
is other than licensure. licensure, as
defined in Section 94848.
(b) During the enrollment process, an institution may discuss
internships and student jobs available to the student during the
student's attendance at the institution. If the institution discusses
internships and student jobs, the institution shall disclose the
number of requests for internship and student job placement
assistance received by the institution during the immediately
preceding calendar year and the number of actual placements during
that year.
SEC. 11. Section 94909 of the Education
Code is amended to read:
94909. (a) Except as provided in subdivision (d), prior to
enrollment, an institution shall provide a prospective student,
either in writing or electronically, with a school catalog
containing, at a minimum, all of the following:
(1) The name, address, telephone number, and, if applicable,
Internet Web site address of the institution.
(2) Except as specified in Article 2 (commencing with Section
94802), a statement that the institution is a private institution and
that it is approved to operate by the bureau.
(3) The following statements:
(A) "Any questions a student may have regarding this catalog that
have not been satisfactorily answered by the institution may be
directed to the Bureau for Private Postsecondary Education at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(B) "As a prospective student, you are encouraged to review this
catalog prior to signing an enrollment agreement. You are also
encouraged to review the School Performance Fact Sheet, which must be
provided to you prior to signing an enrollment agreement."
(C) "A student or any member of the public may file a complaint
about this institution with the Bureau for Private Postsecondary
Education by calling (toll-free telephone number) or by completing a
complaint form, which can be obtained on the bureau's Internet Web
site (Internet Web site address)."
(4) The address or addresses where class sessions will be held.
(5) A description of the programs offered and a description of the
instruction provided in each of the courses offered by the
institution, the requirements for completion of each program,
including required courses, any final tests or examinations, any
required internships or externships, and the total number of credit
hours, clock hours, or other increments required for completion.
(6) If the educational program is designed to lead to positions in
a profession, occupation, trade, or career field requiring licensure
in this state, a notice to that effect and a list of the
requirements for eligibility for licensure.
(7) Information regarding the faculty and their qualifications.
(8) A detailed description of institutional policies in the
following areas:
(A) Admissions policies, including the institution's policies
regarding the acceptance of credits earned at other institutions or
through challenge examinations and achievement tests, admissions
requirements for ability-to-benefit students, and a list describing
any transfer or articulation agreements between the institution and
any other college or university that provides for the transfer of
credits earned in the program of instruction. If the institution has
not entered into an articulation or transfer agreement with any other
college or university, the institution shall disclose that fact.
(B) Cancellation, withdrawal, and refund policies, including an
explanation that the student has the right to cancel the enrollment
agreement and obtain a refund of charges paid through attendance at
the first class session, or the seventh day after enrollment,
whichever is later. The text shall also include a description of the
procedures that a student is required to follow to cancel the
enrollment agreement or withdraw from the institution and obtain a
refund consistent with the requirements of Article 13 (commencing
with Section 94919).
(C) Probation and dismissal policies.
(D) Attendance policies.
(E) Leave-of-absence policies.
(9) The schedule of total charges for a period of attendance and
an estimated schedule of total charges for the entire educational
program.
(10) A statement reporting whether the institution participates in
federal and state financial aid programs, and if so, all consumer
information that is required to be disclosed to the student pursuant
to the applicable federal and state financial aid programs.
(11) A statement specifying that, if a student obtains a loan to
pay for an educational program, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund, and that, if the student has received
federal student financial aid funds, the student is entitled to a
refund of the moneys not paid from federal student financial aid
program funds.
(12) A statement specifying whether the institution has a pending
petition in bankruptcy, is operating as a debtor in possession, has
filed a petition within the preceding five years, or has had a
petition in bankruptcy filed against it within the preceding five
years that resulted in reorganization under Chapter 11 of the United
States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13) If the institution provides placement services, a description
of the nature and extent of the placement services.
(14) A description of the student's rights and responsibilities
with respect to the Student Tuition Recovery Fund. This statement
shall specify that it is a state requirement that a student who pays
his or her tuition is required to pay a state-imposed assessment for
the Student Tuition Recovery Fund. This statement shall also describe
the purpose and operation of the Student Tuition Recovery Fund and
the requirements for filing a claim against the Student Tuition
Recovery Fund.
(15) The following statement:
"NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED
AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is
at the complete discretion of an institution to which you may seek
to transfer. Acceptance of the (degree, diploma, or certificate) you
earn in (name of educational program) is also at the complete
discretion of the institution to which you may seek to transfer. If
the (credits or degree, diploma, or certificate) that you earn at
this institution are not accepted at the institution to which you
seek to transfer, you may be required to repeat some or all of your
coursework at that
institution. For this reason you should make certain that your
attendance at this institution will meet your educational goals. This
may include contacting an institution to which you may seek to
transfer after attending (name of institution) to determine if your
(credits or degree, diploma, or certificate) will transfer."
(16) A statement specifying whether the institution, or any of its
degree programs, are accredited by an accrediting agency recognized
by the United States Department of Education. If the institution is
unaccredited and offers an associate, baccalaureate, master's, or
doctoral degree, or is accredited and offers an unaccredited program
for an associate, baccalaureate, master's, or doctoral degree, the
statement shall disclose the known limitations of the degree program,
including, but not limited to, all of the following:
(A) Whether a graduate of the degree program will be eligible to
sit for the applicable licensure exam in California and other
states. states or become certified or
registered as required for the applicable profession, occupation,
trade, or career field in California.
(B) A degree program that is unaccredited or a degree from an
unaccredited institution is not recognized for some employment
positions, including, but not limited to, positions with the State of
California.
(C) That a student enrolled in an unaccredited institution is not
eligible for federal financial aid programs.
(b) If the institution has a general student brochure, the
institution shall provide that brochure to the prospective student
prior to enrollment. In addition, if the institution has a
program-specific student brochure for the program in which the
prospective student seeks to enroll, the institution shall provide
the program-specific student brochure to the prospective student
prior to enrollment.
(c) An institution shall provide the school catalog to any person
upon request. In addition, if the institution has student brochures,
the institution shall disclose the requested brochures to any
interested person upon request.
(d) An accredited institution is not required to provide a School
Performance Fact Sheet to a prospective student who is not a
California resident, not residing in California at the time of his or
her enrollment, and enrolling in an accredited distance learning
degree program offered by the institution, if the institution
complies with all federal laws, the applicable laws of the state
where the student is located, and other appropriate laws, including,
but not limited to, consumer protection and student disclosure
requirements.
SEC. 12. The heading of Article 14 (commencing
with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3
of the Education Code is amended to read:
Article 14. Student Tuition Recovery Fund
Office of Student Assistance and Relief
SEC. 13. Section 94922.5 is added, immediately
preceding Section 94923, to the Education Code
, to read:
94922.5. (a) The Office of Student Assistance and Relief is
hereby established in order to promote the success of students
attending private postsecondary educational institutions.
(b) Duties of the office include, but are not limited to,
providing assistance to private postsecondary students, conducting
proactive outreach to these students, administering the Student
Tuition Recovery Fund, and overseeing the registration of
institutions pursuant to Section 94952. The office shall serve as a
primary point of contact to address the needs of private
postsecondary education students.
(c) The office shall establish and maintain an Internet Web site
to provide information to private postsecondary students about their
rights and protections available to them. The office shall provide
information on its Internet Web site about free services available to
private postsecondary students offered by local nonprofit community
service organizations with demonstrated experience in assisting
students in areas including, but not limited to, legal services and
student loan matters. Each local nonprofit community service
organization shall be a 501(c)(3) tax-exempt organization in good
standing with the Internal Revenue Service and in compliance with all
applicable laws and requirements.
(d) The office shall work, in consultation with state and federal
agencies, including, but not limited to, the Student Aid Commission,
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 the extent of options and resources available to private
postsecondary students and criteria that indicates what additional
steps state agencies need to take to ensure the protection of the
public from the closure of a private postsecondary educational
institution.
SEC. 14. 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
an institution not exempt from this article pursuant to
Article 4 (commencing with 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 Fund
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 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
June 20, 2014, or withdrew within 120 days of that date or any
greater period determined by the bureau pursuant to this section.
(4)
(5 ) A student to whom an institution has
been ordered to pay a refund by the bureau but has failed to do so.
(5)
( 6) 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)
( 7) 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.
(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 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
For purposes of this section, "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.
SEC. 15. Section 94923.5 is added to the
Education Code , to read:
94923.5. It is the intent of the Legislature to require, to the
extent authorized by federal law, a private postsecondary educational
institution that does not maintain a physical presence in California
and offers distance education to California students to file a
surety bond for the benefit of its California students who suffer
economic loss.
SEC. 16. Section 94935.5 is added to the
Education Code , to read:
94935.5. (a) Bureau staff who, during an inspection of an
institution, detect a violation of this chapter, or regulations
adopted pursuant to this chapter, that is not a minor violation, may
issue the institution a citation before leaving the institution.
(b) The citation may contain either or both of the following:
(1) An order of abatement that may require an institution to
demonstrate how future compliance with this chapter, or regulations
adopted pursuant to this chapter, will be accomplished.
(2) Notwithstanding Section 125.9 of the Business and Professions
Code, an administrative fine not to exceed five thousand dollars
($5,000) for each violation. Assessment of the administrative fine
shall be based on all of the following considerations:
(A) The nature and seriousness of the violation.
(B) The persistence of the violation.
(C) The good faith of the institution.
(D) The history of previous violations.
(E) The purposes of this chapter.
(F) The potential harm to students.
(c) (1) The citation shall be in writing and describe the nature
of the violation and the specific provision of this chapter, or
regulation adopted pursuant to this chapter, that is alleged to have
been violated.
(2) The citation shall inform the institution of its right to
request, in writing, a hearing within 30 days of the issuance of the
citation.
(3) If a hearing is requested, the bureau shall select an informal
hearing pursuant to Article 10 (commencing with Section 11445.10) of
Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government
Code or a formal hearing pursuant to Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(4) If a hearing is not requested, payment of the administrative
fine is due 30 days from the date of service and shall not constitute
an admission of the violation charged.
(5) If a hearing is conducted and payment of an administrative
fine is ordered, the administrative fine is due 30 days from when the
final order is entered.
(6) The bureau may enforce the administrative fine as if it were a
money judgment pursuant to Title 9 (commencing with Section 680.010)
of Part 2 of the Code of Civil Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary Education Administration Fund.
SEC. 17. Section 94944 of the Education
Code is amended to read:
94944. Notwithstanding any other provision of law, the bureau
shall cite any person, and that person shall be subject to a fine not
to exceed fifty thousand dollars ($50,000),
one hundred thousand dollars ($100,000), for operating an
institution without proper approval to operate issued by the bureau
pursuant to this chapter.
SEC. 18. Article 20.5 (commencing with Section
94949.5) is added to Chapter 8 of Part 59 of Division 10 of Title 3
of the Education Code , to read:
Article 20.5. Enforcement Monitor
94949.5. (a) (1) The director shall appoint an enforcement
monitor no later than March 1, 2017. The director may retain a person
for this position by a personal services contract. In this
connection, the Legislature finds, pursuant to Section 19130 of the
Government Code, that this is a new state function.
(2) The director shall supervise the enforcement monitor and may
terminate or dismiss him or her from this position. If the monitor is
terminated or dismissed, the director shall appoint a replacement
monitor within two months.
(3) The monitoring duty of the enforcement monitor shall be on a
continuing basis for a period of no more than two years from the date
of the initial enforcement monitor's appointment.
(b) The enforcement monitor shall monitor and evaluate the bureau'
s enforcement efforts, with specific concentration on the adequacy of
bureau compliance inspections, handling and processing of student
complaints, and timely application of sanctions or discipline imposed
on institutions and persons in order to protect the public.
(c) The enforcement monitor shall exercise no authority over the
bureau's management or staff; however, the bureau and its staff shall
cooperate with the monitor and shall provide data, information, and
files as requested by the monitor to perform all of his or her
duties.
(d) The director shall assist the enforcement monitor in the
performance of his or her duties, and the monitor shall have the same
investigative authority as the director.
(e) The director shall specify additional duties of the
enforcement monitor.
(f) (1) The enforcement monitor shall submit to the department and
the Legislature, in compliance with Section 9795 of the Government
Code, an initial written report of his or her findings and
conclusions no later than July 1, 2018, and a subsequent written
report no later than November 1, 2018. The enforcement monitor shall
be available to make oral reports to the department or the
Legislature if requested to do so. The monitor may also provide
additional information to either the department or the Legislature at
his or her discretion or at the request of either the department or
the Legislature. The monitor shall make his or her reports available
to the public or the media. The monitor shall make every effort to
provide the bureau with an opportunity to reply to any facts,
findings, issues, or conclusions made in his or her reports to the
department or the Legislature with which the bureau may disagree.
(2) The enforcement monitor shall issue a final written report
before January 1, 2019. The final report shall include final findings
and conclusions on the topics addressed in the initial report
submitted by the monitor pursuant to paragraph (1).
(g) The bureau shall pay for all of the costs associated with the
employment of the enforcement monitor.
94949.6. This article shall remain in effect only until March 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before March 1, 2019, deletes or extends
that date.
SEC. 19. Chapter 8.1 (commencing with Section
94952) is added to Part 59 of Division 10 of Title 3 of the
Education Code , to read:
CHAPTER 8.1. PRIVATE POSTSECONDARY EDUCATION OFFERED THROUGH
DISTANCE LEARNING
94952. To the extent authorized by federal law, a private
postsecondary educational institution that does not maintain a
physical presence in California and offers distance education to
California students shall register with the bureau and file a surety
bond in compliance with Section 94923.5.
SECTION 1. Section 94885 of the Education Code
is amended to read:
94885. (a) The bureau shall adopt by regulation minimum operating
standards for an institution that shall reasonably ensure that all
of the following occur:
(1) The content of each educational program can achieve its stated
objective.
(2) The institution maintains specific written standards for
student admissions for each educational program and those standards
are related to the particular educational program.
(3) The facilities, instructional equipment, and materials are
sufficient to enable students to achieve the educational program's
goals.
(4) The institution maintains a withdrawal policy and provides
refunds.
(5) The directors, administrators, and faculty are properly
qualified.
(6) The institution is financially sound and capable of fulfilling
its commitments to students.
(7) That, upon satisfactory completion of an educational program,
the institution gives students a document signifying the degree or
diploma awarded.
(8) Adequate records and standard transcripts are maintained and
are available to students.
(9) The institution is maintained and operated in compliance with
this chapter and all other applicable ordinances and laws.
(b) Except as provided in Section 94885.1, an institution offering
a degree must satisfy one of the following requirements:
(1) Accreditation by an accrediting agency recognized by the
United States Department of Education, with the scope of that
accreditation covering the offering of at least one degree program by
the institution.
(2) An accreditation plan, approved by the bureau, for the
institution to become fully accredited within five years of the
bureau's issuance of a provisional approval to operate to the
institution. The provisional approval to operate to an unaccredited
degree-offering institution shall be in compliance with Section
94885.5.