BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1192 Hearing Date: April 11,
2016
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|Author: |Hill |
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|Version: |April 6, 2016 Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Sarah Mason |
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Subject: Private postsecondary education: California Private
Postsecondary Education Act of 2009
SUMMARY: Makes various changes to the Private Postsecondary Education
Act of 2009 intended to improve the effectiveness of the Bureau
for Private Postsecondary Education and opportunities for
student success.
Existing law: Establishes the California Private Postsecondary
Education Act of 2009 (Act) until January 1, 2017, and requires
the Bureau for Private Postsecondary Education (BPPE) within the
Department of Consumer Affairs (DCA) to, among other things,
review, investigate and approve private postsecondary
institutions, programs and courses of instruction pursuant to
the Act and authorizes BPPE to take formal actions against an
institution/school to ensure compliance with the Act and even
seek closure of an institution/school if determined necessary.
The Act requires unaccredited degree granting institutions to be
accredited by an accrediting agency recognized by the United
States Department of Education (USDE) by 2020. The Act also
provides for specified disclosures and enrollment agreements for
students, requirements for cancellations, withdrawals and
refunds, and that the BPPE shall administer the Student Tuition
Recovery Fund (STRF) to provide refunds to students affected by
the possible closure of an institution/school. (Education Code
§ 94800 et seq.)
This bill:
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1) Ensures that certification and registration necessary for a
student to engage in a particular profession are reflected in
the BPPE's approval of educational programs.
2) Provides BPPE the authority to give extensions on the
timeline for unaccredited degree granting institutions to
become accredited according to certain evidence.
3) Establishes an Office of Student Assistance and Relief
(Office) to serve as a primary point of contact to address
the needs of private postsecondary education students.
Specifies that the duties of the Office include but are not
limited to providing assistance to students, conducting
proactive outreach to students, administering the STRF and
overseeing the registration of institutions that do not have
a physical presence in this state and are offering distance
education to California students. Requires the Office to
establish and maintain a website to provide information to
students about their rights and protections available to them
as well as information about free services available to
students provided by a local nonprofit community service
organization with demonstrated experience assisting students
in areas like legal services and student loan matters.
4) Provides recourse through the STRF to students impacted by
the abrupt closure of Corinthian Colleges, Inc. (CCI).
5) States the intent of the Legislature to require a private
postsecondary educational institution that does not maintain
a physical presence in this state and offers distance
education to California students to file a surety bond for
the benefit of students suffering economic loss. Requires
these institutions to register with BPPE.
6) Authorizes Bureau staff to issue a citation, with a fine not
to exceed $5,000, before leaving an institution when
non-minor violations of the Act are detected during an
inspection.
7) Increases the penalty for operating an institution without
BPPE approval from $50,000 to $100,000.
8) Requires the Director to appoint an enforcement monitor for a
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period of two years to monitor the BPPE's enforcement
efforts, with a 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. Requires the enforcement monitor to
submit reports to the Director and Legislature and be
available to make oral reports to both if requested to do so.
9) Makes various technical changes.
FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1. Purpose. This bill is sponsored by the Author , and is one of
five "sunset bills" the Author is sponsoring this Session.
According to the Author, this bill is necessary to make
changes to the Act in order to ensure continued oversight of
private postsecondary institutions that supports quality,
innovative programs which are approved in a timely manner,
while also making sure a robust government structure prevents
predatory practices and promotes student success. According
to the Author, the focus of any conversation about the Bureau
and Private Postsecondary Education Act should be about
finding balance - balance between a thoughtful regulatory
structure that allows good schools to thrive while at the
same time establishing meaningful opportunities for students.
The Author notes that "we must continue to ensure that the
Californians working to better their lives through education
and skills based training have some confidence in the quality
of education and training they receive. It is also important
for us to find ways to increase accountability for California
students, as well as for the significant amount of public and
private resources spent on educational and training
endeavors." According to the Author, most significantly, it
is important to ensure that students are provided proper
recourse through the Bureau and the vast array of tools the
Bureau has to help students in the event that they are not
provided all of the opportunities they were promised.
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2. Oversight Hearings and Sunset Review of Licensing Boards and
Programs. Beginning in 2015, the Senate Business and
Professions Committee and the Assembly Business and
Professions Committee (Committees) conducted joint oversight
hearings to review 12 regulatory entities: DCA, Acupuncture
Board, Board of Behavioral Sciences, California Massage
Therapy Association, Court Reporters Board, Board of
Pharmacy, Physician Assistant Board, Board of Podiatric
Medicine, BPPE, Board of Psychology, Bureau of Real Estate,
Bureau of Real Estate Appraisers and Veterinary Medical Board
The Committees conducted two hearings in March and joined
with the Senate Committee on Education and Assembly Committee
on Higher Education to review BPPE. This bill and the
accompanying sunset bills are intended to implement
legislative changes as recommended by staff of the Committees
and which are reflected in the Background Papers prepared by
Committee staff for each agency and program reviewed this
year.
3. Background on BPPE. The Bureau for Private Postsecondary
Education (BPPE or Bureau) is responsible for oversight of
private postsecondary educational institutions operating with
a physical presence in California. Established by
AB 48 (Portantino, Chapter 310, Statutes of 2009) after numerous
legislative attempts to remedy the laws and structure
governing regulation of private postsecondary institutions,
the bill took effect January 1, 2010, to make many
substantive changes that created a foundation for oversight
and gave the BPPE enforcement tools to ensure schools comply
with the law.
AB 48 established BPPE's authority to regulate private
postsecondary institutions and enforce the provisions of the
new California Private Postsecondary Education Act (Act) and
to respond to the major problems with the former laws
governing the industry in California. The Act provides for
prohibitions on false advertising and inappropriate
recruiting and requires disclosure of critical information to
students such as program outlines, graduation and job
placement rates, and license examination information, and
ensures colleges justify those figures. The Act also
provides BPPE with enforcement powers necessary to protect
consumers. The Act directs BPPE to:
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Create a structure that provides an appropriate
level of oversight, including approval of private
postsecondary educational institutions and programs;
Establish minimum operating standards for California
private postsecondary educational institutions to ensure
quality education for students;
Provide students a meaningful opportunity to have
their complaints resolved;
Ensure that private postsecondary educational
institutions offer accurate information to prospective
students on school and student performance; and,
Ensure that all stakeholders have a voice and are
heard in the operations and rulemaking process of BPPE.
BPPE is also tasked with actively investigating and
combatting unlicensed activity, administering the Student
Tuition Recovery Fund (STRF), and conducting outreach and
education activities for students and private postsecondary
educational institutions within the state.
1. Review of the BPPE - Issues Identified and Recommended
Changes. Private postsecondary institutions play an
important role in ensuring access to higher educational
opportunities for California's students. The landscape of
schools that are now regulated under BPPE, and that have
become central in California's discussion of private
postsecondary education, has evolved significantly in recent
decades. The smaller, independent for-profit institutions
that made up the bulk of the former-Bureau's licensee
population have shifted. Today, a large number of California
students are being served by multi-campus, publicly-traded
institutions with a national presence. These institutions
also receive significant public funds; under federal law, up
to 90 percent of revenues can come from the Title IV
financial aid program. In 2009-10, nationally, for-profit
institutions received $32 billion in Title IV grants and
loans. High-profile state and federal investigations have
revealed deceptive and illegal practices by some institutions
within the sector. Federal regulators responded by
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increasing student outcome and institutional accountability
measures. Specifically, in California, BPPE's approval can
enable these institutions to access the Title IV program;
USDE relies on the Bureau to provide oversight and student
protection.
Students, the public and quality private postsecondary
educational institutions are best served by a
well-functioning regulatory entity that effectively enforces
the Act. The Bureau has faced significant difficulties in
implementing the law. It is important that California's
approval and oversight of an institution assures minimum
quality and student protections.
The following are some of the major issues pertaining to BPPE
along with background information concerning the particular
issue. Recommendations were made by Committee staff
regarding the particular issue areas which needed to be
addressed.
a) Issue : Relationship of the Bureau to Other Regulatory
Entities.
Background : The Act provides that if an institution offers
an educational program in a profession, occupation, trade,
or career field that requires licensure in California, the
institution must have educational program approval from the
appropriate state licensing agency for any student who
completes that program to sit for any required licensure
exam. The law is intended to deal with the issue of
students completing an educational program specifically
designed to prepare them for certain occupations that in
reality does not meet any requirements for education
required for licensure.
As the Bureau noted during the prior review, the Act may
also be strengthened to ensure students receive training
necessary for employment and licensure. Specifically, the
definition of "licensure" contained in Education Code
section 94848 does not specify certification or
registration, but if these are required for a given
profession, specific language may be included in this
definition. Also, in some professions there are no
requirements for official recognition but there may be
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preferred certification requirements. In those cases,
there should be stronger disclosures to students regarding
employment impediments they may encounter. For example,
ultrasound technicians are not required to graduate from an
institution that is accredited by the American Registry for
Diagnostic Medical Sonography (ARDMS) but many employers
will not hire students who have not graduated from an ARDMS
accredited institution.
Recommendation and Proposed Statutory Change : The
Committees may wish to amend the Act to clarify the
definition of licensure and enhance disclosures to students
regarding necessary requirements for training programs.
This bill makes the following changes to the Act related to
completion of an education or training program designed to
prepare graduates for employment in a profession,
occupation or trade:
Includes certification and registration in the definition
of licensure for purposes of BPPE approval of a program
intended to lead to licensure and adds requirements for
institutions to reflect certification or registration
necessary for a student to engage in a particular
profession during the enrollment process.
b) Issue : Unaccredited Degree Granting Programs.
Background : During the prior sunset review, the Committees
were significantly concerned about the ongoing approval by
BPPE of institutions that offer degrees but are not
accredited. California is one of few states to continue to
allow unaccredited degree granting programs, with
approximately 140 approved institutions offering
unaccredited degrees. A 2012 New York Times article
outlined the experience of students attending these
institutions, including one seeking a bachelor's degree who
had never spoken to a teacher but instead received an email
package of reading materials to read with an open choice
multiple-choice exam. The practice of offering degrees
primarily online and primarily targeted to foreign students
has long been at the heart of the state's role as the
diploma mill capital of the world.
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Some career fields and licensing agencies require degrees
from accredited colleges; this is especially true in
professions like education and health care, where
certification or licensure is a pre-requisite for
employment. Although California licensure requirements in
the health care field vary, many practitioners must obtain
their required degrees from accredited institutions or
institutions approved by their respective licensing boards.
While the accrediting process is not perfect, as
highlighted by the unlawful activities of institutions
accredited by some accrediting agencies, and does not focus
on fair business practices that can impact a student's
success, accreditation is designed to provide a baseline
measure of the quality of a particularly educational
program.
In response to these concerns and as a means of better
serving students while aiming to decrease the Bureau's
significant workload associated with reviewing unaccredited
degree granting institutions, SB 1247 (Lieu, Chapter 840,
Statutes of 2014) amended the Act to require that degree
granting programs be accredited. Institutions offering a
degree that seek BPPE approval are now required to either
be accredited by an accrediting agency recognized by the
USDE to offer the degree(s) or have an accreditation plan,
approved by BPPE, for the institution to become fully
accredited within five years of the BPPE issuance of a
provisional approval to operate. For these schools, the
Act requires compliance with certain student disclosures
about accreditation, review by a visiting committee and
degree limitation requirements. SB 1247 also outlined a
process for institutions that are currently approved by
BPPE and offer degrees to submit an accreditation plan to
the Bureau by July 1, 2015, to obtain pre-accreditation by
July 1, 2017, to obtain accreditation by July 1, 2020, and
to comply with various student disclosure and visiting
committee review requirements.
It appears that some authority to provide extensions for
meeting deadlines is still desirable, as the Bureau's
Statement of Reasons provided to the Office of
Administrative Law in support of the regulations for
implementing the accreditation requirement notes that "a
scenario, in which a program was very close, but not quite
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to the stated goal, was envisioned, where the parties could
easily agree that the program would meet the requirement,
but it needed a couple more months. In short, substantial
performance could be demonstrated. However, extensions were
rejected as the statute states that programs failing to
meet the deadlines must be automatically suspended, which
allows for no other alternatives."
Unaccredited degree granting institutions have also
expressed concerns about the timeframes established in the
law to become accrediting, noting that the 2020 deadline is
too short.
Recommendation and Proposed Statutory Change : The
Committees may wish to provide the Bureau discretionary
authority, as outlined in previous version of SB 1247, to
extend the deadline by which a school must be accredited,
according to certain measures showing meaningful progress
toward accreditation.
This bill makes the following changes to the Act related to
unaccredited degree granting institutions:
Provides BPPE the authority to give extensions on the
timeline for unaccredited degree granting institutions to
become accredited according to certain evidence provided by
the institution.
c) Issues : Outreach/School Closures and STRF.
Background : The Bureau has focused significant efforts to
provide outreach to schools, including new workshops to
assist with application completion and web-based tools to
allow institutions to better understand how they can be
compliant with the Act and Bureau regulations. The Bureau
does not appear to focus similar efforts on student
outreach to inform students about the Bureau's work and
available recourse for students.
Legislative intent outlined in the Act specifically
references "meaningful student protections through
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essential avenues of recourse for students" and "prevention
of the harm to students and the deception of the public
that results from fraudulent or substandard educational
programs and degrees" in continuing the operation of the
Bureau and Act. The Bureau is also required, under
Education Code Section 94879, to "conduct an outreach
program to secondary school pupils as well as prospective
and current private postsecondary students, to provide them
with information on how best to 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 has a number of new tools it has employed since
the prior sunset review to communicate more directly with
schools, including offering workshops once a month to
assist institutions in completing applications for approval
throughout the state as well as webinars and videos to help
schools provide accurate information to the Bureau. These
proactive efforts have helped reduce the licensing backlog
and are likely a means by which institutions have increased
awareness of Bureau requirements and activities.
It does not appear that the Bureau focuses the same effort
and resources on proactive outreach to students. The
Bureau reports that it attends college fairs with agencies
like the California Student Aid Commission (CSAC) which,
the Bureau reports, "informs students of the Bureau and the
resources available to them from the Bureau". Based on the
large scale closures during the past year and increased
exposure to students about BPPE and the Act, it does not
appear that students attending Bureau regulated schools are
as aware of the Bureau and options available provided by
BPPE. Some students may first interact with the Bureau
during site visits amidst an abrupt closure of their school
and while BPPE staff have been swift in trying to make
contact with students at these school sites, it does not
appear that the Bureau utilizes student information
collected in a proactive way to then continue communicating
with students about their options for recourse. Staff
provides students STRF applications during these school
closure visits, but the onus is then on students to contact
the Bureau again for additional follow up. While BPPE
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reported during the CCI closure that it made contact with
almost 80 percent of Wyotech and Everest students who would
be STRF eligible, it has received around 300 applications.
BPPE also reports that it has received over 10,000 calls
related to the CCI closure and while the Bureau notes that
it documents student contact information for students who
attended schools under the Bureau's jurisdiction, it does
not appear that contact information is tracked for all
students who contact BPPE.
The Committees were interested in providing a simple,
streamlined process to students in the wake of a school
closure and proposed in AB 573 (Medina, 2015) first a
closed schools task force and then a single state point of
contact to lead the synchronization of other state agencies
with a role in assisting students, monitoring regulatory
efforts at the state and federal level and be in a position
to work with partner agencies to establish key criteria for
determining the appropriate steps the state should take to
protect students, particularly in light of abrupt school
closures.
The STRF is an important tool to assist harmed students.
STRF, administered by the BPPE, exists to relieve or
mitigate economic loss suffered by students enrolled at
non-exempt private postsecondary education institutions due
to the institutions' closure, the institutions' failure to
pay refunds or reimburse loan proceeds, or the
institutions' failure to pay students' restitution award
for a violation of the Act.
SB 1247 directed BPPE to enact regulations to expand the uses of
STRF to provide relief to harmed students. However, BPPE has
not yet enacted new regulations. Due to this delay, several
categories of students that were harmed by illegal institutional
practices and closure are not provided full recovery under STRF.
Students enrolled in institutions that are exempt from, or not
covered by the Act are not eligible for STRF. Due to broad
exemptions in the Act, over 13,000 students enrolled in Heald
College (owned by CCI) at the time of the institution's unlawful
closure were not eligible for STRF. Further, as a result of the
requirement in the Act that schools under BPPE oversight have a
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physical presence in the state, a number of California students
enrolled in Everest Online (owned by CCI but housed outside of
California) are not eligible for STRF. Several other large,
publicly traded colleges are now under regulatory, financial and
legal pressure similar to that facing CCI prior to closure. A
requirement for a surety bond or for inclusion in STRF for
exempt and online institutions may ensure that all California
students are protected.
Recommendation and Proposed Statutory Change : The
Committees may wish to explore establishing a single point
of contact for prospective and current students of private
postsecondary education institutions. The Committees may
wish to extend the timeframe in which a student may file a
STRF claim. The Committees may wish to establish an
independent student advocate to work with nonprofit
community organizations, to provide outreach and support to
students that may be eligible for state or federal relief,
and to make recommendations to the DCA Director regarding
improving student outreach and protection. The Committees
may wish to require institutions, including exempt or
online institutions) to participate in STRF and/or obtain a
surety bond to protect against unlawful activities or
closures. The Committees may wish to ensure BPPE has clear
authority to help students harmed by illegal or deceptive
school practices; for example, to order institutional
refunds/restitution to students who have been defrauded or
to require institutions to cancel student loan debt when
the institution operates as a private lender.
This bill makes the following changes to the Act related to
outreach, school closures and STRF:
Establishes an Office of Student Assistance and Relief
(Office) to serve as a primary point of contact to address
the needs of private postsecondary education students.
Specifies that the duties of the Office include, but are
not limited to, providing assistance to students,
conducting proactive outreach to students, administering
the STRF and overseeing the registration of institutions
that do not have a physical presence in this state and are
offering distance education to California students.
Requires the Office to establish and maintain a website to
provide information to students about their rights and
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protections available to them, as well as information about
free services available to students provided by a local
nonprofit community service organization with demonstrated
experience assisting students in areas like legal services
and student loan matters.
Provides that a student who was enrolled at a California
campus of CCI, or was a California student enrolled in an
online program offered by an out-of-state campus of a CCI
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 BPPE, is eligible for STRF.
States the intent of the Legislature to require a private
postsecondary education institution that does not maintain
a physical presence in this state and offers distance
education to California students to file a surety bond for
the benefit of students suffering economic loss. Requires
these institutions to register with BPPE.
d) Issue : Unlicensed Activity/Compliance Inspections/BPPE
Investigations Backlog and Enforcement Powers.
Background : The Act provides that the BPPE primary mission
is to protect students. One of the ways BPPE achieves this
objective is through announced and unannounced compliance
inspections that ensure institutions are meeting the
minimum operating standards outlined in the Act and
regulations. Upon conclusion of a compliance inspection,
institutions are issued a notice to comply for any "minor
violations" identified during the inspection. Violations
that are not "minor" are referred to the complaint
investigations unit for further investigation. Committee
staff understands that this internal referral occurs
because BPPE believes, unlike most other DCA boards and
bureaus, it does not currently have the authority to issue
a citation for more serious violations identified during
the compliance inspection.
Information regarding pending investigations is not made
available to the public until a citation or accusation has
been issued by the BPPE. This means that students seeking
information regarding an institution may be provided
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inaccurate information regarding an institution's
compliance with the law. For example, 13 unannounced
compliance inspections were completed in 2015 of Everest
and WyoTech (owned by CCI) campuses. According to the
compliance inspection outcome data posted on the BPPE
website, no minor violations were detected at any of the
inspected campuses. These compliance inspections occurred
after the AG, and a number of other states and federal
agencies, filed charges against CCI for unlawful practices.
The degree to which compliance inspections lead to
investigations that result in the issuance of a citation
and/or accusation is also unclear; BPPE does not report
data on this point. Further, BPPE staff from different
units generate complaints and it appears that this internal
referral process contributes to the current complaints
backlog. According to BPPE data, by 2015 year-end, 32
percent of the 1045 pending complaints were internal
referrals.
The USDE establishes that states are responsible for
providing primary protection of consumers and students
attending postsecondary educational institutions. BPPE
approval not only authorizes institutions to operate and
serve students in California, it can also, as outlined
above, enable institutions to receive public funds through
the federal Title IV financial aid program.
In the last few years, a number of postsecondary
educational corporations have been accused by federal and
state regulators of engaging in misconduct and fraud.
Often, these actions originate from public complaints. The
BPPE faces a growing complaint and investigation backlog
that may significantly reduce California's ability to
protect students and ensure appropriate use of taxpayer
funds.
SB 1247 directed BPPE to consult with the Advisory
Committee and adopt regulations to establish complaint
priorities. BPPE was required specifically to prioritize
complaints related to unlawful, unfair or fraudulent
business practices and institutions making unfair,
deceptive or misleading statements regarding educational
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programs, placement, loans, tuition and fees, and other
outlined areas. BPPE reports the Advisory Committee has
discussed new regulations regarding complaint
prioritization, and the proposed regulations are currently
in the internal review process.
Currently, BPPE reports that it is prioritizing complaints
based on a risk assessment score that reviews the following
criteria:
Allegations of complaint
Population of surrounding community
Number of open/closed complaints
Age of complaint
Institution status
The risk score is used to categorize the complaint as
urgent, high or routine.
BPPE appears to have made some progress toward meeting the
Legislature's directives contained in SB 1247; however,
increased staffing and complaint prioritization changes
have not reduced the BPPE complaint backlog. Further, as
the details of complaints and resolutions are not made
available to the Legislature, it is unclear if complaints
are being acted upon properly in order to enforce the Act
and protect students.
Recommendation and Proposed Statutory Change : To reduce
the complaints backlog associated with internal referrals
resulting from compliance inspections, the Committees may
wish to amend the Act to authorize the Bureau, consistent
with all due process requirements, to issue citations for
non-minor violations detected during a compliance
inspection. To ensure BPPE compliance inspections are
properly identifying and responding to institutional
violations of law, the Committees may wish to require an
independent review and report on the adequacy of BPPE
compliance inspections. The Committees may wish to require
an independent review of complaint prioritization and
investigation and resolution procedures to ensure BPPE is
using all authorized tools to mitigate harm to students.
This bill makes the following changes to the Act related to
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enforcement:
Authorizes Bureau staff to issue a citation, with a fine
not to exceed $5,000, before leaving an institution when
non-minor violations of the Act are detected during an
inspection.
Increases the penalty for operating an institution without
BPPE approval from $50,000 to $100,000.
Requires the Director to appoint an enforcement monitor for
a period of two years to monitor the BPPE's enforcement
efforts, with a 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. Requires the enforcement monitor to
submit reports to the Director and Legislature and be
available to make oral reports to both if requested to do
so.
1. Current Related Legislation. There are a number of bills
moving through the Legislature this year that also make
changes to the Act, or propose statutory changes that could
impact BPPE and students attending private postsecondary
education institutions. It may be appropriate for the
Committee to consider whether some of the proposed policy
changes, particularly those which were addressed in the
Background Paper for BPPE, be included in this more
comprehensive measure.
SB 1059 (Monning) exempts law schools accredited by the State
Bar of California Committee on Bar Examiners from
requirements that they be accredited by an accrediting agency
recognized by USDE in order to receive Title 38 veterans
benefits. ( Status: The measure passed this Committee on
April 4, 2016 and is pending in the Senate.)
SB 1281 (Block) requires law schools that are not ABA
approved to publicly disclose on its website, with a link on
its home page under "Admissions" information about the
institution, including, among other items, outcomes for
graduates and bar passage data. Requires the information to
be complete, accurate and not misleading. ( Status: The bill
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is currently pending in the Senate Committee on Judiciary.)
AB 1835 (Holden) exempts institutions that grant doctoral
degrees in psychoanalysis from the provisions of the Act
requiring unaccredited degree granting institutions to be
accredited if all of the institution's students hold master's
or doctoral degrees before enrollment in the institution and
the institution has obtained accreditation from, or has
submitted a self-study application to, the Accreditation
Council for Psychoanalytic Education on or before July 1,
2017. ( Status: The bill is currently pending in the
Assembly Committee on Higher Education.)
AB 1916 (Irwin) requires a private postsecondary institution
to file a surety bond with BPPE before January 1, 2019, in an
amount no less than the total amount of tuition and fees
charged by the institution for the immediately preceding
academic year, divided by 4. Provides that in the event the
institution ceases operation, requires BPPE to make a demand
on the institution to provide recovery to students who were
enrolled at the time of the closure, or within 120 days of
the closure, and reimburse the Student Tuition Recovery Fund
for moneys paid from the fund for these students. ( Status:
The bill is currently pending in the Assembly Committee on
Higher Education.)
AB 1996 (Gordon) exempts a nonprofit institution that is
accredited by WASC, that does not award degrees or diplomas,
and is paid from state or federal student financial aid
programs for fewer than 20 percent of its students who
receive vocational training from the Act. ( Status: The bill
is currently pending in the Assembly Committee on Higher
Education.)
AB 2581 (Medina) provides financial and other assistance to
students of Heald, Everest, and WyoTech campuses in
California, which were owned by CCI and closed unlawfully on
April 27, 2015. ( Status: The bill is currently pending in
the Assembly.)
AB 2652 (Eggman) requires a private entity with no physical
presence in this state, that would be subject to the
requirements of the Act if the entity was located in this
state, to register with the bureau and participate in STRF.
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Establishes a private task force comprised of specified
individuals to make recommendations, by July 1, 2018, to the
Legislature and the Governor on how California should
regulate educational programs offered by institutions with no
physical presence in this state by means of distance
education. ( Status: The bill is currently pending in the
Assembly Committee on Higher Education.)
2. Prior Related Legislation. SB 81 (Committee on Budget and
Fiscal Review, Chapter 22, Statutes of 2015) included
numerous statutory changes intended to implement the Budget
Act of 2015 related to postsecondary education. Among those
changes is a provision that allows the Bureau to enter into a
contract with any independent institution of higher
education, as defined, to review and act on student
complaints against the institution.
SB 410 (Beall, Chapter 258, Statutes of 2015) defined
"on-time graduates" to mean students who graduate within 100%
of the program length in lieu of classifying this group as
"graduates" for purposes of reporting requirements.
SB 634 (Block) of 2015 would have applied the Act to an
accredited private entity with no physical presence in this
state that offers distance education if the entity does not
participate in a regional state authorization reciprocity
agreement entered into or recognized by the state and would
have authorized DCA to enter into a regional state
authorization reciprocity agreement with other states through
a compact on behalf of this state, allowing an entity
regulated in one member state to be able to provide distance
education in other member states. ( Status: This bill failed
passage in the Senate Committee on Education.)
AB 573 (Medina) of 2015) included a number of components
contained in AB 2581 above. ( Status: The bill was vetoed by
Governor Brown who noted in his veto message: "I am
sympathetic to the many students who were enrolled at
Corinthian Colleges when the company abruptly shuttered its
doors earlier this year?[USDE] has taken the matter of loan
discharge seriously. In recent months, it has greatly eased
the burden of filings for many students, and its work to
provide a simple, swift and fair process for students
continues. As such, it appears premature to create an
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attorney grant program, especially one that provides little
direction on how funds should be used. While the bill's
provisions to extend Cal Grant eligibility for Heald students
are well-intentioned, I am not comfortable creating new
General Fund costs outside of the budget process,
particularly given the Cal Grant augmentations already
included in this year's budget.")
AB 752 (Salas, Chapter 560, Statutes of 2015) required the
Bureau to review, by July 1, 2016, the examinations for
ability-to-benefit students prescribed by the United States
Department of Education. As part of this review, the Bureau
is required to determine whether the examinations are
appropriate for ability-to-benefit students who possess
limited English proficiency and approve an alternative
examination if the Bureau decides the examinations are
inappropriate.
AB 509 (Perea, Chapter 558, Statutes of 2015) created an
exemption from the Act and related oversight by the Bureau
for a bona fide organization, association, or council that
offers pre-apprenticeship training programs, on behalf of one
or more Division of Apprenticeship Standards approved
apprenticeship programs.
AB 2099 (Frazier, Chapter 676, Statutes of 2014) stipulated
new Title 38 veterans funding eligibility standards for
postsecondary institutions in California. All institutions
now must provide license examination passage rates to
students, and institutions that offer degrees must have
institutional and programmatic accreditation in order to
receive Title 38 monies. The bill also provided that, in
order for a postsecondary institution to be determined
eligible to accept Title 38 monies, determined by CSAAVE, the
postsecondary institution, whether it offers degrees or not,
must either be a public school, a nonprofit school, approved
by the Bureau or be regionally accredited.
SB 1247 (Lieu, Chapter 840, Statutes of 2014) extended the
sunset date for the BPPE and the Act until January 1, 2017
and made statutory changes to the protections provided to
students and the requirements placed on private postsecondary
educational institutions, including prohibiting an
institution from claiming an exemption from the Act if the
SB 1192 (Hill) Page 20
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institution is approved to participate in Title 38 programs.
The bill also contained an exemption for an institution that
meets a series of criteria including being accredited by WASC
for at least 10 years, headquartered in California, operated
continuously for at least 25 years, previously held approval
to operate by the former Bureau and derives at least 12.5
percent of its revenues from sources other than state or
federal student assistance like Title 38 and CalGrant monies.
One institution is currently claiming an exemption pursuant
to this provision in SB 1247.
AB 2296 (Block, Chapter 585, Statutes of 2012) expanded the
disclosure requirements for institutions under the Bureau
related to unaccredited programs; expanded disclosure
requirements for all regulated institutions; established more
stringent criteria for determining gainful employment and
calculating job placement rates; and increased institutional
documentation and reporting requirements around completion
rates, job placement/license exam passage rates, and
salary/wage information for graduates.
SB 498 (Liu) of 2011 would have abolished the Bureau and
transferred the Bureau's powers and duties under the Act to
the California Postsecondary Education Commission. ( Status:
The bill was held by the Senate Committee on Business,
Professions and Economic Development.)
SB 619 (Fuller, Chapter 309, Statutes of 2011) exempted
flight instructors or flight schools from Bureau regulation
if they do not require the upfront payment of tuition or
fees, and that do not require students to enter into a
contract of indebtedness in order to receive training.
AB 611 (Gordon, Chapter 103, Statutes of 2011) set forth
certain disclosure requirements pertaining to accreditation
status, licensure, and related limitations for unaccredited
doctoral programs.
AB 773 (Block) of 2011 would have allowed the Bureau to
revoke an exemption of an institution which was exempt based
on accreditation, but still required to comply with the
Student Tuition Recovery Fund requirements, if it determined
that the institution had not in fact complied with those
requirements. ( Status: The bill was never heard in a policy
SB 1192 (Hill) Page 21
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committee.)
AB 797 (Conway) of 2011 would have exempted schools of
cosmetology, as defined, from the Act. ( Status: The bill
was held in Assembly Committee on Higher Education.)
AB 1013 (Assembly Committee on Higher Education, Chapter 167,
Statutes of 2011) made clarifying changes to the Act and
related Bureau oversight.
AB 1889 (Portantino) of 2010 contained provisions regarding
doctoral degrees offered by unaccredited institutions, the
calculation of placement rates, and Bureau employment
requirements. ( Status: The bill was vetoed by Governor
Brown due to concerns over Bureau employment requirements.)
AB 2393 (Ammiano) of 2010 altered the definition of
"graduates employed in the field" for apprenticeship and
nursing programs. ( Status: The bill was vetoed by Governor
Brown, who indicated that it put the state on the same path
to overly confusing statutes and guidelines that existed
prior to the new Act.)
AB 48 (Portantino, Chapter 310, Statutes of 2009) established
the California Private Postsecondary Education Act of 2009.
SB 1568 (Dunn, Chapter 534, Statutes of 2006) transferred
regulation and oversight of unaccredited law schools and
correspondence law schools from the BPPVE to the State Bar
CBE. The bill also required correspondence law schools to be
required to disclose their faculty-to-student ratio and their
Baby Bar and general bar exam passage rates to prospective
students in the same manner required of unaccredited schools.
SB 1544 (Figureroa, Chapter 740, Statutes of 2004) extended
the operation of the former Bureau to 2007 and directed DCA
to appoint an Education Operations and Administrative Monitor
to assess the administrative operations and enforcement
processes and procedures of that Bureau with the primary goal
of improving the Bureau's overall efficiency and compliance
with state laws.
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3. Arguments in Support. A coalition of organizations including
the Center for Public Interest Law , Children's Advocacy
Institute , East Bay Community Law Center , Housing and
Economic Rights Advocates , Public Advocates , Public Law
Center and Veterans Legal Clinic are supportive of this bill
if amended. The groups believe that the bill will strengthen
the existing law, and will improve the Bureau's ability to
address the needs of students.
Supporters state that they hope the extension provided
unaccredited degree granting institutions end the legislative
efforts designed to undermine and diminish the accreditation
and minimum operating standard requirements created by SB
1247, noting "We are confident that schools will be able to
comply within this extended timeline, and that there will be
no further need to seek exemptions or to otherwise attempt to
reduce the requirements which the Legislature has found
necessary to ensure program quality." Supporters also
strongly support the prohibition against institutions
executing enrollment agreements with students who are known
to be ineligible for licensure, certification, or
registration. Supporters support the creation of the Office
of Student Assistance and Relief and note that it is their
hope the office will be given the appropriate resources to
conduct effective outreach and assistance to both current
students with questions and complaints about their
institutions, as well as students at closed schools but would
like the bill to amended to require the office to consult
regularly with student and consumer advocates and legal aid
organizations. Supporters agree with the efforts related to
distance education providers located in another state but
believe that it would be simpler and more efficient for the
Bureau if these institutions simply paid into the STRF, or if
students at these institutions were permitted to draw
recovery from STRF and the bond was instead designed to
reimburse STRF. Supporters note that creating another system
for relief would further complicate the Bureau's management
of student claims and is unnecessary given that the STRF
infrastructure and procedures are already established.
Supporters also agree with providing BPPE authority to issue
citations when it encounters non-minor violations during a
compliance inspection but believe when the Bureau encounters
a material violation it should take action beyond mere
citation and fine. Supporters strongly support the
SB 1192 (Hill) Page 23
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appointment of an Enforcement Monitor but believe the bill
should be amended to include a conflict of interest provision
to ensure the Monitor has never been affiliated with or
employed by a for-profit institution or any for-profit
accreditor; require minimum qualifications for the position
to ensure the Monitor has experience with postsecondary
education, administrative law and regulatory enforcement; and
require the Monitor to solicit and document public input into
his or her report to the Legislature.
NOTE : Double-referral to second to Senate Committee on Education.
SUPPORT AND OPPOSITION:
Support:
Center for Public Interest Law
Children's Advocacy Institute
East Bay Community Law Center
Housing and Economic Rights Advocates
Public Advocates
Public Law Center
Veterans Legal Clinic
Opposition: None on file as of April 6, 2016.
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