Amended in Assembly August 19, 2016

Amended in Assembly August 15, 2016

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 begin insert Section 325 of the Business and Professions Code, and to amend end insert Sections 94809, 94874, 94874.2, 94874.5, 94874.7, 94874.8, 94878, 94880, 94885, 94885.1, 94885.5, 94889, 94905, 94909, 94923, 94930.5, 94932, 94936, 94937, 94944, begin insert 94948, end insert and 94950 of, to add Sections 94801.5, 94850.5, and 94934.5 to, to add and repeal Article 20.6 (commencing with Section 94949.7) of 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.

This bill would recast and revise various provisions of the act. 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 require an out-of-state private postsecondary educational institutions, as defined, to comply with specified requirements, including providing the bureau evidence of the institution’s accreditation. The bill would authorize the bureau to adopt, by regulation, a process that allows an institution with approval to operate to request and receive inactive status. The bill would require an institution with approval to operate that knows begin delete or reasonably should know end delete 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. The bill would adjust annual fees charged to an institution with approval to operate, as specified.

This bill would establish an Office of Student Assistance and Relief to advance and promote the rights of private postsecondary educational institution students, as specified. The bill would require the office to report quarterly by posting on the bureau’s Internet Web site, through September 1, 2018, specified information related to assistance it provides to these students. The bill would require the office to submit a report to the Legislature, the department, and the bureau summarizing that information by January 1, 2019.

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.

Existing law repeals the act on January 1, 2017.

This bill would instead repeal the act on January 1, 2021, thus extending the operation of the act by 4 years. By extending operation of the Student Tuition Recovery Fund, a continuously appropriated fund, this bill would make an appropriation.

Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime.

Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

begin insert

begin insert SECTION end insert begin insert 1. end insert   

end insert

begin insert Section 325 of the end insert begin insert Business and Professions Code end insert

begin insert is amended to read: end insert

325.  

It shall be the duty of the director to receive complaints
from consumers concerning (a) unfair methods of competition and
unfair or deceptive acts or practices undertaken by any person in
the conduct of any trade or commerce; (b) the production,
distribution, sale, and lease of any goods and services undertaken
by any person which may endanger the public health, safety, or
welfare; (c) violations of provisions of this code relating to
businesses and professions licensed by any agency of the
department, and regulations promulgated pursuant thereto; begin delete and end delete (d)
begin insert student concerns related to the Bureau for Private Postsecondary
Education’s performance of its responsibilities, including concerns
that arise related to the Bureau for Private Postsecondary
Education’s handling of a complaint or its administration of the
Student Tuition Recovery Fund, established in Article 14
(commencing with Section 94923) of Chapter 8 of Part 59 of
Division 10 of Title 3 of the Education Code; and (e) end insert other matters
consistent with the purposes of this chapter, whenever appropriate.

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

Section 94801.5 is added to the Education Code, to
read:

94801.5.  

(a) Effective July 1, 2017, an out-of-state private
postsecondary educational institution shall register with the bureau,
pay a fee begin delete in an amount commensurate with the cost of registration,
as determined by the bureau, end delete begin insert pursuant to Section 94930.5, end insert and
comply with all of the following:

(1) The institution shall provide the bureau with all of the
following information:

(A) Evidence of accreditation.

(B) Evidence that the institution is approved to operate in the
state where the institution maintains its main administrative
location.

(C) The agent for service of process consistent with Section
94943.5.

(D) A copy of the institution’s catalog and sample enrollment
agreement.

(2) The institution shall comply with the requirements of the
Student Tuition Recovery Fund, established in Article 14
(commencing with Section 94923), and begin delete implementing end delete regulations
adopted by the bureau related to the fund, for its students residing
in California.

(3) The institution shall provide disclosures pursuant to the
requirements for the Student Tuition Recovery Fund, established
in Article 14 (commencing with Section 94923), and begin delete implementing end delete
regulations adopted by the bureau related to the fund, for its
students residing in California.

(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.

begin insert

(d) A registration with the bureau pursuant to this section shall
be valid for two years.

end insert begin delete

(d)

end delete

begin insert ( end insert begin insert e) end insert  The bureau shall begin delete adopt emergency regulations for purposes
of implementing this section. end delete begin insert develop, through emergency
regulations, a registration form. end insert 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.

begin delete SEC. 2. end delete

begin insert SEC. 3. 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, 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.

begin delete SEC. 3. end delete

begin insert SEC. 4. end insert   

Section 94850.5 is added to the Education Code, to
read:

94850.5.  

“Out-of-state private postsecondary educational
institution” means a private entity without a physical presence in
this state that offers distance education to California students for
an institutional begin delete charge. end delete begin insert charge, regardless of whether the institution
has affiliated institutions or institutional locations in California. end insert

begin delete SEC. 4. end delete

begin insert SEC. 5. end insert   

Section 94874 of the Education Code is amended to
read:

94874.  

Except as provided in Sections 94874.2 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) 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. 5. end delete

begin insert SEC. 6. 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 delete SEC. 6. end delete

begin insert SEC. 7. end insert   

Section 94874.5 of the Education Code is amended to
read:

94874.5.  

An institution that is otherwise exempt from this
chapter shall comply with the requirements of Section 94927.5.

begin delete SEC. 7. end delete

begin insert SEC. 8. end insert   

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.

begin delete SEC. 8. end delete

begin insert SEC. 9. end insert   

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) 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) 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) 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. 9. end delete

begin insert SEC. 10. 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. 10. end delete

begin insert SEC. 11. end insert   

Section 94879 of the Education Code is repealed.

begin delete SEC. 11. end delete

begin insert SEC. 12. end insert   

Section 94880 of the Education Code is amended to
read:

94880.  

(a) There is within the bureau a 12-member advisory
committee. 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) One public member appointed by the Senate Committee on
Rules.

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

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

(A) The chair of a policy committee of the Assembly with
jurisdiction over legislation relating to the bureau 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 a policy committee of the Senate with
jurisdiction over legislation relating to the bureau 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 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 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 chief of the Office of Student Assistance and Relief
established in Article 20.6 (commencing with Section 94949.7)
shall attend, and testify and answer questions at, each meeting of
the advisory committee.

(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.

(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 appointed
members of the committee shall constitute a quorum for the
committee’s meetings.

(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.

(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.

begin delete SEC. 12. end delete

begin insert SEC. 13. 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. 13. end delete

begin insert SEC. 14. 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 to 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 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 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 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, 2023, and
as of that date is repealed, unless a later enacted statute, that is
enacted before January 1, 2023, deletes or extends that date.

begin delete SEC. 14. end delete

begin insert SEC. 15. 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) (1) The bureau 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 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.

begin delete SEC. 15. end delete

begin insert SEC. 16. end insert   

Section 94889 of the Education Code is amended to
read:

94889.  

(a) Except as provided in subdivision (b) of Section
94890 and subdivision (b) of this section, an approval to operate
shall be for a term of five years.

(b) The bureau may adopt, by regulation, a process by which
an institution with an approval to operate may request, and be
approved by the bureau for, an inactive status. begin delete The process shall
ensure that the institution, upon reinstatement of its active approval
to operate, satisfies the requirements of this chapter. end delete begin insert To regain an
active approval status with the bureau, the institution shall apply
for an approval to operate in accordance with this chapter. end insert

begin delete SEC. 16. end delete

begin insert SEC. 17. end insert   

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.

begin delete SEC. 17. end delete

begin insert SEC. 18. 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. 18. end delete

begin insert SEC. 19. 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) (1) The bureau shall adopt, by regulation, procedures
governing the administration and maintenance of the Student
Tuition Recovery Fund. The fund shall be used to provide awards
to students who suffer economic loss.

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

(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.

(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.

(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.

(D) Notwithstanding the requirement that a student attend an
institution that is not exempt from this article, pursuant to
subdivision (a), 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.

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

(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.

(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.

(H) Notwithstanding the definition of economic loss in
subdivision (f), for purposes of recovery from the Student Tuition
Recovery Fund, a student who has sought legal counsel that
resulted in the cancellation of one or more student loans in
connection with his or her Student Tuition Recovery Fund claim
may seek reimbursement for legal services rendered in an amount
up to five hundred dollars ($500). The bureau shall review the
invoice of the legal services rendered and evidence of the
cancellation of the student loan or loans, and upon verifying that
cancellation, pay the claim directly to the student.

(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) As a condition of the bureau satisfying a student loan
obligation on behalf of a Student Tuition Recovery Fund applicant,
the loan servicer or debtholder shall submit a letter stating that the
servicer or holder will no longer collect on the debt and shall report
the debt as “paid in full” to all credit reporting agencies. The bureau
shall retain a copy of that letter and provide the original to the
applicant.

(h) Except as provided in subdivision (i), 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.

(i) Any student whose loan is revived by a loan holder or debt
collector after a period of noncollection by the holder or collector
may, at any time, file a written application for recovery from the
Student Tuition Recovery Fund for the debt that would have been
otherwise eligible for recovery under this section.

begin delete SEC. 19. end delete

begin insert SEC. 20. end insert   

Section 94930.5 of the Education Code is amended
to read:

94930.5.  

Subject to Section 94930, an institution shall remit
to the bureau for deposit in the Private Postsecondary Education
Administration Fund the following fees, in accordance with the
following schedule:

(a) The following fees shall be remitted by an institution
submitting an application for an approval to operate, if applicable:

(1) Application fee for an approval to operate: five thousand
dollars ($5,000).

(2) Application fee for the approval to operate a new branch of
the institution: three thousand dollars ($3,000).

(3) Application fee for an approval to operate by means of
accreditation: seven hundred fifty dollars ($750).

(b) The following fees shall be remitted by an institution seeking
a renewal of its approval to operate, if applicable:

(1) Renewal fee for the main campus of the institution: three
thousand five hundred dollars ($3,500).

(2) Renewal fee for a branch of the institution: three thousand
dollars ($3,000).

(3) Renewal fee for an institution that is approved to operate by
means of accreditation: five hundred dollars ($500).

(c) The following fees shall apply to an institution seeking
authorization of a substantive change to its approval to operate, if
applicable:

(1) Processing fee for authorization of a substantive change to
an approval to operate: five hundred dollars ($500).

(2) Processing fee in connection with a substantive change to
an approval to operate by means of accreditation: two hundred
fifty dollars ($250).

(d) (1) In addition to any fees paid to the bureau pursuant to
subdivisions (a) to (c), inclusive, each institution that is approved
to operate pursuant to this chapter shall remit both of the following:

(A) An annual fee for each campus designated by the institution
as a main campus location in California, in an amount equal to
begin delete 0.55 end delete begin insert 0.45 end insert percent of the campus’ total gross revenue derived from
students in California, but not to be less than two thousand five
hundred dollars ($2,500) and not to exceed sixty thousand dollars
($60,000).

(B) An annual campus fee for each branch of the institution in
an amount equal to begin delete 0.55 end delete begin insert 0.45 end insert percent of the branch’s total gross
revenue derived from students in California, but not to be less than
two thousand five hundred dollars ($2,500) and not to exceed sixty
thousand dollars ($60,000).

(2) The amount of the annual fees pursuant to paragraph (1)
shall be proportional to the bureau’s cost of regulating institutions
under this chapter, but shall not exceed seven hundred fifty
thousand dollars ($750,000) for begin delete an y end delete begin insert any end insert institution.

begin insert

(e) The bureau may assess both of the following fees, if
applicable:

end insert begin insert

(1) An out-of-state institution registration fee in an amount of
one thousand five hundred dollars ($1,500).

end insert begin insert

(2) A request for inactive status fee in an amount of five hundred
dollars ($500).

end insert begin insert

(f) It is the intent of the Legislature that the fees established
pursuant to this section be evaluated during the 2017-18 state
budget process and, if necessary, adjusted by subsequent legislation
based upon information provided to the Legislature by the
department and the bureau.

end insert begin insert

(g) Notwithstanding subdivision (d), effective July 1, 2018, the
annual fee for each campus described in subparagraphs (A) and
(B) of paragraph (1) of subdivision (d) shall be in an amount equal
to 0.55 percent of that campus’ total gross revenue derived from
students in California, but not to be less than two thousand five
hundred dollars ($2,500) and not to exceed sixty thousand dollars
($60,000) for each campus.

end insert

begin delete SEC. 20. end delete

begin insert SEC. 21. end insert   

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 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.

begin delete SEC. 21. end delete

begin insert SEC. 22. end insert   

Section 94934.5 is added to the Education Code, to
read:

94934.5.  

(a) An institution with an approval to operate that
knows begin delete or reasonably should know end delete 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
all of the following:

(1) Any federal or state entity that provides financial aid to
students of begin delete an end delete begin insert the end insert institution or approves begin delete an end delete begin insert the end insert institution for
participation in a financial aid program.

(2) Any state or federal attorney general’s office or department
of justice.

(3) Any regulator that approves the operation of the institution.

(4) The federal Consumer Financial Protection Bureau or the
federal Securities and Exchange Commission.

(5) Any accrediting agency.

(6) Any state professional licensing entity that exercises any
programmatic or institutional approval over begin delete an end delete begin insert the end insert institution.

begin delete SEC. 22. end delete

begin insert SEC. 23. end insert   

Section 94936 of the Education Code is amended to
read:

94936.  

(a) As a consequence of an investigation, which may
incorporate any materials obtained or produced in connection with
a compliance inspection, 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 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.

begin delete SEC. 23. end delete

begin insert SEC. 24. end insert   

Section 94937 of the Education Code is amended to
read:

94937.  

(a) As a consequence of an investigation, which may
incorporate any materials obtained or produced in connection with
a compliance inspection, 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. 24. end delete

begin insert SEC. 25. 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 insert

begin insert SEC. 26. end insert   

end insert

begin insert Section 94948 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

94948.  

In addition to any other reporting requirements under
this chapter, the director shall provide written updates to the
Legislature every six months and shall participate in all oversight
hearings conducted by the appropriate policy committees and
budget subcommittees of the Senate and Assembly. The updates
shall describe the bureau’s progress in protecting consumers and
enforcing the provisions of this begin delete chapter. end delete begin insert chapter and shall include,
but not be limited to, all of the following information received
pursuant to Section 325 of the Business and Professions Code: end insert

begin insert

(a) The total number of student complaints received.

end insert begin insert

(b) The general nature of these complaints.

end insert begin insert

(c) The outcome of these student complaints.

end insert

begin delete SEC. 25. end delete

begin insert SEC. 27. end 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 Education Code, to read:

 

Article 20.6.  Office of Student Assistance and Relief

 

94949.7.  

There is hereby established 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 a chief,
who shall be appointed by the director. The chief, and each staff
employee of the office, shall have experience and expertise,
commensurate with his or her position, 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, “office” means the Office of
Student Assistance and Relief.

94949.72.  

Duties of the office shall include all of the following:

(a) Conducting outreach and providing information and
assistance to students who have been affected by the unlawful
activities or closure of an institution regarding their rights under
state and federal begin delete law end delete begin insert law, including information about how and
where to file a complaint, end insert and to ensure that those students
successfully access available state and federal relief programs.
begin delete With existing resources provided to the bureau and department, end delete
begin insert No later than July 1, 2017, end insert the office shall prioritize and
immediately conduct the activities outlined in Section 94949.73.

begin delete

(b) Coordinating with the bureau and the department to facilitate
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)

end delete

begin insert ( end insert begin insert b) end insert  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.

begin delete

(d)

end delete

begin insert ( end insert begin insert c) end insert  The office may also conduct both of the following activities:

(1) Provide outreach to students and prospective students to
provide them with, among other information, information on
making informed decisions in selecting postsecondary educational
institutions, 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.

(2) Conduct data and information research begin insert concerning industry
trends and enforcement actions end insert from various sources, including,
but not limited to, annual reports provided to the bureau pursuant
to Section 94934, the United States Department of Education,
accrediting agencies, and the California Department of Veterans
Affairs begin delete to identify potential violations of the act. end delete begin insert to help determine
the trends and potential violations of the act. end insert The office shall advise
the director and bureau chief of its findings.

begin delete

(e)

end delete

begin insert ( end insert begin insert d) end insert  The office shall provide, pursuant to Section 9795 of the
Government Code, to the Legislature an annual written update
regarding the office’s progress in protecting students and
conducting the duties of the office.

94949.73.  

(a) The office shall provide individualized assistance
to students to relieve or mitigate the economic and educational
opportunity loss incurred by those students who attended a
Corinthian Colleges, Inc., institution or other eligible institution.

(b) Specific services provided by the office shall include all of
the following:

(1) Outreach and education to students regarding the assistance
available from the office.

(2) Screening requests for assistance received by the office and
providing individualized assistance to help students determine
their relief eligibility, identify and obtain necessary documents,
complete and submit applications, and provide additional services
as necessary.

(c) For purposes of this section, “other eligible institution”
means an institution identified by the office whose unlawful
activities or closure has resulted in its students being eligible for
repayment from the Student Tuition Recovery Fund, debt relief
from the United States Department of Education, or other student
financial aid relief.

(d) (1) The office shall quarterly report by posting on the
bureau’s Internet Web site, through September 1, 2018, on all of
the following:

(A) A summary of the outreach and education activities
conducted by the office pursuant to the requirements of paragraph
(1) of subdivision (b) and the number of students served from
Corinthian Colleges, Inc., institutions and every other eligible
institution.

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

(i) The number of students assisted with submitting Student
Tuition Recovery Fund claims to the bureau by the office, and of
the claims submitted, the number that are pending, on appeal, or
have been approved or denied. For the claims that have been
approved, the office shall report 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 students assisted with submitting federal
loan forgiveness claims, and of the claims submitted, the number
of those claims that are pending, on appeal, or have been approved
or denied. For the claims that have been approved, the office shall
report the estimated total in student loans canceled and the total
amount of funds refunded to students.

(iii) The number of students assisted with private student loan
relief, other than through Student Tuition Recovery Fund claims,
and a summary of assistance provided and relief outcomes
obtained.

(iv) The number of students whom the office helped to 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.

(2) The office shall provide, pursuant to Section 9795 of the
Government Code, the Legislature, the department, and the bureau
a final report summarizing the information submitted pursuant to
paragraph (1) by January 1, 2019.

begin delete SEC. 26. end delete

begin insert SEC. 28. end insert   

Section 94950 of the Education Code is amended to
read:

94950.  

This chapter 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.

begin delete SEC. 27. end delete

begin insert SEC. 29. end insert   

The Legislature finds and declares that the
reimbursement of legal fees, as provided in subparagraph (H) of
paragraph (2) of subdivision (b) of Section 94923 of the Education
Code, is intended to encourage and support the efforts of nonprofit
legal service organizations and pro bono attorneys to secure student
debt cancellation. Complicated student loan cases often require
extensive time and resources. The reimbursement provided is not
intended to reflect the work associated with successful student
debt cancellation.

begin delete SEC. 28. end delete

begin insert SEC. 30. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.