BILL NUMBER: SB 1192 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 16, 2016
AMENDED IN SENATE APRIL 6, 2016
INTRODUCED BY Senator Hill
(Principal coauthors: Assembly Members Medina and Salas)
FEBRUARY 18, 2016
An act to amend Sections 94809, 94848,
94874, 94874.2, 94874.5, 94874.7, 94874.8, 94878,
94879, 94880, 94885, 94885.1, 94885.5,
94899, 94905, 94909, 94923, 94932, 94936,
94937, and 94944 of, to amend the heading of Article
14 (commencing with Section 94923) of Chapter 8 of Part 59 of
Division 10 of Title 3 of, to add Sections
94922.5, 94923.5, and 94935.5 94801.5 and 94934.5
to, to add Chapter 8.1 (commencing with Section 94952)
to Part 59 of Division 10 of Title 3 of, and to add and
repeal Article 20.5 (commencing with Section 94949.5) and
Article 20.6 (commencing with Section 94949.7) to Chapter 8 of
Part 59 of Division 10 of Title 3 of, and to repeal Section
94879 of, 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.
The bill would authorize bureau staff who, during an
inspection of an institution, detect a violation of the act, or
regulations adopted pursuant to the act, to issue the institution a
citation before leaving the institution, as specified. The
bill would require the Director of Consumer Affairs to appoint an
enforcement monitor, no later than March 1, 2017, to, among other
duties, monitor and evaluate the bureau's enforcement of the act and
submit written reports to the department and the Legislature on his
or her findings and conclusions, as specified. The bill would
increase the amount of a fine that may be issued to a person for
operating an institution without proper approval to operate from
$50,000 to $100,000. The bill would, to the extent authorized by
federal law, require a private postsecondary institution that does
not maintain a physical presence in California and offers distance
education to California students to register with the bureau
and file a surety bond, as specified. 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.
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.
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.
The act establishes the Student Tuition Recovery Fund and requires
the bureau to adopt regulations governing the administration and
maintenance of the fund, including requirements relating to
assessments on students and student claims against the fund, and
establishes that the moneys in this fund are continuously
appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian
Colleges, Inc., institution, who meets all of the other eligibility
requirements, eligible for recovery from the fund. To the extent that
the bill expands the purposes of the fund, the bill would make an
appropriation. The bill would establish the Office of
Student Assistance and Relief, which would, among other duties,
administer the fund, serve as a point of contact to address the needs
of private postsecondary students, establish an Internet Web site
that contains specified information for the benefit of these
students, and work, in consultation with specified state and federal
agencies, to determine the extent of resources available for these
students and what actions state agencies need to take to ensure the
protection of the public from the closure of private postsecondary
educational institutions.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 94801.5 is added to the
Education Code , to read:
94801.5. (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.
SECTION 1. SEC. 2. 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, and filed an application to
operate by August 2, 2010, may continue to operate unless a
denial of approval to operate has been issued and has become final,
but shall comply with, and is subject to, this chapter.
(c) Students seeking to enroll in institutions operating under
subdivisions (a) and (b) shall be notified by the institution, in
writing and prior to executing an enrollment agreement, that the
institution's application for approval to operate has not been
reviewed by the bureau.
(d) (1) An institution that is denied an approval to operate
pursuant to subdivision (a) or (b) may file an appeal pursuant to the
procedures established in Section 94888.
(2) An institution that has filed an appeal pursuant to paragraph
(1) may continue to operate during the appeal process but must
disclose in a written statement approved by the bureau, to all
current and prospective students, that the institution's application
for approval to operate was denied by the bureau because the bureau
determined the application did not satisfy the requirements to
operate in California, that the institution is appealing the bureau's
decision, and that the loss of the appeal may result in the
institution's closure.
(3) If the bureau determines that the continued operation of an
institution poses a significant risk of harm to students, the bureau
shall make an emergency decision pursuant to Section 94938.
SEC. 2. Section 94848 of the Education Code is
amended to read:
94848. "Licensure" includes any license, certificate, permit, or
similar credential that a person must hold to lawfully engage in a
profession, occupation, trade, or career field. "Licensure" shall
also include required certification or registration that a person
must hold to lawfully engage in a profession, occupation, trade, or
career field.
SEC. 3. Section 94874 of the Education
Code is amended to read:
94874. Except as provided in Section 94874.2,
Sections 9487 4.2 and 94874.7, 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.
(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)
( j) 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).
SEC. 3. SEC. 4. 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.
SEC. 5. Section 94874.5 of the
Education Code is amended to read:
94874.5. Notwithstanding Sections 94874 and 94874.1, an
An institution that is otherwise exempt from
this chapter shall comply with the requirements of Section 94927.5.
SEC. 6. Section 94874.7 of the
Education Code is amended to read:
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. 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. The bureau
shall establish a reasonable fee to reimburse the bureau's costs
associated with the implementation of this section.
SEC. 7. Section 94874.8 of the
Education Code is amended to read:
94874.8. (a) An institution exempt from all or part of this
chapter pursuant to subdivision (i) or (j) 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) or (j) 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) or (j) 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.
SEC. 4. SEC. 8. 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."
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.
SEC. 9. Section 94879 of the Education
Code is repealed.
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.
SEC. 10. Section 94880 of the Education
Code is amended to read:
94880. (a) There is within the bureau a 14-member
12-member advisory committee. On or
before July 1, 2015, the The 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.
(4) Two members, who shall be employers who hire students,
appointed by the director.
(5)
( 4) One public member appointed by the
Senate Committee on Rules.
(6)
( 5) One public member appointed by the
Speaker of the Assembly.
(7)
( 6) Two nonvoting, ex officio members as
follows:
(A) The chair of the a policy
committee of the Assembly with jurisdiction over legislation relating
to the bureau or designee appointed by the
Speaker of the Assembly. The chair may designate a
representative for any meeting or meetings he or she is unable to
attend.
(B) The chair of the a policy
committee of the Senate with jurisdiction over legislation relating
to the bureau or designee appointed by the Senate
Committee on Rules. The chair may designate a representative for
any meeting or meetings he or she is unable to attend.
(b) (1) A public member appointed pursuant
to paragraph (2), (4), or (5) of subdivision (a) 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 public member appointed pursuant to
paragraph (2), (4), or (5) of subdivision (a) 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.
(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.
(g)
( h) 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.
(h)
( i) 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. A majority of the voting members of
the committee shall constitute a quorum for the committee's meetings.
(i)
( j) 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.
(j)
( k) 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.
SEC. 6. SEC. 11. 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.
SEC. 7. SEC. 12. Section 94885.1 of
the Education Code is amended to read:
94885.1. (a) An institution that is not accredited by an
accrediting agency recognized by the United States Department of
Education and offering at least one degree program, and that has
obtained an approval to operate from the bureau on or before January
1, 2015, shall be required to satisfy at least one of the following
no later than July 1, 2015:
(1) Accreditation by an accrediting agency recognized by the
United States Department of Education, with the scope of that
accreditation covering the offering of at least one degree program by
the institution.
(2) Compliance with subdivision (b).
(b) The bureau shall identify institutions that are subject to
subdivision (a) and notify those institutions by February 1, 2015, of
the accreditation requirements pursuant to this section and that the
institution is required provide the following information to the
bureau if the institution plans to continue to offer a degree program
after July 1, 2015:
(1) An accreditation plan that, at a minimum, identifies an
accrediting agency recognized by the United States Department of
Education from which the institution will seek accreditation, with
the scope of that accreditation covering the offering of at least one
degree program, and outlines the process by which the institution
will achieve accreditation candidacy or pre-accreditation by July 1,
2017, and full accreditation by July 1, 2020.
(2) Evidence of having achieved accreditation candidacy or
pre-accreditation by July 1, 2017.
(3) Evidence of having obtained full accreditation by July 1,
2020.
(4) Any additional documentation the bureau deems necessary.
(c) An institution that satisfies the requirements of subdivision
(b) shall comply with all of the following:
(1) Notify students seeking to enroll in the institution, in
writing, prior to the execution of the student's enrollment
agreement, that the institution's approval to offer a degree program
is contingent upon the institution being subsequently accredited.
(2) A visiting committee, empaneled by the bureau pursuant to
Section 94882, shall review the institution by January 1, 2017, and
determine if the institution is likely to achieve full accreditation
by July 1, 2020. If the visiting committee finds the institution
deficient in its accreditation plan, the bureau may prohibit the
institution from enrolling new students in its degree program or
programs, and require the execution of a teach-out plan for its
enrolled students.
(d) (1) The bureau may, shall, upon
the timely submission of sufficient evidence that an
unaccredited institution is making strong progress toward obtaining
accreditation, grant an institution's request for an extension of
time, not to exceed two years, to obtain pre-accreditation,
accreditation candidacy, or accreditation. meet the
requirements of this section.
(2) Evidence submitted to the bureau pursuant to paragraph (1)
shall include, but is not limited to, an amended accreditation plan
adequately identifying why pre-accreditation,
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 achieve
pre-accreditation, accreditation candidacy, or accreditation.
meet the requirements of this section.
(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.
(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,
2021, 2023, and as of that date is repealed,
unless a later enacted statute, that is enacted before January 1,
2021, 2023, deletes or extends that
date.
SEC. 8. SEC. 13. 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) (1) The bureau may
shall, upon the timely submission of sufficient evidence that an
unaccredited institution is making strong progress toward obtaining
accreditation, grant an institution's request for an extension
of time, not to exceed two years, to obtain
pre-accreditation, accreditation candidacy, or accreditation pursuant
to the requirements outlined in subdivision (d) of Section 94885.1.
meet the requirements of this section.
(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.
(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.
(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.
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.
SEC. 14. 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 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.
(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.
SEC. 11. SEC. 15. 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.
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.
SEC. 14. SEC. 16. 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) (1) The bureau shall
adopt, by regulation, procedures governing the administration and
maintenance of the Student Tuition Recovery Fund
Fund. The fund shall be used to
provide awards to students who suffer economic loss.
The following students, and any other students deemed appropriate,
are eligible for payment from the Student Tuition Recovery Fund:
(2) The following students, and any other students deemed
appropriate, are eligible for payment from the Student Tuition
Recovery Fund:
(1)
( A) Any student who was enrolled at an
institution, at a location of the institution, or in an educational
program offered by the institution, at the time that institution,
location, or program was closed or discontinued, as applicable, who
did not choose to participate in a teach-out plan approved by the
bureau or did not complete a chosen teach-out plan approved by the
bureau.
(2)
( B) Any student who was enrolled at an
institution or a location of the institution within the 120-day
period before the closure of the institution or location of the
institution, or who was enrolled in an educational program within the
120-day period before the program was discontinued, if the
bureau determines there was a significant decline in the quality or
value of that educational program during that time period.
discontinued.
(3)
( C) Any student who was enrolled at an
institution or a location of the institution more than 120 days
before the closure of the institution or location of the institution,
in an educational program offered by the institution as to which the
bureau determines there was a significant decline in the quality or
value of the program more than 120 days before closure.
(4)
( D) 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.
(5)
( E) A student to whom an institution has
been ordered to pay a refund by the bureau but has failed to do so.
(6)
( F) 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.
(7)
( G) 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.
(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.
(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.
SEC. 15. Section 94923.5 is added to the
Education Code, to read:
94923.5. It is the intent of the Legislature to require, to the
extent authorized by federal law, a private postsecondary educational
institution that does not maintain a physical presence in California
and offers distance education to California students to file a
surety bond for the benefit of its California students who suffer
economic loss.
SEC. 16. Section 94935.5 is added to the
Education Code, to read:
94935.5. (a) Bureau staff who, during an inspection of an
institution, detect a violation of this chapter, or regulations
adopted pursuant to this chapter, that is not a minor violation, may
issue the institution a citation before leaving the institution.
(b) The citation may contain either or both of the following:
(1) An order of abatement that may require an institution to
demonstrate how future compliance with this chapter, or regulations
adopted pursuant to this chapter, will be accomplished.
(2) Notwithstanding Section 125.9 of the Business and Professions
Code, an administrative fine not to exceed five thousand dollars
($5,000) for each violation. Assessment of the administrative fine
shall be based on all of the following considerations:
(A) The nature and seriousness of the violation.
(B) The persistence of the violation.
(C) The good faith of the institution.
(D) The history of previous violations.
(E) The purposes of this chapter.
(F) The potential harm to students.
(c) (1) The citation shall be in writing and describe the nature
of the violation and the specific provision of this chapter, or
regulation adopted pursuant to this chapter, that is alleged to have
been violated.
(2) The citation shall inform the institution of its right to
request, in writing, a hearing within 30 days of the issuance of the
citation.
(3) If a hearing is requested, the bureau shall select an informal
hearing pursuant to Article 10 (commencing with Section 11445.10) of
Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government
Code or a formal hearing pursuant to Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(4) If a hearing is not requested, payment of the administrative
fine is due 30 days from the date of service and shall not constitute
an admission of the violation charged.
(5) If a hearing is conducted and payment of an administrative
fine is ordered, the administrative fine is due 30 days from when the
final order is entered.
(6) The bureau may enforce the administrative fine as if it were a
money judgment pursuant to Title 9 (commencing with Section 680.010)
of Part 2 of the Code of Civil Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary Education Administration Fund.
SEC. 17. Section 94932 of the Education
Code is amended to read:
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 an a compliance inspection or
investigation, that an institution has violated any applicable
law or regulation, the bureau shall take appropriate action pursuant
to this article.
SEC. 18. Section 94934.5 is added to the
Education Code , to read:
94934.5. (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.
SEC. 19. Section 94936 of the Education
Code is amended to read:
94936. (a) As a consequence of an a
compliance inspection or 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 either or both
any 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.
(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.
(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.
SEC. 20. Section 94937 of the Education
Code is amended to read:
94937. (a) As a consequence of an a
compliance inspection or 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.
SEC. 17. SEC. 21. 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.
SEC. 18. SEC. 22. Article 20.5
(commencing with Section 94949.5) is added to Chapter 8 of Part 59 of
Division 10 of Title 3 of the Education Code, to read:
Article 20.5. Enforcement Monitor
94949.5. (a) (1) The director shall appoint an enforcement
monitor no later than March 1, 2017. The director may retain a person
for this position by a personal services contract. In this
connection, the Legislature finds, pursuant to Section 19130 of the
Government Code, that this is a new state function.
(2) The director shall supervise the enforcement monitor and may
terminate or dismiss him or her from this position. If the monitor is
terminated or dismissed, the director shall appoint a replacement
monitor within two months.
(3) The monitoring duty of the enforcement monitor shall be on a
continuing basis for a period of no more than two years from the date
of the initial enforcement monitor's appointment.
(b) The enforcement monitor shall monitor and evaluate the bureau'
s enforcement efforts, with specific concentration on the adequacy of
bureau compliance inspections, handling and processing of student
complaints, and timely application of sanctions or discipline imposed
on institutions and persons in order to protect the public.
(c) The enforcement monitor shall exercise no authority over the
bureau's management or staff; however, the bureau and its staff shall
cooperate with the monitor and shall provide data, information, and
files as requested by the monitor to perform all of his or her
duties.
(d) The director shall assist the enforcement monitor in the
performance of his or her duties, and the monitor shall have the same
investigative authority as the director.
(e) The director shall specify additional duties of the
enforcement monitor.
(f) (1) The enforcement monitor shall submit to the department and
the Legislature, in compliance with Section 9795 of the Government
Code, an initial written report of his or her findings and
conclusions no later than July 1, 2018, and a subsequent written
report no later than November 1, 2018. The enforcement monitor shall
be available to make oral reports to the department or the
Legislature if requested to do so. The monitor may also provide
additional information to either the department or the Legislature at
his or her discretion or at the request of either the department or
the Legislature. The monitor shall make his or her reports available
to the public or the media. The monitor shall make every effort to
provide the bureau with an opportunity to reply to any facts,
findings, issues, or conclusions made in his or her reports to the
department or the Legislature with which the bureau may disagree.
(2) The enforcement monitor shall issue a final written report
before January 1, 2019. The final report shall include final findings
and conclusions on the topics addressed in the initial report
submitted by the monitor pursuant to paragraph (1).
(g) The bureau shall pay for all of the costs associated with the
employment of the enforcement monitor.
94949.6. This article shall remain in effect only until March 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before March 1, 2019, deletes or extends
that date.
SEC. 23. Article 20.6 (commencing with Section
94949.7) is added to Chapter 8 of Part 59 of Division 10 of Title 3
of the Education Code , to read:
Article 20.6. Office of Student Assistance and Relief
94949.7. 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.
94949.71. (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.
94949.72. 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.
94949.73. (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.
SEC. 24. 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.
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.