BILL ANALYSIS
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|Hearing Date:June 28, 2010 |Bill No:AB |
| |2393 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 2393Author:Ammiano
As Amended:June 23, 2010 Fiscal: No
SUBJECT: Private postsecondary educational institutions: fair
business practices.
SUMMARY: Requires institutions subject to the California Private
Postsecondary Education Act of 2009 (Act) and the related oversight
provided by the Bureau for Private Postsecondary Education (Bureau) to
comply with various placement rate calculations for specified
programs.
Existing law, the Business and Professions Code:
1)Establishes the Bureau within the Department of Consumer Affairs
(DCA) and provides for Bureau oversight and regulation of California
private postsecondary institutions.
2)Creates the Board of Registered Nursing (BRN) within DCA and
provides for the licensure and regulation of registered nurses by
BRN.
Existing law, the Education Code:
1)Establishes numerous fair business practices for institutions
covered by Act, including prohibiting an institution from promising
employment or otherwise overstating the availability of jobs or
making untrue or misleading statements regarding student completion,
placement or expected salary rates.
2)Provides that, for career fields that require licensure by the
state, institutions offering educational programs must have approval
to conduct that educational program from the applicable licensing
entity.
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3)Requiring institutions covered by the Act to provide prospective
students a School Performance Fact Sheet containing completion
rates, placement rates, license examination passage rates and salary
and wage information.
4)Provides that, for the purposes of determining placement rates,
"graduates employed in the field" means graduates who are gainfully
employed within six months of graduation in a position for which the
skills obtained through the education and training provided by the
institution are required or provided a significant advantage to the
graduate in obtaining the position.
Existing law, the Labor Code: Creates the Division of Apprenticeship
Standards (DAS) within the Department of Industrial Relations (DIR).
Delineates state policy to encourage the utilization of apprenticeship
as a form of on-the-job training, when such training is cost-effective
in developing skills needed to perform public services. Specifies that
state and local public agencies shall make a diligent effort to
establish apprenticeship programs for apprenticeable occupations in
their respective work forces.
This bill:
1)Provides for the purposes of determining job placement rates for an
occupation or job for which the Division of Apprenticeship Standards
(DAS) has approved a certified apprenticeship program, that
"graduates employed in the field" shall mean "graduates who are
gainfully employed for not less than 60 days within 6 months of
graduation in a position with job duties meeting all of the criteria
of the apprenticeable occupation or job set forth by DAS."
2)Provides for the purposes of determining job placement rates for an
occupation or job for which the Bureau of Registered Nursing (BRN)
has established licensure requirements, that "graduates employed in
the field" shall mean graduates who are gainfully employed for not
less than 60 days within six months of passage of the National
Council of State Boards Nursing Licensure Examination and in a
position with job duties meeting all of the criteria of the licensed
occupation or job set forth by BRN.
FISCAL EFFECT: None. Legislative Counsel has keyed this bill as
"nonfiscal."
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COMMENTS:
1.Purpose. This bill is sponsored by the Consumer Federation of
California . According to the Author, "Private postsecondary
vocational schools can report, utilize, and advertise 'successful
job placement' that may not accurately reflect the placement,
employment, or financial information regarding an occupation in an
apprenticeship program approved by DAS or licensed by BRN. Existing
law utilizes a loose definition of 'successful job placement' and
currently if a course gave any benefit in securing a position
related to the coursework, even for just a single day within the
six-month period, the school may record it as a 'successful job
placement.'" The Author believes that this bill will ensure that
prospective students receive an accurate accounting of the number of
former graduates who gained employment in the actual jobs for which
they were trained.
2.Background.
a) Enactment of AB 48. After numerous legislative attempts to
remedy the laws and structure governing regulation of private
postsecondary institutions, AB 48 was enacted in January 1, 2010,
to make many substantive changes that both created a new, solid
foundation for oversight and responded to the major problems with
the Former Act. The Act as created by AB 48 requires all
unaccredited colleges in California to be approved by the new
Bureau, and all nationally accredited colleges to comply with
numerous student protections. It also establishes prohibitions
on false advertising and inappropriate recruiting. The Act
requires disclosure of critical information to students such as
program outlines, graduation and job placement rates, and license
examination information, and ensures colleges justify those
figures. The Act also guarantees students can complete their
educational objectives if their institution closes its doors,
and, most importantly, it gives the Bureau an array of
enforcement tools to ensure colleges comply with the law.
Prior to the enactment of AB 48, California was without a
regulatory body for private postsecondary institutions. The
previous Bureau for Private Postsecondary Institutions (BPPVE)
sunset in July 2008, leaving approximately 1,500 private
postsecondary institutions that had been previously approved by
BPPVE to operate in California without state oversight. The
former BPPVE registered approximately 700 private institutions
providing short-term career/seminar training, continuing
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education, intensive English language programs, and license exam
preparation courses. Those schools had an estimated student
enrollment of approximately 400,000. Of those students,
approximately 280,000 students attended non-degree-granting
institutions and the remaining 120,000 attended degree-granting
institutions. BPPVE approved institutions served a significant
portion of students seeking postsecondary educational and
vocational training services. In 2006, BPPVE approved
institutions served as many students as were served by the entire
California State University system. It is generally believed that
BPPVE institutions, especially the vocational schools, tend to
serve segments of the population that are underserved by the
traditional public and private postsecondary education
institutions.
b) Concerns About Private Postsecondary Schools. Media outlets
and efforts at the Federal level have recently highlighted unease
about the operations and functions of private postsecondary
schools. This Committee, at its March 2009 hearing entitled "The
Role of Private Education Institutions in Preparing California's
Diverse Workforce: Meeting the Challenges of our Workforce and
Job Training Needs." examined the ability of private
postsecondary institutions to fill the career preparation needs
of California's workforce and evaluate policy options that allow
them to expand their workforce development programs with the
requisite amount of oversight required to protect students.
While the sector serves upwards of ten percent of postsecondary
students and provides a path to higher education that may not
always be available for all students, there are increased
questions about these institutions and their accurate
representation of what they are able to offer students. There
are also concerns that schools provide training at a steep cost
that does not balance the earnable income an individual may be
eligible for based on that training or upon completion of a
program. Recent budgetary and capacity issues in California's
public postsecondary schools, coupled with the current economic
crisis may lead to a worsening of the current situation, as
employees are increasingly out of work and more inclined to enter
training programs in the hopes of obtaining gainful employment,
at a cost they may not be able to make up once they are employed.
A recent New York Times article and piece that aired on Frontline
explored complaints against these schools, particularly the
practice of reliance on federal loans and grants and questionable
recruiting practices. Advocates believe that tuition at private
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postsecondary institutions is extremely high, forcing students to
take out private loans to supplement the limitations of those
offered by the Federal government. The rising debt to income
ratio has led to U.S. Department of Education action, including
proposed stricter rules and oversight to protect students from
debt resulting from high student loans. The private
postsecondary school sector responds that career colleges are an
essential part of the solution for restoring this country's
global educational and economic standing, citing the role these
schools play in helping lower unemployment, boost global
competitiveness, fill jobs in key industries, and increase the
number of college graduates by 2020.
3.Similar Legislation This Session. AB 1889 (Portantino) includes
technical cleanup to AB 48, allows for the availability of remedies
for actions after the BPPVE sunset and alters the definition of
graduates employed in the field. That bill is set for a hearing in
this committee on June 28, 2010.
4.Arguments in Support. The Consumer Attorneys of California write in
support of this bill, arguing that this bill "will help put an end
to false job placement advertising by establishing 60 days within a
6-month period to measure vocational school placement 'successes.'"
According to the California Nurses Association and National Nurses
Organizing Committee , this bill sets a standard by which employment
would be considered gainful. They state that this bill creates a
uniform standard by which private postsecondary institutions may
market employment and placement rates to current and prospective
students.
5.Arguments in Opposition. The California Association of Private
Postsecondary Schools (CAPPS) believes that this bill is the first
instance of any sector of higher education being required to align
its educational programs with apprenticeship programs. CAPPS does
not believe that calculating the 60-day timeline is tenable and the
requirement may result in the publishing of artificially low
placement rates.
6.Author's Amendments. The June 23, 2010 version of this bill
includes amendments that were submitted by the Author, at the
request of the American Nurses Association of California. The
Author's intention is to clarify that, for occupations or jobs where
BRN has established licensure requirements, the 60-day requirement
begins not with graduation, but the passage of the National Council
of State Boards of Nursing Licensure Exam.
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7.Policy Issues :
a) Why 60 Days? In its review of AB 48 in 2009, this committee
suggested that the Author remove language for defining reporting
requirements for institutions. Specifically, the Committee noted
that acknowledging a period of at least 60 days of employment in
the field for which a student received education and training,
for the purpose of calculating placement rates, may be burdensome
to students who have to report all of their job changes to a
school, considering that a student may forge a completely
different career path upon completion of a program in one area.
The Committee also stated that a 60-day requirement may result in
harassment of students by schools trying to obtain the data.
This measure now includes a provision that requires that
graduates counted as employed in nursing and apprenticeship
fields be employed for at least 60 days within 6 months of
graduation or passage of a licensing exam. Sixty days is an
arbitrary length of time and may not provide a meaningful
definition, or the most accurate indicator of worthwhile, stable
employment in a particular field. Additionally, a 60-day
provision does not necessarily have a correlation or nexus as to
whether the graduate received appropriate and quality education.
This bill would establish different employment timeline standards
for nursing and apprenticeship placements versus other job
placements. And while this bill only specifies two types of
placements, this bill may set a precedent for adjusting standards
for different professions, rather than relying on one definition.
It may be only a matter of time before the Act is amended to
apply different definitions to different professions, diluting
the strength of one uniform definition. The proposed 60-day
timeline may not arm consumers with any additional significant
information or more essential disclosures of comparative
information as to if and where they should enroll in a program,
nor will this necessarily promote the collection and reporting of
more consequential data by private postsecondary institutions.
b) Competing Definitions Contained in Two Measures Before This
Committee. As noted above, AB 1889 (Portantino) is also being
considered by this committee. That measure also amends the
current definition of "graduates employed in the field" but does
not single out specific professions or programs. The updated
language in AB 1889 is a product of negotiations between the
Author, consumer advocates and schools but is not reflected in
this bill. Code confusion and piecemeal approaches to setting
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standards were at the heart of criticisms of previous legislation
and laws governing private postsecondary schools. The attempt to
create uniform standards for the regulation and oversight of
these institutions led to reconstitution of the Bureau. This
bill creates different standards for different programs and
schools and may not be appropriate at this time.
c) Is this Measure Premature? While the Legislature is committed
to protecting consumers and ensuring that students at private
postsecondary institutions have the best data about the
institution's ability to properly train them and place them in a
viable job, current law as established by AB 48 sets in place
standards to do just that. Additionally, the Bureau has been
operational for just close to six months and operates without a
budget and full staff. Regulations which govern many of the
Bureau's oversight and enforcement activities are just being
adopted. It may be premature to determine that the Act and
accompanying regulations are not adequately and effectively
protecting students, monitoring institutions and promoting
quality.
SUPPORT AND OPPOSITION:
Support:
Consumer Federation of California (Sponsor)
Consumer Attorneys of California
California Nurses Association
National Nurses Organizing Committee
Opposition:
California Association of Private Postsecondary Institutions (CAPPS)
California Coalition of Accredited Career Schools (The Coalition)
Department of Consumer Affairs
Consultant:Sarah Mason