Amended in Assembly June 16, 2016

Amended in Senate April 6, 2016

Senate Bill No. 1192

Introduced by Senator Hill

(Principal coauthors: Assembly Members Medina and Salas)

February 18, 2016

An act to amend Sections 94809, begin delete 94848, end delete begin insert 94874, end insert 94874.2, begin insert 94874.5, 94874.7, 94874.8, end insert 94878, begin delete 94879, end delete begin insert 94880, end insert 94885, 94885.1, 94885.5, begin delete 94899, end delete 94905, 94909, 94923, begin insert 94932, 94936, 94937, end insert and 94944 of, begin delete to amend the heading of Article 14 (commencing with Section 94923) of Chapter 8 of Part 59 of Division 10 of Title 3 of, end delete to add Sections begin delete 94922.5, 94923.5, and 94935.5 end delete begin insert 94801.5 and 94934.5 end insert to, begin delete to add Chapter 8.1 (commencing with Section 94952) to Part 59 of Division 10 of Title 3 of, and end delete to add and repeal Article 20.5 (commencing with Section 94949.5) begin insert and Article 20.6 (commencing with Section 94949.7) end insert to Chapter 8 of Part 59 of Division 10 of Title 3 of, begin insert and to repeal Section 94879 of, end insert the Education Code, relating to private postsecondary 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 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. begin delete 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. end delete 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 begin delete register with the bureau and file a surety bond, as specified. end delete begin insert comply with specified requirements, including register with the bureau. The bill would require an institution with approval to operate that knows or reasonably should know that it is being investigated, is the subject of a judgment, a regulatory action, or increased oversight or monitoring by, or is the subject of a settlement with, an oversight entity other than the bureau to report it to the bureau, as specified. end insert

begin insert

This bill would establish an Office of Student Assistance and Relief within the department to advance and promote the rights of private postsecondary educational institution students, as specified.

end insert begin insert

This bill would appropriate the sum of $1,300,000 from the Student Tuition Recovery Fund to the office for providing grants to eligible nonprofit community service organizations to assist eligible students affected by the closure of Corinthian Colleges, Inc., as defined, with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. The bill would require the office to solicit grant applications from eligible nonprofit community service organizations and select one or more of these organizations deemed to be qualified. The bill would require the grantee to submit specified information to the office on a quarterly basis and would require the office to make these reports available to the Legislature and the department upon request. The bill would require the office to provide the Legislature and the department a final report summarizing all the information submitted to it by grantees, promptly following the time when all funds are expended by the grantees, or by January 1, 2020, whichever is earlier.

end insert

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. begin delete 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. end delete

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 94801.5 is added to the end insert begin insert Education Code end insert begin insert ,
to read: end insert

begin insert

begin insert 94801.5. end insert   

(a) Effective July 1, 2017, a private entity with no
physical presence in this state that provides postsecondary
education to California students for an institutional charge shall
comply with all of the following:

(1) The institution shall register with the bureau and provide
information required by the bureau. The bureau shall adopt, by
regulation, a process and procedure whereby the institution may
apply for and obtain registration.

‎(2) The institution shall be accredited.

(3) The institution shall be approved to operate in the state
where the institution is incorporated.

(4) The institution shall comply with the requirements of the
Student Tuition Recovery Fund, established in Article 14
(commencing with Section 94923), for its California students.

(5) The institution shall provide a disclosure, approved by the
bureau, to its California students on their rights and obligations
under the Student Tuition Recovery Fund.

(b) This section does not apply to nonpublic higher education
institutions that grant undergraduate degrees, graduate degrees,
or both, and that are formed as nonprofit corporations and are
accredited by an agency recognized by the United States
Department of Education.

(c) An institution described in subdivision (a) that fails to comply
with this section is not authorized to operate in this state.

(d) 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 by January 1, 2018.

end insert

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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, begin insert and filed an application
to operate by August 2, 2010, end insert 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.

begin delete

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.

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 94874 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94874.  

Except as provided in begin delete Section 94874.2, end delete begin insert Sections 9487 end insert begin insert 4.2 end insert
begin insert and 94874.7, end insert the following are exempt from this chapter:

(a) An institution that offers solely avocational or recreational
educational programs.

(b) (1) An institution offering educational programs sponsored
by a bona fide trade, business, professional, or fraternal
organization, solely for that organization’s membership.

(2) (A) Except as provided in subparagraph (B), a bona fide
organization, association, or council that offers preapprenticeship
training programs, on behalf of one or more Division of
Apprenticeship Standards-approved labor-management
apprenticeship programs that satisfies one of the following
conditions:

(i) It is not on the Eligible Training Provider List established
and maintained by the California Workforce Investment Board
but has met the requirements for placement on the list.

(ii) It is on the Eligible Training Provider List established and
maintained by the California Workforce Investment Board and
meets the requirements for continued listing.

(B) If an organization, association, or council has been removed
from the Eligible Training Provider List established and maintained
by the California Workforce Investment Board for failure to meet
performance standards, it is not exempt until it meets all applicable
performance standards.

(c) A postsecondary educational institution established, operated,
and governed by the federal government or by this state or its
political subdivisions.

(d) An institution offering either of the following:

(1) Test preparation for examinations required for admission to
a postsecondary educational institution.

(2) Continuing education or license examination preparation,
if the institution or the program is approved, certified, or sponsored
by any of the following:

(A) A government agency, other than the bureau, that licenses
persons in a particular profession, occupation, trade, or career field.

(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, occupation, trade, or career field.

(C) A bona fide trade, business, or professional organization.

(e) (1) An institution owned, controlled, and operated and
maintained by a religious organization lawfully operating as a
nonprofit religious corporation pursuant to Part 4 (commencing
with Section 9110) of Division 2 of Title 1 of the Corporations
Code, that meets all of the following requirements:

(A) The instruction is limited to the principles of that religious
organization, or to courses offered pursuant to Section 2789 of
Business and Professions Code.

(B) The diploma or degree is limited to evidence of completion
of that education.

(2) An institution operating under this subdivision shall offer
degrees and diplomas only in the beliefs and practices of the
church, religious denomination, or religious organization.

(3) An institution operating under this subdivision shall not
award degrees in any area of physical science.

(4) Any degree or diploma granted under this subdivision shall
contain on its face, in the written description of the title of the
degree being conferred, a reference to the theological or religious
aspect of the degree’s subject area.

(5) A degree awarded under this subdivision shall reflect the
nature of the degree title, such as “associate of religious studies,”
“bachelor of religious studies,” “master of divinity,” or “doctor of
divinity.”

(f) An institution that does not award degrees and that solely
provides educational programs for total charges of two thousand
five hundred dollars ($2,500) or less when no part of the total
charges is paid from state or federal student financial aid programs.
The bureau may adjust this cost threshold based upon the California
Consumer Price Index and post notification of the adjusted cost
threshold on its Internet Web site, as the bureau determines,
through the promulgation of regulations, that the adjustment is
consistent with the intent of this chapter.

(g) A law school that is accredited by the Council of the Section
of Legal Education and Admissions to the Bar of the American
Bar Association or a law school or law study program that is
subject to the approval, regulation, and oversight of the Committee
of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the
Business and Professions Code.

(h) A nonprofit public benefit corporation that satisfies all of
the following criteria:

(1) Is qualified under Section 501(c)(3) of the United States
Internal Revenue Code.

(2) Is organized specifically to provide workforce development
or rehabilitation services.

(3) Is accredited by an accrediting organization for workforce
development or rehabilitation services recognized by the
Department of Rehabilitation.

(i) An institution that is accredited by the Accrediting
Commission for Senior Colleges and Universities, Western
Association of Schools and Colleges, or the Accrediting
Commission for Community and Junior Colleges, Western
Association of Schools and Colleges.

begin delete

(j) An institution that satisfies all of the following criteria:

(1) The institution has been accredited, for at least 10 years, by
an accrediting agency that is recognized by the United States
Department of Education.

(2) The institution has operated continuously in this state for at
least 25 years.

(3) During its existence, the institution has not filed for
bankruptcy protection pursuant to Title 11 of the United States
Code.

(4) The institution’s cohort default rate on guaranteed student
loans does not exceed 10 percent for the most recent three years,
as published by the United States Department of Education.

(5) The institution maintains a composite score of 1.5 or greater
on its equity, primary reserve, and net income ratios, as provided
under Section 668.172 of Title 34 of the Code of Federal
Regulations.

(6) The institution provides a pro rata refund of unearned
institutional charges to students who complete 75 percent or less
of the period of attendance.

(7) The institution provides to all students the right to cancel
the enrollment agreement and obtain a refund of charges paid
through attendance at the second class session, or the 14th day
after enrollment, whichever is later.

(8) The institution submits to the bureau copies of its most recent
IRS Form 990, the institution’s Integrated Postsecondary Education
Data System Report of the United States Department of Education,
and its accumulated default rate.

(9) The institution is incorporated and lawfully operates as a
nonprofit public benefit corporation pursuant to Part 2
(commencing with Section 5110) of Division 2 of Title 1 of the
Corporations Code and is not managed or administered by an entity
for profit.

(k)

end delete

begin insert ( end insert begin insert j) end insert  Flight instruction providers or programs that provide flight
instruction pursuant to Federal Aviation Administration regulations
and meet both of the following criteria:

(1) The flight instruction provider or program does not require
students to enter into written or oral contracts of indebtedness.

(2) The flight instruction provider or program does not require
or accept prepayment of instruction-related costs in excess of two
thousand five hundred dollars ($2,500).

begin delete SEC. 3. end delete

begin insert SEC. 4. end insert   

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, shall not be exempt from this
chapter.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 94874.5 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94874.5.  

begin delete Notwithstanding Sections 94874 and 94874.1, an end delete begin insert An end insert
institution that is otherwise exempt from this chapter shall comply
with the requirements of Section 94927.5.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 94874.7 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94874.7.  

The bureau shall establish, by regulation, a process
pursuant to which an institution that is exempt from this chapter
may request, and obtain, from the bureau verification that the
institution is exempt. begin insert The verification shall be valid for a period
of up to two years, as long as the institution maintains full
compliance with the requirements of the exemption. end insert The bureau
shall establish a reasonable fee to reimburse the bureau’s costs
associated with the implementation of this section.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 94874.8 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94874.8.  

(a) An institution exempt from all or part of this
chapter pursuant to subdivision (i) begin delete or (j) end delete of Section 94874 or
Section 94874.1 may apply to the bureau for an approval to operate
pursuant to this section, but only subject to all of the following
provisions:

(1) The bureau may approve the operation of an institution that
is exempt from all or part of this chapter as specified above in
accordance with the authority granted pursuant to Article 6
(commencing with Section 94885). Upon issuing an approval to
operate to an institution pursuant to this section, the bureau is
authorized to regulate that institution through the full set of powers
granted, and duties imposed, by this chapter, as those powers and
duties would apply to an institution that is not exempt from this
chapter.

(2) Notwithstanding any other law, upon issuance of an approval
to operate pursuant to this section, the institution is no longer
eligible for exemption, from the provisions of this chapter pursuant
to subdivision (i) begin delete or (j) end delete of Section 94874 or Section 94874.1, unless
authorized by subsequent legislation.

(3) Upon issuance of an approval to operate pursuant to this
section, an institution is subject to all provisions of this chapter,
and any regulations adopted pursuant to this chapter, that apply to
an institution subject to this chapter, except as expressly provided
in paragraph (4).

(4) (A) With respect to the placement and salary or wage data
required to be collected, calculated, and reported by Article 16
(commencing with Section 94928), an institution issued an
approval to operate pursuant to this section is not required to report
on its first School Performance Fact Sheet any data from the period
prior to the date of the issuance of the approval to operate that the
institution was not required to collect and does not have available
to it. An institution shall, however, report available data collected
and calculated in accordance with this chapter and applicable
regulations, regardless of the purpose for which the data was
collected. If the required data is unavailable, the institution shall
also disclose the unavailability of the data on all documents
required by this chapter and regulations adopted pursuant to this
chapter. Upon receiving an approval to operate pursuant to this
section, an institution shall commence to collect and calculate all
information necessary to comply with Article 16 (commencing
with Section 94928).

(B) An institution receiving an approval to operate pursuant to
this section shall provide to prospective students the School
Performance Fact Sheet, file that fact sheet with the bureau, and
post it on the institution’s Internet Web site no later than the first
August 1 after the institution is approved to operate and no later
than August 1 of each year thereafter. These School Performance
Fact Sheets shall report data for the previous two calendar years
based upon the number of students who began the program or the
number of graduates for each reported calendar year. If two
calendar years have not passed since the issuance of the approval
to operate by the August 1 deadline for the School Performance
Fact Sheet, unless data for two years is available, the institution
shall report the required data for the period subsequent to the date
of the issuance of the notice of approval.

(b) An institution exempt from all or part of this chapter pursuant
to subdivision (i) begin delete or (j) end delete of Section 94874 or Section 94874.1 that
was approved to operate by the bureau before the effective date
of this section shall be deemed to have been approved pursuant to
this section.

begin delete SEC. 4. end delete

begin insert SEC. 8. end insert   

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 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.”

begin delete

SEC. 5.  

Section 94879 of the Education Code is amended to
read:

94879.  

The bureau shall conduct an outreach program to
secondary school 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.

end delete

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 94879 of the end insert begin insert Education Code end insert begin insert is repealed. end insert

begin delete

94879.  

The bureau shall conduct an outreach program to
secondary school pupils 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.

end delete

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 94880 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94880.  

(a) There is within the bureau a begin delete 14-member end delete begin insert 12-member end insert
advisory committee. begin delete On or before July 1, 2015, the end delete begin insert The end insert members
of the committee shall be appointed as follows:

(1) Three members, who shall have a demonstrated record of
advocacy on behalf of consumers, of which the director, the Senate
Committee on Rules, and the Speaker of the Assembly shall each
appoint one member.

(2) Two members, who shall be current or past students of
institutions, appointed by the director.

(3) Three members, who shall be representatives of institutions,
appointed by the director.

begin delete

(4) Two members, who shall be employers who hire students,
appointed by the director.

end delete begin delete

(5)

end delete

begin insert ( end insert begin insert 4) end insert  One public member appointed by the Senate Committee on
Rules.

begin delete

(6)

end delete

begin insert ( end insert begin insert 5) end insert  One public member appointed by the Speaker of the
Assembly.

begin delete

(7)

end delete

begin insert ( end insert begin insert 6) end insert  Two nonvoting, ex officio members as follows:

(A) The chair of begin delete the end delete begin insert a end insert policy committee of the Assembly with
jurisdiction over legislation relating to the bureau begin delete or designee end delete
appointed by the Speaker of the Assembly. begin insert The chair may
designate a representative for any meeting or meetings he or she
is unable to attend. end insert

(B) The chair of begin delete the end delete begin insert a end insert policy committee of the Senate with
jurisdiction over legislation relating to the bureau begin delete or designee end delete
appointed by the Senate Committee on Rules. begin insert The chair may
designate a representative for any meeting or meetings he or she
is unable to attend. end insert

(b) (1) A begin delete public end delete member begin insert appointed pursuant to paragraph (2),
(4), or (5) of subdivision (a) end insert shall not, either at the time of his or
her appointment or during his or her tenure in office, have any
financial interest in any organization currently or previously subject
to regulation by the bureau, be a close family member of an
employee, officer, or the director of any institution subject to
regulation by the bureau, or currently have, or previously have
had, a business relationship, in the five years preceding his or her
appointment, with any institution subject to regulation by the
bureau.

(2) A begin delete public end delete member begin insert appointed pursuant to paragraph (2), (4),
or (5) of subdivision (a) end insert shall not, within the five years immediately
preceding his or her appointment, have engaged in pursuits on
behalf of an institution or institutional accreditor or have provided
representation to the postsecondary educational industry or a
profession regulated by the bureau, if he or she is employed in the
industry or a member of the profession, respectively, and he or
she shall not engage in those pursuits or provide that representation
during his or her term of office.

(c) The advisory committee shall examine the oversight
functions and operational policies of the bureau and advise the
bureau with respect to matters relating to private postsecondary
education and the administration of this chapter, including annually
reviewing the fee schedule and the equity of the schedule relative
to the way institutions are structured, and the licensing and
enforcement provisions of this chapter. The advisory committee
shall make recommendations with respect to policies, practices,
and regulations relating to private postsecondary education, and
shall provide any assistance as may be requested by the bureau.

(d) The bureau shall actively seek input from, and consult with,
the advisory committee regarding the development of regulations
to implement this chapter prior to the adoption, amendment, or
repeal of its regulations, and provide the advisory committee with
sufficient time to review and comment on those regulations. The
bureau shall take into consideration and respond to all feedback
provided by members of the advisory committee.

(e) The bureau chief shall attend all advisory committee
meetings and shall designate staff to provide ongoing
administrative support to the advisory committee.

(f) Until January 1, 2017, the director shall personally attend,
and testify and answer questions at, each meeting of the advisory
committee.

begin insert

(g) The ombudsperson of the Office of Student Assistance and
Relief established in Article 20.6 (commencing with Section
94949.7), appointed pursuant to Section 94949.71, shall attend,
and testify and answer questions at, each meeting of the advisory
committee.

end insert begin delete

(g)

end delete

begin insert ( end insert begin insert h) end insert  The advisory committee shall have the same access to
records within the Department of Consumer Affairs related to the
operation and administration of this chapter as do members of
constituent boards of the department in regard to records related
to their functions.

begin delete

(h)

end delete

begin insert ( end insert begin insert i) end insert  Advisory committee meetings shall be subject to the
Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
the Government Code). Advisory committee meeting materials
shall be posted on the Internet. begin insert A majority of the voting members
of the committee shall constitute a quorum for the committee’s
meetings. end insert

begin delete

(i)

end delete

begin insert ( end insert begin insert j) end insert  The advisory committee shall meet at least quarterly and
shall appoint a member of the committee to represent the committee
for purposes of communicating with the Legislature.

begin delete

(j)

end delete

begin insert ( end insert begin insert k) end insert  The Department of Consumer Affairs shall review, and revise
if necessary, the department’s conflicts of interest regulations to
ensure that each advisory committee member is required to disclose
conflicts of interest to the public.

begin delete

  

end delete

begin delete SEC. 6. end delete

begin insert SEC. 11. end insert   

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.

begin delete SEC. 7. end delete

begin insert SEC. 12. end insert   

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 begin delete may, end delete begin insert shall, end insert upon the begin insert timely end insert 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 begin delete obtain
pre-accreditation, accreditation candidacy, or accreditation. end delete begin insert meet
the requirements of this section. end insert

(2) Evidence submitted to the bureau pursuant to paragraph (1)
shall include, but is not limited to, an amended accreditation plan
begin insert adequately end insert identifying why pre-accreditation, accreditation
candidacy, or accreditation outlined in the original plan submitted
to the bureau was not achieved, begin insert active end insert steps the institution is taking
to comply with this section, and documentation from an accrediting
agency demonstrating the institution’s begin insert likely end insert ability to begin delete achieve
pre-accreditation, accreditation candidacy, or accreditation. end delete begin insert meet
the requirements of this section. end insert

begin insert

(3) The bureau may establish policies and procedures to comply
with the requirements in this subdivision. Establishment of these
policies and procedures are exempt from Chapter 3.5 (commencing
with Section 11340), Chapter 4 (commencing with Section 11370),
Chapter 4.5 (commencing with Section 11400), and Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code.

end insert

(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.

(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.

(g)  This section shall remain in effect until January 1, begin delete 2021, end delete
begin insert 2023, end insert and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, begin delete 2021, end delete begin insert 2023, end insert deletes or extends
that date.

begin delete SEC. 8. end delete

begin insert SEC. 13. end insert   

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)  begin insert (1) end insert begin insert   end insert The bureau begin delete may end delete begin insert shall, upon the timely submission of
sufficient evidence that an unaccredited institution is making strong
progress toward obtaining accreditation, end insert grant an institution’s
request for an extension of time, not to exceed two years, to begin delete obtain
pre-accreditation, accreditation candidacy, or accreditation pursuant
to the requirements outlined in subdivision (d) of Section 94885.1. end delete

begin insert meet the end insert begin insert requirements of this section. end insert

begin insert

(2) Evidence submitted to the bureau pursuant to paragraph
(1) shall include, but is not limited to, an amended accreditation
plan adequately identifying why preaccreditation, accreditation
candidacy, or accreditation outlined in the original plan submitted
to the bureau was not achieved, active steps the institution is taking
to comply with this section, and documentation from an accrediting
agency demonstrating the institution’s likely ability to meet the
requirements of this section.

end insert begin insert

(3) The bureau may establish policies and procedures to comply
with the requirements in this subdivision. Establishment of these
policies and procedures are exempt from Chapter 3.5 (commencing
with Section 11340), Chapter 4 (commencing with Section 11370),
Chapter 4.5 (commencing with Section 11400), and Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title
2 of the Government Code.

end insert

(e) An institution issued a provisional approval under this section
is required to comply with all other laws and regulations.

(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.

begin delete

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,
including required certification or registration, in this state, the
institution shall have an educational program approval from the
appropriate 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 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,
including required certification or registration, in this state shall
exercise reasonable care to determine if the student will not be
eligible to obtain 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, 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,
as defined in Section 94848, the institution shall disclose this
information, including a list of those courses that are not required
for state 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, 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.

end delete

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 94905 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

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
in this state shall exercise reasonable care to determine if the
student will not be eligible to obtain licensure 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 established
by the state, including any applicable course requirements
established by the state. If the minimum course requirements of
the institution exceed the minimum requirements for state licensure,
the institution shall disclose this information, including a list of
those courses that are not required for state licensure. The
institution shall not execute an enrollment agreement with a student
that is known to be ineligible for licensure, unless the student’s
stated objective is other than licensure.

(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.

begin insert

(c) During the enrollment process, an institution offering
educational programs designed to lead to positions in a profession,
occupation, trade, or career field where voluntary licensure by a
government agency is available, shall provide its students seeking
to enroll in those programs with a written copy of the requirements
for that voluntary licensure.

end insert

begin delete SEC. 11. end delete

begin insert SEC. 15. end insert   

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 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.

begin delete

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.  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.

end delete

begin delete SEC. 14. end delete

begin insert SEC. 16. end insert   

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
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)  begin insert (1) end insert begin insert   end insert The begin insert bureau shall adopt, by regulation, procedures
governing the administration and maintenance of the end insert Student
Tuition Recovery begin delete Fund end delete begin insert Fund. The fund end insert shall begin insert be used to end insert provide
awards to students who suffer economic loss.

begin delete

The following students, and any other students deemed
appropriate, are eligible for payment from the Student Tuition
Recovery Fund:

end delete begin insert

(2) The following students, and any other students deemed
appropriate, are eligible for payment from the Student Tuition
Recovery Fund:

end insert begin delete

(1)

end delete

begin insert ( end insert begin insert A) end insert  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.

begin delete

(2)

end delete

begin insert ( end insert begin insert B) end insert  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 begin delete discontinued, if the bureau determines there was a
significant decline in the quality or value of that educational
program during that time period. end delete begin insert discontinued. end insert

begin delete

(3)

end delete

begin insert ( end insert begin insert C) end insert  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.

begin delete

(4)

end delete

begin insert ( end insert begin insert D) end insert  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.

begin delete

(5)

end delete

begin insert ( end insert begin insert E) end insert  A student to whom an institution has been ordered to pay a
refund by the bureau but has failed to do so.

begin delete

(6)

end delete

begin insert ( end insert begin insert F) end insert  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.

begin delete

(7)

end delete

begin insert ( end insert begin insert G) end insert  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) 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) 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.

begin insert

(g) Any representation or agreement by a person or entity not
to collect a student loan obligation does not reduce a student’s
eligibility for recovery from the Student Tuition Recovery Fund
or reduce the student’s economic loss, unless the student loan
obligation is forgiven, discharged, or canceled.

end insert begin insert

(h) The bureau shall require a student seeking reimbursement
from the Student Tuition Recovery Fund to file a written application
that shall be received by the bureau no later than four years after
the date of the action that made the student eligible for recovery
from the Student Tuition Recovery Fund.

end insert

begin delete

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.

end delete

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 94932 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94932.  

The bureau shall determine an institution’s compliance
with the requirements of this chapter. The bureau shall have the
power to require reports that institutions shall file with the bureau
in addition to the annual report, to send staff to an institution’s
sites, and to require documents and responses from an institution
to monitor compliance. When the bureau has reason to believe that
an institution may be out of compliance, it shall conduct an
investigation of the institution. If the bureau determines, after
completing begin delete an end delete begin insert a compliance inspection or end insert investigation, that an
institution has violated any applicable law or regulation, the bureau
shall take appropriate action pursuant to this article.

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 94934.5 is added to the end insert begin insert Education Code end insert begin insert , to
read: end insert

begin insert

begin insert 94934.5. end insert   

(a) An institution with an approval to operate that
knows or reasonably should know that it is being investigated by
an oversight entity other than the bureau shall report that
investigation, including the nature of that investigation, to the
bureau within 30 days of the institution’s first knowledge of the
investigation. An institution with an approval to operate that is
the subject of a judgment by, a regulatory action by, increased
oversight or monitoring by, or a settlement with, any oversight
entity other than the bureau shall report it to the bureau within
30 days. Failure to comply with this section may subject the
institution to an administrative citation pursuant to Section 94936.

(b) For the purposes of this section, “investigation” means any
inquiry into possible violations of any applicable laws or
accreditation standards.

(c) For the purposes of this section, “oversight entity” means
any federal government agency, government agency of any state,
or any accrediting agency.

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Section 94936 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94936.  

(a) As a consequence of begin delete an end delete begin insert a compliance inspection
or end insert investigation, and upon a finding that the institution has
committed a violation of this chapter or that the institution has
failed to comply with a notice to comply pursuant to Section 94935,
the bureau shall issue a citation to an institution for violation of
this chapter, or regulations adopted pursuant to this chapter.

(b) The citation may contain begin delete either or both end delete begin insert any end insert 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. The bureau shall base
its assessment of the administrative fine on:

(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.

begin insert

(3) An order to compensate students for harm, including a
refund of moneys paid to the institution by or on behalf of the
student, as determined by the bureau.

end insert

(c) (1) The citation shall be in writing and describe the nature
of the violation and the specific provision of law or regulation that
is alleged to have been violated.

(2) The citation shall inform the institution of its right to request
a hearing in writing within 30 days from service 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.

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 94937 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94937.  

(a) As a consequence of begin delete an end delete begin insert a compliance inspection
or end insert investigation, and upon a finding that an institution has
committed a violation, the bureau may place an institution on
probation or may suspend or revoke an institution’s approval to
operate for:

(1) Obtaining an approval to operate by fraud.

(2) A material violation or repeated violations of this chapter
or regulations adopted pursuant to this chapter that have resulted
in harm to students. For purposes of this paragraph, “material
violation” includes, but is not limited to, misrepresentation, fraud
in the inducement of a contract, and false or misleading claims or
advertising, upon which a student reasonably relied in executing
an enrollment agreement and that resulted in harm to the student.

(b) The bureau shall adopt regulations, within one year of the
enactment of this chapter, governing probation and suspension of
an approval to operate.

(c) The bureau may seek reimbursement pursuant to Section
125.3 of the Business and Professions Code.

(d) An institution shall not be required to pay the cost of
investigation to more than one agency.

begin delete SEC. 17. end delete

begin insert SEC. 21. end insert   

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 one hundred thousand dollars ($100,000), for operating
an institution without proper approval to operate issued by the
bureau pursuant to this chapter.

begin delete SEC. 18. end delete

begin insert SEC. 22. end insert   

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.

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Article 20.6 (commencing with Section 94949.7) is
added to Chapter 8 of Part 59 of Division 10 of Title 3 of the end insert begin insert
Education Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 20.6. end insert   Office of Student Assistance and Relief

 

begin insert 94949.7. end insert   

There is hereby established within the department an
Office of Student Assistance and Relief for the purpose of
advancing and promoting the rights of prospective students, current
students, or past students of private postsecondary educational
institutions.

begin insert 94949.71. end insert   

(a) The duties of the office shall be vested in an
ombudsperson, who shall be appointed by, and report to, the
director. The ombudsperson shall have experience and expertise
advocating on behalf of students and consumers and shall have
knowledge in the state and federal laws governing student
protection, student financial aid and loan programs, and the
policies and practices of private postsecondary educational
institutions.

(b) For purposes of this article, the following terms have the
following meanings:

(1) “Department” means the Department of Consumer Affairs.

(2) “Office” means the Office of Student Assistance and Relief.

begin insert 94949.72. end insert   

Duties of the office shall include, but are not limited
to, all of the following:

(a) Conducting outreach to students and prospective students
to provide them with, among other information, information on
making an informed decision regarding the selection of a
postsecondary educational institution, student rights regarding
school performance disclosures, enrollment agreements, and
cancellation and refund policies, how to contact the office and the
bureau for assistance, student loan rights and assistance, and free
nonprofit community based resources.

(b) Coordinating with the bureau and facilitating resolution of
student concerns related to the bureau’s performance of its
responsibilities, including concerns that arise related to the
bureau’s handling of a complaint or its administration of the
Student Tuition Recovery Fund established in Article 14
(commencing with Section 94923).

(c) Coordinating with the department, including the bureau,
regarding an Internet Web site that provides information to
students about the rights and protections available to them. The
Internet Web site shall include information about relevant services
available from other governmental organizations and local
nonprofit community service organizations.

(d) Serving as a primary point of contact to address the needs
of private postsecondary education students and working 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.

(e) Providing outreach and coordinating services for students
following the unlawful closure of an institution that was approved
to operate by the bureau.

begin insert 94949.73. end insert   

(a) A pilot program is hereby created to provide
grant funds in accordance with this section to eligible nonprofit
community service organizations to assist eligible students by
relieving or mitigating the economic and educational opportunity
loss incurred by those students who attended a Corinthian
Colleges, Inc. institution.

(b) (1) The terms and conditions of the grant agreements shall
ensure that grant funds are used for the exclusive purpose of
providing outreach and assistance to eligible students with federal
and private loan discharges, recovery through the Student Tuition
Recovery Fund established in Article 14 (commencing with Section
94923), and other financial aid relief.

(2) Services provided by eligible nonprofit community service
organizations shall include, but are not to be limited to, outreach
and education, screening requests for assistance, referring students
for additional assistance through pro bono referral programs,
referring students to the bureau, as appropriate, and other services
related to obtaining financial aid relief for students.

(3) This subdivision is not intended to prohibit a nonprofit
community service organization from using grant funds to screen
student requests for assistance in order to determine if a student
meets assistance eligibility requirements.

(c) For purposes of this section, an “eligible nonprofit
community service organization” is an organization that satisfies
all of the following conditions:

(1) The organization is a 501(c)(3) tax-exempt organization in
good standing with the federal Internal Revenue Service and in
compliance with all applicable laws and requirements.

(2) The organization demonstrates expertise in providing
outreach and assisting students with, and currently provides free
direct services to students for, student loan discharge and
forgiveness, and student tuition recovery-related matters.

(3) The organization does not charge students for any services,
including services provided pursuant to this section.

(d) For purposes of this section, an “eligible student” is a
student who was enrolled at a California campus of, or a California
student who was enrolled in an online campus of, a Corinthian
Colleges, Inc. institution, and who has been screened by the
nonprofit community service organization and determined to be
eligible for debt relief from the United States Department of
Education or other student financial aid relief.

(e) (1) By March 1, 2017, the office shall solicit grant
applications from eligible nonprofit community service
organizations, select one or more of these organizations from
among the applicants who are deemed to be qualified, set
additional terms and conditions of the grants as necessary to fulfill
the requirements of this section, and notify the recipient
organization or organizations of the selection and the share of
grant funds available that the organization shall receive.

(2) The office shall award the full amount of authorized grant
funds, unless it does not receive a sufficient number of applications
from eligible nonprofit community service organizations or it has
good cause to determine that an expenditure of the full amount
authorized is not necessary. If the office determines expenditure
of the full amount is not necessary, it shall provide a detailed
explanation of its determination to the Legislature.

(3) In selecting the grantees and awarding funds to each
grantee, the office shall ensure geographical distribution according
to the location of eligible students, as best can be determined.

(f) (1) Within 30 days of selection, an eligible nonprofit
community service organization that receives funds pursuant to
this section shall enter into a grant agreement with the office and
shall use grant funds exclusively for the purposes set forth in this
section and in accordance with the agreement.

(2) Any unused funds by the grantees shall be returned to the
office, except that, upon the approval of the office, an eligible
nonprofit community service organization may expend funds to
provide assistance to students who attended an institution that
closed unlawfully and was approved to operate by the bureau.

(3) The office may terminate the grant agreement for material
breach, and may require repayment of funds provided to the
nonprofit community service organization during the time that the
agreement was being materially breached. However, the office
shall provide the grantee with written notice of the breach and a
reasonable opportunity of not less than 30 days to resolve the
breach.

(g) An eligible nonprofit community service organization that
receives a grant shall give priority to students who were enrolled
in Corinthian Colleges, Inc., and are eligible for a federal closed
school loan discharge or relief under the Student Tuition Recovery
Fund established in Article 14 (commencing with Section 94923),
if demand exceeds available grant funds. The organization may
give priority to low-income students or may provide assistance
regardless of student income level.

(h) (1)   An eligible nonprofit community service organization
that receives a grant shall report to the office quarterly through
the grant period on all of the following:

(A) The number of eligible students served pursuant to the grant
agreement.

(B) A detailed summary of services provided to those students,
as follows:

(i) The number of Student Tuition Recovery Fund claims referred
or submitted to the bureau by the organization. To the degree the
organization has access to the following information, the report
shall include, of the claims submitted, the number that are pending,
on appeal, or have been approved or denied; for the claims that
have been approved or denied, the amount of student loans
canceled, the total of student loans paid off, the total amount of
cash reimbursed to students, and the total amount of educational
credit granted.

(ii) The number of federal loan forgiveness claims submitted.
Of the claims submitted, the number of those claims that are
pending, on appeal, or have been approved or denied. For claims
submitted by the organization on behalf of the student, the
organization shall also report the estimated total in student loans
canceled and the total amount of funds refunded to students.

(iii) The number of students helped with private student loans,
other than through Student Tuition Recovery Fund claims, and a
summary of assistance provided.

(iv) The number of students whom the organization helped
obtain income-dependent repayment plans on their federal loans,
and of those students, the number of students helped out of default
on the federal loans through consolidation or rehabilitation.

(v) The number of students screened by the nonprofit community
service organization who were determined ineligible for assistance
with debt relief pursuant to subdivision (d), a summary of reasons
for ineligibility, and a summary of any services or referral
information provided to those students.

(vi) Any other information that is deemed reasonably necessary.

(2) The office shall make the reports submitted pursuant to
paragraph (1) available to the Legislature and the department
upon request.

(3) The office shall provide the Legislature and the department
a final report summarizing the information submitted pursuant to
paragraph (1) promptly following the time when all funds are
expended by the grantees or by January 1, 2020, whichever is
earlier.

(j) Funds shall be distributed to preapproved nonprofit
community service organizations as follows:

(1) Fifty percent shall be distributed to the grantee within 30
days of the grantee entering into a grant agreement.

(2) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee’s second quarterly report.

(3) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee’s third quarterly report.

(k) The adoption of any regulation pursuant to this section shall
be deemed to be an emergency and necessary for the immediate
preservation of the public health and safety, or general welfare.

(l) This section shall remain in effect only 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.

end insert

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert The sum of one million three hundred thousand
dollars ($1,300,000) is appropriated from the Student Tuition
Recovery Fund to the Office of Student Assistance and Relief, as
established in Section 94949.7 of the Education Code, for the
purposes of providing grants pursuant to the pilot program
established in Section 94949.73 of the Education Code. end insert

begin delete

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.

end delete