BILL NUMBER: AB 71 CHAPTERED
BILL TEXT
CHAPTER 78
FILED WITH SECRETARY OF STATE JULY 18, 1997
APPROVED BY GOVERNOR JULY 18, 1997
PASSED THE ASSEMBLY JULY 18, 1997
PASSED THE SENATE JULY 17, 1997
AMENDED IN SENATE JULY 17, 1997
AMENDED IN SENATE JULY 16, 1997
AMENDED IN SENATE JULY 14, 1997
AMENDED IN SENATE JUNE 16, 1997
AMENDED IN SENATE JUNE 4, 1997
AMENDED IN ASSEMBLY MAY 15, 1997
AMENDED IN ASSEMBLY APRIL 17, 1997
AMENDED IN ASSEMBLY MARCH 12, 1997
INTRODUCED BY Assembly Member Wright
(Principal coauthors: Assembly Members Aroner, Baca, Bowen, Knox,
Kuehl, Ortiz, Vincent, and Wayne)
(Principal coauthors: Senators Alpert, Polanco, Solis, and
Vasconcellos)
DECEMBER 12, 1996
An act to amend Sections 146, 473.1, and 473.3 of the Business and
Professions Code, to repeal, add, and repeal Chapter 7 (commencing
with Section 94700) of Part 59 of the Education Code, and to amend
Section 1095 of the Unemployment Insurance Code, relating to
postsecondary education, and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 71, R. Wright. Private postsecondary education.
(1) The existing Private Postsecondary and Vocational Education
Reform Act of 1989, until July 18, 1997, establishes various
requirements and standards for the approval of private postsecondary
educational institutions to operate in California and to award
degrees and diplomas.
The existing act establishes the Council for Private Postsecondary
and Vocational Education with specified duties and responsibilities.
This bill would repeal and reenact those provisions, and in doing
so would make numerous substantive changes. The bill would create a
Bureau for Private Postsecondary and Vocational Education in the
Department of Consumer Affairs, operative January 1, 1998, to
administer and enforce the act. This bill would specify that, in
addition to any immunity afforded by a specified section of the Civil
Code, any person serving on a special committee of the bureau, a
visiting team, or any other peer review body impaneled by the bureau
who provides information to the bureau or its staff in the course and
scope of evaluating any institution subject to the act or who
testifies at any administrative hearing arising under the act, has
the same defenses and immunities to any action arising out of
information or testimony to the bureau that person would have if he
or she were a public employee. These provisions would be repealed on
January 1, 2005.
(2) Under the existing act, it is a crime, punishable as
specified, for any person or business entity, regardless of the form
of organization, to willfully violate specified provisions of the
act.
This bill, in addition, would make it a crime, punishable as
specified, for any person or business entity, regardless of the form
of organization, to willfully violate specified provisions governing
refunds to students and requiring each institution to provide
prospective students with information concerning the institution's
general performance standards. The bill would also specify criminal
penalties for violating certain other provisions of the act. Thus,
because the bill would expand the scope of an existing crime and
create new crimes, it would impose a state-mandated local program.
(3) Under the existing act, if the council has evidence that an
institution has violated specified provisions governing prohibited
activities and determines that immediate action is necessary to
protect students, prevent misrepresentations to the public, or
prevent the loss of public funds or tuition and other money paid by
students, the council is authorized to suspend the approval of an
institution to operate. In addition, after notice and, if requested
by the institution, a hearing, if the council concludes that grounds
exist for the suspension or revocation of the institution's approval
to operate, the council may order probation and a penalty, or may
condition the institution's approval to operate as the council deems
appropriate.
This bill, in addition, would authorize any party aggrieved by the
bureau's final decision to seek judicial review, as specified.
(4) The bill, among other things, also would (a) require
educational services that provide intensive English language
programs, short-term seminar training, short-term career training, or
that assist students to prepare for an examination for licensure,
with a specified exception, to register with the bureau, (b) require
those educational services to comply with specified provisions of the
act, (c) revise the method for calculating student tuition refunds,
(d) reenact and revise various provisions governing student
protections, and (e) revise the act to provide for notices and
alternative dispute resolutions, as specified.
(5) The bill would make the bureau subject to the sunset review
process conducted by the Joint Legislative Sunset Review Committee,
as specified.
(6) Under existing law, the Private Postsecondary and Vocational
Education Administration Fund and the Student Tuition Recovery Fund
are continuously appropriated to the council for purposes of the act.
This bill would continue both of those funds in existence but
would provide that only the Student Tuition Recovery Fund is
continuously appropriated to the bureau for the purposes of the act.
(7) This bill would specify that its provisions shall become
operative only if Senate Bill 819, or any other bill, of the 1997-98
Regular Session extends the operative date of the Private
Postsecondary and Vocational Education Reform Act of 1989 until at
least December 31 1997, and is enacted and takes effect on or before
July 18, 1997.
(8) The bill would state that its provisions are severable.
(9) 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.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and declares that the
California Postsecondary Education Commission, in reviewing the
effectiveness of the Private Postsecondary and Vocational Education
Reform Act of 1989, adopted and issued a report on October 30, 1995,
that set forth all of the following findings:
(a) The Private Postsecondary and Vocational Education Reform Act
of 1989 is California's major statute for regulating and
strengthening its more than 2,000 privately operated postsecondary
educational institutions, as well as out-of-state public and private
institutions that have operations in California. The private sector
educates approximately 400,000 students: 100,000 enrolled in
degree-granting institutions, and 300,000 enrolled in
nondegree-granting institutions.
(b) Prior to passage of the act, some degrees and diplomas awarded
by California's private postsecondary and vocational educational
institutions were of questionable integrity and value. The act set
minimum standards of instructional quality and institutional business
practices, and mandated consumer protections for students against
fraud, misrepresentation, and unfair practices by schools. These
changes have restored the credibility and integrity of degrees and
diplomas awarded by private schools and colleges.
(c) More broadly, the improvement of California's work force
preparation programs, both public and private, is of significant
value to the business community in California. By ensuring
high-quality preparation and training for students entering the work
force, this act benefits both employers and employees.
SEC. 2. Section 146 of the Business and Professions Code is
amended to read:
146. (a) Notwithstanding any other provision of law, a violation
of any code section listed in subdivision (c) or (d) is an infraction
subject to the procedures described in Sections 19.6 and 19.7 of the
Penal Code when:
(1) A complaint or a written notice to appear in court pursuant to
Chapter 5c (commencing with Section 853.5) of Title 3 of Part 2 of
the Penal Code is filed in court charging the offense as an
infraction unless the defendant, at the time he or she is arraigned,
after being advised of his or her rights, elects to have the case
proceed as a misdemeanor, or
(2) The court, with the consent of the defendant and the
prosecution, determines that the offense is an infraction in which
event the case shall proceed as if the defendant has been arraigned
on an infraction complaint.
(b) Subdivision (a) does not apply to a violation of the code
sections listed in subdivisions (c) and (d) if the defendant has had
his or her license, registration, or certificate previously revoked
or suspended.
(c) The following sections require registration, licensure,
certification, or other authorization in order to engage in certain
businesses or professions regulated by this code:
(1) Sections 2052 and 2054.
(2) Section 2630.
(3) Section 2903.
(4) Sections 3760 and 3761.
(5) Section 4080.
(6) Section 4825.
(7) Section 4935.
(8) Section 4980.
(9) Section 4996.
(10) Section 5536.
(11) Section 6704.
(12) Section 6980.10.
(13) Section 7317.
(14) Section 7502 or 7592.
(15) Section 7520.
(16) Section 7617 or 7641.
(17) Subdivision (a) of Section 7872.
(18) Section 8016.
(19) Section 8505.
(20) Section 8725.
(21) Section 9681.
(22) Section 9840.
(23) Section 9884.6.
(24) Subdivision (c) of Section 9891.24.
(25) Section 19049.
(d) Institutions that are required to register with the Bureau for
Private Postsecondary and Vocational Education pursuant to Section
94931 of the Education Code.
(e) Notwithstanding any other provision of law, a violation of any
of the sections listed in subdivision (c) or (d), which is an
infraction, is punishable by a fine of not less than two hundred
fifty dollars ($250) and not more than one thousand dollars ($1,000).
No portion of the minimum fine may be suspended by the court unless
as a condition of that suspension the defendant is required to
submit proof of a current valid license, registration, or certificate
for the profession or vocation which was the basis for his or her
conviction.
SEC. 3.5. Section 473.1 of the Business and Professions Code is
amended to read:
473.1. This division shall apply to all of the following:
(a) Every board, as defined in Section 22, that is scheduled to
become inoperative on July 1, 1997, July 1, 1998, or July 1, 1999,
and to be repealed on either January 1, 1998, January 1, 1999, or
January 1, 2000, respectively, by the act which enacted this
division.
(b) The Bureau for Postsecondary and Vocational Education. For
purposes of this division, "board" includes the bureau.
SEC. 3.7. Section 473.3 of the Business and Professions Code is
amended to read:
473.3. (a) Prior to the termination, continuation, or
reestablishment of any board or any of the board's functions, the
Joint Legislative Sunset Review Committee shall, during the interim
recess preceding the date upon which a board becomes inoperative,
hold public hearings to receive testimony from the Director of
Consumer Affairs, the board involved, and the public and regulated
industry. In that hearing, each board shall have the burden of
demonstrating a compelling public need for the continued existence of
the board or regulatory program, and that its licensing function is
the least restrictive regulation consistent with the public health,
safety, and welfare.
(b) In addition to subdivision (a), in the year 2001 and every
four years thereafter, the committee shall hold a public hearing to
receive testimony from the Director of Consumer Affairs, the Bureau
for Private Postsecondary and Vocational Education, private
postsecondary educational institutions regulated by the bureau, and
students of those institutions. In those hearings, the bureau shall
have the burden of demonstrating a compelling public need for the
continued existence of the bureau and its regulatory program, and
that its function is the least restrictive regulation consistent with
the public health, safety, and welfare.
SEC. 3.9. Chapter 7 (commencing with Section 94700) of Part 59 of
the Education Code is repealed.
SEC. 4. Chapter 7 (commencing with Section 94700) is added to Part
59 of the Education Code, to read:
CHAPTER 7. PRIVATE POSTSECONDARY AND VOCATIONAL INSTITUTIONS
Article 1. General Provisions
94700. This chapter shall be known, and may be cited, as the
"Private Postsecondary and Vocational Education Reform Act of 1989."
94705. It is the intent of the Legislature to promote the
effective integration of private postsecondary education into all
aspects of California's educational system and to foster and improve
the educational programs and services of these institutions while
protecting the citizens of the state from fraudulent or substandard
operations.
It is further the intent of the Legislature to recognize the
enormous diversity of California's private postsecondary educational
enterprise, with its approximately 2,300 privately supported
institutions of academic and vocational education.
It is further the intent of the Legislature to provide for the
protection, education, and welfare of citizens of California, its
postsecondary educational institutions, and its students by providing
for all of the following:
(a) Ensuring minimum standards of instructional quality and
institutional stability for all students in all types of
institutions, and thereby encouraging the recognition by public and
private institutions of completed coursework and degrees and diplomas
issued by private institutions, to the end that students will be
provided equal opportunities for equal accomplishment and ability.
(b) Establishing minimum standards concerning the quality of
education, ethical and business practices, health and safety, and
fiscal responsibility to provide protection against substandard,
transient, unethical, deceptive, or fraudulent institutions and
practices.
(c) Prohibiting the granting of false or misleading educational
credentials.
(d) Prohibiting misleading literature, advertising, solicitation,
or representations by private educational institutions or their
agents.
(e) Recognizing the importance of providing adequate funding
through application and renewal fees and federal funding for the
veteran's approval process to support the state's activities in
implementing this chapter.
(f) Protecting the consumer and students against fraud,
misrepresentation, or other practices that may lead to an improper
loss of funds paid for educational costs, whether financed through
personal resources or state and federal student financial aid.
(g) Establishing a path for the development of institutions
offering fields of study or methods of instruction and innovative
educational delivery systems not previously recognized in order to
encourage them to become fully approved institutions.
(h) Recognizing and encouraging quality nongovernmental
accreditation, while not ceding to that or any other nongovernmental
process the responsibility for state oversight for purposes of
approval, if the accreditation process fails either to protect
minimum standards of quality or to acknowledge legitimate innovative
methods in postsecondary education.
(i) Establishing an administrative agency staffed by individuals
who are knowledgeable about private academic and vocational
education, and charged with the responsibility of developing policies
and procedures for the oversight and approval of private
postsecondary and vocational education, including the responsibility
for managing a broadly construed policy and planning process that
seeks to improve state accountability for private postsecondary and
vocational education as well as to improve the articulation of
private postsecondary and vocational education with the public and
independent postsecondary educational community. This new body
should provide the leadership and planning needed to maintain and
develop a strong private sector of this community.
Article 2. Definitions
94710. The definitions set forth in this article govern the
construction of this chapter, unless the context requires otherwise.
94711. "Academic Year" for a degree-granting institution means a
period including a minimum of 30 weeks of instruction.
94712. "Accredited" means that an institution has been recognized
or approved as meeting the standards established by an accrediting
agency recognized by the United States Department of Education, or
the Committee of Bar Examiners for the State of California. It does
not include those institutions that have applied for accreditation,
or are identified by accrediting associations as candidates for
accreditation or have provisional accreditation.
94713. "Agency" means any person or business entity, regardless
of the form of organization, that employs, or in any manner contracts
with, one or more agents. "Agency" does not include an institution.
94714. "Agency approval" means a written document issued by the
council authorizing a business entity or an institution to engage in
the recruitment of students for enrollment in private postsecondary
and vocational institutions approved under this chapter.
94715. "Agent" means any person who, at a place away from the
institution's premises or site of instruction, but within the United
States, for consideration, solicits, promotes, advertises, offers, or
attempts to secure enrollment for an institution, refers any person
to that institution, either for enrollment or to receive a
solicitation for enrollment, or accepts application fees or
admissions fees for education in that institution. Administrators
and faculty who make informational public appearances, but whose
primary task does not include service as a paid recruiter, are not
agents. Publishers of directories that contain general information
on institutions and their offerings and who do not otherwise engage
in any of the activities described in this section are not agents.
94716. "Agent's permit" means a nontransferable written document
issued to an agent pursuant to this chapter by the council.
94717. "Applicant" means a new institution that has submitted an
application but has not been evaluated by the council. An applicant
institution shall not enroll students or offer educational services.
94718. "Approval" or "approval to operate" means that the council
has determined and certified that an institution meets minimum
standards established by the council for integrity, financial
stability, and educational quality, including the offering of bona
fide instruction by qualified faculty and the appropriate assessment
of students' achievement prior to, during, and at the end of its
program.
94719. "Branch" means a site other than the main location or a
satellite. Only educational services approved at the main location
may be offered at the branch.
94719.5. "Bureau" means the Bureau for Private Postsecondary and
Vocational Education in the Department of Consumer Affairs
established pursuant to Section 94770.
94720. "Certificate of authorization for service" means a
written, nontransferable document issued by the council authorizing
an individual to be an instructor or administrator in any private
vocational postsecondary educational institution in California that
is approved under Section 94915.
94721. "Change of location" means a move of up to 25 miles of the
location at which an institution offers any education, training, or
instruction. A change of location of 25 or more miles is deemed the
establishment of a new location of instruction requiring a separate
approval to operate, unless otherwise provided by the council.
94722. (a) Except as provided in subdivision (b), "continuing
education" means instruction in any of the following circumstances:
(1) Only in subjects licensees are required to take as a condition
of continued licensure and solely for that purpose.
(2) Only in subjects necessary to continue to practice or work in
a profession such as law or medicine and solely for that purpose.
(3) To persons who are already in a particular profession, trade,
or job category for the sole purpose of enhancing their skills or
knowledge within that particular profession, trade, or job category.
(b) "Continuing education" does not include any of the following:
(1) Vocational diploma programs.
(2) Degree programs.
(3) An educational service any part of the charge for which is
paid from the proceeds of a loan or grant subject to a governmental
student financial aid program.
94723. "Correspondence school" or "home study school" means any
institution that provides correspondence lessons for study and
completion by a student at a location separate from the institution,
including those institutions which offer that instruction by
correspondence in combination with in-residence instruction.
94724. "Council" means the Bureau for Private Postsecondary and
Vocational Education in the Department of Consumer Affairs
established pursuant to Section 94770.
94725. "Course of study" means either a single course or a set of
related courses for which a student enrolls.
94726. "Degree" means any type of degree or honorary degree or
title of any designation, mark, appellation, series of letters or
words such as, but not limited to, associate, bachelor, master,
doctor, or fellow which signifies, purports, or is generally taken to
signify satisfactory completion of the requirements of an academic,
educational, technological, or professional program of study beyond
the secondary school level or is an honorary title conferred for
recognition of some meritorious achievement.
94727. "Degree title" means the designated subject area of study
that also appears on the face of the document awarded to a student
signifying the conferring of a "degree."
94728. "Diploma" means any diploma, certificate, document, or
other writing in any language other than a degree which signifies,
purports, or is generally taken to signify satisfactory completion of
the requirements of an academic, educational, technological, or
professional program of study beyond the secondary school level.
94728.5. "Director" means the Director of Consumer Affairs.
94729. "Education," "educational services," or "educational
program" includes, but is not limited to, any class, course, or
program of training, instruction, or study.
94730. "Institution" means any private postsecondary educational
institution. An "institution" includes its branch and satellite
campuses, unless otherwise provided by the council.
94731. "Institutional approval" means an institution that has
been evaluated by the council and has been found to be in compliance
with the council's standards pursuant to this chapter.
94732. "Instruction" includes any specific, formal arrangement by
an institution or its enrollees to participate in learning
experiences in which the institution's faculty or contracted
instructors present a planned curriculum appropriate to the enrollee'
s educational program.
94733. "Intensive English language program" means an educational
service approved by the United States Immigration and Naturalization
Service solely to provide English instruction to international
students for a designated period of study in the United States and
that offers instruction that is nondegree granting, nonvocational,
and is not represented to lead to, or offered for the purpose of
preparing a student for employment in, any occupation or job title.
Additionally, the educational service shall meet all of the following
criteria:
(a) Students enrolling in this type of educational service are not
residents of this state or citizens of the United States and are not
eligible for federal or state financial aid, including loans.
(b) Coursework in this type of educational service is limited to
English instruction in all areas of language skills development,
including reading, writing, speaking, listening, grammar, and test
preparation.
94734. "License and exam preparation" means that the educational
program is either of the following:
(a) Designed to assist students to prepare for an examination for
licensure.
(b) Offered for the sole purpose of providing continuing education
in subjects licensees are required to take as a condition of
continued licensure.
94735. "Main location" or "main site" means the institution's
primary teaching location. If an institution operates at only one
site, that site shall be considered its main location or main site.
94736. "Occupational Associate Degree," "Associate of
Occupational Studies," or "Associate of Applied Science" designated
by terms including, but not limited to, AOS (Associate Occupational
Studies), AAS (Associate Applied Science), AST (Associate Specialist
Technical), or ASB (Associate Specialist Business) means an associate
degree that may be awarded to students who complete an occupational
program that provides preparation for employment in an occupational
field.
94737. "Out-of-state school" means any private postsecondary or
vocational educational institution offering career or job training
programs, including both an in-residence institution and a home-study
institution that has its place of instruction or its principal
location outside the boundaries of the state, or that offers or
conducts programs of instruction or subjects on premises maintained
by the school outside the boundaries of the state, or that provides
correspondence or home-study lesson materials from a location outside
the boundaries of this state, or that evaluates completed lesson
materials or otherwise conducts its evaluation service from a
location outside the boundaries of this state, or that otherwise
offers or provides California students with programs of instruction
or subjects through activities engaged in or conducted outside the
boundaries of the state.
94738. "Person" means a natural person or any business entity,
regardless of the form or organization.
94739. (a) "Private postsecondary educational institution" means
any person doing business in California that offers to provide or
provides, for a tuition, fee, or other charge, any instruction,
training, or education under any of the following circumstances:
(1) A majority of the students to whom instruction, training, or
education is provided during any 12-month period is obtained from, or
on behalf of, students who have completed or terminated their
secondary education or are beyond the age of compulsory high school
attendance.
(2) More than 50 percent of the revenue derived from providing
instruction, training, or education during any 12-month period is
obtained from, or on behalf of, students who have completed or
terminated their secondary education or are beyond the age of
compulsory high school attendance.
(3) More than 50 percent of the hours of instruction, training, or
education provided during any 12-month period is provided to
students who have completed or terminated their secondary education
or are beyond the age of compulsory high school attendance.
(4) A substantial portion, as determined by the council, by
regulation, of the instruction, training, or education provided is
provided to students who have completed or terminated their secondary
education or are beyond the age of compulsory high school
attendance.
(b) The following are not considered to be private postsecondary
educational institutions under this chapter:
(1) Institutions exclusively offering instruction at any or all
levels from preschool through the 12th grade.
(2) Institutions offering education solely avocational or
recreational in nature, and institutions offering this education
exclusively.
(3) Institutions offering education sponsored by a bona fide
trade, business, professional, or fraternal organization, solely for
that organization's membership.
(4) Postsecondary or vocational educational institutions
established, operated, and governed by the federal government or by
this state, or its political subdivisions.
(5) Institutions offering continuing education where 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, trade, or job category.
(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, trade, or job category.
(C) A bona fide trade, business, or professional organization.
(6) A nonprofit institution owned, controlled, and operated and
maintained by a bona fide church, religious denomination, or
religious organization comprised of multidenominational members of
the same well-recognized religion, 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, if the
education is limited to instruction in the principles of that church,
religious denomination, or religious organization, or to courses
offered pursuant to Section 2789 of the Business and Professions
Code, and the diploma or degree is limited to evidence of completion
of that education, and the meritorious recognition upon which any
honorary degree is conferred is limited to the principles of that
church, religious denomination, or religious organization.
Institutions operating under this paragraph shall offer degrees and
diplomas only in the beliefs and practices of the church, religious
denomination, or religious organization. The enactment of this
paragraph expresses the legislative intent that the state shall not
involve itself in the content of degree programs awarded by any
institution operating under this paragraph, as long as the
institution awards degrees and diplomas only in the beliefs and
practices of the church, religious denomination, or religious
organization. Institutions operating under this paragraph shall not
award degrees in any area of physical science. Any degree or diploma
granted in any area of study under these provisions 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. Degrees awarded under this paragraph
shall reflect the nature of the degree title, such as "Associate of
Religious Studies," or "Bachelor of Religious Studies," or "Master of
Divinity" or "Doctor of Divinity." The use of the degree titles
"Associate of Arts" or "Associate of Science," "Bachelor of Arts" or
"Bachelor of Science," "Master of Arts" or "Master of Science," or
"Doctor of Philosophy" or "Ph.D." shall only be awarded by
institutions approved to operate under Article 8 (commencing with
Section 94900) or meeting the requirements for an exemption under
Section 94750. The enactment of this paragraph is intended to
prevent any entity claiming to be a nonprofit institution owned,
controlled, and operated and maintained by a bona fide church,
religious denomination, or religious organization comprised of
multidenominational members of the same well-recognized religion,
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, from marketing and granting degrees or diplomas
that are represented as being linked to their church, religious
denomination, or religious organization, but which, in reality, are
degrees in secular areas of study. An institution operating under
this paragraph shall file annually with the council evidence to
demonstrate its status as a nonprofit religious corporation under the
Corporations Code. A college or university operating under this
paragraph shall file annually with the council evidence to
demonstrate its status as a nonprofit religious corporation under the
Corporation Code.
(7) (A) Public institutions accredited by the senior commission or
the junior commission of the Western Association of Schools and
Colleges.
(B) Institutions accredited by the senior commission or the junior
commission of the Western Association of Schools and Colleges that
are incorporated and lawfully operating as a nonprofit public benefit
corporation pursuant to Part 2 (commencing with Section 5110) of
Division 2 of Title 1 of the Corporations Code and that are not
managed by any entity for
profit.
(C) For-profit institutions accredited by the senior or the junior
commission of the Western Association of Schools and Colleges, if
the institution exclusively confers degrees upon the completion of a
course of study of two or more years.
(D) Institutions accredited by the Western Association of Schools
and Colleges that do not meet all of the criteria in subparagraph (B)
and that are incorporated and lawfully operating as a nonprofit
public benefit corporation pursuant to Part 2 (commencing with
Section 5110) of Division 2 of Title 1 of the Corporations Code, that
have been in continuous operation since April 15, 1997, and that are
not managed by any entity for profit. Notwithstanding this
subdivision, institutions that meet the criteria in this subparagraph
shall be subject to Section 94831, except subdivision (c) of that
section, and Sections 94832, 94834, 94838, and 94985.
94740. "Program" or "program of instruction" means a program of
training, set of related courses, or education for which a student
enrolls.
94740.1. "Registered," "registered institution," or "registered
educational service" means any individual or organization that offers
an educational service and is registered to operate under Article
9.5 (commencing with Section 94931).
94741. "Representative" means an employee, an agent as defined in
Section 2295 of the Civil Code, an agent subject to Section 94940,
an agency subject to Section 94942, or any person who, for
compensation, does either of the following:
(a) Solicits, promotes, advertises, or refers or recruits students
or prospective students for an institution.
(b) Is involved with enrollment, admissions, student attendance,
administration, financial aid, instruction, or job placement
assistance on behalf of an institution.
94742. "Satellite" means an auxiliary classroom or a teaching
site. All of the following apply to a satellite:
(a) Only educational services that are approved at the main
location shall be offered at the satellite.
(b) The institution shall maintain no permanent records of
attendance or academic progress at the satellite.
(c) Advertisement of a satellite shall indicate that the satellite
is an auxiliary classroom or a teaching site.
94742.1. (a) "Short-term career training" means an educational
service consisting of all of the following:
(1) The total charge to the student is two thousand dollars
($2,000) or less.
(2) The length of training is less than 250 hours.
(3) The course is represented as preparing the student for any
occupation or job title.
(b) "Short-term career training" does not include any of the
following:
(1) Instruction leading to a degree.
(2) Instruction financed by a federal or state loan or grant.
(3) Any educational service, other than provided for in
subdivision (a), consisting of more than 250 hours of instruction or
costing two thousand dollars ($2,000) or more in total charges that
is divided or structured into one or more segments that consists of
250 or fewer hours of instruction, the total charge for which is less
than two thousand dollars ($2,000).
(4) Any educational service represented to lead to, or offered for
the purpose of preparing a student for, employment as a certified
nursing assistant, a private security guard, or a private patrol
operator.
(c) Short-term career training may include an educational service
licensed by another state agency so long as that educational service
complies with subdivision (a) and Article 9.5 (commencing with
Section 94931).
94742.2. (a) "Short-term seminar training" means an educational
service offered at a main location, branch, or satellite, or any
other location, consisting of 100 hours or less of instruction, the
total charge for which is less than one thousand dollars ($1,000).
(b) "Short-term seminar training" does not include any of the
following:
(1) Instruction leading to a degree.
(2) Instruction financed by a federal or state loan or grant.
(3) Instruction in how to prepare for, take, or pass a licensing
examination or other test qualifying a person for employment.
(4) Instruction that is represented to lead to an occupation or
job title.
(5) Any educational service consisting or more than 100 hours of
instruction or costing one thousand dollars ($1,000) or more in total
charges that is divided or structured into one or more segments that
consist of 100 or fewer hours of instruction, the total charge for
which is less than one thousand dollars ($1,000).
(c) Short-term seminar training may include an educational service
licensed by another state agency so long as that educational service
complies with subdivision (a) and Article 9.5 (commencing with
Section 94931).
94743. "Site" means a main location, branch, or satellite campus.
94744. "To offer" includes, in addition to its usual meanings,
advertising, publicizing, soliciting, or encouraging any person,
directly or indirectly, in any form, to perform the act described.
94745. "To operate" an educational institution, or like term,
means to establish, keep, or maintain any facility or location in
this state where, or from or through which, educational services are
offered or educational degrees or diplomas are offered or granted.
94746. "Vocational diploma program" means an educational program
having all of the following characteristics:
(a) The educational program consists of a job-training program or
other instruction, training, or education that the institution
represents will lead to, fit, or prepare students for employment in
any occupation.
(b) The program is offered to students who do not possess a
bachelor's or graduate degree in the field of training.
(c) Students who complete all or a portion of the program are
awarded a diploma, certificate, or occupational associate degree.
Article 3. Exemptions
94750. Article 4 (commencing with Section 94770), Article 8
(commencing with Section 94900), the last sentence of paragraph (6)
of subdivision (b) of Section 94739, subdivision (c) of Section
94831, and Sections 94802, 94830, 94835, 94836, 94840, 94846, 94934,
94942, 94944, 94945, 94946, 94947, 94965, and 94970 shall not apply
to an institution that is a nationally accredited agency recognized
by the United States Department of Education if the bureau has
determined, subsequent to an onsite qualitative review and assessment
of the institution conducted at least once every three years, as
described in Section 94901, that the institution is in compliance
with all of the following:
(a) The institution meets the financial responsibility
requirements set forth in subdivision (b) of Section 94804.
(b) The faculty of the institution meets the requirements set
forth in paragraph (2) of subdivision (a) of Section 94900.
(c) The institution's cohort default rate on guaranteed student
loans does not exceed 15 percent for the three most recent years as
published by the United States Department of Education.
(d) The institution has operated in this state for at least 15
years.
(e) The institution submits to the bureau copies of the most
recent IRS Form 990 and the Integrated Postsecondary Education Data
System Report of the United States Department of Education and the
accumulated default rate.
(f) The institution pays fees in accordance with Section 94932.
(g) The institution exclusively confers degrees upon the
completion of a course of study of two or more years.
Institutions that satisfy the requirements of this subdivision may
also (1) teach state-mandated continuing education programs if the
institution offers a degree for which the continuing education
program is required, and (2) teach prerequisite courses for admission
to a degree program offered at the institution.
(h) The institution has offered a masters, doctorate, or first
professional degree program for at least five years.
(i) The institution is incorporated and lawfully operates as a
nonprofit public benefit corporation pursuant to Part 2 (commencing
with Section 5110) of Division 2 of Title 1 of the Corporations Code
and is not managed or administered by an entity for profit.
Article 3.5. Transition Provisions
94760. (a) Any institution operating on December 31, 1997, with a
full, conditional, or temporary approval to operate, may continue to
operate under the terms of that approval until that full,
conditional, or temporary approval to operate expires or a subsequent
action is taken by the bureau that affects that approval to operate,
whichever comes first.
(b) Each regulation in Division 7.5 (commencing with Section
70000) of Title 5 of the California Code of Regulations in effect on
June 29, 1997, shall be in full force and effect on and after
January 1, 1998, to the extent the regulation is consistent with the
relevant provisions in this chapter. The council may, by emergency
regulation, designate which regulations are consistent with this
chapter and which are not.
Article 4. Administration
94770. There is a Bureau for Private Postsecondary and Vocational
Education in the Department of Consumer Affairs. The bureau shall
succeed to any and all rights and claims of the former Council for
Private Postsecondary and Vocational Education that may have been
asserted in any judicial or administrative action pending on January
1, 1998, and shall take any action reasonably necessary to assert and
realize those rights and claims in its own name. The functions of
the former council and the responsibilities the former council had
for the administration of former Chapter 7 (commencing with Section
94700) on June 29, 1997, are transferred to the bureau, effective
January 1, 1998, as provided by this act. It is the intent of the
Legislature that there be no gap in the performance of functions or
the administration of the law governing private postsecondary
educational institutions. Notwithstanding any other provision of
law, Section 19050.9 of the Government Code shall apply regardless of
the date on which former Chapter 7 (commencing with Section 94700)
became inoperative or was repealed.
The bureau shall have possession and control of all records,
papers, offices, equipment, supplies, or other property, real or
personal, held for the benefit or use by the former council in the
performance of the duties, powers, purposes, responsibilities, and
jurisdictions that are vested in the bureau.
The bureau has the responsibility for approving and regulating
private postsecondary educational institutions. The bureau shall
have, as its objective, the development of a strong, vigorous, and
widely respected sector of private postsecondary and vocational
education.
94771. (a) The duty of administering and enforcing this chapter
is vested in the Director of Consumer Affairs, who may assign and
delegate those duties to a program administrator, subject to the
other provisions of this section.
(b) Every power granted to, or duty imposed upon, the bureau under
this chapter may be exercised or performed in the name of the
bureau, subject to any conditions and limitations the director may
prescribe. The program administrator may redelegate any of those
powers or duties to his or her designee. The program administrator
shall be appointed by the Governor and confirmed by the Senate, and
is exempt from the State Civil Service Act (Part 2 (commencing with
Section 18500) of Division 5 of Title 2 of the Government Code).
(c) The director, in accordance with the State Civil Service Act,
may appoint and fix the compensation of such clerical, inspection,
investigation, evaluation, and auditing personnel, as may be
necessary to carry out this chapter.
(d) The proceedings under this chapter shall be conducted by the
bureau in accordance with Chapter 5 (commencing with Section 11500)
of Part 1 of Division 3 of Title 2 of the Government Code. To the
extent of any conflict between any of the provisions of this chapter
and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3
of Title 2 of the Government Code, that Chapter 5 shall prevail.
(e) The director shall appoint an advisory committee which shall
consist of representatives of institutions, student advocates, and
employers who hire students, among other parties. The advisory
committee shall be balanced to ensure that institutions and student
advocates have approximate equal representation. Institutional
representatives on the committee shall be in general proportion to
the types of institutions approved or registered pursuant to this
chapter and to the number of students served by each type of
institution. The advisory committee shall advise the bureau
concerning the bureau's administration, licensing, and enforcement
functions under this chapter.
94772. It is the intent of the Legislature that the bureau's
approval and regulating responsibilities be funded solely through
approval fees and federal funding provided to implement the approval
process for courses offered to veterans by approved institutions.
94774. The bureau shall have the following functions and
responsibilities in its capacity as the statewide private
postsecondary and vocational educational planning and licensing
agency:
(a) The establishment of policies for the administration of this
chapter.
(b) The establishment of minimum criteria for the approval of
private postsecondary or vocational educational institutions to
operate in California and award degrees and diplomas, and for the
approval of institutions that meet the criteria.
(c) The adoption of regulations governing the conduct of
institutions under this chapter, including, but not limited to,
minimum state standards for refund policies, advertising, enrollment
agreements and contracts, consumer information, attendance policies,
and financial responsibility.
(d) The adoption of regulations for the transaction of its own
affairs, and procedures necessary or appropriate for the conduct of
its work and the implementation of this chapter.
(e) The publication of an Internet directory of all private
postsecondary and vocational educational institutions approved to
operate in California under this chapter.
(f) The impaneling of special committees of technically qualified
persons to assist the bureau in the development of standards for
education and educational institutions and the evaluation of an
application or institutions pursuant to this chapter. The members of
the special committees shall receive no compensation but shall be
reimbursed for their actual expenses for attendance at official
meetings and actual expenses when on official bureau business. The
members of the special committees shall serve at no expense to the
state. The actual travel and per diem expenses incurred by each
member of a special committee shall be reimbursed by the institution
that is the subject of inspection or investigation.
94774.5. (a) For the purposes of administration and enforcement
of this chapter, the Department of Consumer Affairs, the bureau, and
the director and officers and employees of the department and the
bureau, shall have all the powers and authority granted under this
chapter and under Division 1 (commencing with Section 100) and
Division 1.5 (commencing with Section 475) of the Business and
Professions Code. In addition to satisfying the approval,
compliance, and enforcement provisions of this chapter, the bureau
shall also comply with and exercise all authority granted by Division
1 (commencing with Section 100) and Division 1.5 (commencing with
Section 475) of the Business and Professions Code.
(b) The bureau shall establish a regular inspection program which
shall include unannounced inspections.
(c) If the bureau determines after an investigation that an
institution has violated this chapter or any of the regulations
adopted by the bureau, the bureau may do any or all of the following:
(1) Place the institution on probation.
(2) Issue an order prohibiting the enrollment of new students.
(3) Issue an administrative citation and impose an administrative
fine as authorized by, and in accordance with, Section 94957 of this
code or Section 146, 147, or 148 of the Business and Professions
Code.
(4) Issue an order of abatement or citation pursuant to Section
125.9 or 148 of the Business and Professions Code.
(5) Initiate proceedings under the Administrative Procedure Act or
this chapter to revoke or suspend the institution's approval to
operate.
(6) With the consent of the institution, refer an adjudicative
proceeding to mediation, or binding or nonbinding arbitration, in
accordance with the regulations of the Office of Administrative
Hearings, the department, or the bureau.
(7) Order reimbursement of the costs of the investigation and
enforcement in accordance with Section 94935 of this code or Section
125.3 of the Business and Professions Code. An institution shall not
be required to pay the same costs and expenses to more than one
investigating entity.
(8) Notify the telephone company to disconnect the institution's
telephone as authorized by Section 149 of the Business and
Professions Code.
94775. (a) Any person, serving on a special committee of the
bureau pursuant to subdivision (i) of Section 94774, a visiting
committee pursuant to Section 94901, or any other peer review body
impaneled by the bureau and who provides information to the bureau or
its staff in the course and scope of evaluating any institution
subject to this chapter or who testifies at any administrative
hearing arising under this chapter, is entitled to a defense by, and
indemnification from, the bureau to any action arising out of
information or testimony to the bureau which that person would have
if he or she were a public employee.
(b) Any defense by, or indemnification from, the bureau, as
specified in subdivision (a) shall be solely with respect to that
claim or action pursuant to Article 4 (commencing with Section 825)
of Chapter 1 of Part 2 of, and Part 7 (commencing with Section 995)
of, Division 3.6 of Title 1 of the Government Code.
94776. The director may purchase annuity contracts for permanent
employees of the bureau who formerly were permanent employees of the
State Department of Education and who had similar state-purchased
annuity contracts prior to January 1, 1998. The bureau shall reduce
the salaries of the employees for whom the contracts are purchased by
the amount of the costs of the contract if all of the following
conditions are met:
(a) The annuity contract is under an annuity plan that meets the
requirements of subdivision (b) of Section 403 of the Internal
Revenue Code.
(b) The employee applies to the director for the purchase of the
contract and reduction of salary.
(c) All provisions of the Insurance Code and the Government Code
applicable to the purchase of this type of annuity are satisfied.
94777. The bureau may utilize the resources of accrediting
associations in gathering information about accredited postsecondary
and vocational institutions, including participating as an observer
on accreditation site visits. However, this section does not
preclude or relieve the bureau of its responsibilities under this
chapter and the bureau shall retain full authority for approving all
private postsecondary and vocational institutions operating in
California.
94778. (a) The bureau may adopt and enforce regulations that are
necessary, appropriate, or useful to interpret and implement this
chapter pursuant to Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. Pending the
adoption of those regulations, the bureau may adopt emergency
regulations that shall become effective immediately. The adoption of
the emergency regulations shall be subject to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, and the emergency regulations shall only be
effective until June 30, 1999, or on the effective date of the
regulations adopted by the bureau to implement this chapter,
whichever occurs first, at which time the emergency regulations shall
be deemed to be repealed.
(b) The bureau shall adopt regulations establishing a voluntary
arbitration process similar to that set forth in Article 6.2
(commencing with Section 7085) of Chapter 9 of Division 3 of the
Business and Professions Code for the resolution of disputes between
an institution approved to operate under this chapter and a
complainant or complainants.
94779. The bureau shall make available to members of the public,
upon request, the nature and disposition of all compliants on file
with the bureau against an institution.
Article 5. Classification of Educational Programs Offered by
Postsecondary Institutions
94780. No institution, subject to this chapter, shall offer any
educational service unless the institution is first approved by the
council and meets all of the requirements in the following articles:
(a) This article, Article 6 (commencing with Section 94800) except
as provided for institutions approved under Article 9.5 (commencing
with Section 94931), Article 10 (commencing with Section 94932),
Article 11 (commencing with Section 94940), and Article 12
(commencing with Section 94944).
(b) Article 8 (commencing with Section 94900), if the institution
offers degrees.
(c) Article 9 (commencing with Section 94915), if the institution
does not offer degrees.
(d) Article 9.5 (commencing with Section 94931), if the
institution is registered pursuant to that article.
(e) Article 7 (commencing with Section 94850), if the educational
programs are not exempt under Section 94790.
94785. (a) Article 7 (commencing with Section 94850) does not
apply to an institution during a calendar year if both of the
following conditions are satisfied during that calendar year:
(1) The institution enrolls 100 or fewer students.
(2) No part of the charges for any educational service offered by
the institution is paid from the proceeds of a loan or grant subject
to a governmental student financial aid program.
(b) If the conditions specified in subdivision (a) are not
satisfied for the entire calendar year, Article 7 (commencing with
Section 94850) shall apply to all students enrolled during that
calendar year except to the extent that the institution or its
educational services are otherwise exempt.
(c) Article 7 (commencing with Section 94850) does not apply to an
institution that is incorporated and has continuously lawfully
operated for at least five years as a nonprofit public benefit
corporation pursuant to Part 2 (commencing with Section 5110), or as
a nonprofit religious corporation pursuant to Part 4 (commencing with
Section 9110), of Division 2 of Title 1 of the Corporations Code and
is not managed or administered by any entity for profit.
94786. Article 7 (commencing with Section 94850) does not apply
to an educational service if the total charge, as defined in
subdivision (k) of Section 94852, for that educational service is one
thousand dollars ($1,000) or less, and no part of the total charge
is paid from the proceeds of a loan or grant subject to a
governmental student financial aid program.
94787. Article 7 (commencing with Section 94850) except Sections
94872 and 94873, applies to schools that offer instruction in how to
prepare for, take, and pass civil service examinations or other tests
qualifying a student for employment by a governmental entity. For
the purpose of determining compliance with this article, schools
described in this section shall be considered "institutions."
94790. Except as otherwise provided in this section, Article 7
(commencing with Section 94850) does not apply to any of the
following educational services:
(a) (1) Except as provided in paragraph (2), educational services
that confer degrees upon the completion of a course of study of two
or more academic years that are scheduled to be completed in not less
than 17 months or that confer degrees, such as master's or doctorate
degrees, on students who have completed a graduate course of study
of one or more years at a college or university.
(2) For educational services that consist of an AOS (Occupational
Associate degrees or Associate of Occupational Studies degrees), AAS
(Associate of Applied Science degrees), or any other occupational
associate degree, if the institution confers diplomas or certificates
to students who do not complete the degree program, Article 7
(commencing with Section 94850) shall apply to any student enrolled
in any course that can be accepted to meet the requirements of the
diploma or certificate program. Notwithstanding this paragraph,
Article 7 (commencing with Section 94850) shall not apply to any
student who continues to be enrolled in the institution one academic
year after the student has commenced instruction or completed all of
the courses in the diploma program or certificate program, whichever
is later. Students enrolled in the degree program who are awarded a
certificate or diploma after completing the certificate or diploma
program, but prior to completing the degree program, may be counted
by the institution towards the requirements in paragraph (1) of
subdivision (a) of Section 94854 and paragraph (1) of subdivision (b)
of Section 94854 for the diploma or certificate program.
(3) The requisite number of semester or quarter units for AOS,
AAS, or any other occupational associate degree shall be 60 semester
units or 90 quarter units. The bureau shall adopt regulations to
specify the necessary classroom instruction and out-of-class learning
experience for each unit or semester or quarter hour credit
(combination of lecture, laboratory, practicum, or outside
preparation), based on Carnegie Commission standards.
(4) This subdivision does not apply to any educational service for
which a student enrolled before January 1, 1998.
(b) The educational service, as defined in subdivision (b) of
Section 94734, is offered as continuing education in subjects that
licensees are required to take as a condition of continued licensure.
(c) The educational service is offered exclusively to assist
students to prepare for an examination for entrance into an
undergraduate or graduate course of study at an accredited or
approved college or university.
(d) The educational service, as defined in subdivision (a) of
Section 94734, is offered exclusively to assist students, who have
obtained, or who are in the process of obtaining, degrees after
completing an
undergraduate or graduate course of study at a college or university,
to prepare for an examination for licensure in a recognized
profession, such as medicine, dentistry, accounting, or law.
(e) The educational service is three or more academic years, is
scheduled to be completed in not less than 27 months, the institution
does not admit students to the educational service more than four
times during a year, and the institution confers a diploma upon the
student's completion of the educational service.
(f) The educational service offers training exclusively in the
fine arts or performing arts, such as training to be an actor,
dancer, author, vocal or instrumental musician, painter, sculptor, or
photographer; in body arts, such as training in body piercing or
massage; or in another similar field as designated by the council.
(g) The educational service is more than 30 months in length, and
the total charge for the educational service is payable by the
student in equal monthly installments over the entire length of the
course, and the institution does not receive, and the student is not
obligated to pay, an advance payment for more than one month.
(h) The educational service for all students enrolled is entirely
and exclusively offered pursuant to a contract between the
institution and a community college, a high school, or an employer
who has the responsibility for applicable cost; and the students are
not required to pay, or are not liable to pay, any part of the total
charge for the educational service.
(i) Any educational service identified in this section that is
exempt from Article 7 (commencing with Section 94850) does not become
subject to Article 7 (commencing with Section 94850) solely because
the institution offers other educational services that are identified
in this section and that are also exempt from Article 7 (commencing
with Section 94850).
94795. It is the intent of the Legislature that if any exception
provided in this article is declared by a court to be invalid for any
reason, all of the provisions of Article 7 (commencing with Section
94850) shall apply to the institutions, programs, or educational
services that would otherwise be subject to that exception.
Article 6. General Standards for All Postsecondary
Institutions Approved Under This Chapter
94800. All institutions approved under this chapter shall be
maintained and operated, or in the case of a new institution, shall
demonstrate that it will be maintained and operated, in compliance
with all of the following minimum standards:
(a) That the institution is financially capable of fulfilling its
commitments to its students.
(b) That upon satisfactory completion of training, the student is
given an appropriate degree, diploma, or certificate by the
institution, indicating that the course or courses of instruction or
the program or programs of instruction or study have been
satisfactorily completed by the student.
(c) That the institution provides instruction as part of its
educational program. Instruction shall include any specific, formal
arrangement by an institution for its enrollees to participate in
learning experiences wherein the institution's faculty or contracted
instructors present a planned curriculum appropriate to the enrollee'
s educational program.
94802. (a) Each institution desiring to operate in this state
shall make application to the council, upon forms to be provided by
the council. The application shall include, as a minimum, at least
all of the following:
(1) A catalog published, or proposed to be published, by the
institution containing the information specified in the criteria
adopted by the council. The catalog shall include specific dates as
to when the catalog applies.
(2) A description of the institution's placement assistance, if
any.
(3) Copies of media advertising and promotional literature.
(4) Copies of all student enrollment agreement or contract forms
and instruments evidencing indebtedness.
(5) The name and California address of a designated agent upon
whom any process, notice, or demand may be served.
(6) The information specified in Section 94808.
(7) The institution's most current financial report as described
in Section 94806.
(b) Each application shall be signed and certified under oath by
the owners of the school or, if the school is incorporated, by the
principal owners of the school (those who own at least 10 percent of
the stock), or by the corporate officers or their designee.
(c) Following review of the application and any other further
information submitted by the applicant, or required in conformity
with Article 8 (commencing with Section 94900) and Article 9
(commencing with Section 94915), and any investigation of the
applicant as the council deems necessary or appropriate, the council
either shall grant or deny approval to operate to the applicant.
94804. (a) The review of a private postsecondary educational
institution's original application for approval, or a renewal
application to the council, or an approved institution already in
operation, shall include a determination of the institution's
financial responsibility. An institution shall be considered
financially responsible if it has sufficient assets to do all of the
following:
(1) Provide the educational services stated in its official
publications and statements.
(2) Comply with the standards and requirements specified in
Article 8 (commencing with Section 94900), Article 9 (commencing with
Section 94915), or Article 9.5 (commencing with Section 94931),
whichever is applicable.
(3) Provide the administrative and financial resources to fully
comply with this article.
(4) Comply with any applicable provisions of Section 94855.
(b) An institution shall not be considered financially responsible
under any of the following conditions:
(1) The institution fails to have available sufficient funds and
accounts receivable to pay all operating expenses due within 30 days.
For the purpose of this paragraph, "funds" means cash or assets
that can be converted into cash within seven days.
(2) Under generally accepted accounting principles, the
institution had, at the end of its latest fiscal year, a ratio of
current assets to current liabilities of less than 1.25 to 1. For
the purpose of this paragraph, "current assets" does not include any
of the following: (A) intangible assets, including goodwill, going
concern value, organization expense, startup costs, long-term
prepayment of deferred charges, and nonreturnable deposits, or (B)
state or federal grant funds that are not the property of the
institution but are held for future disbursement for the benefit of
students. Unearned tuition shall be accounted for in accordance with
generally accepted accounting principles. When another government
agency requires an institution to file annual financial audit
prepared by a certified public accountant, that agency's current
ratio standard may apply in lieu of the ratio specified in this
paragraph if the ratio of current assets to current liabilities under
that standard is 1 to 1 or greater.
(c) (1) In determining an institution's compliance with
subdivision (a), the council, at the institution's request, may
consider the financial resources of a parent corporation if the
parent corporation files with the council, and at all times complies
with, an irrevocable and unconditional agreement approved by its
board of directors that satisfies all of the requirements of
paragraph (2):
(2) The agreement described in paragraph (1) shall provide that
the parent corporation do all of the following:
(A) Consent to be sued in California.
(B) Consent to be subject to the administrative jurisdiction of
the council and the Student Aid Commission in connection with the
institution's compliance with this chapter.
(C) Appoint an agent for service of process in California and all
notices required by this chapter.
(D) Agree to pay any refund, claim, penalty, or judgment that the
institution is obligated to pay.
(E) File financial reports, maintain financial records, and permit
the inspection and copying of financial records to the same extent
as is required of the institution.
(3) For the purposes of this subdivision, a "parent corporation"
means a corporation that owns more than 80 percent of the stock of
the institution whose financial resources are at issue.
(d) If the council determines that an institution is not
financially responsible, the council, under terms and conditions
prescribed by the council, may require the institution to submit for
its latest complete fiscal year and its current fiscal year, each of
the following:
(1) A financial audit of the institution conducted by a licensed
certified public accountant, in accordance with generally accepted
auditing standards.
(2) The institution's financial plan for establishing financial
responsibility.
(3) Any other information requested by the council.
This subdivision does not prevent the council from taking any
other actions authorized under this chapter.
94806. (a) This section applies to every audit, review, and
statement prepared by an independent accountant and to every
financial report required to be prepared or filed by this chapter.
(b) Institutional audits and reviews of financial data, including
the preparation of financial statements, shall comply with all of the
following:
(1) An institution that collected seven hundred fifty thousand
dollars ($750,000) or more in total student charges in its preceding
fiscal year shall file financial reports prepared in accordance with
generally accepted accounting principles established by the American
Institute of Certified Public Accountants, and audited or reviewed by
an independent certified public accountant who is not an employee,
officer, or corporate director or member of the governing board of
the institution.
(2) An institution that collected less than seven hundred fifty
thousand dollars ($750,000) in total student charges in its preceding
fiscal year shall file financial reports prepared in accordance with
generally accepted accounting principles established by the American
Institute of Certified Public Accountants. These financial reports
may be prepared by an individual with sufficient training to adhere
to the required accounting principles.
(3) Financial reports prepared on an annual basis shall include a
balance sheet, statement of operations, statement of cash flow, and
statement of retained earnings or capital. Nonprofit institutions
shall provide this information in the manner required under generally
accepted accounting principles for nonprofit organizations.
(4) The financial report shall establish whether the institution
complies with subdivision (a) of Section 94804 or subdivision (a) of
Section 94855, if applicable, and whether any of the circumstances
described in subdivision (b) of Section 94804 or subdivision (b) of
Section 94855, if applicable, exist.
(5) If an audit that is performed to determine compliance with any
federal or state student financial aid program reveals any failure
to comply with the requirements of the program, and the noncompliance
creates any liability or potential liability for the institution,
the financial report shall reflect the liability or potential
liability.
(6) Work papers for the financial statements shall be retained for
five years from the date of the reports and shall be made available
to the council upon request after completion of the report.
(c) Any audits shall be conducted in accordance with generally
accepted auditing standards and shall include the matters described
in subdivision (d).
(d) If an audit is conducted, the accountant shall obtain an
understanding of the institution's internal financial control
structure, assess any risks, and report any material deficiencies in
the internal controls.
94808. (a) Each institution approved to operate under this chapter
shall be required to report to the council, by July 1 of each year,
or another date designated by the council, the following information
for educational programs offered in the prior fiscal year:
(1) The total number of students enrolled, by level of degree or
type of diploma program.
(2) The number of degrees and diplomas awarded, by level of
degree.
(3) The degree levels offered.
(4) Program completion rates.
(5) The schedule of tuition and fees required for each term,
program, course of instruction, or degree offered.
(6) Financial information demonstrating compliance with
subdivisions (b) and (c) of Section 94804 and subdivisions (b) and
(c) of Section 94855, if applicable.
(7) Institutions having a probationary or conditional status shall
submit an annual report reviewing their progress in meeting the
standards required for approval status.
(8) Any additional information that the council may prescribe.
(b) Colleges and universities operating under paragraph (6) of
subdivision (b) of Section 94739 shall comply with the reporting
requirements of paragraphs (1), (2), (3), and (5) of subdivision (a).
(c) Program completion rates and placement data shall be reported
in accordance with the standards and criteria prescribed by the
council pursuant to paragraphs (1) to (4), inclusive, of subdivision
(a) of Section 94816 and Section 94859, if applicable. Based on the
review of information submitted to fulfill the requirements of this
section, the council may initiate a compliance review and may place
the institution on probation pursuant to subdivision (h) of Section
94901 and subdivision (i) of Section 94915, and may require evidence
of financial stability and responsibility pursuant to Sections 94804
and 94855, if applicable.
94809. Each institution approved under this chapter shall provide
the council with copies of all accrediting agency reports, including
preliminary reports and reports of visiting committees, all audit
reports prepared by the United States Department of Education and
student loan guaranty agencies, including all preliminary reports,
and the institution's written responses to the reports described in
this section, if applicable. The institution shall provide a copy of
each report within 15 days of the institution's receipt of the
report and a copy of the institution's response within 15 days of the
institution's submission of its response.
94810. (a) Any written contract or agreement for educational
services with an institution shall include all of the following:
(1) On the first page of the agreement or contract, in 12-point
boldface print or larger, the following statement:
"Any questions or problems concerning this school which have not
been satisfactorily answered or resolved by the school should be
directed to the Council for Private Postsecondary and Vocational
Education, (address), Sacramento, California 95814."
(2) In underlined capital letters on the same page of the contract
or agreement in which the student's signature is required, the total
amount that the student is obligated to pay for the course of
instruction and all other services and facilities furnished or made
available to the student by the school, including any charges made by
the school for tuition, room and board, books, materials, supplies,
shop and studio fees, and any other fees and expenses that the
student will incur upon enrollment.
(3) A list of any charges and deposits that are nonrefundable
clearly identified as nonrefundable charges.
(4) The name and address of the school and the addresses where
instruction will be provided.
(5) The name and description of the program of instruction,
including the total number of credits, classes, hours, or lessons
required to complete the program of instruction.
(6) A clear and conspicuous statement that the agreement or
contract is a legally binding instrument when signed by the student
and accepted by the school.
(7) A clear and conspicuous caption, "BUYER'S RIGHT TO CANCEL"
under which it is explained that the student has the right to cancel
the enrollment agreement and obtain a refund, the form and means of
notice that the student should use in the event that he or she elects
to cancel the enrollment agreement, and the title and address of the
school official to whom the notice should be sent or delivered.
(8) A clear statement of the refund policy written in plain
English.
(9) The signature of the student under the following statement
that is presented in 12-point boldface or larger print: "My
signature below certifies that I have read, understood, and agreed to
my rights and responsibilities, and that the institution's
cancellation and refund policies have been clearly explained to me."
(10) If the student is not a resident of California, a clear
statement that the student is not eligible for protection under and
recovery from the Student Tuition Recovery Fund.
(b) All contracts and enrollment agreements signed by the student
shall be written in language that is capable of being easily
understood. If English is not the primary language spoken by the
student, the student shall have the right to obtain a clear
explanation of the terms and conditions of the agreement and all
cancellation and refund policies in his or her primary language.
94812. Any written contract or agreement signed by a prospective
student shall not become operative until the student attends the
first class or session of instruction. This provision does not apply
to correspondence schools or other distance-learning programs.
94814. (a) The institution shall provide to students and other
interested persons, prior to enrollment, a catalog or brochure
containing at a minimum the following information:
(1) Descriptions of the instruction provided under each course
offered by the institution including the length of programs offered.
(2) The number of credit hours or clock hours of instruction or
training per unit or units required for completion of the educational
degree or certificate program.
(3) The attendance, dropout, and leave-of-absence policies.
(4) The faculty and their qualifications.
(5) The schedule of tuition payments, fees, and all other charges
and expenses necessary for the term of instruction and the completion
of the course of study.
(6) The cancellation and refund policies.
(7) For institutions that participate in federal and state
financial aid programs, all consumer information that the institution
is required to disclose to the student.
(8) All other material facts concerning the institution and the
program or course of instruction that are reasonably likely to affect
the decision of the student to enroll, as prescribed by rules and
regulations adopted by the council.
(b) No written contract signed by the student shall be enforceable
unless the information specified in subdivision (a) has been
disclosed to the student.
94816. (a) Each institution offering a degree or diploma program
designed to prepare students for a particular vocational, trade, or
career field shall provide to each prospective student a school
performance fact sheet disclosing all of the following information:
(1) The number and percentage of students who begin the
institution's program and successfully complete the entire program.
The rate shall be calculated by determining the percentage of
students enrolled in the program who were originally scheduled, at
the time of enrollment, to complete the program in that calendar year
and who successfully completed the program.
(2) The passage rates of graduates in the program for the most
recent calendar year that ended not less than six months prior to the
date of disclosure on any licensure or certificate examination
required by the state for employment in the particular vocational,
trade, or career field and for any licensing preparation examination
as required under subdivision (a) of Section 94734 for which data is
available.
(3) The number and percentage of students who begin the program
and secure employment in the field for which they were trained. In
calculating this rate, the institution shall consider as not having
obtained employment, any graduate for whom the institution does not
possess evidence, documented in his or her file, showing that he or
she has obtained employment in the occupation for which the program
is offered.
(4) The average annual starting wages or salary of graduates of
the institution's program, if the institution makes a claim to
prospective students regarding the starting salaries of its
graduates, or the starting salaries or local availability of jobs in
a field. The institution shall disclose to the prospective student
the objective sources of information necessary to substantiate the
truthfulness of the claim.
Each school that offers or advertises placement assistance for any
course of instruction shall file with the council its placement
statistics for the 12-month period or calendar year immediately
preceding the date of the school's application for annual review for
every course of instruction.
The council shall develop standards and criteria to be used by
each institution in determining the statistical information required
by this paragraph.
(b) In addition to the fact sheet required by subdivision (a),
each institution offering a degree program designed to prepare
students for a particular vocation, trade, or career field and each
institution subject to Article 7 (commencing with Section 94850)
shall provide to each prospective student a statement in at least
12-point type that contains the following statement:
"NOTICE CONCERNING TRANSFERABILITY OF UNITS AND DEGREES EARNED
AT OUR SCHOOL
Units you earn in our ____ (fill in name of program) program in
most cases will probably not be transferable to any other college or
university. For example, if you entered our school as a freshman,
you will still be a freshman if you enter another college or
university at some time in the future even though you earned units
here at our school. In addition, if you earn a degree, diploma, or
certificate in our ____ (fill in name of program) program, in most
cases it will probably not serve as a basis for obtaining a higher
level degree at another college or university."
The disclosures required by this section shall be signed by the
institution and the student and be dated. If the solicitation or
negotiation leading to the agreement for a course of instruction was
in a language other than English, the disclosures shall be in that
other language.
(c) The council shall take into consideration the character of the
educational program in determining whether specific programs may be
excluded from application of this section.
(d) Except as provided in subdivision (b), this section does not
apply to educational programs subject to Article 7 (commencing with
Section 94850).
94818. (a) Every institution shall designate and maintain an
agent for service of process within this state and provide the name,
address, and telephone number of the agent to the council. The
council shall furnish the agent's name, address, and telephone number
to any person upon request.
(b) If an institution is not operating in California when it
applies for approval to operate, the institution shall set forth the
name, address, and telephone number of its agent for service of
process in the institution's application.
(c) If an institution fails to designate or maintain an agent for
service of process pursuant to subdivision (a) and if service on the
institution cannot reasonably be effected in the manner provided in
Section 415.10, 415.20, 415.30, or 415.40 of the Code of Civil
Procedure, the institution may be served by leaving a copy of the
process or any other document in an office of the council and by
sending, by first-class mail, a notice of the service upon the
council and a copy of the process or other document to the
institution at its last address on file with the council. Service in
this manner shall be deemed complete on the 10th day after that
mailing to the institution. Proof of service may be made by a
declaration showing compliance with this subdivision.
94819. Within 30 days of any action by any accrediting agency
that establishes, reaffirms, or publicly sanctions the accreditation
of any private postsecondary educational institution operating in the
state, including those institutions that satisfy the requirements of
paragraph (7) of subdivision (b) of Section 94739, the accrediting
agency shall notify the bureau of that action and shall provide a
copy of any public statements regarding the reasons for the
accrediting agency's action.
94820. (a) The institution shall have and maintain the policy set
forth in this article for the refund of the unused portion of
tuition fees and other charges if the student does not register for
the period of attendance or withdraws therefrom at any time prior to
completion of the courses, or otherwise fails to complete the period
of enrollment. The institutional refund policy for students who have
completed 60 percent or less of the course of instruction shall be a
pro rata refund.
(b) Except as provided in subdivision (c), the refund shall be
calculated as follows:
(1) Deduct a registration fee not to exceed one hundred dollars
($100) from the total tuition charge.
(2) Divide this figure by the number of hours in the program.
(3) The quotient is the hourly charge for the program.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total hours attended by the
hourly charge for instruction plus the amount of the registration fee
specified in paragraph (1).
(5) The refund shall be any amount in excess of the figure derived
in paragraph (4) that was paid by the student.
(c) For an educational service offered by distance learning, home
study, or correspondence, the refund shall be calculated as follows:
(1) Deduct a registration fee not to exceed one hundred ($100)
from the total tuition charge.
(2) Divide this figure by the number of lessons in the program.
(3) The quotient is the per-lesson charge.
(4) The amount owed by the student for the purposes of calculating
a refund is derived by multiplying the total number of lessons
received by the per-lesson charge calculated in paragraph (3) plus
the amount of the registration fee specified in paragraph (1).
(5)
The refund shall be any amount in excess of the figure derived in
paragraph (4) that was paid by the student.
(d) For the purposes of this section, institutions may specify in
enrollment agreements the time limits within which students are
required to complete the requirements of a course in a distance
learning program.
94821. Institutions offering distance learning, home study, or
correspondence instruction may petition the council for an
alternative method of calculating tuition refunds if they can
demonstrate all of the following:
(a) The method of calculation set forth in subdivision (c) of
Section 94820 cannot be utilized.
(b) The proposed alternative method will result in the calculation
of a refund that is monetarily equivalent to or greater than the
results achieved by the pro rata calculations described in this
subdivision.
94822. Institutions, for all students, without penalty or
obligation, shall refund 100 percent of the amount paid for
institutional charges, less a reasonable deposit or application fee
not to exceed one hundred dollars ($100), if notice of cancellation
is made prior to or on the first day of instruction. If the first
lesson in a home study or correspondence course is sent to the
student by mail, the institution shall send it by first-class mail,
postage prepaid, documented by a certificate of mailing, and the
student shall have the right to cancel until midnight of the eighth
business day after the first lesson was mailed. The institution
shall advise each student that any notification of withdrawal or
cancellation and any request for a refund is required to be made in
writing.
94823. The institution shall provide a written statement
containing its refund policy, together with examples of the
application of the policy, to each student prior to signing the
enrollment contract, and shall make its policy known to currently
enrolled students.
94824. The institution shall pay or credit refunds due on a
reasonable or timely basis, not to exceed 30 days following the date
upon which the student's withdrawal has been determined.
94825. The institution shall publish a current schedule of all
student charges, a statement of the purpose for those charges, and a
statement of the cancellation and refund policies with examples of
the application of the policies, and shall provide the schedule to
all current and prospective students prior to enrollment. The
schedule shall clearly indicate and differentiate all mandatory and
optional student charges. The institution shall include a clear
statement written in English describing the procedures that a student
is required to follow to cancel the contract or agreement and obtain
a refund. If the institution solicited the student or negotiated
the agreement in a language other than English, the notice to the
student shall be in that same language. The schedule shall specify
the total costs of attendance which shall include, but not be limited
to, tuition, fees, equipment costs, housing, transportation, books,
necessary supplies, materials, shop and studio fees, and any other
fees and expenses that the student will incur upon enrollment.
The schedule shall clearly identify all charges and deposits that
are nonrefundable.
94826. Where the refund calculations set forth in this article
cannot be utilized because of the unique way in which an educational
program is structured, the council shall determine the details of an
alternative refund policy, by regulation, and shall take into
consideration the contract for educational services entered into with
the student, as well as the length and character of the educational
program in determining standards for refunds. The decision of the
council shall be final. This section does not apply to the refunds
subject to Sections 94869 and 94870.
94828. In addition to withholding institutional services as
described in Section 94948, an institution may withhold a student's
transcript or grades if the student is in default on a student
tuition contract.
If the student has made partial payment of his or her tuition
obligation, the institution may only withhold that portion of the
grades or transcript that corresponds on a pro rata basis to the
amount of tuition or loan obligation the student has not paid. If
the course of study consists of only one course, the institution may
withhold the grades or the transcript until the tuition or loan
obligation is paid in full.
94829. (a) Adequate and accurate records shall be maintained by
the institution, in accordance with regulations adopted by the
council, and satisfactory standards shall be enforced relating to
attendance, progress, and performance.
(b) The institution shall maintain current records for a period of
not less than five years at its principal place of business in
California, that are immediately available during normal business
hours for inspection and copying by the council or the Attorney
General and showing all of the following:
(1) The name and addresses, both local and home, of each of its
students.
(2) The programs of study offered by the institution.
(3) The names and addresses of its faculty, together with a record
of the educational qualifications of each.
(4) The degrees or diplomas and honorary degrees and diplomas
granted, the date of granting, together with the curricula upon which
the diplomas and degrees were based.
94830. The council may refuse to issue or renew any private
postsecondary or vocational educational institution's approval to
operate, or may revoke any approval to operate for any one, or any
combination, of the following causes:
(a) A violation of this chapter, or any standard, rule, or
regulation established under this chapter, or an order of the council
made under this chapter.
(b) Furnishing false, misleading, or incomplete information to the
council, or the failure to furnish information requested by the
council or required by this chapter.
(c) A finding that an owner, a person in control, a director, or
an officer of an institution is not in compliance with this chapter
or was not in compliance with applicable law while serving as an
owner, person in control, director, or officer of an institution
within the previous five-year period.
(d) A finding that a signatory to an application for an approval
to operate was responsible for the closure of any institution in
which there were unpaid liabilities to any state or federal
government, or uncompensated pecuniary losses suffered by students
without restitution.
(e) A finding that the applicant, owner, or persons in control
have been found previously in any judicial or administrative
procedure to have violated this chapter or admitted to having
violated this chapter.
(f) A finding that there was either a denial of a previous
application submitted by the same institution to the council or a
revocation of the institution's approval and that the conditions or
violations that were the cause of the denial or revocation have not
been corrected.
(g) The failure of the institution to maintain the minimum
educational standards prescribed by this chapter, or to maintain
standards that are the same as, or substantially equivalent to, those
represented in the school's applications and advertising.
(h) Presenting to prospective students information that is false
or misleading relating to the school, to employment opportunities, or
to enrollment opportunities in institutions of higher learning after
entering into or completing courses offered by the school.
(i) The failure to maintain financial resources adequate for the
satisfactory conduct of the courses of instruction offered as
required by statute.
(j) The failure to provide timely and correct refunds to students.
(k) Paying a commission or valuable consideration to any persons
for acts or services in violation of this chapter.
(l) Attempting to confer a degree, diploma, or certificate to any
student in violation of this chapter.
(m) Misrepresenting to any students or prospective students that
they are qualified, upon completion of any course, for admission to
professional examination under any state occupational licensing
provision.
(n) The failure to correct any deficiency or act of noncompliance
under this chapter, or the standards, rules, regulations, and orders
established and adopted under this chapter within reasonable time
limits set by the council.
(o) The conducting of business or instructional services at any
location not approved by the council.
(p) Failure on the part of an institution to comply with
provisions of law or regulations governing sanitary conditions of
that institution specified in Division 2 (commencing with Section
500) and Division 3 (commencing with Section 5000) of the Business
and Professions Code.
(q) The failure to pay any fees, order for costs and expenses
under Section 94935, assessments, or penalties owed to the council,
as provided in this chapter.
94831. No institution, or representative of that institution
shall do any of the following:
(a) Operate in this state a postsecondary educational institution
not exempted from this chapter, unless the institution is currently
approved to operate pursuant to this chapter. The council may
institute an action, pursuant to Section 94955, to prevent any
individual or entity from operating an institution in this state that
has not been approved to operate pursuant to this chapter and to
obtain any relief authorized by that section.
(b) Offer in this state, as or through an agent, enrollment or
instruction in, or the granting of educational credentials from, an
institution not exempted from this chapter, whether that institution
is within or outside this state, unless that agent is a natural
person and has a currently valid agent's permit issued pursuant to
this chapter, or accept contracts or enrollment applications from an
agent who does not have a current permit as required by this chapter.
The council, however, may adopt regulations to permit the rendering
of legitimate public information services without a permit.
(c) Instruct or educate, or offer to instruct or educate,
including soliciting for those purposes, enroll or offer to enroll,
contract or offer to contract with any person for that purpose, or
award any educational credential, or contract with any institution or
party to perform any act, in this state, whether that person, agent,
group, or entity is located within or without this state, unless
that person, agent, group, or entity observes and is in compliance
with the minimum standards set forth in this article and Article 7
(commencing with Section 94850), if it is applicable, the criteria
established by the council pursuant to subdivision (b) of Section
94773, and the regulations adopted by the council pursuant to
subdivision (c) of Section 94773.
(d) Use, or allow the use of, any reproduction or facsimile of the
Great Seal of the State of California on any diploma.
(e) Promise or guarantee employment.
(f) Advertise concerning job availability, degree of skill and
length of time required to learn a trade or skill unless the
information is accurate and in no way misleading.
(g) Advertise, or indicate in any promotional material, that
correspondence instruction, or correspondence courses of study are
offered without including in all advertising or promotional material
the fact that the instruction or programs of study are offered by
correspondence or home study.
(h) Advertise, or indicate in any promotional material, that
resident instruction, or programs of study are offered without
including in all advertising or promotional material the location
where the training is given or the location of the resident
instruction.
(i) Solicit students for enrollment by causing any advertisement
to be published in "help wanted" columns in any magazine, newspaper,
or publication or use "blind" advertising that fails to identify the
school or institution.
(j) Advertise, or indicate in any promotional material, that the
institution is accredited, unless the institution has been recognized
or approved as meeting the standards established by an accrediting
agency recognized by the United States Department of Education or the
Committee of Bar Examiners for the State of California.
(k) Fail to comply with federal requirements relating to the
disclosure of information to students regarding vocational and career
training programs, as described in Section 94816.
94832. (a) No institution or representative of an institution
shall make or cause to be made any statement that is in any manner
untrue or misleading, either by actual statement, omission, or
intimation.
(b) No institution or representative of an institution shall
engage in any false, deceptive, misleading, or unfair act in
connection with any matter, including the institution's advertising
and promotion, the recruitment of students for enrollment in the
institution, the offer or sale of a program of instruction, course
length, course credits, the withholding of equipment, educational
materials, or loan or grant funds from a student, training and
instruction, the collection of payments, or job placement.
(c) An institution is liable in any civil or administrative action
or proceeding for any violation of this article committed by a
representative of the institution. An institution is liable in a
criminal action for violations of this article committed by a
representative of the institution to the extent permitted by law.
(d) (1) No institution or representative of an institution shall
induce a person to enter into an agreement for a program of
instruction by offering to compensate that person to act as the
institution's representative in the solicitation, referral, or
recruitment of others for enrollment in the institution.
(2) No institution or representative of an institution shall offer
to pay or pay any consideration to a student or prospective student
to act as a representative of the institution with regard to the
solicitation, referral, or recruitment of any person for enrollment
in the institution in either of the following:
(A) During the 60-day period following the date on which the
student began the program.
(B) At any subsequent time, if the student has not maintained
satisfactory academic progress in acquiring the necessary level of
education, training, skill, and experience to obtain employment in
the occupation or job title to which the program is represented to
lead. The institution shall have the burden of proof to establish
that the student has maintained satisfactory academic progress.
(e) No institution shall compensate a representative involved in
recruitment, enrollment, admissions, student attendance, or sales of
equipment to students on the basis of a commission, commission draw,
bonus, quota, or other similar method except as follows:
(1) If the program of instruction is scheduled to be completed in
90 days or less, the institution shall pay compensation related to a
particular student only if that student completes the course.
(2) If the program of instruction is scheduled to be completed in
more than 90 days, the institution shall pay compensation related to
a particular student as follows:
(A) No compensation shall be paid for at least 90 days after that
student has begun the program.
(B) Up to one-half of the compensation may be paid before the
student completes the program only if the student has made
satisfactory academic progress, documented by the institution in the
student's file, for more than 90 days.
(C) The remainder of the compensation shall be paid only after the
student's completion of the program. This subdivision shall not
prevent the payment at any time of an hourly, weekly, monthly, or
annual wage or salary.
(f) No institution or representative of an institution shall pay
any consideration to a person to induce that person to sign an
agreement for a program of instruction.
(g) No institution shall use a misleading name in any manner
implying any of the following:
(1) The institution is affiliated with any governmental agency,
public or private corporation, agency, or association.
(2) The institution is a public institution.
(3) The institution grants degrees.
(h) (1) No institution or any representative of an institution
shall in any manner make any untrue or misleading change in, or
untrue or misleading statement related to, any test score, grade,
record of grades, attendance record, record indicating student
completion or employment, financial information, including any of the
following:
(A) Any financial report required to be filed pursuant to Sections
94804 to 94808, inclusive.
(B) Any information or record relating to the student's
eligibility for financial assistance or attendance at the
institution.
(C) Any other record or document required by this chapter or by
the council.
(2) No institution or any representative of an institution shall
falsify, destroy, or conceal any record or other item described in
paragraph (1) while that record or item is required to be maintained
by this chapter or by the council.
(i) No institution or representative of an institution shall use
the terms "approval," "approved," "approval to operate," or "approved
to operate" without stating clearly and conspicuously that approval
to operate means compliance with minimum state standards and does not
imply any endorsement or recommendation by the state or by the
council. If the council has granted an institution approval to
operate, the institution or its representative may indicate that the
institution is "licensed" or "licensed to operate" but may not state
or imply any of the following:
(1) The institution or its programs of instruction are endorsed or
recommended by the state or by the council.
(2) The council's grant to the institution of approval to operate
indicates that the institution exceeds minimum state standards.
(3) The council or the state endorses or recommends the
institution.
(j) No institution offering programs or courses of instruction
represented to lead to occupations or job titles requiring licensure
shall enter into an agreement for a course of instruction with a
person whom the institution knows or, by the exercise of reasonable
care, should know, would be ineligible to obtain licensure in the
occupation or job title to which the course of instruction is
represented to lead, at the time of the scheduled date of course
completion, for reasons such as age, physical characteristics, or
relevant past criminal conviction.
(k) No institution shall divide or structure a program of
instruction or educational service to avoid the application of any
provision of this chapter.
(l) No institution or representative of an institution shall
direct a representative to perform any unlawful act, to refrain from
complaining or reporting unlawful conduct to the council or another
government agency, or to engage in any unfair act to persuade a
student not to complain to the council or another government agency.
94834. (a) Any person or business entity, regardless of the form
of organization that willfully violates Section 94800, Sections 94810
to 94826, inclusive, or Section 94828, 94829, 94831, or 94832 is
guilty of a crime and shall be subject to separate punishment for
each violation either by imprisonment in a county jail not to exceed
one year, by a fine not to exceed ten thousand dollars ($10,000), or
by both that imprisonment and fine; or by imprisonment in the state
prison, by a fine not to exceed fifty thousand dollars ($50,000), or
by both that imprisonment and fine.
(b) Notwithstanding any other law, any prosecution under this
section shall be commenced within three years of the discovery of the
facts constituting grounds for commencing the prosecution.
(c) The penalties provided by this section supplement, but do not
supplant, the remedies and penalties provided under other law.
(d) In addition to any other fines or penalties imposed pursuant
to this section, any person or business entity found guilty of a
crime as described in subdivision (a) shall be ordered to pay the
Attorney General, any district attorney, or any city attorney all of
their costs and expenses in connection with any investigation
incident to that prosecution. An institution shall not be required
to pay the same costs and expenses to more than one investigating
agency.
94835. (a) The council shall review and investigate all
institutions, programs, and courses of instruction approved under
this chapter. Consideration in the scheduling of reviews and
investigations shall be afforded to student complaints and
information collected by the Attorney General, the Student Aid
Commission, any board within the Department of Consumer Affairs, or
any other federal, state, or local agency. The council also shall
conduct periodic unannounced reviews and investigations of
institutions to determine compliance with this chapter.
(b) At the council's request in connection with an investigation
to determine compliance with this chapter, an institution, during its
normal business hours, shall immediately make available for
inspection and copying all records required to be maintained by this
chapter or that relate to the institution's compliance with this
chapter and permit the council's representatives to have immediate
access to the institution's primary administrative location and sites
of instruction during the institution's normal business hours to
examine and copy these records, to inspect the institution's physical
facilities, equipment, library and other learning resources, and to
interview school administrators, faculty, and students.
(c) The approval to operate shall be issued to the owners or the
governing body of the applicant institution, and shall be
nontransferrable. Any person that makes a proper application and
complies with this chapter and each standard and regulation
pertaining to this chapter shall be qualified to receive an approval
to operate or an approval of the transfer of ownership.
94836. (a) If there is reasonable cause to believe that there has
been a violation by a private postsecondary educational institution
of the standards prescribed by this chapter, the council shall
conduct an investigation of the institution.
(b) Within a reasonable time after the commencement of the
investigation required in subdivision (a), the council shall conclude
its investigation and take action against the institution involved,
as appropriate.
94838. (a) No note, other instrument of indebtedness, or contract
relating to payment for educational services shall be enforceable by
any institution within or outside this state governed by this
chapter unless at the time of execution of that note, other
instrument of indebtedness, or contract, the institution has a valid
approval to operate pursuant to this chapter.
(b) No note, other instrument of indebtedness, or contract
relating to payment for educational services shall be enforceable by
any institution within or outside this state governed by this chapter
unless the agent, who enrolled persons to whom educational services
were to be rendered or to whom degrees or diplomas were to be granted
pursuant to this chapter, held a valid agent's permit at the time of
execution of the note, other instrument of indebtedness, or
contract.
(c) Any school or institution governed by this chapter extending
credit or lending money to any person for tuition, fees, or any
charges whatever for educational services to be rendered or furnished
shall cause any note, instrument, or other evidence of indebtedness
taken in connection with that loan or extension of that credit to be
conspicuously marked on the face thereof with the following notice:
"NOTICE
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL
CLAIMS AND DEFENSES THAT THE DEBTOR COULD ASSERT AGAINST THE SELLER
OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS
HEREOF, RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS
PAID BY THE DEBTOR HEREUNDER."
In the event the school or institution fails to do so, it shall be
liable for any damage or loss suffered or incurred by any subsequent
assignee, transferee, or holder of that evidence of indebtedness on
account of the absence of that notification.
(d) Notwithstanding the presence or absence of that notification
and notwithstanding any agreement in which the student waives the
right to assert any claim or defense, the school or institution
making that loan or extending that credit and the transferee,
assignee, or holder of that evidence of indebtedness, shall be
subject to all defenses and claims that could be asserted against the
school or institution that was to render or furnish those
educational services by any party to that evidence of indebtedness or
by the person to whom these educational services were to be rendered
or furnished up to the amount remaining to be paid thereon.
(e) Institutions that participate in federal student assistance
programs and that comply with the financial disclosure and
notification requirements for those programs shall be deemed to be in
compliance with the standards prescribed by this section.
94840. At least 90 days prior to the expiration of an approval to
operate, the institution shall complete and file with the council an
application form for renewal of its approval to operate. The
renewal application need only contain a description of any changes
made by the institution since the time its last application was
reviewed by the council. Fees for processing the renewal application
shall be based on the number and types of changes it contains. The
renewal application shall be reviewed and acted upon as provided in
Sections 94802, 94804, and 94835, and Section 94900 or 94915,
whichever is applicable.
94841. Before any institution may be considered for approval or
renewal of approval to operate, the institution, at a minimum, shall
pay all annual fees, assessments to the Student Tuition Recovery
Fund, orders for costs and expenses under Section 94935, and
penalties in arrears retroactive to January 1, 1990. If an
institution that has failed to make timely payments of fees and
assessments is approved, the approval shall be conditional, subject
to any restrictions the council deems appropriate, and shall be valid
for a period not to exceed two years.
94842. If a review and decision on a renewal application
submitted pursuant to Section 94840 cannot be completed by the
council prior to the expiration of the institution's current pending
approval, that expiration date shall be extended until the date that
the council notifies the institution of its decision.
94846. (a) If a shift in control or change of ownership of an
institution occurs, an application for a new approval to operate for
the institution under the changed ownership or control shall be filed
with the council at least 20 days prior to the shift in control or
change in ownership. Whenever an institution is operated at
different locations, an application for approval shall be filed for
each location.
(b) The application for approval to operate submitted in
conjunction with a change of ownership may include pertinent portions
of the institution's previous application prepared in connection
with programs or courses of instruction that remain unchanged or
unaffected by the change in ownership.
(c) No application for ownership or transfer of ownership shall be
approved for any applicant that has been found previously in any
judicial or administrative proceeding to have violated this chapter,
or if there exists any of the grounds for denial set forth in Section
480 of the Business and Professions Code.
(d) No change in ownership of the institution shall be made until
the application is approved. If an application for a new approval to
operate is not timely filed as required by this section, the
institution's approval to operate shall terminate. Upon approval of
a change in ownership, the council shall give written notice to the
Student Aid Commission.
(e) For the purposes of this section, a change in ownership occurs
when there is a change of control of the institution, or where a
person that previously did not own at least 25 percent of the stock
or controlling interest of an institution or its parent corporation,
acquires ownership of at least 25 percent of the stock of the
institution or its parent corporation, or when a for-profit business
converts to nonprofit corporation status or forms a nonprofit
corporation as a subsidiary to provide the educational services for
which the for-profit business is approved to operate.
94848. An institution may not claim an exception pursuant to
Section 94739 or 94785 if the bureau finds, after notice and hearing
as provided in Section 94975, that the institution adopted a form of
organization or method of operation for the purpose of avoiding any
provision of this chapter.
Article 7. Maxine Waters Student Protection Act
94850. (a) This article shall be known, and may be cited, as the
Maxine Waters School Reform and Student Protection Act of 1989.
(b) The Legislature finds and declares that students have been
substantially harmed and the public perception of reputable
institutions has been damaged because of the fraudulent, deceptive,
and unfair conduct of some institutions that offer courses of
instruction for a term of two years or less that are supposed to
prepare students for employment in various occupations. Students
have been induced to enroll in these schools through various
misrepresentations including misrepresentations related to the
quality of education, the availability and quality of equipment and
materials, the language of instruction and employment and salary
opportunities. Some of the most egregious misrepresentations are
made by representatives who recruit students at places other than the
institution's premises. Some students have been enrolled who do not
have the ability to benefit from the instruction. In addition, the
quality of the education offered is often inadequate to enable
students to obtain jobs after the completion of instruction.
(c) The Legislature further finds and declares that many students
who enroll in these schools pay their tuition from the proceeds of
loans and grants guaranteed or provided by the state and federal
governments. Students who leave schools before the completion of
instruction, often because of misrepresentations and inadequate
instruction, do not receive adequate refunds of tuition for the
instruction not received. Students remain liable to repay student
loans but are frequently unable to do so in part because they were
unable to obtain the proper educational preparation for jobs.
Students are also harmed by the closure of institutions, often caused
by the fraud or mismanagement of the institution's operators,
because the students neither obtain the education promised nor a
refund of tuition and the cost of materials. As a result of all of
the foregoing, the state and federal governments spend many millions
of dollars annually to satisfy loan guarantees for often inadequate
and misrepresented vocational school courses.
(d) It is the intent and purpose of this article to protect
students and reputable institutions, ensure appropriate state control
of business and operational standards, ensure minimum standards for
educational quality, prohibit misrepresentations, require full
disclosures, prohibit unfair dealing, and protect student rights. It
is the intent and purpose of this article to save millions of
dollars of taxpayer's funds from being misused to underwrite the
activities of institutions that depart from the standards of fair
dealing and the requirements of this article.
(e) This article shall be liberally construed to effectuate its
intent and achieve its purposes.
(f) To the extent of any conflict between any other law and this
article, this article shall prevail.
94851. (a) The Legislature further finds and declares that
students have been harmed by some institutions because of the
financial improprieties and mismanagement of those institutions,
their failure to fully disclose the student's financial and
contractual obligations, and their failure to have sufficient
resources to provide the promised training. The Legislature also
finds that the tuition refund policies of institutions often
encourage unfair practices by creating a financial benefit to the
institution if a student drops out, and do not encourage institutions
to provide adequate counseling or to adopt policies designed to curb
student dropouts. In addition, the Legislature finds that many
institutions have poor records of student completion and job
placement, even though these institutions expressly or implicitly
represent that students will receive sufficient training and skills
to obtain well-paid employment in the field that is the subject of
the training, and that a reputable institution is one that complies
with this chapter. Consequently, the Legislature finds that the
business of providing occupational training, instruction, and related
equipment by commercial enterprises has a substantial impact on the
economy of this state and the welfare of its citizens.
(b) It is the further intent and purpose of this article to
establish incentives to reduce student dropouts, minimum fiscal
standards, minimum standards for admission based on the student's
ability to be successfully trained, and minimum standards for
institutional accountability for course completion and student
employment in the occupations or job titles to which the training is
represented to lead. The Legislature finds that the accountability
standards for completion and employment reflect a reasonable
tolerance for factors outside an institution's control. It is also
the intent and purpose of this article to ensure that the cost to
taxpayers of loans and grants for vocational instruction is
commensurate with the benefits obtained by students and flowing to
the state's economy.
94852. The following definitions and provisions apply to this
article:
(a) "Class" means a subject, such as English or mathematics, that
is taught as part of a course of instruction. "Class session" means
the part of a day that an institution conducts instruction or
training in a particular class, such as an hour of instruction in
English or mathematics offered on a particular day of the week.
(b) "Council" means the Council for Private Postsecondary and
Vocational Education established pursuant to Section 94770.
(c) "Educational service" means any education, training, or
instruction offered by an institution, including any equipment.
(d) "Equipment" includes all textbooks, supplies, materials,
implements, tools, machinery, computers, electronic devices, or any
other goods related to any education, training, or instruction, or an
agreement for educational services or a course of instruction.
(e) "Licensure" includes any license, certificate, permit, or
similar credential that a person must hold to lawfully engage in any
occupation or activity.
(f) "Owner" means any person who has a legal or equitable interest
in 10 percent or more of an institution's stock or assets.
(g) "Person" means a natural person or any business entity,
regardless of the form of organization.
(h) "Person in control" means a person who has sufficient
capacity, directly or indirectly, to direct or influence the
management, policies, or conduct of the institution so that the
person can cause or prevent violations of this chapter. There is a
rebuttable presumption affecting the burden of proof that an owner,
director, or office of an institution is a person in control.
(i) "Private postsecondary educational institution" or
"institution" means any person doing business in California who
offers to provide or provides, for a tuition, fee, or other charge,
any instruction, training or education primarily to people who have
completed or terminated their secondary education or are beyond the
age of compulsory high school attendance. An "institution" includes
its branch and satellite campuses, unless otherwise provided.
(j) "Program" or "program of instruction" or "course" or "course
of instruction," except as otherwise provided, means the program of
instruction, training, set of related courses or education
represented to lead to an occupation or job title.
(k) "Total charge" means the total charge for a course of
instruction or other education, instruction, or training, including
the charge for tuition, equipment, finance charges, and all other
fees, charges, costs, and expenses.
(l) "Year" means a calendar year.
94853. (a) In addition to making any other required disclosures,
a representative of an institution who in any manner solicits or
recruits any person in person at any place other than the institution'
s premises or by telephone for enrollment in a course of instruction
shall disclose the following, orally, and, if the solicitation is in
person, in a correctly dated written document given to the person and
printed in at least 10-point type and signed by the representative.
(1) The representative is a paid recruiter for an institution and
the institution is not a public school.
(2) The representative is not offering a job, making job
referrals, or conducting a survey.
(3) There is no guarantee of a job after a student graduates from
the course of instruction.
(4) The total charge for the course of instruction or if the
solicitation or recruitment is for more than one course, the range of
the total charges for the courses offered.
(b) The representative shall make the disclosures required by
paragraphs (1) to (3), inclusive, of subdivision (a) before
attempting to solicit or recruit any person. The representative
shall make the disclosure required by paragraph (4) of subdivision
(a) before the end of a solicitation or attempt to recruit any
person.
(c) A representative who solicits or recruits any person as
described in subdivision (a) shall provide the person with a copy of
the institution's current catalog or brochure, containing the
information described in paragraph (4) of subdivision (a) of Section
94859, which the person may obtain without charge. The institution
or its representative shall provide the catalog or brochure required
by this subdivision at the time of an in-person solicitation or
recruitment or send the catalog brochure within two days of a
telephonic solicitation or recruitment.
(d) No institution shall enter an agreement for a course of
instruction with, or prepare or assist in preparation of a student
loan or grant application for, a person solicited or recruited as
described in subdivision (a) within three days of the date on which
the person was solicited or recruited.
(e) This section does not apply to solicitations or presentations
made at informational public appearances directed to five or more
people or to advertisements in print or broadcast media.
94854. (a) Every institution shall meet all of the following
performance standards for each program offered during the applicable
time period described in subdivision (l):
(1) Sixty percent or more of the students who began the program,
did not cancel pursuant to Section 94867, and were originally
scheduled at the time of enrollment to complete the course during
that period, shall complete it.
(2) Seventy percent or more of the students who completed the
program within that period shall obtain employment starting within
six months after completing the course in the occupations or job
titles to which the course of instruction was represented to lead.
For the purpose of this subdivision, "program" or "program of
instruction" or "course" or "course of instruction" includes all
courses of instruction, however denominated, that are represented to
lead to the same or closely related occupations or job titles.
(b) Every institution shall meet all of the following performance
standards for all programs in the aggregate offered by the
institution at each of its campuses during the applicable time period
described in subdivision (l):
(1) Sixty percent or more of all the students who began the
programs did not cancel pursuant to Section 94867, and were
originally scheduled at the time of enrollment to complete these
programs during that time period, shall complete these programs.
(2) Seventy percent or more of all the students who completed the
programs within that time period shall obtain employment, starting
within six months after completing the programs, in the occupations
or job titles to which the programs of instruction were represented
to lead.
(c) For the purposes of subdivisions (a) and (b), students who, as
documented by the institution, have been prevented from completing
the program or programs of instruction due to death, disability,
illness, pregnancy, military service, or participation in the Peace
Corps or Domestic Volunteer Service shall be excluded from the
computations used to determine whether an institution has met the
performance standards prescribed by those subdivisions. Except as
provided in Section 94874, an institution shall not disclose the
records maintained pursuant to this subdivision unless production of
those records are required by any law, subpoena, or court order, or
are necessary for a certified public accountant to prepare a
compliance report pursuant to subdivision (g) of Section 94870.
(d) An institution shall meet the standards prescribed in
subdivisions (a) and (b) at each site at which the program or
programs are offered. A determination of whether a particular site
meets the standards prescribed in subdivisions (a) and (b) shall be
based only on students who attended that site. An institution shall
be subject to subdivisions (f) and (g) only with respect to its sites
that fail to meet the standards prescribed in subdivisions (a) and
(b).
(e) (1) This subdivision applies only to institutions in which 15
or fewer students began a program or programs, did not cancel
pursuant to Section 94867, and were originally scheduled to complete
the program or programs within the applicable time period described
in subdivision (l).
(2) If an institution described in paragraph (1) fails to meet any
of the standards prescribed in subdivision (a) or (b), but would
have met that standard if one additional student had completed or
obtained employment, the institution shall be deemed to comply with
this section. If an institution described in paragraph (1) fails to
meet the standard for review established in subdivision (f), but
would have met the standard if one additional student had completed
or obtained employment, the institution shall be deemed subject to
subdivision (f).
(f) (1) This subdivision applies only to an institution or any
site that fails to meet any of the following:
(A) Any of the standards established in subdivision (a) or (b) by
10 percent or less.
(B) Any of the standards established in subdivision (a), but has a
placement rate of 42 percent or more for the course in which the
standard was failed.
(C) Any of the standards established in subdivision (b), but has a
placement rate of 42 percent or more for all courses in the
aggregate.
(2) If the institution's failure to meet the standards prescribed
in subdivision (a) or (b) was not caused by a violation of this
chapter, the council shall order, after notice and, if requested,
after a hearing, that the institution implement a program to achieve
compliance with subdivisions (a) and (b). The program may include
any of the following:
(A) Limitations on enrollment for specific courses of instruction.
(B) Revision of admission policies and screening practices to
ensure that students have a reasonable expectation of completing
courses and obtaining employment.
(C) Increased academic counseling and other student support
services.
(D) Improved curricula, facilities, and equipment.
(E) Revisions to the qualifications and number of faculty.
(F) Improved job placement services, including revisions to the
qualifications and number of job placement personnel and the
expansion of contacts with employees and state and federal employment
development agencies.
(G) Submission of a compliance report prepared by a certified
public accountant, who is not an officer, director, shareholder, or
employee of the institution, any parent corporation or any
subsidiary, prepared pursuant to an attestation engagement in
accordance with the Statements on Standards for Attestation
Engagements of the American Institute of Certified Public Accounts,
which states that the institution has complied with the performance
standards in this section within the period set forth in paragraph
(4).
(H) Any other reasonable procedure required by the council.
(3) If an institution is subject to an order pursuant to paragraph
(2), the council may require that the institution file information
or reports requested by the council. The council may also monitor
the institution in the manner provided in subdivision (d) of Section
94878.
(4) (A) An institution subject to an order pursuant to paragraph
(2) shall satisfy the standards established in subdivisions (a) and
(b) within the period designated by the council. This period shall
not extend more than one year beyond the length of the program for
noncompliance with the standards prescribed by subdivision (a) or
more than one year beyond the longest program for noncompliance with
the standards prescribed in subdivision (b).
(B) If the institution fails to satisfy the standards of
subdivision (a) within the period designated by the council, the
council shall order the institution to cease offering the course of
instruction at the campus where that program was offered. If the
institution fails to satisfy the standards of subdivision (b) within
the period designated by the council, the council shall revoke the
institution's approval to operate, or approval to operate the branch
or satellite campus where the programs were offered. No action shall
be taken pursuant to this paragraph without notice, and, if
requested by the institution, a hearing. In taking action pursuant
to this subparagraph, the bureau shall consider the impact, if any,
of changes in the employment rate in the area served by this
institution.
(g) If an institution fails to meet any of the standards
established in subdivision (a) and does not have a placement rate of
42 percent or more for the program in which the standard was failed,
the council shall order the institution to cease offering the program
of instruction at the campus where the course was offered. If the
institution fails to meet any of the standards prescribed in
subdivision (b) and does not have a placement rate of 42 percent or
more for all programs in the aggregate, the council shall revoke the
institution's approval to operate, or approval to operate the branch
or satellite campus where the programs were offered. No action shall
be taken pursuant to this subdivision without notice and, if
requested by the institution, a hearing.
(h) (1) The institution shall have the burden of proving its
compliance with this section.
(2) The council shall investigate the institution whenever the
council deems appropriate to verify the institution's compliance with
this section. The investigation shall include an examination of
the records maintained by the institution pursuant to subdivision (j)
and contacts with the students and employers.
(3) If an institution willfully falsifies, alters, destroys,
conceals, or provides untrue or misleading information relating to
compliance with this section, including records maintained pursuant
to subdivision (j), the council shall revoke the institution's
approval to operate. No action shall be taken pursuant to this
paragraph without notice and, if requested by the institution, a
hearing. This provision supplements but does not supplant any other
penalty or remedy provided by law.
(4) The institution shall pay all reasonable costs and expenses
incurred by the council in connection with this section at a time
designated by the council.
(i) If the council, pursuant to subdivision (f) or (g), orders an
institution to cease offering a program of instruction or revokes the
approval of an institution to operate or operate a branch or
satellite campus, the institution may apply, no sooner than two years
after the order to cease or the revocation became effective, for
approval to offer that program or for approval to operate. Before
the council may grant any approval, the institution shall establish
that it complies with this chapter, each program satisfies all of the
minimum standards prescribed by this chapter, and the circumstances
surrounding the institution's failure to meet the requirements of
this section have sufficiently changed so that the institution will
be substantially likely to comply with this section.
(j) An institution shall maintain records of the name, address,
and telephone number of students who enroll in a program of
instruction, including students who begin the program and students
who cancel pursuant to Section 94867, and of students who graduate
from that program of instruction. An institution shall inquire
whether students who complete a program of instruction obtain
employment starting within six months of completing the program in
the occupation to which the program of instruction is represented to
lead and continue in employment for a period of at least 60 days.
The inquiry shall be documented by a list indicating each student's
name, address, and telephone number; the employer's name, address,
and telephone number; the name, address, and telephone number of the
person who provided the information regarding the student's
employment to the institution; the name, title, or description of the
job; the date the student obtained employment; the duration of the
student's employment; information concerning whether the student was
employed full-time or part-time including the number of hours worked
per week; and the names, addresses, and telephone numbers of students
who choose not to seek employment and instead enroll in another
program to earn a higher degree, as well as the name and address of
the institution in which they enroll. If the student is
self-employed, the list shall include reliable indices of
self-employment such as contracts, checks for payment, tax returns,
social security contribution records, records of accounts receivable
or customer payments, invoices for business supplies, rent receipts,
appointment book entries, business license, or any other information
required by the bureau that is a reliable indicator of
self-employment.
(k) For the purposes of this section, the following definitions
shall apply:
(1) "Annual report" means the report required to be filed pursuant
to Section 94861.
(2) (A) "Employment" means either of the following:
(i) Full-time employment for at least 32 hours per week for a
period of at least 60 days in the occupations or job titles to which
the program of instruction is represented to lead.
(ii) Part-time employment for at least 17.5 hours, but less than
32 hours, per week for a period of at least 60 days in the
occupations or job titles to which the program of instruction is
represented to lead, provided the student completes a handwritten
statement at the beginning of the program and at the end of the
program which states that the student's educational objective is
part-time employment. The institution shall not require that any
student complete such a statement or provide any incentive, financial
or otherwise, to any student for signing such a statement.
(B) The bureau shall adopt regulations to specify the job tasks,
other than those directly related to generating income, which may be
counted towards meeting the hour requirements for full-time and
part-time employment for students who are self employed.
(3) "Hearing" means a hearing pursuant to the requirements of
either Section 94965 or 94975.
(4) "Placement rate" means the percentage of students who
fulfilled the provisions of the following two subparagraphs:
(A) Began the program, did not cancel pursuant to Section 94867,
and were originally scheduled at the time of enrollment to complete
the program during the applicable time period described in
subdivision (l).
(B) Completed the program, within the applicable time period
described in subdivision (l) and started employment within six months
of completing the program or, if employment requires taking a state
licensure examination for which only graduates of the program may
apply, then (i) started employment within six months of the date on
which the state licensing agency announces the results of the first
licensure examination reasonably available to students who completed
the program, or (ii) started employment within six months of the next
reasonably available
licensure examination date for any student who did not receive
passing results on the first exam. The time period determined
pursuant to this subparagraph shall not exceed 10 months beyond the
date of completion of the program of instruction. The institution
shall retain a record of the date of the first reasonably available
licensure exam following the completion date of each student, the
date the licensure agency announces the results of the first
reasonably available licensure exam, and the date of the next
reasonably available licensure exam for each student who did not pass
the first exam.
(5) "Reporting period" means the institution's fiscal year or any
year period designated by the council to be covered in the
institution's annual report.
(6) "Time period" means the two most recent calendar years that
ended at least eight months before the end of the institution's
applicable reporting period.
(l) (1) An institution's compliance with the standards prescribed
in subdivisions (a) and (b) shall be determined as of the date on
which the institution's reporting period ends.
(2) The institution shall report its determination of its
compliance with the standards established in subdivisions (a) and (b)
in each annual report.
(3) The council may adjust the meaning of "time period" if the
council finds that an adjustment is necessary for the efficient
administration of this section. If any adjustment is made in the
annual reporting periods, the council may adjust when the time period
commences but shall not alter the two-year length of the period.
(m) In determining the placement rate for a particular time period
as described in subdivision (l), an institution may exclude from the
determination a student whose completion date was extended beyond
that time period if the extension was requested by the student in
writing on an enrollment agreement modification request form that
meets specifications established by the council. The form shall
include instructions to the student indicating that, when signed by
both the student and the institution, the request modifies the
existing agreement. The form shall not be valid unless it provides
space for the student to complete a handwritten description, in the
student's handwriting, of the reasons necessitating the extension
that are distinctly personal to the student and unrelated to the
provision of educational services or activities of the institution,
contains the new expected completion date of the program, and is
signed and dated by the student and the institution. The institution
shall provide the student a copy of the signed modification request
form. The institution shall retain the student's original written
request to modify the enrollment agreement with the original
enrollment agreement. A student excluded from the placement rate
determination for a particular time period pursuant to this
subdivision shall be included in the placement rate determination for
the next immediately following time period. The institution shall
state in the institution's annual report the number of students for
whom an extension was granted.
(n) In determining the placement rate for a particular time period
as described in subdivision (l), an institution may exclude from the
calculation a student who either:
(1) Decides not to obtain employment and within six months of
completing the program enrolls in a program to continue his or her
education to obtain a higher level degree that is related to, or
provides for the student to use, the same skills or knowledge
obtained in the program the student completed.
(2) Is in possession at the completion of the program of a valid
United States Immigration and Naturalization Service Form I-20.
(o) In determining the placement rate for a particular time period
as described in subdivision (l), an institution may count a student
who drops out of the program after completing at least 75 percent of
the program because the student has obtained employment which lasts
for a period of at least 60 days in the occupations or job titles to
which the program of instruction is represented to lead. No more
than 10 percent of the institution's total number of placed students
may be counted pursuant to this subdivision.
(p) If an order to cease offering a program or a revocation is
issued pursuant to this section, the council may permit the
institution to continue to offer the program or programs of
instruction to the students who had begun the course or courses
before the effective date of the order or revocation or may order the
institution to cease instruction and provide a refund of tuition and
all other charges to students.
94855. (a) As a condition of maintaining its approval to operate,
an institution offering any educational programs or educational
services subject to this article shall meet the following financial
resource requirements in addition to the financial requirements of
Section 94804.
(1) Satisfy minimum standards prescribed by Section 94900, 94905,
or 94915, whichever is applicable.
(2) Provide the education, training, skill, and experience that
the institution, in any manner represented it would provide.
(3) Pay timely refunds as required by Sections 94867, 94869,
94870, 94873, and 94877.
(b) (1) In determining an institution's compliance with
subdivision (a), the council, at the institution's request, may
consider the financial resources of a parent corporation if the
parent corporation files with the council, and at all times complies
with, an irrevocable and unconditional agreement approved by its
board of directors that satisfies all of the requirements of
paragraph (2).
(2) The agreement described in paragraph (1) shall provide that
the parent corporation do all of the following:
(A) Consent to be sued in California.
(B) Consent to be subject to the administrative jurisdiction of
the council and the Student Aid Commission in connection with the
institution's compliance with this chapter.
(C) Appoint an agent for service of process in California and all
notices required by this chapter.
(D) Agree to pay any refund, claim, penalty, or judgment that the
institution is obligated to pay.
(E) File financial reports, maintain financial records, and permit
the inspection and copying of financial records to the same extent
as is required of the institution.
(3) For the purposes of this subdivision, a "parent corporation"
means a corporation that owns more than 80 percent of the stock of
the institution whose financial resources are at issue.
(c) If an institution does not comply with Section 94804, the
council may do any or any combination of the following:
(1) Require the institution to establish and implement a financial
plan to ensure compliance with Section 94804.
(2) Require the institution to post satisfactory security for the
performance of its financial obligations pursuant to Section 94804.
(3) Require the institution to furnish additional information such
as an audit report of financial statements prepared by a California
licensed certified public accountant who is not an employee, officer,
or director of the institution.
(4) Proceed pursuant to Section 94879.
(d) In any action or proceeding involving an institution's failure
to comply with Section 94804, there shall be a presumption affecting
the burden of proof that the institution does not have sufficient
financial resources if the institution fails to meet any of the
standards set forth in Section 94804.
94856. If any person willfully violates this article and the
violation results in the closure of an institution, that person shall
pay to all students of the closed institution full refunds or full
compensation for actual damages resulting from the closure that were
not paid by the closed institution.
94857. (a) No institution shall establish a branch or satellite
campus unless the council approves the branch or satellite campus
before any students are enrolled for instruction, or any instruction
is offered, at that campus.
(b) The council shall not approve a branch or satellite campus if
any of the following conditions exist:
(1) The institution or the branch or satellite campus fail to
satisfy all of the standards and requirements of Sections 94900 and
94901, or Section 94915, whichever applies.
(2) The institution proposes to offer a course of instruction at
the branch or satellite campus that could not be offered at another
site operated by the institution because of the institution's failure
to satisfy the standards prescribed in Section 94854.
(3) If the institution participates in a federal student loan
program, the student loan default rate attributable to the
institution for the two most recent years, as preliminarily announced
or finally determined by the United States Department of Education,
is 25 percent or more.
(4) The establishment of a branch or satellite campus would, in
any manner, facilitate the institution's avoidance or evasion of this
chapter or of any state or federal law applicable to a student
financial aid program in which the institution participates.
94859. (a) Before a person executes an agreement obligating that
person to pay any money to an institution for a program of
instruction or related equipment, the institution shall provide the
person with all of the following:
(1) A copy of the agreement containing all of the information
required by Section 94871.
(2) If the institution has offered the course of instruction for
at least one calendar year, it shall provide orally and in writing
all of the following information:
(A) The percentage of students completing that program of
instruction as determined pursuant to Section 94854, for the time
period that is required to be covered in the last annual report that
institution was required to file with the council pursuant to Section
94861.
(B) The percentage of students who completed the program of
instruction and obtained employment as determined pursuant to Section
94854, for the time period that is required to be covered in the
last annual report that the institution was required to file with the
council pursuant to Section 94861.
(C) Any other information necessary to substantiate the truth of
any claim made by the institution as to job placement.
(D) If the institution or a representative of the institution
makes any express or implied claim about the salary that may be
earned after completing a program of instruction, such as a claim
that the student may be able to repay a student loan from the salary
received at a job obtained following completion of the program of
instruction, the following disclosures, orally and in writing:
(i) The percentage of students who were originally scheduled, at
the time of enrollment, to complete the program of instruction in the
most recent calendar year that ended not less than six months prior
to the date of disclosure who earn salaries at or above the claimed
level.
(ii) The ranges of monthly salaries earned by these students in
two hundred dollar ($200) increments and the number of these students
in each salary range.
(E) If the institution or a representative of the institution in
any manner represents that the program of instruction might lead to
employment in an occupation or job title for which a state licensing
examination is required, the following disclosures, orally and in
writing:
(i) All licensure or certification requirements established by the
state for the occupation or job title category.
(ii) The pass rate of graduates of the program of instruction
offered by that institution for the most recent calendar year that
ended not less than six months prior to the date of disclosure on any
licensure or certification examination required by the state for the
particular occupation or job title.
(3) If the institution has offered the program of instruction for
less than one calendar year, the following statement: "This program
is new. We are not able to tell you how many students graduate, how
many students find jobs, or how much money you can earn after
finishing this course."
(4) A current catalog or brochure containing information
describing the courses offered, all of the occupations or job titles,
if any, to which the program of instruction is represented to lead,
length of program, faculty and their qualifications, schedule of
tuition payments, fees, and all other charges and expenses necessary
for completion of the course of instruction, cancellation and refund
rights, the total cost of tuition over the entire period, a
description of the student's rights under the Student Tuition
Recovery Fund established pursuant to Section 94944, and all other
material facts concerning the institution and the program of
instruction that might reasonably affect the student's decision to
enroll.
(5) If applicable, the following disclosures, orally and in
writing:
(A) If the student obtains a loan to pay for the course of
instruction, the student will have the responsibility to repay the
full amount of the loan plus interest, less the amount of any refund.
(B) If the student is eligible for a loan guaranteed or reinsured
by the state or federal government and the student defaults on the
loan:
(i) The federal or state government or the loan guarantee agency
can take action against the student, including applying any income
tax refund to which the person is entitled to reduce the balance owed
on the loan.
(ii) The student may not be eligible for any other federal
financial assistance for education at a different school or for
government housing assistance until the loan is repaid.
(C) The institution is not a public institution.
(D) The institution has filed, or has had filed against it, a
petition in bankruptcy.
(6) A written statement set forth in a table of the amount of the
refund to which the student would be entitled if the student withdrew
from the program after completing a period of days or weeks of
instruction equivalent to 10 percent, 25 percent, 50 percent, 60
percent, and 75 percent of the program of instruction. The
disclosures required by this paragraph may be set forth in the
agreement for the course.
(b) The information required by paragraph (2) of subdivision (a)
shall be documented by the institution with all facts needed to
substantiate that information. Any information regarding a student's
employment shall be based on an inquiry by the institution and shall
be documented by a list indicating the student's name, address, and
telephone number; the employer's name, address, and telephone number;
the name and address or telephone number of the person who provided
the information regarding the student's employment to the
institution; the name, title, or description of the job; the date the
student obtained the job; the duration of the student's employment;
and the amount of the salary, if any salary claim has been made.
Except as provided in Section 94874, an institution shall not
disclose the records maintained pursuant to this subdivision unless
production of those records are required by any law or by subpoena or
court order, or are necessary for a certified public accountant to
prepare a compliance report pursuant to subdivision (g) of Section
94870.
(c) No institution which has offered a course of instruction for
less than one year shall make any express or implied claims about the
salary that a student may earn after completing the course of
instruction.
(d) The institution shall provide the catalog or brochure
described in paragraph (4) of subdivision (a) to any person upon
request.
(e) The written disclosure of information required by
subparagraphs (A), (B), and (C) of paragraph (2) of subdivision (a)
may be made in accordance with the chart in Appendix A of Part 668 of
Title 34 of the Code of Federal Regulations, or any other similar
form prescribed by law for the disclosure of that information.
(f) No institution shall obtain the signature of any person to an
agreement obligating that person to pay any money to the institution
until the person has had a reasonable opportunity to read and review
all of the items described in subdivision (a).
(g) The disclosure of any information pursuant to Section 94853
shall not relieve any institution of any obligation to make any
disclosure required under this section.
(h) Notwithstanding any provision of this section, an institution
offering a home study or correspondence course need not orally make
the disclosures required by this section in connection with that
course if the institution did not orally solicit or recruit the
student for enrollment and the student enrolled by mail.
94860. If a state board, bureau, department, or agency has
established the minimum number of classes or class hours or the
minimum criteria of a course of instruction necessary for licensure
in an occupation and an institution offers a course of instruction
differing from the state entity's minimum requirements, the
institution shall disclose orally and in writing the state entity's
minimum requirements and how the course of instruction differs from
those criteria. The institution shall make this disclosure before a
prospective student executes an agreement obligating that person to
pay any money to the institution for the course of instruction.
94861. (a) Every institution shall file annually with the
council, on July 1, or another date designated by the council, a
report subscribed under penalty of perjury that contains all of the
following:
(1) The information described in subdivisions (a) and (b) of
Section 94854.
(2) The information described in paragraph (2) of subdivision (a)
of Section 94859.
(3) A statement that the information is documented as provided in
subdivision (c) of Section 94854 and subdivision (b) of Section
94859.
(4) Financial information demonstrating compliance with Section
94855.
(5) Any additional information that the council may prescribe.
(b) The council shall maintain each report for 10 years and shall
provide copies of the reports to any person upon request.
(c) Based on the review of the information submitted pursuant to
this section, the council may initiate a compliance review, may take
action including placing the institution on probation as provided in
Section 94878, or may require evidence of compliance with this
article in a form satisfactory to the council.
(d) The bureau shall develop standards and procedures for
submission by institutions of the information pursuant to this
section electronically or on computer disk, in a standardized format.
(e) If the institution uses any of the categories identified in
subparagraph (B) of paragraph (2) of subdivision (k) of, or
subdivision (n) or (o) of, Section 94854 in determining compliance
with that section, the information submitted pursuant to this section
shall include the number of students that were included in each of
the categories identified in those provisions.
94862. The institution shall file biennially with the council a
financial report prepared pursuant to Section 94806. The report
shall include the financial information required by Section 94855 and
average monthly expenditures. Work papers for the audit shall be
retained for five years from the date of the audit report and shall
be made available to the council upon request after the completion of
the audit.
94863. (a) No institution shall pay any consideration to any
agent subject to Section 94940 who has not complied with that
section, or enter into an agreement, as described in Section 94871,
with any person who was recruited or solicited to enroll in that
institution by an agent who was not in compliance with Section 94940
at the time of the recruitment or solicitation.
(b) No institution shall pay any consideration to any agency
subject to Section 94942 that has not complied with that section, or
enter into an agreement, as described in Section 94871, with any
person who was recruited or solicited to enroll in that institution
by an agency or by an agent employed by or under contract with the
agency if the agency was not in compliance with Section 94942 at the
time of the recruitment or solicitation.
94864. The enrollment, course completion, and employment data
used to determine compliance with subdivisions (a) and (b) of Section
94854 and paragraph (2) of subdivision (a) of Section 94859 shall
continue to apply to an institution notwithstanding a change in the
institution's ownership, name, or identification number.
94865. (a) As used in this section, "ESL instruction" means any
educational service involving instruction in English as a second
language.
(b) No institution shall offer ESL instruction without the prior
approval of the bureau.
(c) The bureau shall not approve an institution's offering of ESL
instruction unless that institution complies with the minimum
standards established in subdivision (a) of Section 94915.
(d) An institution that offers ESL instruction to a student shall
not enroll the student in any educational service presented in the
English language unless the student passes a test indicating that he
or she has attained adequate proficiency in oral and written English
to comprehend instruction in English.
(e) A student who has completed ESL instruction at an institution
shall not be enrolled in any course of instruction presented in the
English language at that institution unless the student passes a test
indicating that he or she has attained adequate proficiency in oral
and written English to be successfully trained by English language
instruction to perform tasks associated with the occupations or job
titles to which the educational program is represented to lead.
(f) If an institution offers ESL instruction to a student to
enable the student to use already existing knowledge, training, or
skills in the pursuit of an occupation, the institution shall test
the student after the student completes the ESL instruction to
determine that the student has attained adequate proficiency in oral
and written English to use his or her existing knowledge, training,
or skills. Before enrolling the student in ESL instruction, the
institution shall document the nature of the student's existing
knowledge, training, or skills and that the ESL instruction is
necessary to enable the student to use that existing knowledge,
training, or skills.
(g) If an institution offers ESL instruction to a student in
connection with a course of instruction leading to employment in any
occupation requiring licensure awarded after the passage of an
examination offered in English, the institution shall test the
student after the student completes the ESL instruction to determine
that the student has attained a level of proficiency in English
reasonably equivalent to the level of English in which the licensure
examination is offered.
(h) If the results of a test administered pursuant to subdivision
(d), (e), (f), or (g) indicate that the student has not attained
adequate English language proficiency after the completion of ESL
instruction, the institution shall offer the student additional
instruction without charge, for a period of up to 50 percent of the
number of hours of instruction previously offered by the institution
to the student, to enable the student to attain adequate English
language proficiency.
(i) This section does not apply to educational services exempted
from this article under subdivision (c) of Section 94790 or to
grantees funded under Section 1672 of Title 29 of the United States
Code.
(j) The institution, for five years, shall retain an exemplar of
each language proficiency test administered pursuant to this section,
an exemplar of the answer sheet for each test, a record of the score
for each test, the answer sheets or other responses submitted by
each person who took each test, and the documentation required by
subdivision (f).
(k) (1) In addition to any applicable provisions of this chapter,
this article, except for Section 94854, subparagraph (B) of paragraph
(2) of subdivision (a) of Section 94859, and Section 94872, applies
to any program in which ESL instruction is offered.
(2) For the purpose of determining compliance with this article,
ESL instruction shall be deemed a course, and a charge shall be
deemed to be made for ESL instruction if a student is obligated to
make any payment in connection with the educational service,
including, but not limited to, the ESL instruction that is offered by
the institution.
(l) The tests used by an institution pursuant to this section
shall be tests that are approved by the United States Department of
Education or tests such as the Test of English as a Foreign Language
and the Comprehensive Adult Student Assessment System that are
generally recognized by public and private institutions of higher
learning in this state for the evaluation of English language
proficiency. An institution shall demonstrate to the bureau that the
tests and passing scores that it uses establish that students have
acquired the degree of proficiency in oral and written English
required by subdivision (d), (e), (f), or (g), whichever is
applicable. The required level of proficiency in oral and written
English shall not be lower than the sixth grade level.
(m) All tests shall be independently administered, without charge
to the student and in accordance with the procedures specified by the
test publisher. The tests shall not be administered by a previous
or current owner, director, consultant, or representative of the
institution or by any person who previously had, or currently has, a
direct or indirect financial interest in the institution other than
the arrangement to administer the test. The bureau shall adopt
regulations that contain criteria to ensure independent test
administration including the criteria established by the United
States Department of Education and set forth on pages 52160 and 52161
of Volume 55 of the Federal Register, dated December 19, 1990.
(n) The bureau shall adopt regulations concerning the manner of
documenting the nature of a student's existing knowledge, training,
and skill and that ESL instruction offered by the institution is
necessary to enable the student to use that existing knowledge,
training, and skill, as prescribed in subdivision (f). The
regulations shall specify all of the following:
(1) Reliable sources of information, independent of the student
and the institution, from which documentation of a student's existing
knowledge, training, and skill shall be obtained.
(2) Circumstances
that must be documented by the institution to establish that
information from a designated reliable source of information cannot
reasonably be obtained.
(3) Alternate acceptable sources of information if designated
reliable sources are not available.
(4) The nature of all required types of documentation.
(o) The bureau shall develop and distribute instructions,
informational materials, or forms to assist institutions in
developing the documentation described in this section. These
instructions, materials, and forms shall not be subject to review or
approval by the Office of Administrative Law pursuant to any
provision of the Government Code.
94866. (a) When a person executes an agreement obligating that
person to pay any money to an institution for a course program of
instruction or related equipment, the institution shall provide the
person with a document containing only the following notice:
"NOTICE OF STUDENT RIGHTS (12-point bold type)
"1. You may cancel your contract for school, without any penalty
or obligations on the fifth business day following your first class
session as described in the Notice of Cancellation form that will be
given to you at (insert "the first class you go to" or "with the
first lesson in a home study or correspondence course," whichever is
applicable). A different cancellation policy applies for home study
or correspondence courses. Read the Notice of Cancellation form for
an explanation of your cancellation rights and responsibilities. If
you have lost your Notice of Cancellation form, ask the school for a
sample copy.
"2. After the end of the cancellation period, you also have the
right to stop school at any time, and you have the right to receive a
refund for the part of the course not taken. Your refund rights are
described in the contract. If you have lost your contract, ask the
school for a description of the refund policy.
"3. If the school closes before you graduate, you may be entitled
to a refund. Contact the Council for Private Postsecondary and
Vocational Education at the address and telephone number printed
below for information.
"4. If you have any complaints, questions, or problems that you
cannot work out with the school, write or call the Council for
Private and Postsecondary Education:
____________________________________________________________________
(insert address and telephone number of the Council for
Private Postsecondary and Vocational Education)"
(b) Except as otherwise provided in subdivision (a), the notice
required by subdivision (a) shall be printed in 10-point type in
English and, if any solicitation or negotiation leading to the
agreement for a course of instruction was in a language other than
English, in that other language.
(c) A copy of the notice, in each language in which the notice was
printed pursuant to subdivision (b), shall be posted at all times in
a conspicuous place at the main entrance of the institution, in each
admissions office, and in each room used for instruction. The
council may prescribe the size and format of the posted notice. This
subdivision does not apply to an institution that exclusively offers
correspondence or home study courses.
(d) Upon request, the institution shall provide a student with a
copy of a Notice of Cancellation form, a written description of the
student's refund rights, a copy of the contract executed by the
student, a copy of documents relating to loans or grants for the
student, and a copy of any document executed by the student.
(e) The council may provide for the inclusion of additional
information in the notice set forth in subdivision (a).
94867. (a) (1) In addition to any other right of rescission, for
programs in excess of 50 days, the student shall have the right to
cancel an agreement for a program of instruction including any
equipment, until midnight of the fifth business day after the day on
which the student did any of the following:
(A) Attended the first class of the program of instruction that is
the subject of the agreement or received the first lesson in a home
study or correspondence course.
(B) Received a copy of the notice of cancellation as provided in
Section 94868.
(C) Received a copy of the agreement and the disclosures as
required by subdivision (a) of Section 94859, whichever is later.
(2) For programs of 50 or fewer days, the student shall have the
right to cancel the agreement until midnight of the date that is one
business day for every 10 days of scheduled program length, rounded
up for any fractional increments thereof.
If the first lesson in a home-study or correspondence course is
sent to the student by mail, the institution shall send it by
first-class mail, postage prepaid, documented by a certificate of
mailing, and the student shall have a right to cancel until midnight
of the eighth business day after the first lesson was mailed.
(b) Cancellation shall occur when the student gives written notice
of cancellation to the institution at the address specified in the
agreement.
(c) The written notice of cancellation, if given by mail, is
effective when deposited in the mail properly addressed with postage
prepaid.
(d) The written notice of cancellation need not take a particular
form and, however expressed, is effective if it indicates the student'
s desire not to be bound by the agreement.
(e) Except as provided in subdivision (f), if the student cancels
the agreement, the student shall have no liability, and the
institution shall refund any consideration paid by the student within
10 days after the institution receives notice of the cancellation.
(f) If the institution gave the student any equipment, the student
shall return the equipment within 10 days following the date of the
Notice of Cancellation. If the student fails to return the equipment
within this 10 day-period, the institution may retain that portion
of the consideration paid by the student equal to the documented cost
to the institution of the equipment and shall refund the portion of
the consideration exceeding the documented cost to the institution of
the equipment within 10 days after the period within which the
student is required to return the equipment. The student may retain
the equipment without further obligation to pay for it.
(g) For the purpose of determining the time within which a student
may cancel that student's agreement for a course, as described in
Sections 94866, 94867, and 94868, "business day" means the following:
(1) Except as provided in paragraph (2), a day on which that
student is scheduled to attend a class session.
(2) For home-study or correspondence courses, any calendar day
except Saturday, Sunday, or any holiday enumerated in Section 6700 of
the Government Code.
94868. The institution shall provide the student with two
cancellation forms at the first class attended by the student or with
the first lesson in a home study course submitted by the student.
The form shall be completed in duplicate, captioned "Notice of
Cancellation," and shall contain the following statement:
"Notice of Cancellation
______________________________
(Date)
(Enter date of first class, date
first lesson received, or date
first lesson was mailed, whichever
is applicable)
"You may cancel this contract for school, without any penalty or
obligation by the date stated below.
"If you cancel, any payment you have made and any negotiable
instrument signed by you shall be returned to you within 30 days
following the school's receipt of your cancellation notice.
"But, if the school gave you any equipment, you must return the
equipment within 30 days of the date you signed a cancellation
notice. If you do not return the equipment within this 30-day
period, the school may keep an amount out of what you paid that
equals the cost of the equipment. The total amount charged for each
item of equipment shall be separately stated. The amount charged for
each item of equipment shall not exceed the equipment's fair market
value. The institution shall have the burden of proof to establish
the equipment's fair market value. The school is required to refund
any amount over that as provided above, and you may keep the
equipment.
"To cancel the contract for school, mail or deliver a signed and
dated copy of this cancellation notice, or any other written notice,
or send a telegram to:
___________________________, at
________________________________.
(name of institution) (address of institution)
"NOT LATER THAN ____________________________________
(Enter midnight of the date that is the fifth
business day following the day of the first class or
the day the first lesson was received; or, if the program
is fifty or fewer days, midnight of the date that is one
business day for every 10 days of scheduled program
length, rounded up for any fractional increment thereof;
or, if the lesson was sent by mail, the eighth business
day following the day of mailing, whichever is applicable)
"I cancel the contract for school.
__________________________________
(Date)
__________________________________
(Student's signature)
"REMEMBER, YOU MUST CANCEL IN WRITING. You do not have the right
to cancel by just telephoning the school or by not coming to class.
"If you have any complaints, questions, or problems which you
cannot work out with the school, write or call the Council for
Private Postsecondary and Vocational Education:
______________________________________________________________________
_______
(insert address and telephone number of the Council for
Private Postsecondary and Vocational Education)"
94869. (a) Each student of an institution has the right to
withdraw from a program of instruction at any time.
(b) If a student withdraws from a program of instruction after the
period described in subdivision (a) of Section 94867, the
institution shall remit a refund as provided in Section 94870 within
30 days following the student's withdrawal.
(c) If any portion of the tuition was paid from the proceeds of a
loan, the refund shall be sent to the lender or, if appropriate, to
the state or federal agency that guaranteed or reinsured the loan.
Any amount of the refund in excess of the unpaid balance of the loan
shall be first used to repay any student financial aid program from
which the student received benefits, in proportion to the amount of
the benefits received, and any remaining amount shall be paid to the
student.
(d) Within 10 days of the day on which the refund is made, the
institution shall notify the student in writing of the date on which
the refund was made, the amount of the refund, the method of
calculating the refund, and the name and address of the entity to
which the refund was sent. The following statement shall be placed
at the top of the notice in at least 10-point boldface type: "This
Notice is Important. Keep It For Your Records."
(e) Except for subdivision (a), this section shall not apply to a
student if both of the following occur:
(1) All of that student's tuition and fees are paid by a
third-party organization, such as a Job Training Partnership Act
agency, a Regional Occupational Program or Regional Occupational
Center, a Private Industry Council, or a vocational rehabilitation
program, if the student is not obligated to repay the third-party
organization or does not lose time-limited educational benefits.
(2) The third-party organization and the institution have a
written agreement, entered into on or before the date the student
enrolls, that no refund will be due to the student if the student
withdraws prior to completion.
The institution shall provide a copy of the written agreement to
the bureau. The institution shall disclose to any student whose
refund rights are affected by this agreement, in all disclosures
required to be given to the student by this chapter, that the student
is not entitled to a refund. It is the intent of the Legislature
that this subdivision not apply to any student whose tuition and fees
are paid with funds provided to the third-party organization for the
student's benefit as part of any program that provides funds for
training welfare recipients or that is related to welfare reform.
94870. (a) (1) Except as provided in paragraph (2), the refund to
be paid to a student for a program of instruction subject to this
article shall be calculated as follows:
(A) Deduct a registration fee not exceeding seventy-five dollars
($75) from the total tuition charge.
(B) Divide this figure by the number of hours in the program.
(C) The quotient is the hourly charge for the program.
(D) The amount owed by the student for purposes of calculating a
refund is derived by multiplying the total hours attended by the
hourly charge for instruction.
(E) The refund would be any amount in excess of the figure derived
in subparagraph (D) that was paid by the student.
(F) The refund amount shall be adjusted as provided in subdivision
(b) or (c) for equipment, if applicable.
(2) For an educational service offered by home study or
correspondence, the refund shall be the amount the student paid for
lessons less a registration fee not exceeding seventy-five dollars
($75), multiplied by a fraction, the numerator of which is the number
of lessons for which the student has paid but which the student has
not completed and submitted, and the denominator of which is the
total number of lessons for which the student has paid. The refund
amount shall be adjusted as provided in subdivision (b) or (c) for
equipment and as provided in subdivision (d) for resident
instruction, if applicable.
(3) Notwithstanding any provision in any agreement, all of the
following shall apply:
(A) All amounts that the student has paid, however denominated,
shall be deemed to have been paid for instruction, unless the student
has paid a specific charge for equipment set forth in the agreement
for the program of instruction.
(B) In the case of an educational service offered by home study or
correspondence, all amounts that the student has paid, however
denominated, shall be deemed to have been paid for lessons unless the
student has paid a specific charge for equipment or resident
instruction as set forth in the agreement for the educational
service.
(C) The total number of hours necessary to complete each lesson of
home study or correspondence instruction shall be substantially
equivalent to each other lesson unless otherwise permitted by the
council.
(D) An equal charge shall be deemed to have been made for each
hour of instruction or each lesson.
(b) If the institution specifies in the agreement a separate
charge for equipment that the student actually obtains and the
student returns that equipment in good condition, allowing for
reasonable wear and tear, within 30 days following the date of the
student's withdrawal, the institution shall refund the charge for the
equipment paid by the student. If the student fails to return that
equipment in good condition, allowing for reasonable wear and tear,
within 30 days following the date of the student's withdrawal, the
institution may offset against the refund calculated under
subdivision (a) the documented cost to the institution of that
equipment. The student shall be liable for the amount, if any, by
which the documented cost for equipment exceeds the refund amount
calculated under subdivision (a). For the purpose of this
subdivision, equipment cannot be returned in good condition if the
equipment cannot be reused because of clearly recognized health and
sanitary reasons and this fact is clearly and conspicuously disclosed
in the agreement.
(c) If the institution specifies in the agreement a separate
charge for equipment, which the student has not obtained at the time
of the student's withdrawal, the refund also shall include the amount
paid by the student that is allocable to that equipment.
(d) If an agreement for educational service offered by home study
or correspondence includes a separate charge for resident
instruction, which the student has not begun at the time of the
student's withdrawal, the institution shall refund the charge for the
resident instruction paid by the student. If the student withdraws
from the educational service after beginning the resident
instruction, the institution shall pay a refund equal to the amount
the student paid for the resident instruction multiplied by a
fraction, the numerator of which is the number of hours of resident
instruction which the student has not received but for which the
student has paid, and the denominator of which is the total number of
hours of resident instruction for which the student has paid.
(e) For the purpose of determining a refund under this section, a
student shall be deemed to have withdrawn from a program of
instruction when any of the following occurs:
(1) The student notifies the institution of the student's
withdrawal or of the date of the student's withdrawal, whichever is
later.
(2) The institution terminates the student's enrollment as
provided in the agreement.
(3) The student has failed to attend classes for a three-week
period. For the purpose of subdivision (a) of Section 94869 and for
determining the amount of the refund, the date of the student's
withdrawal shall be deemed the last date of recorded attendance. For
the purpose of determining when the refund must be paid pursuant to
subdivision (b) of Section 94869, the student shall be deemed to have
withdrawn at the end of the three-week period.
(4) The student has failed to submit three consecutive lessons or
has failed to submit a completed lesson within 60 days of its due
date as set by an educational service offered by home study or
correspondence. For the purpose of this paragraph, the date of the
student's withdrawal shall be deemed to be the date on which the
student submitted the last completed lesson.
(f) An institution shall have the burden of proof to establish the
validity of the amount of every refund. The institution shall
maintain records for five years of all the evidence on which the
institution relies.
(g) Any institution that meets each of the criteria in paragraph
(1) shall be subject to the refund requirements in this section only
for those students who withdraw from a course of instruction after
having completed 60 percent or less of the course of instruction.
(1) To qualify under this subdivision, an institution shall submit
to the bureau a compliance report prepared by a certified public
accountant, who is not an officer, director, shareholder, or employee
of the institution, any parent corporation, or any subsidiary,
prepared pursuant to an attestation engagement in accordance with the
Statements on Standards for Attestation Engagements of the American
Institute of Certified Public Accountants, which states that for a
period of two years prior to the compliance report, the beginning and
ending dates of which shall be determined by the bureau, the
institution has:
(A) Complied with Section 94824 or subdivision (b) of Section
94869 and with this section for refunds owed by the institution.
(B) Complied with subdivision (b) of Section 94854 for each of the
two years covered by the audit except that:
(i) The institution shall have an aggregate completion rate of 70
percent or more pursuant to paragraph (1) of subdivision (b) of
Section 94854.
(ii) The institution shall have an aggregate placement rate of 80
percent or more pursuant to paragraph (2) of subdivision (b) of
Section 94854.
(iii) As an alternative to clauses (i) and (ii), the institution
shall have a combined aggregate completion and placement rate of 56
percent or more.
(iv) In attesting to the institution's compliance with the
requirements of this subparagraph, the certified public accountant,
at a minimum, shall review a random statistically valid sample of the
students to whom the institution owed a refund, the students counted
by the institution towards its completion rate and its placement
rate, and the students excluded from the calculation of the
completion and placement rates, review the institution's placement
log or files and contact students and employers to verify information
in the placement records, whether the student was employed in the
job for which the training was represented to lead, and whether the
student was employed for at least 60 days.
(2) (A) The bureau shall review the compliance report submitted by
the institution pursuant to this subdivision.
(B) The bureau shall review any complaints against the institution
by current or former students, any civil lawsuit in which the
institution is a defendant or any lawsuit, action, charges,
proceeding, or investigation by any government agency or any
accrediting agency in which the institution is a party which were
filed, pending, or resolved during the two-year period covered by the
compliance report. After reviewing such complaints, lawsuits,
actions, charges, proceedings, or investigations, as well as any
other information available to the bureau and performing whatever
other investigation it deems appropriate, the bureau shall make a
determination, in writing, of whether the institution has materially
violated Section 94831, 94832, 94834, 94853, 94859, 94860, 94866,
94868, 94869, 94870, 94871, 94873, 94875, 94881, or their predecessor
sections, based on a preponderance of the evidence. The bureau's
determination shall contain a summary of the evidence relied upon in
making the determination and the sections for which a material
violation exists. The bureau's determination shall have no probative
value in connection with any lawsuits, actions, charges, or
proceedings pending before any court or any other agency.
(C) If the bureau determines that the institution has met all of
the criteria in paragraph (1) and that no material violation exists
pursuant to subparagraph (B) of this paragraph, it shall notify the
institution that it qualifies under this subdivision. Following such
notification, the refund provisions of this subdivision shall apply
to the institution for a period of two years, unless revoked by the
bureau.
(D) If the bureau determines that the institution has not met all
of the criteria in paragraph (1) or that a material violation exists
pursuant to subparagraph (B) of this paragraph, it shall notify the
institution that it does not qualify under this subdivision.
(E) The institution shall receive notice of any determination with
a summary of evidence pursuant to this paragraph and, if requested
in writing, a hearing. The institution may appeal the bureau's
adverse decision under this paragraph. To the extent feasible, the
bureau shall adopt regulations to provide for a streamlined appeal
process for purposes of appeals pursuant to this subparagraph.
Pending resolution of the appeal, the institution is not eligible to
qualify under this subdivision. If the institution prevails on
appeal, it may obtain relief limited to a determination that it is
eligible for the refund provisions of this subdivision at the next
time when it starts new students in its programs following the
determination of the appeal. If the institution does not prevail on
appeal, it may not seek to qualify under this subdivision for one
year following the determination of the appeal.
(3) Prior to notifying an institution pursuant to paragraph (2),
the bureau shall adopt regulations to implement this subdivision,
including regulations to establish the dates each year for submission
of compliance reports by institutions, notification of institutions
by the bureau of the applicable refund policy for the institution,
the effective date of that refund policy, appropriate standards and
procedures for conducting any review by a certified public accountant
or any other person pursuant to this subdivision, including a
description of the information and materials to be reviewed and
appropriate standards for review which shall be based on the American
Institute of Certified Public Accountants' Statements on Standards
for Attestation Engagements.
(4) (A) Any institution that has been notified by the bureau that
it qualifies for the refund provisions in this subdivision shall lose
its qualification if the bureau determines either of the following:
(i) The institution has materially violated Section 94831, 94832,
94834, 94853, 94859, 94860, 94866, 94868, 94869, 94870, 94871, 94873,
94875, or 94881, or has failed to meet the criteria in paragraph (1)
during the period covered by the compliance report upon which the
bureau based its determination of qualification.
(ii) The institution has been found by any court or any other
governmental agency in any proceeding, to have violated any of the
provisions set forth in clause (i) and that violation was material or
the institution has been found by any court or any other
governmental agency in any proceeding, to have failed to meet the
criteria in paragraph (1) during the period covered by the compliance
report upon which the bureau based its determination of eligibility.
(B) If the bureau, a court, or other government agency finds that
the institution willfully supplied information required by this
subdivision which it knew or should have known was inaccurate or
misleading, the institution's approval to operate may be subject to
termination, suspension, or probation.
(C) The institution shall receive notice of any determination with
a summary of evidence and, if requested in writing, a hearing prior
to any action being taken pursuant to this paragraph. To the extent
feasible, the bureau shall adopt regulations to provide for a
streamlined appeal process for purposes of appeals pursuant to this
subparagraph. Pending resolution of the appeal, the institution may
not reapply pursuant to paragraph (9). If the institution prevails
on appeal, it may obtain relief limited to a determination that it
continues to qualify under this subdivision for
the period of time covered by the bureau's
most recent determination of qualification. If the institution does
not prevail on appeal, the institution may not seek to qualify for
the refund provisions of this subdivision for three years following
the determination of the appeal and shall be subject to the refund
requirements in subdivision (a), and not the refund provisions in
this subdivision, for all students who enrolled during the entire
time period covered by the bureau's most recent determination of
qualification.
(D) The penalties in this paragraph supplement, but do not
supplant, any other sanction or remedy allowed by law.
(5) If an institution does not qualify under this subdivision
because it fails to meet the requirement of subparagraph (A) of
paragraph (1) by three students out of all students to whom it owed
refunds during the period examined by the compliance report or 1
percent of all students to whom it owed refunds during the period
covered by the compliance report, whichever is greater, the bureau
may determine that the institution qualifies under this subdivision.
(6) The certified public accountant shall submit any initial
compliance report prepared pursuant to this subdivision to both the
institution and the bureau. The institution shall submit any
comments, suggested corrections, or exceptions to the initial
compliance report to the certified public accountant and the bureau.
The certified public accountant shall submit a final compliance
report to both the institution and the bureau. The certified public
accountant shall maintain possession of all work papers for a period
of five years following completion of the final compliance report.
The bureau shall make a copy of the compliance report available to
any student, prospective student, or former student of the
institution upon request.
(7) If the bureau determines that the institution has met the
criteria in this subdivision based on the information contained in a
compliance report prepared by a certified public accountant pursuant
to this subdivision, the following shall be deemed to be the intended
beneficiaries of that compliance report:
(A) The bureau.
(B) The Student Aid Commission.
(C) The United States Department of Education.
(D) Any student who enrolls in the institution during the time
period the institution qualifies under this subdivision.
(8) In lieu of the attestation engagement referred to in paragraph
(1), an institution that qualifies as a small institution under this
paragraph may show that it has complied with each of the criteria in
paragraph (1) pursuant to a review performed by the bureau, or any
other alternative review that meets all of the requirements for an
attestation by a certified public accountant pursuant to this
subdivision which shall conform with the bureau's regulations. If
the bureau performs the review requested by the institution, the
institution shall pay the bureau all of its costs and expenses
associated with conducting the review. The bureau shall, by
regulation, define "small institution" for the purposes of this
paragraph in terms of assets, number of students, gross revenues,
other appropriate criteria, as determined by the bureau, or any
combination thereof.
(9) An institution may apply to the bureau for a renewal of the
bureau's determination that the institution qualifies under this
subdivision subject to the same terms and conditions as required for
the bureau's initial determination.
(10) If an institution qualifies under this subdivision, it shall
disclose that refund policy in any disclosure, catalogue, notice, or
agreement in which disclosure of a refund policy is required by this
chapter. The institution may not state in any advertising,
disclosure, catalogue, notice, or agreement that it qualifies for a
"good school" or a "high performance" exemption, that it qualifies
for a "good school" or "high performance" refund policy, or that it
has been determined by the state to be a "good school" or a "high
performing school," or use any similar words or phrases.
(11) If a request for approval under this subdivision is filed
concurrently with an initial or renewal application, no additional
fees shall be charged. If a request for approval is not filed
concurrently with an initial or renewal application, fees shall be
charged as authorized by Section 94932 and the bureau's regulations.
94871. (a) No institution shall offer any program of instruction
to any person, or receive any consideration from any person for a
course of instruction, except pursuant to a written agreement as
described in this section. Every agreement for a program of
instruction shall provide the following:
(1) A general description of the program of instruction and any
equipment to be provided.
(2) The total number of classes, hours, or lessons required to
complete the program of instruction.
(3) The total amount that the student is obligated to pay
including all fees, charges, and expenses separately itemized that
must be paid to complete the program of instruction. The total
amount shall be underlined and shall appear immediately above the
following notice, which shall be printed above the space on the
agreement that is reserved for the student's signature:
"YOU ARE RESPONSIBLE FOR THIS AMOUNT. IF YOU GET A STUDENT LOAN,
YOU ARE RESPONSIBLE FOR REPAYING THE LOAN AMOUNT PLUS ANY INTEREST."
(4) The total amount charged for each item of equipment shall be
separately stated. The amount charged for each item of equipment
shall not exceed the equipment's fair market value. The institution
shall have the burden of proof to establish the equipment's fair
market value.
(5) A schedule of payments.
(6) The student's right to withdraw from the program of
instruction and obtain a refund and an explanation of refund rights
and of how the amount of the refund will be determined including a
hypothetical example.
(7) A detailed explanation of the student's right to cancel the
agreement as provided in Section 94867.
(8) If the student is not a resident of California, a clear
statement that the student is not eligible for protection under, and
recovery from, the Student Tuition Recovery Fund.
(9) The following statement shall be printed in 12-point boldface
type on the first page of the agreement: "If you have any
complaints, questions, or problems which you cannot work out with the
school, write or call the Council for Private Postsecondary and
Vocational Education:
____________________________________________________________________
(insert address and telephone number of the Council for
Private Postsecondary and Vocational Education)"
(b) Unless otherwise provided in subdivision (a), the institution
shall provide the information required under Sections 94859, 94867,
and 94868, in at least 10-point type in English and, if any
solicitation or negotiation leading to the agreement for a course of
instruction was in a language other than English, in that other
language.
(c) When a student is a client of a third-party organization and
that organization pays all of the student's tuition and fees, the
institution may substitute for the enrollment agreement required by
this section a form provided to the student that contains the
information required by subdivision (b) and paragraphs (1), (2), and
(9) of subdivision (a). The form also shall contain a statement that
students whose entire tuition and fees are paid by a third party
organization are not eligible for payments from the Student Tuition
Recovery Fund.
94872. (a) An institution shall not enter into an agreement for a
program of instruction with a student unless the institution first
administers to the student and the student passes a test as provided
in subdivision (b).
(b) (1) The test required by subdivision (a) shall be a
standardized test that is designed to measure and that reliably and
validly measures the student's ability to be successfully trained to
perform the tasks associated with the occupations or job titles to
which the program of instruction is represented to lead. The student'
s performance on the test must demonstrate that ability.
(2) Nothing in paragraph (1) precludes an institution from using
additional tests to determine a student's ability to be trained to
perform tasks associated with the occupations and job titles for
which training is offered as described in paragraph (1).
(3) (A) If no standardized test is available that satisfies
paragraph (1), the institution shall use other appropriate tests to
determine the student's ability to be trained to perform the tasks
associated with the occupations and job titles for which training is
offered as described in paragraph (1). Within 30 days of determining
that no standardized test satisfies paragraph (1), the institution
shall so inform the council and shall describe and, if possible,
furnish the council with the test to be used in lieu of the test
required by paragraph (1).
(B) Upon reasonable notice to the institution, the council may
order the institution to demonstrate to the reasonable satisfaction
of the council that the test and passing score are an appropriate
measure of the student's ability to be trained to perform the tasks
associated with the occupations or job titles to which the course is
represented to lead. If the test is not an appropriate measure, the
council, after notice, and if requested, a hearing as provided in
Section 94965 or 94975, shall order that the institution cease
administering the test.
(c) The institution shall have the burden of proof that the test
complies with subdivision (b). If no minimum passing score is
established by the test developer or if the minimum passing score
used by the institution is below the minimum passing score
established by the test's developer, the institution shall have the
burden of proof that the student's achievement of the minimum passing
score reasonably measures the student's ability to be successfully
trained to perform the tasks associated with the occupations and job
titles to which the course of instruction is represented to lead.
The test shall be administered in accordance with the test's
instructions, rules, and time limits.
(d) (1) The test shall be completed solely by the student.
(2) No institution or any person in any manner associated with the
institution shall do any of the following:
(A) Answer any of the test questions.
(B) Read any of the test questions to the student.
(C) Provide any assistance whatsoever to the student in answering
test questions.
Nothing in this subparagraph prevents an institution from
providing nonsubstantive assistance to accommodate the disability of
a handicapped person otherwise qualified to take the test.
(3) The test shall be given by the institution on its premises or
by an independent testing service. The site requirement does not
apply to an institution offering a home study or correspondence
course.
(4) If a prospective student has failed a test, the institution or
the testing service that administered the test shall not administer
another test to that prospective student for at least the period
specified by the test developer or one week, whichever is longer.
Any subsequent test administered by an institution to the same
prospective student shall be a substantially different form of the
same test or a substantially different test than the preceding test
and shall satisfy the requirements of paragraph (1) or, if
applicable, paragraph (3) of subdivision (b).
(e) An institution's application for approval to operate shall do
all of the following:
(1) Identify the test used to comply with this section.
(2) State the minimum score, if any, that the test's developer
indicates a prospective student must achieve to demonstrate an
ability to be successfully trained to perform the tasks associated
with the occupations or job titles to which the course is represented
to lead.
(3) State the minimum passing score used by the institution.
(4) If the institution accepts a lower minimum passing score than
is indicated by the test's developer, state an explanation of why the
institution accepts a lower minimum passing score.
(f) The institution shall, for five years, retain an exemplar of
each test administered by the institution pursuant to this section,
an exemplar of the answer sheet for each test, a record of the
passing score for each test, and the answer sheets or other responses
submitted by each person who took each test.
94873. (a) If a program of instruction is based on a sequence of
classes, class sessions, or lessons and the learning experience to be
derived from any class, class sessions, or lesson within the
sequence is based in any manner on a student's attendance at or
completion of a prior class, class session, or lesson, an institution
shall not enroll a student in that program of instruction unless the
instruction begins with the first class, class session, or lesson
and proceeds in the appropriate sequence.
(b) (1) If a program of instruction is based on a series of
modules comprised of class sessions or lessons and the learning
experience to be derived from any module is based in a manner on a
student's attendance at, or completion of, any class sessions or
lessons in any other module, an institution shall not enroll a
student in that course of instruction unless the student begins and
proceeds in the appropriate sequence.
(2) If a program of instruction is based on a series of modules
comprised of class sessions or lessons and the learning experience to
be derived from any module is not based on a student's attendance
at, or completion of, any classes or lessons in any other module, an
institution shall only enroll a student in the program of instruction
if the student begins with the first class session or lesson in a
module.
(c) Notwithstanding subdivisions (a) and (b), if a class or a
module consists of more than 60 days of instruction, the institution
may enroll a student to begin no later than the fifth class session
of the first class or the fifth class session in the appropriate
module.
(d) The council, at any time, may determine whether the learning
experience to be derived from any class session or lesson in a
sequence of class sessions or lessons or from any module is based in
any manner on a student's attendance at, or completion of, a prior
class session or lesson in the sequence or any class sessions or
lessons in any other module. The council may make the determination
described in this subdivision upon the application of any person or
when the council deems that a determination is appropriate. The
institution shall have the burden to establish compliance with this
section.
(e) The institution shall not merge classes unless all of the
students have received the same amount of instruction and training.
This subdivision does not prevent the placement of students, who are
enrolled in different programs of instruction, in the same class if
that class is part of each of the courses and the placement in a
merged class will not impair the students' learning of the subject
matter of the class.
(f) After a student has enrolled in a program of instruction, the
institution shall not do any of the following:
(1) Make any unscheduled suspension of any class unless caused by
circumstances completely beyond the institution's control.
(2) Change the day or time in which any class is offered to a day
when the student is not scheduled to attend the institution or to a
time that is outside of the range of time that the student is
scheduled to attend the institution on the day for which the change
is proposed unless at least 90 percent of the students who are
enrolled consent to the change and the institution offers full
refunds to the students who do not consent to the change. For the
purpose of this paragraph, "range of time" means the period beginning
with the time at which the student's first scheduled class session
for the day is set to start and ending with the time the student's
last scheduled class session for that day is set to finish.
(g) If an institution enrolls a student in a program of
instruction that is not offered or designed as a home study or
correspondence course at the time of enrollment, the institution
shall not convert the program of instruction from classroom
instruction to a home study or correspondence course.
(h) An institution shall not move the class instruction to a
location more than five miles from the location of instruction at the
time of enrollment unless any of the following occur:
(1) The institution discloses orally and clearly and conspicuously
in writing to each student before enrollment in the program that the
location of instruction will change after the program begins and the
address of the proposed location.
(2) The institution applies for, and the council grants, approval
to change the location. The council shall grant the application
within 30 days if the council, after notice to affected students and
an opportunity for them to be heard as prescribed by the council,
concludes that the change in location would not be unfair or unduly
burdensome to students. The council may grant approval to change the
location which shall be subject to reasonable conditions, such as
requiring the institution to provide transportation, transportation
costs, or refunds to adversely affected students.
(3) The institution offers a full refund to students enrolled in
the program of instruction who do not voluntarily consent to the
change.
94874. (a) Every institution shall maintain for a period of not
less than five years at its principal place of business in California
accurate records that show all of the following:
(1) The names, telephone numbers, and home and local addresses of
each student.
(2) The courses of instruction offered by the institution and the
curriculum for each course.
(3) The name, address, and educational qualifications of each
member of its faculty.
(4) The information required by subdivision (j) of Section 94854
and subdivision (b) of Section 94859.
(5) All information and records required by this chapter or
required by the council.
(b) All records that an institution is required to maintain by
this chapter or that relate to the institution's compliance with this
chapter shall be made immediately available by the institution for
inspection and copying during normal business hours by the council,
the Attorney General, any district attorney or city attorney, and the
Student Aid Commission.
(c) An institution shall make available to a student, or a person
designated by the student, all of the student's records, except for
transcripts of grades as described in subdivision (d) and (e).
(d) As provided in Section 94948, an institution may withhold a
student's transcript or grades if the student is in default on a
student tuition contract.
(e) If the student has made partial payment of his or her tuition
obligation, the institution may only withhold that portion of the
grades or transcript that corresponds to the amount of tuition or
loan obligation that the student has not paid. If the course of
study consists of only one course, the institution may withhold the
grades or the transcript until the tuition or loan obligation is paid
in full.
(f) Each institution shall be deemed to have authorized the
accrediting agency that accredited the institution to provide to the
council, the Attorney General, any district attorney or city
attorney, or the Student Aid Commission, within 30 days of written
notice, copies of all documents and other material concerning the
institution that is maintained by the accrediting agency.
(g) Within 30 days of receiving written notice from the council,
the Attorney General, any district attorney or city attorney, or the
Student Aid Commission, an accrediting agency shall provide the
requesting official with all documents or other material concerning
an institution accredited by that accrediting agency that are
designated specifically or by category in the written notice.
(h) If the council, the Attorney General, any district attorney or
city attorney, or the Student Aid Commission is conducting a
confidential investigation of an institution and so informs the
accrediting agency, the accrediting agency shall not inform that
institution of the investigation.
(i) If an accrediting agency willfully fails to comply with this
section, the accrediting agency shall be liable for a civil penalty
of not less than two thousand five hundred dollars ($2,500) or more
than twenty-five thousand dollars ($25,000) for each violation.
Penalties awarded pursuant to this section shall be deposited in the
Private Postsecondary and Vocational Education Administration Fund or
any successor fund.
94875. (a) The institution shall provide sufficient instruction
and materials pursuant to a planned curriculum appropriate to the
student's educational program and establish sufficient student
attendance, progress, and performance standards to reasonably ensure
that students acquire the necessary level of education, training,
skill, and experience to obtain employment in the occupation or job
title to which the course of instruction is represented to lead.
(b) The institution shall provide each student with sufficient
materials, including current publications and equipment, not later
than the time the materials are appropriate for use in the course of
instruction.
(c) If a student has begun a course of instruction and any portion
of the student's tuition is to be paid from the proceeds of a loan
or grant, the institution shall not withhold any instruction,
equipment, or materials from the student pending approval of the loan
or grant or the disbursement of any portion of the proceeds of the
loan or grant.
94876. No student may waive any provision of this article. Any
waiver or limitation of any substantive or procedural right or remedy
is in violation of this section and is void and unenforceable.
94877. (a) If an institution violates this article or Section
94832 or commits an act as set forth in Section 94830 in connection
with an agreement for a course of instruction, that agreement shall
be unenforceable, and the institution shall refund all consideration
paid by or on behalf of the student.
(b) Notwithstanding any provision in an agreement, a student may
bring an action for a violation of this article or Section 94832 or
an institution's failure to perform its legal obligations and upon
prevailing shall be entitled to the recovery of damages, equitable
relief, any other relief authorized by this article, and reasonable
attorney's fees and costs.
(c) If a court finds that a violation was willfully committed or
that the institution failed to refund all consideration as required
by subdivision (a) on the student's written demand, the court, in
addition to the relief awarded under subdivision (b), shall award a
civil penalty of up to two times the amount of the damages sustained
by the student.
(d) The remedies provided in this article supplement, but do not
supplant, the remedies provided under other provisions of law.
(e) An action brought under this section shall be commenced within
three years of the discovery of the facts constituting grounds for
commencing the action.
(f) Any provision in any agreement that purports to require a
student to invoke any grievance dispute procedure established by the
institution or any other procedure before bringing an action to
enforce any right or remedy is void and unenforceable.
(g) A student may assign his or her causes of action for a
violation of this article to the council, or to any state or federal
agency that guaranteed or reinsured a loan for the student or
provided any grant or other financial aid.
(h) This section applies to any action pending under former
Chapter 7 (commencing with Section 94700) on January 1, 1990.
94878. (a) An institution is legally authorized to provide
courses of instruction if the institution complies with both this
article and Sections 94831, 94832, and 94985, or former Section 94320
as that section was in effect on January 1, 1991, has received
approval from the council, and has not been found to be in violation
of this article by the council, the Student Aid Commission, or a
court. No institution shall offer any course of instruction if the
institution's approval to offer that course of instruction has been
suspended or revoked.
(b) (1) The council, after notice and, if requested by the
institution, a hearing as provided in Section 94965 or 94975, may
suspend or revoke an institution's approval to operate or approval to
operate a branch or satellite campus or may order that an
institution cease offering a class or course of instruction because
of any violation of this article, Section 94831, 94832, or 94985, or
former Section 94320 as that section was in effect on January 1,
1991, or any regulation or order issued pursuant to this article.
(2) If the council takes any of the actions described in paragraph
(1), the council may permit the institution to continue to offer the
class or course of instruction to students already enrolled or may
order the institution to cease instruction and provide a refund of
tuition and all other charges to students.
(c) If the council determines after notice and if requested by the
institution, a hearing, that an institution has violated this
article, Section 94831, 94832, or 94985, or former Section 94320 as
that section was in effect on January 1, 1991, but that the
institution's approval to operate, or approval to operate a branch or
satellite campus should not be suspended or revoked, or that the
institution should not be ordered to cease offering a class or
program of instruction, the council may do any or all of the
following:
(1) Place the institution, or branch or satellite campus, on
probation under reasonable terms and conditions for a specified
period of time not to exceed two years.
(2) Order the institution to post a bond.
(3) Order the institution not to enter into new agreements for
courses of instruction.
(d) During the period of probation, the institution, or the branch
or satellite or both the institution and the branch or satellite
campus, shall be subject to monitoring that may include the required
submission of periodic reports, as prescribed by the council and
special onsite inspections to determine progress toward compliance.
The onsite inspections may include
an inspection of the institution's facilities and records,
interviews of administrators, faculty, and students, and observation
of class instruction. The council shall order the institution to
reimburse all reasonable costs and expenses incurred by the council
in connection with this subdivision. The council may make the
payment of the order for reimbursement a condition of probation.
(e) If, at the period of probation, the council is not satisfied
with the steps taken by the institution to eliminate the violations
of this article, Sections 94831, 94832, and 94985, or former Section
94320 as that section was in effect on January 1, 1991, upon which
the probation was based, the council may revoke the institution's
approval to operate or the institution's approval to operate a branch
or satellite campus.
(f) The council may assess a penalty of up to ten thousand dollars
($10,000) as part of a probation order for violations of this
article, Sections 94831, 94832, and 94985, or former Section 94320 as
that section was in effect on January 1, 1991. In determining the
amount of that penalty, the council shall consider the number and
gravity of the violations, the degree of the institution's good faith
or culpability, the history of the institution's previous
violations, and the institution's ability to pay. If the institution
fails to pay a penalty within the time prescribed by the council the
institution's approval to operate the institution, or approval to
operate a branch or satellite campus, shall be automatically
suspended until the penalty is paid in full.
(g) (1) Any bond ordered by the council shall be issued by an
admitted surety insurer in an amount established at the discretion of
the council that is sufficient to protect students from the
potential consequences of the violation.
(2) The bond shall be in favor of the State of California for the
indemnification of any person for any loss, including the loss of
prepaid tuition, suffered as a result of the occurrence of any
violation of this chapter during the period of coverage.
(3) Liability on the bond may be enforced after a hearing before
the council, after 30 days' advance written notice to the principal
and surety. The council shall adopt regulations establishing the
procedure for administrative enforcement of liability. This
paragraph supplements, but does not supplant, any other rights or
remedies to enforce liability on the bond.
(4) The council may order the institution to file reports at any
interval the council deems necessary to enable the council to monitor
the adequacy of the bond coverage and to determine whether further
action is appropriate.
(h) The council shall determine an institution's compliance,
including the compliance of its branch and satellite campuses, with
this article, Sections 94831, 94832, and 94985, or former Section
94320 as that section was in effect on January 1, 1991, and shall not
be bound by the findings or conclusions of any accrediting agency.
(i) The council may revoke the approval to operate of any
institution that fails to pay an order imposing a penalty or an order
for the reimbursement of costs and expenses. The council may
enforce any administrative order requiring the payment of money in
the same manner as if it were a money judgment pursuant to Title 9
(commencing with Section 680.010) of Part 1 of the Code of Civil
Procedure. All penalties and reimbursements paid pursuant to this
section shall be deposited in the vocational education account in the
Private Postsecondary and Vocational Education Administration Fund
established pursuant to Section 94932.
(j) Proceedings by the council under this section shall be
conducted in accordance with regulations adopted by the council or,
if there are no regulations establishing hearing procedures, Section
94965 or 94975, and the council shall have all of the powers granted
therein.
94879. The council may suspend or revoke an institution's
approval to operate or order probation or the posting of a bond, as
provided in Section 94878, for any of the following reasons:
(a) The institution has failed to make timely refunds to, or on
behalf of students, as required by Sections 94867, 94869, 94870, and
94877, or has not satisfied, within 30 days of its issuance, a final
judgment obtained by a student against the institution.
(b) The institution or an owner, person in control, director, or
officer of the institution is, or has been, found in any criminal,
civil, or administrative proceeding, after notice and an opportunity
to be heard, to have violated any law regarding the obtaining,
maintenance, or disbursement of state or federal loan or grant funds,
or any other law substantially related to the operation of the
institution.
(c) The institution, or a person in control of the institution is,
or has been, found in any criminal, civil, or administrative
proceeding, after notice and an opportunity to be heard, to have
unpaid financial liabilities involving the refund or unlawful
acquisition, use, or expenditure of state or federal financial aid
funds.
(d) (1) All of the following are, or have been, found in any
criminal, civil, or administrative proceeding:
(A) A person in control of the institution was a person in control
of another institution within one year before that institution's
closure.
(B) While the person was acting as a person in control of the
other institution, the person knew or, by the exercise of reasonable
care, should have known that the institution violated this chapter.
(C) That violation was a cause of that institution's closure or of
damage to students.
(D) That institution did not pay to all students refunds owed as a
result of the closure and full compensation for actual damages from
that violation.
(E) The person in control has not paid to all students of the
closed institution refunds owed and full compensation for actual
damages resulting from the closure that were not paid by the closed
institution. For the purpose of this subdivision, "closure" includes
closure of a branch or satellite campus, the termination of either
the correspondence or residence portion of a home-study or
correspondence course, and the termination of a course of instruction
for some or all of the students enrolled in the course before the
time these students were originally scheduled to complete it, or
before a student who has been continually enrolled in a course of
instruction has been permitted to complete all the educational
services, and the classes that comprise the course.
94880. (a) The council may bring an action for equitable relief
for any violation of this article in addition to, or instead of, any
other remedy or procedure.
(b) The suspension or revocation of an institution's approval to
operate also may be embraced in any action otherwise proper in any
court involving the institution's compliance with this chapter or
performance of its legal obligations.
94881. (a) For the purposes of this section, the following
definitions apply:
(1) "Document or record" means any test score, grade, record of
grades, attendance record, record indicating student course
completion or employment, financial information, including any
financial report required to be filed pursuant to Sections 94861 and
94862, information or records relating to the student's eligibility
for financial assistance or attendance at the institution, or any
other record or document required by this chapter or by the council.
(2) "Person" means a natural person and any business entity,
regardless of the form of organization.
(b) Any person who, in any manner, makes or causes to be made any
untrue or misleading statement in connection with offering or
providing a course of instruction, or who makes or causes to be made
any untrue or misleading change in any document or record and who
knows or, by the exercise of reasonable care, should know that the
statement or change is untrue or misleading is guilty of a crime,
punishable as provided in subdivision (e).
(c) Any person who willfully falsifies, destroys, fails to
maintain, or conceals any document or record that is required to be
maintained by this chapter or by the council is guilty of a crime,
punishable as provided in subdivision (e).
(d) Any person who is required to file any report required by
paragraph (3) of subdivision (f) of Section 94854, or Section 94861
or 94862 and who willfully fails to file that report as required, or
willfully violates or causes the violation of subdivision (b) of
Section 94874, is guilty of a crime and is subject to punishment for
each violation as provided in paragraph (2) of subdivision (e).
(e) Any person who violates subdivision (b) or (c), or who
willfully violates Section 94831, 94832, 94853, or 94985, or former
Section 94320 as that section was in effect January 1, 1991, is
guilty of a crime and is subject to separate punishment for each
violation either by:
(1) Imprisonment in the state prison, by a fine not to exceed
fifty thousand dollars ($50,000), or by both that imprisonment and
fine.
(2) Imprisonment in a county jail not to exceed one year, by a
fine not to exceed ten thousand dollars ($10,000), or by both that
imprisonment and fine.
(f) Notwithstanding any other law, any prosecution under this
section shall be commenced within three years of the discovery of the
facts constituting grounds for commencing the prosecution.
(g) The penalties provided by this section supplement, but do not
supplant, the remedies and penalties provided under other law.
94882. The council may adopt and enforce regulations as may be
necessary, appropriate, or useful to interpret and otherwise
implement this article. Pending the adoption of regulations, the
council may adopt emergency regulations, which shall be immediately
effective, notwithstanding any other provision of law, and which
shall be superseded upon the adoption of subsequent regulations.
Article 8. Standards and Evaluation Procedures for
Degree-Granting Institutions
94900. (a) No private postsecondary educational institution may
issue, confer, or award an academic or honorary degree unless the
institution is approved by the council to operate in California and
award degrees.
The council shall not issue an approval under paragraph (1) of
subdivision (c) of Section 94901 or a conditional approval under
paragraph (2) of subdivision (c) of Section 94901 until it has
conducted a qualitative review and assessment of, and has approved,
each degree program offered by the institution, and all of the
operations of the institution, and has determined all of the
following:
(1) The institution has the facilities, financial resources,
administrative capabilities, faculty, and other necessary educational
expertise and resources to ensure its capability of fulfilling the
program or programs for enrolled students.
(2) The faculty are fully qualified to undertake the level of
instruction that they are assigned and shall possess degrees or
credentials appropriate to the degree program and level they teach
and have demonstrated professional achievement in the major field or
fields offered, in sufficient numbers to provide the educational
services.
(3) The education services and curriculum clearly relate to the
objectives of the proposed program or programs and offer students the
opportunity for a quality education.
(4) The facilities are appropriate for the defined educational
objectives and are sufficient to ensure quality educational services
to the students enrolled in the program or programs.
(5) The program of study for which the degree is granted provides
the curriculum necessary to achieve its professed or claimed academic
objective for higher education, and the institution requires a level
of academic achievement appropriate to that degree.
(6) The institution provides adequate student advisement services,
academic planning and curriculum development activities, research
supervision for students enrolled in Ph.D. programs, and clinical
supervision for students enrolled in various health profession
programs.
(7) If the institution offers credit for prior experiential
learning it may do so only after an evaluation by qualified faculty
and only in disciplines within the institution's curricular offerings
that are appropriate to the degree to be pursued. The council shall
develop specific standards regarding the criteria for awarding
credit for prior experiential learning at the graduate level,
including the maximum number of hours for which credit may be
awarded.
(b) The approval process shall include a qualitative review and
assessment of all of the following:
(1) Institutional purpose, mission, and objectives.
(2) Governance and administration.
(3) Curriculum.
(4) Instruction.
(5) Faculty, including their qualifications.
(6) Physical facilities.
(7) Administrative personnel.
(8) Procedures for keeping educational records.
(9) Tuition, fee, and refund schedules.
(10) Admissions standards.
(11) Financial aid policies and practices.
(12) Scholastic regulations and graduation requirements.
(13) Ethical principles and practices.
(14) Library and other learning resources.
(15) Student activities and services.
(16) Degrees offered.
The standards and procedures utilized by the council shall foster
the development of high quality, innovative educational programs and
emerging new fields of study within postsecondary education. In
addition, the standards and procedures utilized by the council shall
not unreasonably hinder educational innovation and competition.
(c) (1) The Committee of Bar Examiners for the State of
California, in lieu of the council, shall be responsible for the
approval, regulation, and oversight of degree-granting law schools
that (A) exclusively offer bachelor's, master's, or doctorate degrees
in law, such as Juris Doctor, and (B) are not otherwise exempt under
Section 94750. This paragraph does not apply to unaccredited law
schools that remain subject to the jurisdiction of the bureau.
(2) If a law school not exempt under Section 94750 offers
educational services other than bachelor's, master's, or
doctorate-degree programs in law, the law school and its nonlaw
degree programs shall be subject to this chapter, and the law school'
s degree programs in law shall be subject to the approval,
regulation, and oversight of the Committee of Bar Examiners.
94901. (a) The council shall conduct a qualitative review and
assessment of the institution. It also shall conduct a qualitative
review and assessment of all programs offered except continuing
education programs and programs that are exclusively avocational or
recreational in nature. The review shall include the items listed in
subdivision (b) of Section 94900, through a comprehensive onsite
review process, performed by a qualified visiting committee impaneled
by the council for that purpose.
An institution may include some or all of its separate operating
sites under one application. Alternately, it may submit separate
applications for any one site or combination of sites. The
satellites or branches included in either an initial or renewal
application shall be considered by the council to comprise a
separate, single institution for purposes of regulation, approval,
and compliance under this chapter.
The application shall include a single fee based on the number of
branches, satellites, and programs included within a single
application in order to cover the costs involved for those multisite
and multiprogram reviews. If the application is for renewal of an
existing approval, the institution need only submit information
necessary to document any changes made since the time its previous
application was filed with the council. Fees for renewal
applications will be based on the actual costs involved in the
administrative review process.
(b) The number of sites inspected by the council as part of its
review process shall be subject to the following considerations:
(1) If the application for approval includes branches and
satellites, the council shall inspect each branch and may inspect any
satellite campus.
(2) If the application is for approval to operate a branch or a
satellite, the council, in addition to inspecting the branch or
satellite, also may inspect the institution operating the branch or
satellite campus.
(c) The council may waive or modify the onsite inspection for
institutions offering home study or correspondence courses. The
visiting committee shall be impaneled by the council within 90 days
of the date of the receipt of a completed application and shall be
composed of educators, and other individuals with expertise in the
areas listed in subdivision (b) of Section 94900, from
degree-granting institutions legally operating within the state.
Within 90 days of the receipt of the visiting committee's evaluation
report and recommendations, or any reasonable extension of time not
to exceed 90 days, the council shall take one of the following
actions:
(1) If the institution is in compliance with this chapter and has
not operated within three years before the filing of the application
in violation of this chapter then in effect, the bureau may grant an
approval to operate not to exceed five years.
(2) If the institution is in compliance with this chapter, but has
operated within three years before the filing of the application in
violation of this chapter then in effect, or if the council
determines that an unconditional grant of approval to operate is not
in the public interest, the council may grant a conditional approval
to operate subject to whatever restrictions the council deems
appropriate. The council shall notify the institution of the
restrictions or conditions, the basis for the restrictions or
conditions, and the right to request a hearing to contest them.
Conditional approval shall not exceed two years.
(3) The council may deny the application. If the application is
denied, the council may permit the institution to continue offering
the program of instruction to students already enrolled or may order
the institution to cease instruction and provide a refund of tuition
and all other charges to students.
(d) When evaluating an institution whose purpose is to advance
postsecondary education through innovative methods, the visiting
committee shall comprise educators who are familiar with, and
receptive to, evidence bearing on the educational quality and
accomplishments of those methods.
(e) The standards and procedures utilized by the council shall not
unreasonably hinder educational innovation and competition.
(f) Each institution or instructional program offering education
for entry into a health care profession in which the provider has
primary care responsibilities shall offer that education within a
professional degree program which shall be subject to approval by the
council pursuant to this section.
(g) (1) If an institution is not operating in California when it
applies for approval to operate for itself or a branch or satellite
campus, the institution shall file with its application an
operational plan establishing that the institution will satisfy the
minimum standards set forth in subdivision (a) of Section 94900. The
operational plan also shall include a detailed description of the
institution's program for implementing the operational plan,
including proposed procedures, financial resources, and the
qualifications of owners, directors, officers, and administrators
employed at the time of the filing of the application. The council
may request additional information to enable the council to determine
whether the operational plan and its proposed implementation will
satisfy these minimum standards.
(2) If the council determines that the operational plan satisfies
the minimum standards described in subdivision (a) of Section 94900,
that the institution demonstrates that it will implement the plan,
and that no ground for denial of the application exists, the council
shall grant a temporary approval to operate, subject to any
restrictions the council reasonably deems necessary to ensure
compliance with this chapter, pending a qualitative review and
assessment as provided in subdivisions (a) and (b) of Section 94900.
The council shall inspect, pursuant to subdivision (a) of Section
94901, the institution, or branch or satellite campus if approval is
sought for that campus between 90 days and 180 days after operation
has begun under the temporary approval to operate. Following receipt
of the visiting committee's or the council staff's report, the
council shall act as provided in paragraph (1), (2), or (3) of
subdivision (c).
(h) If at any time the council determines that an institution has
deviated from the standards for approval, the council, after
identifying for the institution the areas in which it has deviated
from the standards, and after giving the institution due notice and
an opportunity to be heard, may place the institution on probation
for a prescribed period of time, not to exceed 24 calendar months.
During the period of probation, the institution shall be subject to
special monitoring. The conditions for probation may include the
required submission of periodic reports, as prescribed by the
council, and special visits by authorized representatives of the
council to determine progress toward total compliance. If, at the
end of the probationary period, the institution has not taken steps
to eliminate the cause or causes for its probation to the
satisfaction of the council, the council may revoke the institution's
approval to award degrees and provide notice to the institution to
cease its operations.
(i) An institution may not advertise itself as an approved
institution unless each degree program offered by the institution has
been approved in accordance with the requirements of this section.
The council shall review all operations of the institution,
pertaining to California degrees, both within and outside of
California. The council may conduct site visits outside of
California, including the institution's foreign operations, when the
council deems these visits to be necessary. The institution shall be
responsible for the expenses of the visiting team members including
the council's staff liaison. The council may authorize any
institution approved to issue degrees under this section to issue
certificates for the completion of courses of study that are within
the institution's approved degree-granting programs.
(j) An institution shall not offer any educational program or
degree title that was not offered by the institution at the time the
institution applied for approval to operate, and shall not offer any
educational program or degree title at a campus that had not offered
the program or degree title at the time the institution applied for
approval to operate that campus, unless the council first approves
the offering of the program or degree title after determining that it
satisfies the minimum standards established by this section.
94905. (a) Any public or private postsecondary educational
institution incorporated in another state that has accreditation from
a regional accrediting association recognized by the United States
Department of Education at the time of the issuance of a degree, and
that is approved by the council, may issue degrees, diplomas, or
certificates. Except for continuing education programs and programs
that are exclusively avocational or recreational in nature,
accredited public or private postsecondary educational institutions
incorporated in another state shall not offer degrees, diplomas, or
certificates in California unless they comply with this section.
(b) The council shall not approve an institution to issue degrees,
diplomas, or certificates pursuant to this section until the council
has conducted a qualitative review and assessment of, and has
approved, each program offered by the institution and all of its
operations in California, and the council has determined that the
institution meets all of the following standards:
(1) The institution has financial resources to ensure the
capability of fulfilling the program or programs for enrolled
students.
(2) The faculty includes personnel who possess appropriate degrees
from institutions accredited by a regional accrediting association
recognized by the United States Department of Education in the degree
major field or fields offered, in sufficient number to provide the
educational services.
(3) The education services and curriculum clearly relate to the
objectives of the proposed program or programs.
(4) The facilities are appropriate for the defined educational
objectives and are sufficient to ensure quality educational services
to the students enrolled in the program or programs.
(5) The institution has verifiable evidence of academic
achievement comparable to that required of graduates of other
institutions operating in this state for the program or programs upon
which the degree, diploma, or certificate is based.
(c) The period of any approval issued under this section shall be
subject to Section 94901.
(d) Institutions approved under this section shall offer in
California only programs that the institution can document to have
been acknowledged or favorably reviewed by the home regional
accrediting association.
(e) In reviewing the out-of-state accredited institutions, the
council shall use as guidelines the standards and procedures
developed by the special committee created pursuant to paragraph (5)
of subdivision (b) of Section 94310.1, as in effect on December 31,
1989, and adopted by the California Postsecondary Education
Commission. These standards and procedures were based on all of the
following principles:
(1) Following the initial site review, subsequent onsite reviews
by the council may be conducted in conjunction with institutional
reviews by the regional accrediting association. However, if there
is substantial evidence that the institution is not in compliance
with state standards, the council may initiate a special review of
the California operations of the institution.
(2) Each institution may include some, or all, of its separate
operating sites under one application. Alternately, it may submit
separate applications for any one site or combination of sites. The
satellites or branches included in either an initial or renewal
application shall be considered by the council to comprise a
separate, single institution for purposes of regulation, approval,
and compliance under
this chapter.
(3) The application shall include a single fee based on the number
of branches, satellites, and programs included within a single
application in order to cover the costs involved for such multisite
and multiprogram reviews.
(4) If the application is for renewal of an existing approval, the
institution need only submit information necessary to document any
changes made since the time its previous application was filed with
the council. Fees for reapproval applications will be based on the
actual costs involved in the administrative review process.
(5) The council shall develop a procedural rationale to justify
the number of sites to be visited by the state in the review of the
institution's operations in California. The number of sites visited
shall be subject to the following considerations:
(A) If the application for approval includes branches and
satellites, the council may inspect each branch and may inspect any
satellite campus.
(B) If the application is for approval to operate a branch or a
satellite, the council, in addition to inspecting the branch or
satellite, also may inspect the institution operating the branch or
satellite campus.
(C) The council may waive or modify the onsite inspection for
institutions offering home study or correspondence courses.
(D) The purpose of the onsite review by the council shall be to
determine that operations by the institution in California meet the
minimum state standards identified in statute.
(E) The standards and procedures shall not unreasonably hinder
educational innovation and competition.
Article 9. Standards and Evaluation Procedures for
Nondegree-Granting Institutions
94915. (a) No private postsecondary educational institution,
except those offering degrees and approved under Article 8
(commencing with Section 94900) or those registered under Article 9.5
(commencing with Section 94931), may offer educational services or
programs unless the institution or locations at which these services
or programs are offered have been approved by the council as meeting
the requirements of this section. In addition, if the institution is
regulated by any other state licensing agency, the institution shall
have obtained and retained the approval of that agency.
(b) If an institution is operating under the council's prior
approval and the institution has applied for approval to operate for
itself or a branch or satellite campus that is operating, the council
shall not grant approval to operate until the council has conducted
a qualitative review and assessment of the operations of the
institution in California and determined that all of the following
minimum standards have been satisfied.
(1) The quality and content of each course or program of
instruction, training, or study may reasonably and adequately be
expected to achieve the objective for which the course or program is
offered. Except for continuing education programs and programs that
are exclusively avocational or recreational in nature, all programs
offered by the institution shall meet the minimum standards
prescribed by this subdivision. If an institution represents that a
course or program leads to employment, the quality, content, and
instruction of the course or program shall be sufficient to ensure
that students may acquire the necessary level of education, training,
skill, and experience to obtain employment in the occupation or job
title to which the course or program of instruction is represented to
lead.
(2) The institution has adequate space, equipment, instructional
material, and instructor personnel to provide training of the quality
needed to attain the objective described in paragraph (1).
(3) Every instructor and administrator possesses adequate
academic, experiential, and professional qualifications to teach the
course or to perform the duties that the person is assigned,
satisfies all standards established by the council by regulation, and
holds an applicable and valid certificate of authorization for
service issued by the council in the specified competence area in
which the individual will serve. No person shall serve as an
instructor or member of the administrative staff if that person has
been convicted of, or has pled nolo contendere or guilty to, a crime
involving the acquisition, use, or expenditure of federal or state
funds, or who has been judicially or administratively determined to
have committed any violation of this chapter or of any law involving
state or federal funds.
(4) The institution maintains for at least five years written
records of each student's previous education and training, where
applicable.
(5) A copy of the course outline, description of the occupations
or job titles, if any, to which the course of instruction is
represented to lead, schedule of tuition, fees, and other charges,
refund policy, regulations pertaining to tardiness, absences, and the
grading policy, and rules of operation and conduct is given to
students prior to enrollment.
(6) The institution maintains and enforces adequate standards
relating to, and maintains records of, attendance, satisfactory
academic progress, and student performance to achieve the objective
described in paragraph (1).
(7) The institution complies with all local city, county,
municipal, state, and federal regulations relative to the safety and
health of all persons upon the premises such as fire, building, and
sanitation codes. The council may require evidence of compliance.
(8) The institution does not exceed enrollment that the facilities
and equipment of the institution can reasonably handle.
(9) The institution's officers, directors, and owners demonstrate
financial and fiduciary responsibility, as prescribed by statute, or
by regulations adopted by the council.
(10) The institution is in compliance with this chapter and has
developed policies and procedures designed to ensure that compliance.
(11) No circumstances exist that may constitute grounds for the
revocation or suspension of an approval to operate.
(12) The institution complies with Article 7 (commencing with
Section 94850) if that article is applicable to any educational
program it offers.
(13) Application for approval shall be made in writing on forms
prescribed by the council. The application for approval shall
include, if applicable to the institution, a statement of whether the
institution claims that it is exempt or that a course or other
educational service it offers is exempt from Article 7 (commencing
with Section 94850), and the information required by subdivision (f)
of Section 94873.
An institution may include some, or all, of its separate operating
sites under one application. Alternately, it may submit separate
applications for any one site or combination of sites. The
satellites or branches included in either an initial or renewal
application shall be considered by the council to comprise a
separate, single institution for purposes of regulation, approval,
and compliance under this chapter. The application shall include a
single fee based on the number of branches, satellites, and programs
included within a single application in order to cover the costs
involved for those multisite and multiprogram reviews.
(c) Within 90 days following the receipt of an application from an
institution and prior to granting any approval, a representative of
the council shall personally inspect the institution and verify the
institution's compliance with the standards prescribed by this
chapter. The council may use a qualified visiting committee in the
initial review of programs and in subsequent reviews. The visiting
committee may include employers with expertise related to the program
being reviewed. The institution seeking approval shall reimburse
the council for the expenses of the visiting committee. The onsite
inspection shall include an inspection of the institution's
facilities and records, interviews of administrators, faculty, and
students, and an observation of class instruction, as determined to
be appropriate by the council.
(1) If the application for approval includes branch or satellite
campuses, the council shall inspect each branch campus and may
inspect any satellite campus.
(2) If the application is for approval to operate a branch or a
satellite, the council, in addition to inspecting the branch or
satellite, also may inspect the institution operating the branch or
satellite campus.
(3) The council may waive or modify the requirement for onsite
inspections of branch campuses located outside of California or for
an institution offering home study or correspondence courses.
(4) If the application is for reapproval of an existing approval,
the institution need only submit information necessary to document
any changes made since the time its previous application was filed
with the council. Fees for reapproval applications shall be based on
the actual costs involved in the administrative review process.
(d) The council shall review all operations of the institution
both within and outside of California. The council may conduct site
visits outside of California, including the institution's foreign
operations, when the council deems these visits to be necessary. The
institution shall be responsible for the expenses of any visiting
team members including the council's staff liaison.
(e) Within 90 days following the inspection described in
subdivision (c) or any reasonable extension of time not to exceed 90
days, the council shall reach a decision on the merits and shall do
one of the following:
(1) If the institution is in compliance with this chapter and has
not operated within three years before the filing of the application
in violation of this chapter then in effect, the council may grant
approval for a period not to exceed four years.
(2) If the institution is in compliance with this chapter, but has
operated within three years before the filing of the application in
violation of this chapter then in effect, or if the council
determines that an unconditional grant of approval to operate is not
in the public interest, the council may grant a conditional approval
to operate subject to whatever restrictions the council deems
appropriate. The council shall notify the institution of the
restrictions, the basis for the restrictions, and the right to
request a hearing to contest the restrictions.
(3) The council may deny the application if the institution does
not comply with this chapter, including the minimum standards
established in subdivision (b), or has operated within three years
before the filing of the application in violation of this chapter
then in effect. If the application is denied, the council may permit
the institution to continue offering the course or courses of
instruction to students already enrolled or may order the institution
to cease all instruction and provide a refund of tuition and all
other charges to students. The council shall notify the institution
of the denial, the basis for the denial, and the right of the
institution to request a hearing to contest the denial.
(f) (1) If an institution is not operating in California when it
applies for approval to operate for itself or a branch or satellite
campus, the institution shall file with its application an
operational plan establishing that the institution will satisfy the
minimum standards set forth in subdivision (b). The operational plan
also shall include a detailed description of the institution's
program for implementing the operational plan, including proposed
procedures, financial resources, and the qualifications of owners,
directors, officers, and administrators employed at the time of the
application's filing. The council may request additional information
to enable the council to determine whether the operational plan and
its proposed implementation will satisfy these minimum standards.
(2) If the council determines that the operational plan satisfies
the minimum standards described in subdivision (b), that the
institution demonstrates that it will implement the plan, and that no
ground for denial of the application exists, the council shall grant
a temporary approval to operate, subject to any restrictions the
council reasonably deems necessary to ensure compliance with this
chapter, pending a qualitative review and assessment as provided in
subdivisions (b) and (c). The council shall inspect the institution,
or branch or satellite campus if approval is sought for that campus,
between 90 days and 180 days after operation has begun under the
temporary approval to operate. Within 90 days following the council'
s inspection of the institution, the council shall act as provided in
subdivision (e).
(g) If an institution approved to operate in California applies
for approval to operate an additional site location that has not been
previously approved by the council, the institution shall file an
operational plan for the additional site location as described in
subdivision (f). The council shall evaluate the additional site
location as provided in subdivision (f). The council also may
evaluate the institution as provided in subdivisions (b) and (c)
before determining whether to grant to the institution temporary or
final approval to operate the additional site location. If the
institution or the additional site location does not meet the
requirements of this chapter or if the institution has operated
within three years before the filing of the application in violation
of this chapter then in effect, the council may deny the application
for approval to operate the additional site location or may grant a
conditional approval to operate the additional site location subject
to any restrictions it deems appropriate. The provisions for notice
and hearing described in paragraphs (2) and (3) of subdivision (e)
shall apply.
(h) No institution shall offer a course or program of instruction,
training, or study at a campus that had not offered the course or
program at the time the institution applied for approval to operate
that campus unless the council first approves the offering of the
course or program after determining that it satisfies the minimum
standards established in subdivision (b).
(i) The council may enter into an agreement for the regulation and
oversight of nondegree-granting private postsecondary institutions
with the Federal Aviation Administration or with the state agency
responsible for administering Article 1 (commencing with Section
1250) of Chapter 2 of Division 2 of the Health and Safety Code.
The council may enter into a regulatory agreement only when the
appropriate agency can demonstrate that its standards and procedures
for the review of institutions encompass the standards and consumer
protection requirements prescribed by this chapter and that these
standards and procedures are rigorously enforced. Nothing in this
section shall modify the existing authority of regulatory agencies
within the Department of Consumer Affairs relating to schools or
programs.
(j) If at any time the council determines that an institution has
deviated from the standards for approval, the council, after giving
the institution due notice and an opportunity to be heard, may place
the institution on probation for a specified period of time not to
exceed 24 calendar months. During the period of probation, the
institution shall be subject to special monitoring. The conditions
for probation may include the required submission of periodic
reports, as prescribed by the council, and special visits by
authorized representatives of the council to determine progress
toward total compliance. If at the end of the specified probationary
period, the institution has not taken steps to eliminate the causes
for its probation to the satisfaction of the council, the council may
revoke the institution's approval and provide notice to the
institution to cease its operations.
94920. (a) Each individual submitting an application for a
certificate of authorization for service, pursuant to paragraph (3)
of subdivision (b) of Section 94915, shall provide the council with
the following information:
(1) A completed application as supplied by the council.
(2) Certified copies of educational transcripts, where applicable.
(3) Verified employment history.
(4) Other documentation of prior experience or education as
required by the council for verification.
(b) To be eligible for a certificate of authorization for service,
the applicant shall fulfill the following requirements:
(1) Instructors shall have all of the following qualifications:
(A) No record of any violations of this chapter.
(B) Verification that he or she possesses a combination of at
least three years' experience and training or education in the
occupation or job title category for which the certification is
sought.
(C) An instructor for a program that leads to a degree shall
possess a degree of equal or higher level in the occupation for which
certification is sought.
(2) Directors shall have both of the following qualifications:
(A) Three years' experience in an administrative position in a
public or an approved private postsecondary school.
(B) No record of any violations of this chapter.
(3) Associate directors shall have both of the following
qualifications:
(A) Two years' experience in an administrative or other
responsible position in a public or state approved private
postsecondary school.
(B) No record of any violations of this chapter.
(4) Financial aid directors shall have all of the following
qualifications:
(A) Five years' experience in an administrative position in the
financial aid office of a public or approved private postsecondary
school.
(B) Verification of completion within the previous two years of a
training seminar or workshop certified by the Student Aid Commission
as providing up-to-date comprehensive information on financial aid
programs and policies.
(C) No record of any violations of this chapter.
(D) Any other requirements the council deems necessary.
(5) Financial aid officers shall possess all of the following
qualifications:
(A) Verification of completion within the previous two years of a
training seminar or workshop certified by the Student Aid Commission
as providing up-to-date comprehensive information on financial aid
programs and policies.
(B) No record of any violations of this chapter.
(C) Other requirements the council deems necessary.
(c) An individual who is the sole owner of an institution may
serve in the capacity of director for three years prior to meeting
the qualifications of subparagraph (A) of paragraph (2) of
subdivision (b).
(d) Any individual filling a position left vacant by a previously
certified financial aid director or financial aid officer shall
verify with the council completion of the training referred to in
subparagraph (A) of paragraph (5) of subdivision (b) within one year
of accepting that position.
(e) Each individual certified for authorization for service in the
positions listed in paragraphs (1), (4), and (5) of subdivision (b)
shall maintain at each private postsecondary educational institution
where he or she is employed a validated transcript evidencing the
successful completion of three continuing education units of
recognized in-service training in their education, job title
category, or employment field during every period of certification.
These units may be completed through in-service training offered by
accrediting associations, professional organizations, or
council-approved programs.
(f) Every certificate of authorization issued to a person who
possesses the qualifications described in paragraphs (1), (4), and
(5) of subdivision (b) shall be valid for a period of three years.
(g) In addition to the requirements set forth in this section, the
council may impose additional requirements by regulation.
94925. No person shall own or operate a school, or give
instruction, for the driving of motortrucks of three or more axles
that are more than 6,000 pounds unladen weight unless all of the
following conditions are met:
(a) The school or instruction has been approved by the council.
(b) The school, at the time of application and thereafter,
maintains both of the following:
(1) Proof of compliance with liability insurance requirements that
are the same as those established by the Department of Motor
Vehicles for a driving school owner, pursuant to Section 11103 of the
Vehicle Code, unless the council deems it necessary to establish a
higher level of insurance coverage.
(2) A satisfactory safety rating by the Department of the
California Highway Patrol is established pursuant to Division 14.8
(commencing with Section 34500) of the Vehicle Code.
(c) The school, at all times, shall maintain the vehicles used in
driver training in safe mechanical condition. The school shall keep
all records concerning the maintenance of the vehicles.
(d) The driving instructors meet the requirements set forth in
Section 11104 of the Vehicle Code.
(e) Any other terms and conditions required by the council to
protect the public safety or to meet the requirements of this
chapter.
94930. (a) All institutions that were certified to offer flight
instruction by the Federal Aviation Administration (FAA) and that
operated in California on December 31, 1990, pursuant to prior
authority of subdivision (a) or (b) of former Section 94311, shall
receive approval from the council for a period not to exceed three
years. On or before June 30, 1999, the council shall work in
cooperation with the FAA to review each of these institutions to
determine whether the institution is in compliance with the
requirements of this chapter. It is the intent of the Legislature
that all institutions whose cumulative gross student loan default
rate is above 40 percent, as determined by the Student Aid
Commission, shall be reviewed by the FAA and the council to determine
if these institutions are in compliance with the requirements of
this chapter and should continue to be approved to offer educational
programs in California. It is further the intent of the Legislature
that the bureau develop a memorandum of understanding with the FAA to
delineate the responsibilities of each agency for the approval and
monitoring of these institutions that were operating on December 31,
1990, under the prior authority of subdivision (a) or (b) of former
Section 94311.
(b) Institutions certified to offer flight instruction by the FAA,
or its successor agency, shall comply with all of the requirements
of Sections 94800, 94810, 94814, and 94816, Sections 94820 to 94826,
inclusive, and Sections 94828 and 94829 and Article 7 (commencing
with Section 94850) if applicable, but shall not be required to file
any materials with the council that are not required by the FAA or
its successor agency, except those minimally necessary to administer
the Student Tuition Recovery Fund as determined by the council. The
responsibility for monitoring and enforcing institutional compliance
for these institutions shall be with the council.
(c) This chapter does not apply to individual flight instructors
not requiring any advance payments, who do not negotiate a formal
contract of indebtedness, and who do not have an established place of
business other than their residences.
Article 9.5. Registered Institutions
94931. (a) No private postsecondary educational institution,
except those offering degrees and approved under Article 8
(commencing with Section 94900) or offering vocational and nondegree
granting programs and approved under Article 9 (commencing with
Section 94915), or those that are exempt from this chapter, may offer
educational services or programs unless the institution has been
registered by the bureau as meeting the requirements of this section.
(b) An institution approved to offer degrees under Article 8
(commencing with Section 94900) or approved to offer vocational and
nondegree granting programs under Article 9 (commencing with Section
94915) may offer registered programs without affecting its status
under either of those articles so long as the registered program is
disclosed in its approval to operate application or the institution
completes a registration application and receives specific
authorization for the program, maintains compliance for all
registered programs in conformity with this article, and maintains a
set of student records for registered programs separate from its
approved programs. Any registered institution that offers an
educational program not specified in subdivision (c) or not otherwise
exempt from this chapter shall be approved under Article 8
(commencing with Section 94900) or Article 9 (commencing with Section
94915) and shall comply with this chapter.
(c) Except as otherwise provided in this article, this chapter
does not apply to an educational service that qualifies for
registration status and that complies with this article. The
educational services that qualify for registration status are limited
to:
(1) An educational service, as defined in Section 94733, that is
offered to provide an intensive English language program.
(2) An educational service, as defined in Section 94742.1, that is
offered to provide short-term career training.
(3) An educational service, as defined in Section 94742.2, that is
offered to provide short-term seminar training.
(4) An educational service that is offered to assist students to
prepare for an examination for licensure, except as provided in
Section 94787.
(5) An educational service that consists of continuing education
not otherwise exempt from this chapter.
(d) An institution that qualifies under any of paragraphs (1) to
(4), inclusive, of subdivision (c) shall complete a registration form
provided by the bureau, including a signed declaration by the chief
executive officer of the institution under penalty of perjury, and
provide all of the following information for public disclosure:
(1) The owner's legal name, headquarters address, and the name of
an agent for the service of process within California.
(2) All names, whether real or fictitious, under which the owner
is doing and will do business.
(3) The names and addresses of the principal officers of the
institution.
(4) A list of all California locations at which the institution
operates, its offerings, and, if previously registered, the number of
students enrolled in California during the preceding year.
(5) A copy of the registration form or agreement that enrolls the
student in the educational service that contains all of the
following:
(A) The name and address of the location where instruction will be
provided.
(B) The title of the educational program.
(C) The total amount the student is obligated to pay for the
educational service.
(D) A clear and conspicuous statement that the enrollment form or
agreement is a legally binding instrument when signed by the student
and accepted by the institution.
(E) The refund policy developed by the institution unless this
article specifies a different refund policy.
(F) Unless this article specifies that the institution is required
to participate in the Student Tuition Recovery Fund, a statement
that the institution does not participate in that fund.
(G) In 10-point boldface print or larger, the following statement:
"Any questions or problems concerning this school that have not
been satisfactorily answered or resolved by the school should be
directed to the Bureau for Private Postsecondary and Vocational
Education in the Department of Consumer Affairs, (insert city,
address, CA ZIP, and telephone number)."
(H) Schools approved under paragraph (1) of subdivision (c) of
Section 94931 shall also include with the statement required by
subparagraph (G) information referring the student to a consulate of
his or her country and the United States Immigration and
Naturalization Service.
(6) A brochure or catalog and a sample advertisement used to
promote the educational service.
(7) A copy of its certificate of completion.
(8) If the educational service offers short-term career training,
the institution shall comply with the requirements of Sections 94804
and 94806.
(9) If the institution assists students in obtaining financing
from a third party for the cost of the educational services at the
institution, a copy of the contract or finance agreement reflecting
that financing.
(e) The bureau shall establish the initial registration fee and
the annual fee to be paid by institutions registered under this
article. No institution shall be registered pursuant to this article
unless it has paid the appropriate fees required by the bureau.
Upon receipt of an institution's initial application for registration
for a program, the bureau may conduct a site visit pursuant to
subdivision (c) of Section 94915.
(f) For the purposes of communication with other state agencies,
any organization or individual registered to offer short-term seminar
training may state that they are "authorized" by the State of
California.
(g) Except as provided by subdivision (f), any institution
registered pursuant to this article shall be restricted to stating
that their training is "registered" with the State of California and
is prohibited from using the words "approval," "approved," "approval
to operate," "approved to operate," "authorized," "licensed," or
"licensed to operate."
The institution shall place the following statement in all
brochures, catalogues, enrollment agreements, and registration forms,
in a conspicuous location in at least 12-point bold faced type:
"We are registered with the State of California. Registration
means we have met certain minimum standards imposed by the state for
registered schools on the basis of our written application to the
state. Registration does not mean we have met all of the more
extensive standards required by the state for schools that are
approved to operate or licensed or that the state has verified the
information we submitted with our registration form."
(h) Sections 94812 and 94818, Sections 94822 to 94825, inclusive,
and Sections 94829 to 94838, inclusive, and Sections 94841 and 94846
shall apply to any institution registered pursuant to this article.
(i) Article 13 (commencing with Section 94950) shall apply to any
institution registered pursuant to this article.
94931.1. (a) Before accepting any consideration from a student,
an institution registered pursuant to this article shall provide the
student with an enrollment agreement or registration form containing
in a single document all of the terms related to the instruction and
payment. The agreement or registration form shall contain all of the
information set forth in paragraph (5) of subdivision (d) of Section
94931.
(b) The enrollment agreement or registration form shall be printed
in at least 10-point type in English and, except for educational
services described in paragraph (1) of subdivision (c) of Section
94931, if any solicitation or negotiation leading to the student's
enrollment was in a language other than English, in that other
language. Institutions that provide educational services described
in paragraph (1) of subdivision (c) of Section 94931 shall provide in
a written agreement with any agent or representative that the agent
or representative is required to disclose to each prospective student
in writing, in the language of any solicitation or negotiation
leading to the student's enrollment, all of the information described
in paragraph (5) of subdivision (d) of Section 94931.
(c) If the institution fails to comply with this section, any
enrollment agreement or registration form shall be invalid and the
institution shall refund to the student all of the tuition paid by
the student to the institution.
(d) In addition to any other requirement in this article, each
institution registered under paragraph (2) of subdivision (c) of
Section 94931 shall provide to each prospective student all of the
information required by Section 94816 and shall be subject to Section
94820 and Article 12 (commencing with Section 94944).
94931.2. (a) Each institution registered under paragraph (1) of
subdivision (c) of Section 94931 shall maintain, and provide to each
prospective student on the registration form or enrollment agreement,
the following refund policy:
(1) A refund shall be provided for the unused portion of tuition
fees and other charges if the student does not register for the
period of attendance or withdraws therefrom at any time prior to
completion of the courses, or otherwise fails to complete the period
of enrollment. Institutions shall pay or credit refunds due on a
reasonable or timely basis, not to exceed 30 days following the date
upon which the student's withdrawal has been determined.
(2) The institution shall advise each student that any
notification of withdrawal or cancellation and any request for refund
must be made in writing.
(b) The refund shall be determined as follows:
(1) The institution, for all students, without penalty or
obligation, shall refund 100 percent of the amount paid for
institutional charges, less a reasonable deposit or application fee
not to exceed one hundred dollars ($100), if notice of cancellation
is made prior to the first day of instruction or if the student never
attends the institution.
(2) The institutional refund policy for students who did not
cancel pursuant to paragraph (1) and who have completed 60 percent or
less of the course of instruction shall be a pro rata refund if any
of the following occurs:
(A) The student transfers to another school.
(B) The student returns to his or her country of residence.
(C) The student gains admittance to a college or university.
The refund under this paragraph shall be the amount the student
paid for the instruction multiplied by a fraction, the numerator of
which is the number of hours of instruction in the course which the
student has not received, but for which the student has paid, and the
denominator of which is the total number of hours of instruction for
which the student has paid. The school may deduct a fee which shall
not exceed an amount derived by multiplying the hourly charge for
the program by the number of hours that were taught in the first four
weeks of instruction, or for a student who withdraws during the
first four weeks, the hours taught and which, at the time of the
student's withdrawal, were scheduled to be taught in the first four
weeks of instruction plus, if the student withdraws pursuant to
subparagraph (B), 30 percent of the total tuition amount. For the
purposes of this paragraph, the hourly charge for the program shall
be derived by dividing the total tuition charge by the number of
hours in the program.
(c) The bureau shall conduct, or contract with the California
Postsecondary Education Commission to conduct, a study on the effect
of the refund policy specified in this section on the student dropout
rate. The bureau shall report the results of the study to the
Legislature no later than March 30, 1999.
(d) This section shall remain in effect only until January 1,
2000, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2000, deletes or extends
that date.
Article 10. Fees and Costs
94932. (a) The Private Postsecondary and Vocational Education
Administration Fund is continued in existence. All fees collected
pursuant to this section shall be credited to this fund along with
any interest on the money, for the administration of this chapter.
If the Legislature makes an appropriation for the support of the
council in the Budget Act of any fiscal year, the amount for the
support of the council expended from the fund during the fiscal year
shall not exceed the amount appropriated by the Budget Act, unless
that amount is modified in accordance with the Budget Act.
(b) On and after January 1, 1998, a minimum of 50 percent of the
funds appropriated to the council shall be used to cover the costs of
enforcing all of the following:
(1) Enforcing the act and the council's regulations by taking
actions against violators while ensuring due process for all
institutions.
(2) Ensuring that independent onsite evaluations and random and
targeted inspections and audits of institutions are conducted, and
that students have easy access to information concerning their rights
to contract cancellation, withdrawal, refunds, and remedies.
(3) Mediating student complaints to achieve balanced outcomes for
students and institutions.
(c) (1) For the approval of private institutions operating under
this chapter, the council shall charge an amount not to exceed the
actual costs of approving or renewing the approval of the private
institutions. The council shall adopt a fee schedule for all
institutions approved under this chapter, including the maximum
amounts to be charged for an institution's initial application and
annual renewal.
(2) On January 1, 1998, the bureau shall reduce the application
fees for approval and reapproval to operate and the annual fees, that
are in effect on December 31, 1997, as follows:
(A) By 5 percent for institutions whose annual gross revenues or
projected annual gross revenues are one million dollars ($1,000,000)
or more.
(B) By 10 percent for institutions whose annual gross revenues or
projected annual gross revenues are one hundred thousand dollars
($100,000) or more but less than one million dollars ($1,000,000).
(C) By 15 percent for institutions whose annual gross revenues or
projected annual gross revenues are less than one hundred thousand
dollars ($100,000).
(3) The council may propose modifications to the fee schedule to
the Governor and the Legislature to add or delete categories of fees
related to work performed by the council and propose to the Governor
and the Legislature the maximum amount to be charged for each fee
category added to the fee schedule. The fee schedule shall provide
adequate resources for the council to implement this chapter
effectively. It is the intent of the Legislature that the council
shall adopt a fee schedule that reflects the size of the institution,
with institutions enrolling a larger number of students being
required to pay a larger annual fee than those with smaller student
enrollments. The fee schedule, consistent with this section, also
may contain provisions for fees assessed in conjunction with the
evaluation of an application for a certificate of authorization for
service issued pursuant to paragraph (3) of subdivision (b) of
Section 94915. The council shall annually present its proposed
budget and fee schedule, penalty fees assessed for delinquent
payments pursuant to regulations adopted by the council and additions
and deletions of fee categories to the Department of Finance and the
Joint Legislative Budget Committee for their review and approval as
part of the annual budget process. The council shall annually
publish a schedule of the current fees to be charged pursuant to this
section and shall make this schedule generally available to the
public. The fees may be increased annually up to the maximum
allowable level by a majority vote of the council, without any
additional review and approval by the Office of Administrative Law.
The adoption of the annual fee schedule, any modification of the fee
schedule, and any increase in fees up to the maximum allowable level
shall be subject to Article 5 (commencing with Section 11346) of
Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government
Code. Increases above the maximum level shall be changed through
legislation enacted by the Legislature and signed by the Governor.
94934. Any institution more than 30 days delinquent in the
payment of any fee or order for the recovery of costs and expenses
under Section 94935, may be assessed a penalty fee by the council.
94935. If the council determines after an investigation that an
institution has violated this chapter, the council may order the
institution to pay the costs and expenses incurred in connection with
the investigation and any civil or administrative proceeding
involving the violation that was investigated, including charges made
by the Attorney General for his or her services, and any expenses
incurred by a district attorney. Before any order for the payment of
costs and expenses is made under this section, the council shall
provide the institution with written notice, including notice of the
institution's right to request a hearing within 15 days of service of
the notice. If a hearing is not timely requested, the council may
order payment. If a hearing is requested, the council shall comply
with Section 94965, 94975, or 94980. Within 30 days after the
effective date of the order, the council may enforce the order as if
it were a money judgment pursuant to Title 9 (commencing with Section
680.10) of Part 2 of the Code of Civil Procedure. Alternatively,
the council may seek the costs and expenses allowed under this
section in a civil proceeding. An institution shall not be required
to pay the same costs and expenses incurred in connection with the
investigation and any civil or administrative proceeding to more than
one investigating agency.
94936. The effective date of any statutory amendment to this
chapter affecting revenues payable to the council from any service
shall be delayed for a period of 12 months in order to enable the
council to make the necessary adjustments in its fee schedule through
the regulatory adoption process.
Article 11. Agents and Agencies
94940. (a) Notwithstanding any other provision of this chapter
concerning agents, the owner of at least 51 percent of the equitable
interest in an institution shall be exempt from this section if the
institution is approved to operate pursuant to Article 8 (commencing
with Section 94900) or Article 9 (commencing with Section 94915).
No person may act as an agent, unless that person holds a valid
permit issued by the council and maintains at all times a surety bond
as described in paragraph (2). Administrators or faculty, or both,
who make informational public appearance, but whose primary task is
not to serve as a paid recruiter, are exempt from this section.
The application for a permit shall be furnished by the council and
shall include the following:
(1) A statement signed by the applicant that he or she has read
this chapter and the regulations adopted pursuant thereto.
(2) A surety bond issued by an admitted surety insurer in favor of
the State of California for the indemnification of any person for
any loss suffered as a result of the occurrence, during the period of
coverage, of any fraud or misrepresentation used in connection with
the solicitation for the sale or the sale of any program of study, or
as a result of any violation of this chapter. The term of the bond
shall extend over the period of the permit. The bond may be supplied
by the institution or by the person for whom the issuance of the
permit is sought and may extend to cover individuals separately or to
provide blanket coverage for all persons to be engaged as
representatives of the institution. The bond shall provide for
liability in the penal sum of twenty-five thousand dollars ($25,000)
for each agent to whom coverage is extended by its terms. Neither
the principal nor the surety on a bond may terminate the coverage of
the bond, except upon giving 30 days' prior written notice to the
council, and contemporaneously surrendering the agent's permit.
Liability on the bond may be enforced after a hearing before the
council, after 30 days' advance written notice to the principal and
surety. The council shall adopt regulations establishing the
procedure for administrative enforcement of liability. This
paragraph supplements, but does not supplant, any other rights or
remedies to enforce liability on the bond.
(3) A fee as required by Section 94932.
(b) An agent representing more than one institution shall obtain a
separate agent's permit and bond for each institution represented.
(c) No person shall be issued a permit if he or she previously has
been found in any judicial or administrative proceeding to have
violated this chapter, or there exists any of the grounds for denial
set forth in Section 480 of the Business and Professions Code.
(d) A permit shall be valid for the calendar year in which it is
issued, unless sooner revoked or suspended by the council for fraud
or misrepresentation in connection with the solicitation for the sale
of any course of study, for any violation of this chapter, or for
the existence of any condition in respect to the permittee or the
school he or she represents which, if in existence at the time the
permit was issued, would have been grounds for denial of the permit.
(e) The permittee shall carry the permit with him or her for
identification purposes when engaged in the solicitation of sales and
the selling of courses of study away from the premises of the
school, and shall produce the permit for inspection upon the request
of any person.
(f) Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code or Section 94975 shall
apply to any determination of the council made pursuant to this
section.
(g) The issuance of a permit pursuant to this section shall not be
interpreted as, and it shall be unlawful for any individual holding
any permit to expressly or impliedly represent by any means
whatsoever, that the council has made any evaluation, recognition,
accreditation, or endorsement of any course of study being offered
for sale by the individual.
(h) It is unlawful for any individual holding a permit under this
section to expressly or impliedly represent, by any means whatsoever,
that the issuance of the permit constitutes an assurance by the
council that any course of study being offered for sale by the
individual will provide and require of the student a course of
education or training necessary to reach a professional, educational,
or vocational objective, or will result in employment or personal
earnings for the student.
(i) No agent shall make any untrue or misleading statement or
engage in sales, collection, credit, or other practices of any type
that are false, deceptive, misleading, or unfair.
(j) The council shall maintain records for five years of each
application for a permit, each bond, and each issuance, denial,
termination, suspension, and revocation of a temporary permit or
permit.
(k) A student may bring an action for an agent's violation of this
chapter or any fraud or misrepresentation and, upon prevailing, is
entitled to the recovery of damages, reasonable attorney's fees, and
costs. If a court finds that the violation was willfully committed,
the court, in addition to the award of damages, shall award a civil
penalty of up to two times the amount of damages sustained by the
student.
(l) Any person who violates this section is guilty of a
misdemeanor, punishable by imprisonment in a county jail not
exceeding six months, by a fine not to exceed five thousand dollars
($5,000), or by both that imprisonment and fine.
94942. (a) Except as provided in subdivision (g), any agency
shall be required to hold a valid authorization issued by the
council. The application for an authorization shall include all of
the following:
(1) A current financial statement prepared by a California
licensed certified public accountant who is not an employee, officer,
or director of the institution.
(2) Evidence of a surety bond issued in favor of the State of
California by an admitted surety insurer making provision for
indemnification of any person for any loss suffered as a result of
the occurrence, during the period of coverage, of any fraud or
misrepresentation used in connection with the solicitation for the
sale or the sale of any program of study, or as a result of any
violation of this chapter. The term of the bond shall extend over
the period of the authorization. The bond shall provide for
liability in the penal sum of two hundred fifty thousand dollars
($250,000) for each agency to which coverage is extended by its
terms. Neither the principal nor the surety on a bond may terminate
the coverage of the bond except upon giving 30 days' prior written
notice to the council, and upon contemporaneously surrendering the
agency's authorization to operate. Liability on the bond may be
enforced after a hearing before the council, after 30 days' advance
written notice to the principal and surety. The council shall adopt
regulations establishing the procedure for administrative enforcement
of liability and hearings under this section. This paragraph
supplements, but does not supplant, any other rights or remedies to
enforce liability on the bond.
(3) A copy of the student disclosure statement to be read and
signed by all prospective students referred to institutions by an
agency. The student disclosure statement shall include, but shall
not be limited to, all of the following:
(A) A statement to the effect that no promise of employment has
been made by the agency.
(B) A statement to the effect that repayment of any debt incurred
by a student in connection with his or her education will be the sole
responsibility of the student.
(C) The amount and terms of any fee to be paid by the student to
the agency.
(D) A verbatim statement, as follows:
"Any questions or problems concerning this agency should be
directed to the Council for Private Postsecondary and Vocational
Education, Sacramento, CA 95814."
(E) A statement to the effect that the institution or institutions
to which the prospective student is referred by the agency have the
obligation to make available to the student a catalog or brochure
containing information describing all of the following:
(i) The courses offered.
(ii) Program objectives.
(iii) Length of program.
(iv) The faculty and their qualifications.
(v) A schedule of tuition, fees, and all other charges and
expenses necessary for the completion of the course of study.
(vi) The cancellation and refund policies.
(vii) The total cost of tuition over the period needed to complete
the student's education.
(viii) For vocational training programs, placement data, including
program completion rates, placement rates, and starting salaries.
(ix) Other material facts concerning the institution and the
program or course of instruction that are reasonably likely to affect
the decision of the student to enroll in the institution.
(4) Identification of all employees of the agency and their
titles, and of all agents with whom the agency contracts.
(5) Identification of all owners, and if the entity is a
corporation, the identification of all persons possessing an interest
equal to, or in excess, of 10 percent.
(6) Identification of all vendors of educational services for
which the agency provides recruitment services.
(7) A signed statement by the applicant that all employees engaged
in recruitment activities will be required to read Sections 94831,
94832, and 94985 and, if the educational program for which the agency
recruits is subject to Article 7 (commencing with Section 94850),
Section 94853.
(b) Within 30 days of receipt of a completed application and prior
to issuance of an authorization a representative of the council
shall inspect the applicant agency and verify the application.
Within 30 days of the inspection, the council shall issue the
authorization for a one-year period, subject to annual renewal at the
end of that period, or deny the application. The council shall deny
the authorization if the agency or any owner, officer, or director
of the agency previously has been found in any judicial or
administrative proceeding to have violated this chapter, or if there
exists any of the grounds for denial set forth in Section 480 of the
Business and Professions Code.
(c) Any employee of an authorized agency engaged in student
recruitment activities of an authorized agency is exempt from the
bond requirements of Section 94940.
(d) Neither the agency nor any of its employees shall make any
untrue or misleading statement in the course of any solicitation or
recruitment activity or engage in the sales, collection, credit, or
other practices of any type that are false, deceptive, misleading, or
unfair.
(e) An agency or an employee of an agency shall provide a
prospective student with the disclosure statement described in
paragraph (3) of subdivision (a) and shall allow the prospective
student a sufficient opportunity to read it before soliciting or
recruiting him or her for enrollment or referring him or her to an
institution. That disclosure statement shall be printed in 10-point
type in English and, if the solicitation, recruitment, or referral is
to be conducted in a language other than English, in that other
language.
(f) Any institution approved under this chapter shall cease
any and all recruitment activities involving the agency upon action
by the council to revoke or deny an agency's authorization. The
failure of the institution to do so upon presentation of notice of
the council's action shall be cause to deny or revoke any approval
held by that institution.
(g) This section does not apply to any agency recruiting solely
for institutions described in Article 8 (commencing with Section
94900).
(h) The council shall maintain records for five years of each
application for an authorization, each verification by the council of
an application, each bond, and each denial, issuance, and revocation
of an authorization.
(i) A student may bring any action against any agency if the
agency or an employee of the agency violates this chapter or commits
any fraud or misrepresentation and, upon prevailing, is entitled to
the recovery of damages, reasonable attorney's fees, and costs. If a
court finds that the violation was willfully committed, the court
shall, in addition to the award of damages, award a civil penalty of
up to two times the amount of damages sustained by the student.
(j) Any person who violates this section is guilty of a
misdemeanor punishable by imprisonment in a county jail not exceeding
six months, by a fine not to exceed five thousand dollars ($5,000),
or by both that imprisonment and fine.
Article 12. Student Tuition Recovery Fund and Student
Obligations
94944. (a) The Student Tuition Recovery Fund is continued in
existence. All assessments collected pursuant Section 94945 shall be
credited to this fund along with any interest on the money, for the
administration of this article. Notwithstanding Section 13340 of the
Government Code, the money in the fund is continuously appropriated
to the council without regard to fiscal years for the purposes of
this chapter. The fund shall consist of a degree-granting
postsecondary educational institution account, a vocational
educational institution account, and an account for institutions
approved under any provision of this chapter that charge each
enrolled student a total charge, as defined in subdivision (k) of
Section 94852, of less than one thousand dollars ($1,000), for the
purpose of relieving or mitigating pecuniary losses suffered by any
California resident who is a student of an approved institution and
who meets either of the following conditions:
(1) The student was enrolled in an institution, prepaid tuition,
and suffered loss as a result of, (A) the closure of the institution,
(B) the institution's failure to pay refunds or charges on behalf of
a student to a third party for license fees or any other purposes,
or to provide equipment or materials for which a charge was collected
within 180 days before the institution's closure, (C) the
institution's failure to pay or reimburse loan proceeds under a
federally guaranteed student loan program as required by law or to
pay or reimburse proceeds received by the institution prior to
closure in excess of tuition and other costs, (D) the institution's
breach or anticipatory breach of the agreement for the course of
instruction, or (E) a decline in the quality or value of the course
of instruction within the 30-day period before the institution's
closure or, if the decline began before that period, the period of
decline determined by the council. For the purpose of this section,
"closure" includes closure of a branch or satellite campus, the
termination of either the correspondence or residence portion of a
home study or correspondence course, and the termination of a course
of instruction for some or all of the students enrolled in the course
before the time these students were originally scheduled to complete
it, or before a student who has been continuously enrolled in a
course of instruction has been permitted to complete all the
educational services and classes that comprise the course.
(2) The student obtained a judgment against the institution for
any violation of this chapter and the student certifies that the
judgment cannot be collected after diligent collection efforts.
(b) Payments from the fund to any student shall be made from the
appropriate account with the fund, as determined by the type of
institution into which the student has paid his or her fees, and
shall be subject to any regulations and conditions as the council
shall prescribe.
(c) (1) The institution shall provide to the council, at the time
of the institution's closure, the names and addresses of persons who
were students of an institution within 60 days prior to its closure,
and shall notify these students, within 30 days of the institution's
closure, of their rights under the fund and how to apply for payment.
If the institution fails to comply with this subdivision, the
council shall attempt to obtain the names and addresses of these
students and shall notify them, within 90 days of the institution's
closure, of their rights under the fund and how to apply for payment.
The council shall develop a form in English and Spanish fully
explaining a student's rights, which shall be used by the institution
or the council to comply with this paragraph. The form shall
include, or be accompanied by, a claim application and an explanation
of how to complete the application.
(2) If an institution fails to comply with paragraph (1), the
council shall order the institution, or any person responsible for
the failure to provide notice as required by paragraph (1), to
reimburse the council for all reasonable costs and expenses incurred
in notifying students as required in paragraph (1). In addition, the
council may impose a penalty of up to five thousand dollars ($5,000)
against the institution and any person found responsible for the
failure to provide notice. The amount of the penalty shall be based
on the degree of culpability and the ability to pay. Any order may
impose joint and several liability. Before any order is made
pursuant to this paragraph, the council shall provide written notice
to the institution and any person from whom the council seeks
recovery of the council's claim and of the right to request a hearing
within 30 days of the service of the notice.
If a hearing is not requested within 30 days of service of the
notice, the council may order payment in the amount of the claim. If
a hearing is requested, Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code shall apply,
and the council shall have all of the powers therein prescribed.
Within 30 days after the effective date of the issuance of an order,
the council may enforce the order in the same manner 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. All penalties and
reimbursements paid pursuant to this section shall be deposited in
the Private Postsecondary and Vocational Education Administration
Fund established pursuant to Section 94932 or any successor fund.
(d) (1) Students entitled to payment as provided in paragraph (1)
of subdivision (a) shall file with the council a verified application
indicating each of the following:
(A) The student's name, address, telephone number, and social
security number.
(B) If any portion of the tuition was paid from the proceeds of a
loan, the name of the lender, and any state or federal agency that
guaranteed or reinsured the loan.
(C) The amount of the prepaid tuition, the amount and description
of the student's loss, and the amount of the student's claim.
(D) The date the student started and ceased attending the
institution.
(E) A description of the reasons the student ceased attending the
institution.
(F) If the student ceased attending because of a breach or
anticipatory breach or because of the decline in the quality or value
of the course of instruction as described in subparagraph (E) of
paragraph (1) of subdivision (a), a statement describing in detail
the nature of the loss incurred. The application shall be filed
within one year of the council's service on the student of the notice
described in paragraph (1) of subdivision (c) or, if no notice is
served, within four years of the institution's closure.
(2) Students entitled to payment as provided in paragraph (2) of
subdivision (a) shall file with the council a verified application
indicating the student's name, address, telephone number, and social
security number, the amount of the judgment obtained against the
institution, a statement that the judgment cannot be collected, and a
description of the efforts attempted to enforce the judgment. The
application shall be accompanied by a copy of the judgment and any
other documents indicating the student's efforts made to enforce the
judgment.
The application shall be filed within two years after the date
upon which the judgment became final.
(3) The council may require additional information designed to
facilitate payment to entitled students. The council shall relieve a
student from the requirement to provide all of the information
required by this subdivision if the council has the information or
the information is not reasonably necessary for the resolution of a
student's claim.
(e) Within 60 days of the council's receipt of a completed
application for payment, the council shall pay the claim from the
Student Tuition Recovery Fund or deny the claim. The council, for
good cause, may extend the time period for up to an additional 90
days to investigate the accuracy of the claim.
(f) (1) If the council pays the claim, the amount of the payment
shall be (A) the greater of either (i) the total guaranteed student
loan debt incurred by the student in connection with attending the
institution, or (ii) the total of the student's tuition and the cost
of equipment and materials related to the course of instruction, less
(B) the amount of any refund, reimbursement, indemnification,
restitution, compensatory damages, settlement, debt forgiveness,
discharge, cancellation, or compromise, or any other benefit received
by, or on behalf of, the student before the council's payment of the
claim in connection with the student loan debt or cost of tuition,
equipment, and materials. The payment also shall 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.
However, if the claim is based solely on the circumstances described
in subparagraph (B) or (C) of paragraph (1) of subdivision (a), the
amount of the payment shall be the amount of the loss suffered by the
student.
In addition to the amount determined under this paragraph, the
amount of the payment shall include all interest and collection costs
on all student loan debt incurred by the student in connection with
attending the institution.
(2) The council may reduce the total amount specified in paragraph
(1) by the value of the benefit, if any, of the education obtained
by the student before the closure of the institution. If the council
makes any reduction pursuant to this paragraph, the council shall
notify the claimant in writing at the time the claim is paid of the
basis of its decision and provide a brief explanation of the reasons
upon which the council relied in computing the amount of the
reduction.
(3) No reduction shall be made to the amount specified in
paragraph (1) if (A) the student did not receive adequate instruction
to obtain the training, skills, or experience, or employment to
which the instruction was represented to lead, or (B) credit for the
instruction obtained by the student is not generally transferable to
other institutions approved by the council.
(4) The amount of the payment determined under this subdivision is
not dependent on the amount of the refund to which the student would
have been entitled after a voluntary withdrawal.
(5) Upon payment of the claim, all of the student's rights against
the institution shall be deemed assigned to the council to the
extent of the amount of the payment.
(g) (1) The director of the council may negotiate with a lender,
holder, guarantee agency, or the United States Department of
Education for the full compromise or write-off of student loan
obligations to relieve students of loss and thereby reduce the amount
of student claims.
(2) The director of the council, with the student's permission,
may pay a student's claim directly to the lender, holder, guarantee
agency, or the United States Department of Education under a
federally guaranteed student loan program only if the payment of the
claim fully satisfies all of the student's loan obligations related
to attendance at the institution for which the claim was filed.
(3) Notwithstanding subdivision (e), the council may delay the
payment of a claim pending the resolution of the council's attempt to
obtain a compromise or write-off of the claimant's student loan
obligation. However, the council shall immediately pay the claim in
the event any adverse action that is not stayed is taken against the
claimant, including the commencement of a civil or administrative
action, tax offset, the enforcement of a judgment, or the denial of
any government benefit.
(h) If the council denies the claim, or reduces the amount of the
claim pursuant to paragraph (2) of subdivision (f), the council shall
notify the student of the denial or reduction and of the student's
right to request a hearing within 60 days or any longer period
permitted by the council. If a hearing is not requested within 60
days or any additional period reasonably requested by the student,
the council's decision shall be final. If a hearing is requested,
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code shall apply.
It is the intent of the Legislature that, when a student is
enrolled in an institution that closes prior to the completion of the
student's program, the student shall have the option for a teach-out
at another institution approved by the council. The council shall
seek to promote teach-out opportunities wherever possible and shall
inform the student of his or her rights, including payment from the
fund, transfer opportunities, and available teach-out opportunities,
if any.
(i) This section applies to all claims filed or pending under
former Chapter 7 (commencing with Section 94700) after January 1,
1990.
94945. (a) The council shall assess each institution that
collects any moneys in advance of rendering services.
(1) The amount assessed each institution shall be calculated only
for those students who are California residents and who are eligible
to be reimbursed from the fund. It shall be based on the actual
amount charged each of these students for total course cost,
regardless of the portion that is prepaid. The assessment shall be
as follows:
(A) For a total course cost of one cent ($0.01) to nine hundred
ninety-nine dollars and ninety-nine cents ($999.99), inclusive, the
assessment is one dollar ($1) per student.
(B) For a total course cost of one thousand dollars ($1,000) to
two thousand nine hundred ninety-nine dollars and ninety-nine cents
($2,999.99), inclusive, the assessment is two dollars and fifty cents
($2.50) per student.
(C) For a total course cost of three thousand dollars ($3,000) to
five thousand nine hundred ninety-nine dollars and ninety-nine cents
($5,999.99), inclusive, the assessment is three dollars and fifty
cents ($3.50) per student.
(D) For a total course cost of six thousand dollars ($6,000) to
eight thousand nine hundred ninety-nine dollars and ninety-nine cents
($8,999.99), inclusive, the assessment is four dollars and fifty
cents ($4.50) per student.
(E) For a total course cost of nine thousand dollars ($9,000) or
more, the assessment is five dollars and fifty cents ($5.50) per
student.
(2) The council shall levy additional reasonable assessments only
if they are required to ensure that sufficient funds are available to
satisfy the anticipated costs of paying student claims pursuant to
Section 94944.
(3) The assessments shall be paid into the Student Tuition
Recovery Fund and credited to the appropriate account in the fund,
and the deposits shall be allocated, except as otherwise provided for
in this chapter, solely for the payment of valid claims to students.
Unless additional reasonable assessments are required, no
assessments for the degree-granting postsecondary educational
institution account shall be levied during any fiscal year if, as of
June 30 of the prior fiscal year, the balance in that account of the
fund exceeds one million dollars ($1,000,000). Unless additional
reasonable assessments are required, no assessments for the
vocational educational institution account shall be levied during any
fiscal year if, as of June 30 of the prior fiscal year, the balance
in that account exceeds three million dollars ($3,000,000). Unless
additional reasonable assessments are required, no assessments for
the account for institutions approved under any provision of this
chapter that charge each enrolled student a total charge, as defined
in subdivision (k) of Section 94852, of less than one thousand
dollars ($1,000) shall be levied during any fiscal year if, as of
June 30 of the prior fiscal year, the balance in that account exceeds
three hundred thousand dollars ($300,000). However, regardless of
the balance in the fund, assessments shall be made on any newly
approved institution for a period established pursuant to regulation
by the council. Notwithstanding Section 13340 of the Government
Code, the moneys so deposited in the fund are continuously
appropriated to the council for the purpose of paying claims to
students pursuant to Section 94944. The bureau shall adjust the
amounts in this subdivision to reflect changes in the United States
Cost of Living Index published by the United States Bureau of Labor
Statistics subsequent to January 1, 1990. The adjustments shall be
made on January 1 of each year.
(b) The council may deduct from the fund the reasonable costs of
administration of the tuition recovery program authorized by Section
94944 and this section. The maximum amount of administrative costs
that may be deducted from the fund, in a fiscal year, shall not
exceed one hundred thousand dollars ($100,000) from the
degree-granting postsecondary educational institution account, three
hundred thousand dollars ($300,000) from the vocational educational
institution account, and thirty thousand dollars ($30,000) from the
account for institutions approved under any provision of this chapter
that charge each enrolled student a total charge, as defined in
subdivision (k) of Section 94852, of less than one thousand dollars
($1,000), plus the interest earned on money in the fund that is
credited to the fund. Prior to the council's expenditure of any
amount in excess of one hundred thousand dollars ($100,000) from the
fund for administration of the tuition recovery program, the council
shall develop a plan itemizing that expenditure. The plan shall be
subject to the approval of the Department of Finance. Institutions,
except for schools of cosmetology licensed pursuant to Article 8
(commencing with Section 7362) of Chapter 10 of Division 3 of the
Business and Professions Code and institutions that offer vocational
or job training programs, that meet the student tuition
indemnification requirements of a California state agency, or that
demonstrate to the council that an acceptable alternative method of
protecting their students against loss of prepaid tuition has been
established, shall be exempted from this section.
(c) Reasonable costs in addition to those permitted under
subdivision (b) may be deducted from the fund for any of the
following purposes:
(1) To make and maintain copies of student records from
institutions which close.
(2) To reimburse the council or a third party serving as the
custodian of records.
(3) To review records in order to determine whether a student
improperly received a loan due to false certification, in which case
the student would be eligible for a loan write-off or discharge in
lieu of reimbursement in whole or in part from the fund.
(d) In the event of a closure by any approved institution under
this chapter, any assessments that have been made against those
institutions, but have not been paid into the fund, shall be
recovered. Any payments from the fund made to students on behalf of
any institution shall be recovered from that institution.
(e) In addition to civil remedies, the council may order an
institution to pay previously unpaid assessments or to reimburse the
council for any payments made from the fund in connection with the
institution. Before any order is made pursuant to this section, the
council shall provide written notice to the institution and notice of
the institution's right to request a hearing within 30 days of the
service of the notice. If a hearing is not requested within 30 days
of the service of the notice, the council may order payment. If a
hearing is requested, Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code shall apply,
and the council shall have all powers prescribed in that chapter.
Within 30 days after the effective date of the issuance of the order,
the council may enforce the order in the same manner 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.
(f) In addition to any other action that the council may take
under this chapter, the council may suspend or revoke an institution'
s approval to operate because of the institution's failure to pay
assessments when due or failure to pay reimbursement for any payments
made from the fund within 30 days of the council's demand for
payment.
(g) The moneys deposited in the fund shall be exempt from
execution and shall not be the subject of litigation or liability on
the part of creditors of those institutions or students.
(h) Claims for approved institutions that charge each enrolled
student a total charge, as defined in subdivision (k) of Section
94852, of less than one thousand dollars ($1,000) shall be paid from
(1) the account established for these institutions if the claim
relates to a period of student enrollment beginning on or after the
effective date of this section, or (2) the vocational educational
institution account if the claim relates to a period of student
enrollment that began before the effective date of this section.
(i) This section shall become inoperative on January 1, 1999, and
on that date is repealed unless a later enacted statute that becomes
effective on or before January 1, 1999, deletes or extends that date.
94945. (a) The council shall assess each institution that
collects any moneys in advance of rendering services.
(1) The amount assessed each institution shall be calculated only
for those students who are California residents and who are eligible
to be reimbursed from the fund. It shall be based on the actual
amount charged each of these students for total course cost,
regardless of the portion that is prepaid. The assessment shall be
as follows:
(A) For a total course cost of one cent ($0.01) to two thousand
nine hundred ninety-nine dollars and ninety-nine cents ($2,999.99),
inclusive, the assessment is two dollars and fifty cents ($2.50) per
student.
(B) For a total course cost of three thousand dollars ($3,000) to
five thousand nine hundred ninety-nine dollars and ninety-nine cents
($5,999.99), inclusive, the assessment is three dollars and fifty
cents ($3.50) per student.
(C) For a total course cost of six thousand dollars ($6,000) to
eight thousand nine hundred ninety-nine dollars and ninety-nine cents
($8,999.99), inclusive, the assessment is four dollars and fifty
cents ($4.50) per student.
(D) For a total course cost of nine thousand dollars ($9,000) or
more, the assessment is five dollars and fifty cents ($5.50) per
student.
(2) The council shall levy additional reasonable assessments only
if they are required to ensure that sufficient funds are available to
satisfy the anticipated costs of paying student claims pursuant to
Section 94944.
(3) The assessments shall be paid into the Student Tuition
Recovery Fund and credited to the appropriate account in the fund,
and the deposits shall be allocated, except as otherwise provided for
in this chapter, solely for the payment of valid claims to students.
Unless additional reasonable assessments are required, no
assessments for the degree-granting postsecondary educational
institution account shall be levied during any fiscal year if, as of
June 30 of the prior fiscal year, the balance in that account of the
fund exceeds one million dollars ($1,000,000). Unless additional
reasonable assessments are required, no assessments for the
vocational educational institution account shall be levied during any
fiscal year if, as of June 30 of the prior fiscal year, the balance
in that account exceeds three million dollars ($3,000,000). However,
regardless of the balance in the fund, assessments shall be made on
any newly approved institution. Notwithstanding Section 13340 of the
Government Code, the moneys so deposited in the fund are
continuously appropriated to the council for the purpose of paying
claims to students pursuant to Section 94944.
(b) The council may deduct from the fund the reasonable costs of
administration of the tuition recovery program authorized by Section
94944 and this section. The maximum amount of administrative costs
that may be deducted from the fund, in a fiscal year, shall not
exceed one hundred thousand dollars ($100,000) from the
degree-granting postsecondary educational institution account and
three hundred thousand dollars ($300,000) from the vocational
educational institution account, plus the interest earned on money in
the fund that is credited to the fund. Prior to the council's
expenditure of any amount in excess of one hundred thousand dollars
($100,000) from the fund for administration of the tuition recovery
program, the council shall develop a plan itemizing that expenditure.
The plan shall be subject to the approval of the Department of
Finance. Institutions, except for schools of cosmetology licensed
pursuant to Article 8 (commencing with Section 7362) of Chapter 10 of
Division 3 of the Business and Professions Code and institutions
that offer vocational or job training programs, that meet the student
tuition indemnification requirements of a California state agency,
or that demonstrate to
the council that an acceptable alternative method of protecting their
students against loss of prepaid tuition has been established, shall
be exempted from this section.
(c) Reasonable costs in addition to those permitted under
subdivision (b) may be deducted from the fund for any of the
following purposes:
(1) To make and maintain copies of student records from
institutions which close.
(2) To reimburse the council or a third party serving as the
custodian of records.
(d) In the event of a closure by any approved institution under
this chapter, any assessments that have been made against those
institutions, but have not been paid into the fund, shall be
recovered. Any payments from the fund made to students on behalf of
any institution shall be recovered from that institution.
(e) In addition to civil remedies, the council may order an
institution to pay previously unpaid assessments or to reimburse the
council for any payments made from the fund in connection with the
institution. Before any order is made pursuant to this section, the
council shall provide written notice to the institution and notice of
the institution's right to request a hearing within 30 days of the
service of the notice. If a hearing is not requested within 30 days
of the service of the notice, the council may order payment. If a
hearing is requested, Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code shall apply,
and the council shall have all powers prescribed in that chapter.
Within 30 days after the effective date of the issuance of the order,
the council may enforce the order in the same manner 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.
(f) In addition to any other action that the council may take
under this chapter, the council may suspend or revoke an institution'
s approval to operate because of the institution's failure to pay
assessments when due or failure to pay reimbursement for any payments
made from the fund within 30 days of the council's demand for
payment.
(g) The moneys deposited in the fund shall be exempt from
execution and shall not be the subject of litigation or liability on
the part of creditors of those institutions or students.
(h) This section shall become operative on January 1, 1999.
94946. (a) Any institution that willfully violates Section 94945
shall be subject to all of the following:
(1) The institution shall lose all rights to enforce the terms of
any contract or agreement arising from the transaction in which the
violation occurred.
(2) The institution shall refund to the student any fees that it
has collected from that student.
(b) An institution's willful violation of Section 94945 may be
grounds for the revocation of that institution's approval to operate
in this state.
94947. Students enrolling in institutions that come under
Sections 94944 and 94945, shall disclose in writing, if applicable,
the source of any and all guaranteed or insured loans granted for the
purposes of paying tuition to that institution. In the event of a
closure of any institution, the council shall provide any lending
institution that is the source of any guaranteed or insured student
loan with the names of students maintaining loans with that lending
institution.
94948. (a) The governing board or other governing authority of
any private postsecondary or vocational educational institution shall
adopt rules providing for the withholding of institutional services
from students or former students who have been notified, in writing,
at the student's or former student's last known address, that he or
she is in default on a loan or loans under either of the following
loan programs:
(1) The Stafford Student Loan program.
(2) The Supplemental Loans for Students program.
(3) Any program directly or indirectly financed by the California
Educational Facilities Authority.
"Default," as used in this section, with respect to a loan under
the Stafford Student Loan program or Supplemental Loans for Students
program means the failure of a borrower to make an installment
payment when due, or to meet other terms of the promissory note under
circumstances where the guarantee agency finds it reasonable to
conclude that the borrower no longer intends to honor the obligation
to repay, provided that this failure persists for 180 days for a loan
repayable in monthly installments, or 240 days for a loan repayable
in less frequent installments. "Default," as used in this section,
with respect to a program directly or indirectly financed by the
California Educational Facilities Authority, means the failure of a
borrower to make an installment payment when due, or to meet other
terms of the loan, within that period and under the circumstances
determined by the California Educational Facilities Authority with
respect to that program.
(b) The rules adopted pursuant to subdivision (a) shall provide
that the services withheld may be provided during a period when the
facts are in dispute and when the student or former student
demonstrates to either the governing board or other appropriate
governing authority of the institution, or the Student Aid Commission
and the appropriate entity or its designee, that reasonable progress
has been made to repay the loan or that there exists a reasonable
justification for the delay as determined by the institution. The
rules shall specify the services to be withheld from the student and
may include, but are not limited to, the following:
(1) The provision of grades.
(2) The provision of transcripts.
(3) The provision of diplomas.
The rules shall not include the withholding of registration
privileges.
(c) When it has been determined that an individual is in default
on a loan or loans under either of the loan programs specified in
subdivision (a), the Student Aid Commission shall give notice of the
default to all institutions through which that individual acquired
the loan or loans.
(d) Guarantors, or those who act as their agents or act under
their control, who provide information to institutions pursuant to
this section, shall defend, indemnify, and hold harmless the
governing board or other governing authority of the institutions from
action resulting from compliance with this section when the action
arises as a result of incorrect, misleading, or untimely information
provided to the institution by the guarantors, their agents, or those
acting under the control of the guarantors.
Article 13. Administrative and Judicial Procedures
94950. (a) The procedures set forth in Section 94965 or,
alternatively, in Section 94975 govern the following types of
administrative actions:
(1) Denial of an application for an approval or renewal of an
approval.
(2) Suspension or revocation of an existing approval.
(3) Appeals of conditional approvals.
(b) In lieu of the procedures set forth in Section 94965 or 94975,
an institution may voluntarily elect to utilize the procedures set
forth in Section 94980 if it appeals a conditional approval by the
council.
(c) The procedures set forth in Section 94970 govern emergency
suspensions of an institution's approval to operate initiated by the
council.
(d) Sections 94952 and 94955 authorize the council and the
Attorney General to seek various forms of judicial relief in order to
enforce this chapter.
(e) Section 94960 governs actions based on student complaints.
(f) Section 94985 authorizes civil remedies for individual
students in addition to those available under other provisions of
law.
(g) Procedures established pursuant to regulations adopted by the
council shall govern the following types of administrative appeals:
(1) Probationary actions.
(2) Decisions by the council denying an institution's claim for an
exemption or exclusion from this chapter or any provision thereof.
94952. (a) The Attorney General, or any district attorney, or
city attorney, may make investigations as may be necessary to carry
out this chapter, including, but not limited to, investigations of
complaints. The council may jointly bring actions as necessary to
enforce this chapter, including, but not limited to, civil actions
for injunctive relief. In actions brought pursuant to this
subdivision, the council shall be represented by the Attorney
General.
(b) The Attorney General shall represent the council in the
following administrative proceedings arising under this chapter:
(1) Suspension or revocation of an institution's approval.
(2) Denial of an institution's application for approval.
(3) An appeal of a conditional approval to operate issued
following a review of an institution's application for approval.
(c) Nothing in this section or this chapter shall preclude the
Attorney General, or any district attorney or city attorney, from any
of the following:
(1) Bringing any action on behalf of the people as he or she is
empowered by law to bring, including, but not limited to, actions
based upon alleged violations of Chapter 5 (commencing with Section
17200) of Part 2, and Chapter 1 (commencing with Section 17500) of
Part 3, of Division 7 of the Business and Professions Code.
(2) Conducting investigations necessary to determine whether there
have been violations of law specified in paragraph (1).
(3) Conducting any investigations that he or she is authorized to
conduct, including, but not limited to, investigations authorized
under Section 11180 of the Government Code.
(4) In the case of the Attorney General, delegating his or her
representation authority under subdivision (b) to staff attorneys of
the council.
(5) Entering into an agreement or understanding with the council
with respect to representation in any judicial or administrative
proceeding not expressly enumerated herein.
94955. (a) The council may bring an action for equitable relief
for any violation of this chapter. The equitable relief may include
restitution, a temporary restraining order, the appointment of a
receiver, and a preliminary or permanent injunction. The action may
be brought in the county in which the defendant resides or in which
any violation has occurred or may occur.
(b) The remedies provided in this section supplement, and do not
supplant, the remedies and penalties under other provisions of law.
(c) In actions brought pursuant to this section, the council shall
be represented by the Attorney General.
94957. (a) In addition to or in lieu of any other remedy or
penalty, the council may issue a citation to an institution for
committing any violation of this chapter or regulation adopted under
this chapter.
(b) The citation may contain an order of abatement or the
assessment of an administrative fine. The administrative fine may
not exceed two thousand five hundred dollars ($2,500) for each
violation. The council shall base its assessment of the
administrative fine on the nature and seriousness of the violation,
the persistence of the violation, the good faith of the institution,
the history of previous violations, and the purposes of this chapter.
(c) The citation shall be in writing and shall describe the nature
of the violation and the specific provision of law determined to
have been violated. The citation shall inform the institution of its
right to request a hearing in writing within 15 days of the date
that the citation was issued. If a hearing is not requested, payment
of the administrative fine shall not constitute an admission of the
violation charged. If a hearing is requested, the council shall
provide a hearing as described in Section 94965, 94975, or 94980.
Payment of the administrative fine is due 15 days after the citation
was issued if a hearing is not requested, or when a final order is
entered if a hearing is requested. The council may enforce the
administrative fine as if it were a money judgment pursuant to Title
9 (commencing with Section 680.10) of Part 2 of the Code of Civil
Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary and Vocational Education Administration Fund.
94960. (a) Any person claiming damage or loss as a result of any
act or practice by a postsecondary or vocational educational
institution or its agent, or both, that is a violation of this
chapter or of the regulations adopted pursuant to this chapter, may
file with the council a verified complaint against that institution
or its agent, or both.
The complaint shall set forth the alleged violation and shall
contain any other information as may be required by the council.
(b) The council shall investigate any complaint and may attempt to
effectuate settlement by persuasion and conciliation.
(c) If, upon all the evidence at a hearing, the council finds that
an institution or its agent, or both, have engaged in, or are
engaging in, any act or practice that violates this chapter or the
regulations adopted pursuant to this chapter, the council shall
report that evidence to the Attorney General. The council, based on
its own investigation or the evidence adduced at a hearing, or both,
also may commence an action to revoke an institution's approval to
operate or an agent's permit.
(d) Complaints received by the council pertaining to institutions
accredited by the Western Association of Schools and Colleges shall
be forwarded to the association. Actions by the council relating to
complaints against these institutions shall be limited to the
transmittal of this information.
(e) A person entitled to bring an action for the recovery of
damages or other relief shall not be required to file a complaint
pursuant to this section, or to pursue or exhaust any administrative
process or remedy before bringing the action.
94965. (a) Proceedings in connection with the denial of an
application to operate, the grant of a conditional approval to
operate, or the revocation of an approval to operate shall be
conducted in accordance with Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code, and
the council shall have all of the powers granted in that chapter.
Any action by the council to place an institution on probation shall
be subject to appeal to the full council, and the council shall
establish procedures that provide the institution with adequate
notice and an opportunity to be heard and to present evidence as to
why the action recommended by staff or by a visiting committee shall
not be taken.
(b) Upon taking any action to suspend or revoke an institution's
approval to operate, or to deny an application for renewal of an
approval to operate, the council shall provide written notice to the
Student Aid Commission, the United States Department of Education,
and to any appropriate accrediting association.
94970. (a) If an institution has violated this chapter and
determines that immediate action is necessary to protect students,
prevent misrepresentations to the public, or prevent the loss of
public funds, tuition, or other money paid by students, the council
may institute an emergency action to suspend the approval of an
institution to operate, or the approval to operate a branch or
satellite campus, for not more than 30 days unless the council
initiates a proceeding to suspend or revoke the approval to operate
within that period.
(b) (1) The council shall provide notice of the emergency action
to the institution by certified mail, if the effective date of the
emergency action is 10 or more working days after mailing, or
personal service, if the effective date of the emergency action is
five or more days after service.
(2) The notice shall specify all of the following:
(A) The violations upon which the emergency action is based.
(B) The nature and grounds of the emergency action, including
whether the action applies to the continuation of instruction to
enrolled students or to the enrollment of new students.
(C) The effective date of the action, which shall not be less than
five days after the notice is provided.
(D) The institution's right to show cause that the emergency
action is unwarranted by submitting to the council, at least two days
before the effective date of the emergency action, declarations,
documentary evidence, and written arguments demonstrating that the
violations did not occur or that immediate action is not required.
(E) The right of the institution to request, in writing, within 30
days of the service of the notice, a hearing.
(c) The council may (1) continue the effective date of an
emergency action or (2) terminate the emergency action at any time if
the council concludes that the institution has shown cause that the
emergency action is unwarranted or that the grounds for instituting
the emergency action no longer remain. The council shall provide
written notice of a continuance or termination of an emergency action
to the institution.
(d) (1) If the institution does not take the opportunity to show
cause why the emergency action is unwarranted, the emergency action
shall become effective on the date specified in the notice or notice
of continuance.
(2) If the institution takes the opportunity to show cause and the
council decides, after a consideration of the declarations,
documentary evidence and written argument submitted by the
institution, that the emergency action should become effective, the
emergency action shall be effective on the date specified in the
notice or notice of continuance. The council shall notify the
institution of the decision at least one day before the effective
date, and the institution may thereafter seek judicial relief upon
notice to the council and the Attorney General.
(e) (1) If a hearing is requested within the 30-day period
specified in subdivision (b) the council shall set a date for the
hearing within 20 days after receipt of the request.
(2) If the institution does not request a hearing within the
30-day period specified in subdivision (b) or if the council
concludes after a hearing requested by the institution that grounds
exist for the suspension or revocation of the institution's approval
to operate or approval to operate a branch or satellite campus, the
council may extend the suspension or revoke the institution's
approval to operate or approval to operate a branch or satellite
campus, order probation and a penalty, order the posting of a bond,
or condition the institution's approval to operate or approval to
operate a branch or satellite campus as the council deems
appropriate.
(f) During the pendency of an emergency action, the council may
investigate the institution's compliance with this chapter, including
an onsite inspection, and may institute a proceeding pursuant to
Section 94878, if applicable, or Section 94965 or 94975 to suspend or
revoke an institution's approval to operate or approval to operate a
branch or satellite campus, order a bond, or order probation and a
penalty, based on any violation of this chapter.
(g) This section supplements, but does not supplant, the authority
of the council to seek judicial relief, including a temporary
restraining order and injunction, to redress any violation of this
chapter.
94975. (a) This section establishes the procedure for notice and
hearing required under this chapter and, except as provided in
Section 94970, may be used in lieu of other notice or hearing
requirements provided in this chapter.
(b) If notice of administrative action is required by this
chapter, the council shall serve notice stating the following:
(1) The action, including the penalties and administrative
sanctions sought.
(2) The grounds for the action with sufficient particularity to
give notice of the transactions, occurrences, violations, or other
matters on which the action is based.
(3) The right to a hearing and the time period within which the
party subject to the notice may request a hearing in writing. The
time period shall not be less than 15 days after service of the
notice unless a longer period is provided by statute.
(4) The right to be present at the hearing, to be represented by
counsel, to cross-examine witnesses, and to present evidence.
(5) That, if the party subject to the notice does not request a
hearing in writing within the time period expressed in the notice, he
or she will waive or forfeit his or her right to an administrative
hearing and the action will become final.
(c) If a party subject to a notice provided pursuant to
subdivision (b) requests a hearing in writing within the time period
specified in subparagraph (3) of paragraph (b), then within 10 days
of receiving this request, the council shall schedule a hearing. The
hearing shall be held in a location determined pursuant to Section
11508 of the Government Code. The council shall serve reasonable
notice of the time and place for the hearing at least 10 days before
the hearing. The council may continue the date of the hearing upon a
showing of good cause.
(d) (1) Any party, including the council, may submit a written
request to any other party before the hearing to obtain the names and
addresses of any person who has personal knowledge, or who the party
receiving the request claims to have personal knowledge, of any of
the transactions, occurrences, violations, or other matters that are
the basis of the administrative action. In addition, the requesting
party shall have the right to inspect and copy any written statement
made by that person and any writing, as defined by Section 250 of the
Evidence Code, or thing that is in the custody, or under the
control, of the party receiving the request and that is relevant and
not privileged. This subdivision shall constitute the exclusive
method for prehearing discovery. However, nothing in this paragraph
shall affect the council's authority, at any time, to investigate,
inspect, monitor, or obtain and copy information under any provision
of this chapter.
(2) The written request described in paragraph (1) shall be made
before the hearing and within 30 days of the service of the notice
described in subdivision (b). Each recipient of a request shall
comply with the request within 15 days of its service by providing
the names and addresses requested and by producing at a reasonable
time at the council's office, or other mutually agreed reasonable
place, the requested writings and things. The council may extend the
time for response upon a showing of good cause.
(3) Except as provided in this paragraph, no party may introduce
the testimony or statement of any person or any writing or thing into
evidence at the hearing if that party failed to provide the name and
address of the person or to produce the writing or thing for
inspection and copying as provided by this subdivision. A party may
introduce the testimony, statement, writing, or thing that was not
identified or produced as required herein only if there is no
objection or if the party establishes that the person, writing, or
thing was unknown at the time when the response was made to the
written request, the party could not have informed other parties
within a reasonable time after learning of the existence of the
person, writing, or thing, and no party would be prejudiced by the
introduction of the evidence.
(e) Before the hearing has commenced, the council shall issue
subpoenas at the written request of any party for the attendance of
witnesses or the production of documents or other things in the
custody or under the control of the person subject to the subpoena.
Subpoenas issued pursuant to this section are subject to Section
11510 of the Government Code.
(f) (1) The council shall designate an impartial hearing officer
to conduct the hearing. The hearing officer may administer oaths and
affirmations, regulate the course of the hearing, question
witnesses, and otherwise investigate the issues, take official notice
according to the procedure provided in Division 4 (commencing with
Section 450) of the Evidence Code of any technical or educational
matter in the council's special field of expertise and of any matter
that may be judicially noticed, set the time and place for continued
hearings, fix the time for the filing of briefs and other documents,
direct any party to appear and confer to consider the simplification
of issues by consent, and prepare a statement of decision.
(2) Neither a hearing officer nor any person who has a direct or
indirect interest in the outcome of the hearing shall communicate
directly or indirectly with each other regarding any issue involved
in the hearing while the proceeding is pending without notice and
opportunity for all parties to participate in the communication. A
hearing officer who receives any ex parte communication shall
immediately disclose the communication to the council and all other
parties. The council may disqualify the hearing officer if necessary
to eliminate the effect of the ex parte communication. If the
council finds that any party willfully violated, or caused the
violation of, this paragraph, the council shall enter that party's
default and impose the administrative sanction set forth in the
notice provided pursuant to subdivision (b).
(g) (1) Each party at the hearing shall be afforded an opportunity
to present evidence, respond to evidence presented by other parties,
cross-examine, and present written argument or, if permitted by the
hearing officer, oral argument on the issues involved in the hearing.
The council may call any party as a witness who may be examined as
if under cross-examination.
(2) Each party may appear through its representative or through
legal counsel.
(3) The technical rules relating to evidence and witnesses shall
not apply. However, only relevant evidence is admissible.
(4) Oral evidence shall be taken only upon oath or affirmation.
The hearing shall be conducted in the English language. The
proponent of any testimony to be offered by a witness who is not
proficient in English shall provide, at the proponent's cost, an
interpreter proficient in English and the language in which the
witness will testify.
(5) The hearing shall be recorded by tape recording or other
phonographic means unless all parties agree to another method of
recording the proceedings.
(6) (A) At any time 10 or more days before the hearing, any party
may serve on the other parties a copy of any declaration that the
party proposes to introduce in evidence.
(B) The declaration shall be accompanied by a notice
indicating the date of service of the notice and stating that the
declarations will be offered into evidence, the declarants will not
be called as witnesses, and there will be no right of
cross-examination unless the party receiving the notice requests the
right to cross-examine, in writing, within seven days of the service
of the declarations and notice.
(C) If no request for cross-examination is served within seven
days of the service of the declarations and notice described in
subparagraph (B), the right to cross-examination is deemed waived and
the declaration shall have the same effect as if the declarant
testified orally. Notwithstanding this paragraph, a declaration may
be admitted as hearsay evidence without cross-examination.
(7) Disposition of any issues involved in the hearing may be made
by stipulation or settlement.
(8) If a party fails to appear at a hearing, that party's default
shall be taken and the party shall be deemed to have waived the
hearing and agreed to the administrative action and the grounds for
that action described in the notice given pursuant to subdivision
(b). The council shall serve the party with an order of default
including the administrative action ordered. The order shall be
effective upon service or at any other time designated by the
council. The council may relieve a party from an order of default if
the party applies for relief within 15 days after the service of an
order of default and establishes good cause for relief. An
application for relief from default shall not stay the effective date
of the order unless expressly provided by the council.
(h) (1) At any time before the matter is submitted for decision,
the council may amend the notice provided pursuant to subdivision (b)
to set forth any further grounds for the originally noticed
administrative action or any additional administrative action and the
grounds therefor. The statement of the further grounds for the
originally noticed administrative action, or of the grounds for any
additional administrative action, shall be made with sufficient
particularity to give notice of the transactions, occurrences,
violations, or other matters on which the action or additional action
is based. The amended notice shall be served on all parties. All
parties affected by the amended notice shall be given reasonable
opportunity to respond to the amended notice as provided in this
section.
(2) The council may amend the notice after the case is submitted
for decision. The council shall serve each party with notice of the
intended amendment and shall provide the party with an opportunity to
show that the party will be prejudiced by the amendment unless the
case is reopened to permit the party to introduce additional
evidence. If prejudice is shown, the council shall reopen the case
to permit the introduction of additional evidence.
(i) (1) Within 30 days after the conclusion of the hearing or at
another time established by the council, the hearing officer shall
submit a written statement of decision setting forth a recommendation
for a final decision and explaining the factual and legal basis for
the decision as to each of the grounds for the administrative action
set forth in the notice or amended notice. The council shall serve
the hearing officer's statement of decision on each party and its
counsel within 10 days of its submission by the hearing officer.
(2) The council shall make the final decision which shall be based
exclusively on evidence introduced at the hearing. The final
decision shall be supported by substantial evidence in the record.
The council also shall issue a statement of decision explaining the
factual and legal basis for the final decision as to each of the
grounds for the administrative action set forth in the notice or
amended notice. The council shall issue an order based on its
decision which shall be effective upon service or at any other time
designated by the council. The council shall serve a copy of the
final decision and order, within 10 days of their issuance, on each
party and its counsel.
(3) The council may hold a closed session to deliberate on a
decision to be reached based upon evidence introduced at the hearing.
(4) The council shall serve a certified copy of the complete
record of the hearing, or any part thereof designated by a party,
within 30 days after receiving the party's written request and
payment of the cost of preparing the requested portions of the
record. The complete record shall include all notices and orders
issued by the council, a transcript of the hearing, the exhibits
admitted or rejected, the written evidence and any other papers in
the case, the hearing officer's statement of decision, and the final
decision and order.
(j) The council shall serve all notices and other documents that
are required to be served by this section on each party by personal
delivery, by certified mail, return receipt requested, or by any
other means designated by the council.
(k) (1) Any party aggrieved by the council's final decision and
order may seek judicial review by filing a petition for a writ of
mandate pursuant to Section 1085 of the Code of Civil Procedure
within 30 days of the issuance of the final decision and order. If
review is not sought within that period, the party's right to review
shall be deemed waived.
(2) The aggrieved party shall present the complete record of the
hearing or all portions of the record necessary for the court's
review of the council's final decision and order. The court shall
deny the petition for a writ of mandate if the record submitted by
the party is incomplete. The court shall not consider any matter not
contained in the record. The factual basis supporting the final
decision set forth in the council's statement of decision shall be
conclusive if supported by substantial evidence on the record
considered as a whole.
(3) The final order shall not be stayed or enjoined during review
except upon the court's grant of an order on a party's application
after due notice to the council and the Attorney General. The order
shall be granted only if the party establishes the substantial
likelihood that it will prevail on the merits and posts a bond
sufficient to protect fully the interests of the students, the
council, and the fund, from any loss.
(l) The council may adopt regulations establishing alternative
means of providing notice and an opportunity to be heard in
circumstances in which a full hearing is not required by law.
(m) For the purposes of this section, "good cause" shall require
sufficient ground or reason for the determination to be made by the
council.
94980. (a) If the council, through the program administrator,
denies an institution's application for approval, grants a
conditional approval, or initiates a proceeding to suspend or revoke
an institution's approval to operate, the institution may request a
hearing pursuant to this section in lieu of the hearing procedure
designated by the council under Section 94965 or 94975.
(b) At the time the council provides notice to an institution of
its right to a hearing under Section 94965 or 94975 in connection
with the denial of an application for approval to operate, the
issuance of a conditional approval to operate, or a proposed
suspension or revocation of approval to operate, the council also
shall provide notice of the provisions of this section.
(c) Within 15 days after service of the notice described in
subdivision (b), the institution may request in writing a hearing
under this section in lieu of the hearing procedure in Section 94965
or 94975. The request shall acknowledge that by electing to proceed
under this section, the institution is knowingly waiving all rights
under the hearing procedure otherwise provided by the council.
(d) After receiving the institution's request for a hearing under
this section, the council shall provide the institution or its
representative with copies of all the documents, testimony in
declaration form, and written arguments on which the council relies
to support its proposed administrative action.
(e) The institution shall have 30 days from the service of the
council's written evidence and arguments to submit all the documents,
testimony in declaration form, and written arguments on which the
institution relies in opposition to the council's proposed
administrative action.
(f) Neither the council nor the institution has any right to
discovery or to compel the production of documents or the testimony
of witnesses by subpoena.
(g) The program administrator shall review all of the documents,
declarations, and arguments and shall render a proposed decision in
writing based solely on the written evidence and arguments that set
forth the proposed administrative action and the factual and legal
bases for it.
(h) Within 10 days of the service of the program administrator's
decision, the institution may request in writing to have the matter
reviewed by the members of the council and may also request oral
argument, as described in subdivision (i). If a timely request for
review is not submitted, the program administrator's decision shall
be deemed the final decision of the council. If a timely request for
review is submitted without a request for oral argument, the right
to make oral argument is deemed waived.
(i) If a timely request for review is made, the matter shall be
considered by the members of the council based solely on the written
evidence and arguments submitted to the program administrator and, if
oral argument was timely requested, any oral argument permitted by
the council. No new evidence may be presented during oral argument.
An institution requesting oral argument shall receive at least 10
days advance notice of the council meeting at which time oral
argument may be made. The council members may deliberate on the
decision to be reached in a closed session as provided in paragraph
(3) of subdivision (c) of Section 11126 of the Government Code. The
council shall issue its final decision within 30 days after the
council meeting at which the matter was reviewed. The program
administrator's proposed decision shall be sustained if it is
supported by substantial evidence on the record considered as a
whole.
(j) The council shall serve the institution with a written
decision setting forth the administrative action taken and the legal
and factual bases for it. The decision shall become final within 30
days unless another time is specified by the council.
(k) The council shall serve a certified copy of the complete
record, or any part thereof designated by an institution, within 30
days after receiving the institution's written request and payment of
the cost of preparing the requested record or portions thereof. The
complete record shall consist of all notices and orders of the
council, the documents, declarations, and written argument submitted,
a transcript of any oral argument, and the final decision and order.
(l) Any party aggrieved by the council's final decision and order
may seek judicial review as provided in, and subject to, the
requirements of subdivision (k) of Section 94975.
(m) All documents required by this section to be served by the
council shall be served on the institution, its counsel, or
authorized representative by any means authorized for service
pursuant to Chapter 5 (commencing with Section 1010) of Title 14 of
Part 2 of the Code of Civil Procedure.
94985. (a) Any institution that willfully violates any provision
of Section 94800, 94810, 94814, or 94816, Sections 94820 to 94826,
inclusive, Section 94829, 94831, or 94832 may not enforce any
contract or agreement arising from the transaction in which the
violation occurred, and any willful violation is a ground for
revoking an approval to operate in this state or for denying a
renewal application.
(b) Notwithstanding any provision of the contract or agreement, a
student may bring an action for a violation of this article or for an
institution's failure to perform its legal obligations and, upon
prevailing thereon, is entitled to the recovery of damages, equitable
relief, or any other relief authorized by this article, and
reasonable attorney's fees and costs.
(c) If a court finds that a violation was willfully committed or
that the institution failed to refund all consideration as required
by subdivision (b) on the student's written demand, the court, in
addition to the relief authorized under subdivision (b), shall award
a civil penalty of up to two times the amount of the damages
sustained by the student.
(d) The remedies provided in this article supplement, but do not
supplant, the remedies provided under any other provision of law.
(e) An action brought under this section shall be commenced within
three years of the discovery of the facts constituting grounds for
commencing the action.
(f) Any provision in any agreement that purports to require a
student to invoke any grievance dispute procedure established by the
institution before enforcing any right or remedy is void and
unenforceable.
(g) A student may assign his or her cause of action for a
violation of this article to the council, or to any state or federal
agency that guaranteed or reinsured a loan for the student or that
provided any grant or other financial aid.
(h) This section applies to any action pending on the effective
date of this section.
(i) This section supplements, but does not supplant, the authority
granted the Division of Labor Law Enforcement under Section 1700.4
of the Labor Code to the extent that placement activities of trade
schools are subject to regulation by the division under the Labor
Code.
Article 14. Council Reports
94990. The bureau is subject to the sunset review process
conducted by the Joint Legislative Sunset Review Committee pursuant
to Division 1.2 (commencing with Section 473) of the Business and
Professions Code. Notwithstanding that this chapter does not specify
that it will become inoperative on a specified date, the analyses,
reports, public hearings, evaluations, and determinations required to
be prepared, conducted, and made pursuant to Division 1.2
(commencing with Section 473) of the Business and Professions Code
shall be prepared, conducted, and made in 2001 and every four years
thereafter as long as this chapter is operative.
94995. (a) Notwithstanding Section 7550.5 of the Government Code,
on or before January 31 of each calendar year, the council shall
submit a written report to the Legislature and to the California
Postsecondary Education Commission, summarizing its activities during
the previous fiscal year.
(b) Annual reports prepared pursuant to this section shall
include, but shall not necessarily be limited to, all of the
following:
(1) Timely information relating to the enforcement activities of
the council pursuant to this chapter.
(2) Statistics providing a composite picture of the private
postsecondary educational community, including data on how many
schools, as classified by subject matter, and how many students there
are within the scope of the activities of the council.
(c) Any reports submitted by the council to the Joint Legislative
Sunset Review Committee pursuant to Division 1.2 (commencing with
Section 473) of the Business and Professions Code during any calendar
year shall satisfy the reporting requirements of this section for
that year.
Article 15. Severability
94998. The provisions of this chapter are severable. If any
provision of this chapter or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
Article 16. Termination
94999. This chapter shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted on or before January 1, 2005, deletes or
extends that date.
SEC. 4. Section 1095 of the Unemployment Insurance Code is amended
to read:
1095. The director shall permit the use of any information in his
or her possession to the extent necessary for any of the following
purposes:
(a) To properly present a claim for benefits.
(b) To acquaint a worker or his or her authorized agent with his
or her existing or prospective right to benefits.
(c) To furnish an employer or his or her authorized agent with
information to enable him or her to fully discharge his or her
obligations or safeguard his or her rights under this division or
Division 3 (commencing with Section 9000). This subdivision, as it
relates to Division 3 (commencing with Section 9000), applies only to
subdivision (j) of this section.
(d) To enable an employer to receive a reduction in contribution
rate.
(e) To enable the Director of Social Services or his or her
representatives or the Director of Health Services or his or her
representatives, subject to federal law, to verify or determine the
eligibility or entitlement of an applicant for, or a recipient of,
public social services provided pursuant to the Welfare and
Institutions Code, and directly connected with, and limited to, the
administration of public social services.
(f) To enable county administrators of general relief or
assistance, or their representatives, to determine entitlement to
locally provided general relief or assistance, where the
determination is directly connected with, and limited to, the
administration of general relief or assistance.
(g) To enable county district attorneys, or their representatives,
to seek criminal, civil, or administrative remedies in connection
with the unlawful application for, or receipt of, relief provided
under Division 9 (commencing with Section 10000) of the Welfare and
Institutions Code.
(h) To enable the director or his or her representative to carry
out his or her responsibilities under this code.
(i) To enable county departments of collection or their
representatives to determine entitlement to medical assistance
services rendered pursuant to Part 5 (commencing with Section 17000)
of Division 9 of the Welfare and Institutions Code, and, when
appropriate, to enable collection for the county's expenditures for
these medical assistance services.
(j) To furnish an employer, or his or her authorized agent, with
information including, but not limited to, the applicant's or
recipient's name, social security number, address, employable skills,
and job placement in order to enable him or her to fully discharge
his or her obligations or safeguard his or her rights under the
elements of a joint union, management, and Employment Development
Department agreement as are deemed necessary to assist displaced
workers to obtain new employment under Chapter 2.9 (commencing with
Section 9970) of Part 1 of Division 3 and related provisions of
Division 3 (commencing with Section 9000). The information shall be
limited to any information gathered under these divisions by the
department and authorized for release by the labor organization which
shall act as an agent for the affected workers under terms of the
agreement and shall participate in defining the information release
provisions.
(k) To provide any law enforcement agency with the name, address,
telephone number, birth date, social security number, physical
description, and names and addresses of present and past employers,
of any victim, suspect, missing person, potential witness, or person
for whom a felony arrest warrant has been issued, when a request for
this information is made by any investigator or peace officer as
defined by Sections 830.1 and 830.2 of the Penal Code and designated
by the head of the law enforcement agency and who requests this
information in the course of and as a part of an investigation into
the commission of a crime where there is a reasonable suspicion that
the crime is a felony and that the information would lead to relevant
evidence. The information provided pursuant to this subdivision
shall be provided to the extent permitted by federal law and
regulations, and to the extent the information is available and
accessible within the constraints and configurations of existing
department records. Any person who receives any information under
this subdivision shall make a written report of the information to
the law enforcement agency that employs him or her, for filing under
the normal procedures of that agency. Any officer or employee of the
department who discloses information in violation of this
subdivision is guilty of a misdemeanor. Any person who obtains
information in violation of this subdivision is guilty of a
misdemeanor.
(1) This subdivision shall not be construed to authorize the
release of a general list identifying individuals applying for or
receiving benefits to any law enforcement agency.
(2) The department shall maintain records pursuant to this
subdivision only for periods required under regulations or statutes
enacted for the administration of its programs.
(3) This subdivision shall not be construed as limiting the
information provided to law enforcement agencies to that pertaining
only to applicants for, or recipients of, benefits.
(4) The department shall notify all applicants for benefits that
release of confidential information from their records will not be
protected should there be a felony arrest warrant issued against the
applicant or in the event of an investigation by a law enforcement
agency into the commission of a felony.
(l) Nothing in this section shall be construed to authorize or
permit the use of information obtained in the administration of this
code by any private collection agency.
(m) To provide the State Teachers' Retirement System, pursuant to
Section 22327 of the Education Code, with information relating to the
earnings of any person who is receiving a disability allowance, or
disability retirement allowance, from the State Teachers' Retirement
System. The earnings information shall be released to the Teachers'
Retirement Board only upon written request from the board specifying
that the person is receiving a disability allowance or disability
retirement allowance from the system. The request may be made by the
chief executive officer of the system or by an employee of the
system so authorized and identified by name and title by the chief
executive officer in writing.
(n) To provide the Public Employees' Retirement System, pursuant
to Section 20231 of the Government Code, with information relating to
the earnings of any person who is receiving a disability retirement
allowance from the Public Employees' Retirement System. The earnings
information shall be released to the Board of Administration of the
system only upon written request from the board specifying that the
person is receiving a disability retirement allowance from the
system. The request may be made by the executive officer of the
system or by an employee of the system so authorized and identified
by name and title by the executive officer in writing.
(o) To provide the University of California Retirement System with
information in its possession relating to the earnings of any person
who has applied for or is receiving disability income from the
system. The earnings information shall be disclosed only upon
written request from the system specifying that the person has
applied for or is receiving disability income from the system. The
request may be made by the chief administrative officer of the system
or by an employee so authorized and identified by name and title by
the chief administrative officer in writing. The system shall notify
applicants for and recipients of disability income that earnings
information from the department's records will be released upon the
system's request. The information obtained pursuant to this
subdivision shall be used or disclosed by the system only to
determine or to verify entitlement to, or continuing eligibility for,
disability income. The system shall reimburse the department for
all reasonable administrative expenses incurred pursuant to this
subdivision.
(p) To enable the Division of Labor Standards Enforcement in the
Department of Industrial Relations to seek criminal, civil, or
administrative remedies in connection with the failure to pay, or the
unlawful payment of, wages pursuant to Chapter 1 (commencing with
Section 200) of Part 1 of, and Chapter 1 (commencing with Section
1720) of Part 7 of, Division 2 of, the Labor Code. The Division of
Labor Standards Enforcement shall reimburse the department for all
reasonable administrative expenses incurred pursuant to this
subdivision.
(q) To enable the federal Department of Health and Human Services,
Office of Child Support Enforcement, Federal Parent Locator Service,
to administer its child support enforcement programs under Title IV
of the Social Security Act (42 U.S.C. Sec. 651 et seq.).
(r) To provide county probation departments, the State Board of
Control, and the United States Attorney General with wage and claim
information in its possession that will assist those departments and
agencies in the location of victims of crime who, by state mandate or
court order, are entitled to restitution that has been, or can be
recovered, and to assist in the collection of money owed to the
county, the state, or the United States by any person who has been
directed by state mandate or court order to pay restitution, fines,
penalties, assessments, or fees as a result of a violation of law.
Information provided about victims of crime shall be limited to data
necessary to assist in locating them. Nothing in this section shall
be construed to prevent the department from providing information to
the State Board of Control or the United States Attorney General
through electronic methods. The department may charge a fee for all
reasonable administrative expenses incurred pursuant to this
subdivision. Except as provided by Section 1463.007 of the Penal
Code, any officer or employee of the department who discloses
information in violation of this subdivision is guilty of a
misdemeanor. Except as provided by Section 1463.007 of the Penal
Code, any person who obtains information in violation of this
subdivision is guilty of a misdemeanor.
(s) To provide the Student Aid Commission with information
concerning any individuals who are delinquent or in default on
guaranteed student loans or who owe repayment of funds received
through other financial assistance programs administered by the
commission. The information obtained pursuant to this subdivision
shall be utilized by the
commission exclusively to enable the collection of defaulted loans
and other funds owed, pursuant to the authority granted in Chapter 2
(commencing with Section 69500) of Part 42 of the Education Code and
Chapter 1 (commencing with Section 30000) of Title 5 of the
California Code of Regulations. The information released by the
director for the purposes of this subdivision shall not include any
employment, wage, or other information concerning any person who is
receiving unemployment insurance benefits. The information shall be
released to the commission only upon written request from the
director of the commission or by an employee so authorized and
identified by name and title by the director. The commission shall
reimburse the department for all reasonable administrative expenses
incurred pursuant to this subdivision.
(t) To provide an authorized governmental agency with any or all
relevant information that relates to any specific workers'
compensation insurance fraud investigation. The information shall be
provided to the extent permitted by federal law and regulations.
For the purposes of this subdivision, "authorized governmental agency"
means the district attorney of any county, the office of the
Attorney General, the Department of Industrial Relations, and the
Department of Insurance. An authorized governmental agency may
disclose this information to the State Bar, the Medical Board of
California, or any other licensing board or department whose licensee
is the subject of a workers' compensation insurance fraud
investigation. This subdivision shall not prevent any authorized
governmental agency from reporting to any board or department the
suspected misconduct of any licensee of that body. The Department of
Insurance or Department of Industrial Relations shall reimburse the
department for all reasonable administrative expenses incurred
relative to a request that it submits pursuant to this subdivision.
Relevant information may include, but is not limited to, all of the
following:
(1) Copies of unemployment and disability insurance application
and claim forms and copies of any supporting medical records,
documentation, and records pertaining thereto.
(2) Copies of returns or reports filed by an employer pursuant to
Section 1088 and copies of supporting documentation.
(3) Copies of benefit payment checks issued to claimants.
(4) Copies of any documentation that specifically identifies the
claimant by social security number, residence address, or telephone
number.
(u) To enable the Director of the Bureau for Private Postsecondary
and Vocational Education, or his or her representatives, to access
unemployment insurance quarterly wage data on a case-by-case basis to
verify information on school administrators, school staff, and
students provided by those schools who are being investigated for
possible violations of Chapter 7 (commencing with Section 94700) of
Part 59 of the Education Code.
(v) To provide employment tax information to the tax officials of
Mexico, if a reciprocal agreement exists. For purposes of this
subdivision, "reciprocal agreement" means a formal agreement to
exchange information between national taxing officials of Mexico and
taxing authorities of the State Board of Equalization, the Franchise
Tax Board, and the Employment Development Department. Furthermore,
the reciprocal agreement shall be limited to the exchange of
information which is essential for tax administration purposes only.
Taxing authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
(w) Wages as defined by Section 13009 and amounts required to be
deducted and withheld under Section 13020 shall not be disclosed
except as provided in Article 2 (commencing with Section 19542) of
Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation
Code.
(x) To enable city and county planning agencies to develop
economic forecasts for planning purposes. The information shall be
limited to businesses within the jurisdiction of the city or county
whose planning agency is requesting the information, and shall not
include information regarding individual employees. The city or
county planning agency receiving the information shall adhere to the
same standards regarding confidentiality and the protection of
proprietary information that the department is required to follow.
The city and county planning agencies shall reimburse the department
for all reasonable administrative expenses incurred pursuant to this
subdivision.
(y) To provide the State Department of Developmental Services with
wage and employer information that will assist in the collection of
moneys owed by the recipient, parent, or any other legally liable
individual for services and supports provided pursuant to Chapter 9
(commencing with Section 4775) of Division 4.5 of, and Chapter 2
(commencing with Section 7200) and Chapter 3 (commencing with Section
7500) of Division 7 of, the Welfare and Institutions Code. The
State Department of Developmental Services shall reimburse the
department for all reasonable administrative expenses incurred
pursuant to this subdivision.
SEC. 5. (a) All funds in the Private Postsecondary and Vocational
Education Administration Fund and in the Student Tuition Recovery
Fund on December 31, 1997, shall remain in those funds and may be
used for the purposes authorized by Chapter 7 (commencing with
Section 94700) of Part 59 of the Education Code commencing January 1,
1998.
(b) It is the intent of the Legislature that any unencumbered
funds appropriated to the Council for Private Postsecondary and
Vocational Education by Item Numbers 6880-001-0305, 6880-001-0890,
and 6880-001-0960 in the Budget Act of 1997 be reappropriated for
expenditure by the Bureau for Private Postsecondary and Vocational
Education in the Department of Consumer Affairs for the purposes of
Chapter 7 (commencing with Section 94700) of Part 50 of the Education
Code on and after January 1, 1998. To the extent of any conflict
between this section and any conditions specified in the above item
numbers, this section shall prevail.
(c) It is the intent of the Legislature that on and after January
1, 1998, any moneys received as a result of litigation involving the
former Council for Private be deposited in the Private Postsecondary
and Vocational Education be deposited in the Private Postsecondary
and Vocational Education Administration Fund to be used by the Bureau
for Private Postsecondary and Vocational Education in the Department
of Consumer Affairs, upon appropriation, to enforce the Private
Postsecondary and Vocational Education Reform Act of 1989.
SEC. 6. Every cause of action that accrued pursuant to former
Chapter 7 (commencing with Section 94700) of Part 59 of the Education
Code prior to its repeal by this act shall be unaffected by that
repeal, regardless of whether the cause of action was reduced to
final judgment, and shall remain fully enforceable under that chapter
as though it had not been repealed but remained in full force and
effect on and after January 1, 1998. It is the intent of the
Legislature in enacting this section to preserve all causes of action
filed under that chapter, including all causes of action alleged in
any pending action.
SEC. 6.5. This act shall become operative only if Senate Bill 819,
or any other bill of the 1997-98 Regular Session, extends the
operation of the Private Postsecondary and Vocational Education
Reform Act of 1989 until at least December 31, 1997, and is enacted
and takes effect on or before July 18, 1997.
SEC. 7. The provisions of this act are severable. If any
provision of this act or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
SEC. 8. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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,
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.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.