BILL ANALYSIS �
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|Hearing Date:June 6, 2011 |Bill No:AB |
| |611 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 611Author:Gordon
As Amended:March 22, 2011 Fiscal:Yes
SUBJECT: Private postsecondary education: unaccredited doctoral
degree program.
SUMMARY: Sets forth certain disclosure requirements pertaining to
accreditation status, licensure, and related limitations for
unaccredited doctoral programs.
Existing law:
1)Establishes the Bureau of Private Postsecondary Education (Bureau)
within the Department of Consumer Affairs (DCA) and provides for
Bureau oversight and regulation of California private postsecondary
institutions under the California Private Postsecondary Education
Act of 2009 (Act). (Business and Professions Code(BPC) � 101 and
Education Code (EC) � 94820)
2)Prohibits institutions from: using the seal of the state on a
diploma, promising employment or otherwise overstating the
availability of jobs in the local economy upon graduation,
presenting or advertising specified information including inaccurate
information, failing to include distance education information in
advertisements, inaccurately advertising approval or accreditation
status, using "help wanted" ads to solicit students, compensating or
providing gifts to students for recruitment activities, making
untrue or misleading statements, willfully falsifying or destroying
documents, improperly implying approval or licensure or failing to
completely disclose what approval or licensure means, directing an
individual to violate the Act or persuading a student not to file a
complaint, compensating an employee by bonus or commission for
recruitment or student assistance except as specified, and requiring
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prospective students to provide personal contact information before
being granted access to educational program information via the
institution's internet website, among other outlined prohibited
practices. (EC � 94897)
3)Provides that for career fields that require licensure by the state,
institutions offering educational programs must have approval to
conduct that educational program. (EC � 94899)
4)Requires institutions offering programs in professions that require
licensure to, during enrollment, exercise reasonable care to
determine if a student will be eligible to obtain licensure by
providing the student with a written copy of the requirements for
licensure established by this state. Prohibits the institution from
executing an enrollment agreement with a student that is known to be
ineligible for licensure unless the student's stated objective is
other than licensure; and allows an institution to discuss
internships or student job availability during the enrollment
process with certain limitations and disclosure requirements. (EC �
94905)
This bill:
1)Prohibits an institution from offering an unaccredited doctoral
degree program without disclosing to prospective students prior to
enrollment that the degree program is unaccredited, whether the
degree issued is in a field that requires licensure in California,
and any known limitation of the degree, including, but not limited
to, whether the degree is recognized for licensure or certification
in California and other states.
FISCAL EFFECT: According to the Assembly Committee on Appropriations
analysis dated May 4, 2011, this bill will result in minor absorbable
enforcement-related costs to the Bureau.
COMMENTS:
1. Purpose. The Author is the Sponsor of this bill. According to the
Author, ensuring unaccredited doctoral degree programs disclose
certain information, including any known limitations of the
unaccredited degree and whether the degree is recognized for
licensure or certification in other states will further protect
consumers who decide to participate in these programs. Currently,
unaccredited doctoral programs are not required to disclose their
accreditation status and related limitations in California or in
other states. The Author believes that this bill will improve
access to information for potential consumers before they make
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investments in their education.
The Author also cites recent reports and hearings on the abuses and
pitfalls in the for-profit postsecondary education industry as
rationale for a need for greater transparency. According to
information provided by the Author, from 1998 to 2008, enrollment
in for-profit schools jumped 236%, far outpacing growth in public
and nonprofit private schools which grew by around 20%. On
average, only 22% of students at for-profit schools will earn
degrees from those institutions within six years, compared to 55%
and 65% at public and private nonprofit colleges and universities,
respectively. The Author also notes that a quarter of borrowers
who attended for-profit colleges and entered repayment on their
loans in 2008 defaulted within three years; a higher rate than any
other sector in postsecondary education and states that with more
information, potential students can make fully informed decisions
concerning their education before entering into costly loan
agreements for programs that may not be recognized in the field of
intended employment.
2. Background. After numerous legislative attempts to remedy the laws
and structure governing regulation of private postsecondary
institutions, AB 48 (Portantino, Chapter 310, Statutes of 2009),
established the Act and created the Bureau within DCA for the
purpose of regulating private postsecondary educational
institutions that provide educational services in California. The
Act made 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 is important to note that not all
private institutions are covered by the provisions of the Act; full
and partial exemptions are provided for low-cost programs,
recreational schools, schools accredited by regional accrediting
agencies, among other types of institutions. For those
institutions that are covered by the Act, they are required to
follow a Bureau evaluation and approval process, required to abide
by numerous "fair business practices" aimed at protecting students,
required to disclose information to students in enrollment
agreements and catalogs, required to participate in a Student
Tuition Recovery Fund (STRF), and required to pay application and
annual fees to the Bureau to support the oversight structure. The
Act also establishes processes for penalties for non-compliance,
providing the Bureau authority to perform site visits and
investigations, order fines and student tuition refunds, and
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ultimately suspend or revoke an institution's approval to operate.
Finally, the Act requires evaluation and reporting from the
Legislative Analyst's Office (LAO) and the Bureau of State Audits
(BSA).
3. Concerns Regarding Private Postsecondary Institutions. Media
outlets, efforts at the Federal level and increased scrutiny by
state legislatures have recently highlighted unease about the
operations and functions of private postsecondary schools. 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.
Last fall, the U.S. Department of Education (DOE) adopted new rules
to rein in the recruiting practices of for-profit colleges by
changing standards for students to use federal Title IV money at
these institutions. The effort gained momentum following a report
by the U.S. Government Accountability Office (GAO) that found
potential deception by schools to students about graduation and job
placement rates in the process of getting them to enroll and sign
up for state and federal loans. Using undercover testing, GAO
found some schools encouraging students to falsify their financial
aid applications in order to qualify for federal grants. Other
schools misrepresented their programs' graduation rates,
job-placement rates and costs while recruiting students.
According to the National Conference of State Legislatures (NCSL),
17 states are considering legislation to further regulate these
institutions. In California, for-profit schools now face
restriction on the ability to receive state monies in the form of
Cal Grants, which provide over $20 million more annually to the
schools than to community colleges. Just recently, Maryland's
House and Senate enacted measures that would eliminate all state
aid to for-profit schools, ban commissions or bonuses for student
recruiting, and make all for-profit schools in the state contribute
to a fund to protect students if any college in their group
breaches a contract.
Recent budgetary and capacity issues in California's public
postsecondary schools, coupled with the current economic crisis
have led to growth in enrollment at private postsecondary schools,
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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. 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 evaluated policy options that allow them to expand
their workforce development programs with the requisite amount of
oversight required to protect students. The private postsecondary
school sector has responded to additional regulation and oversight
proposals by noting 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.
According to federal data, more than 2.2 million students enrolled
in a private for-profit institution in the fall of 2009, almost 25
percent more than the previous year.
4. Accreditation. Accreditation is a voluntary, non-governmental peer
review process utilized for the purpose of determining academic
quality of higher education institutions and programs. Under
federal law, DOE is required to publish a list of recognized
accrediting agencies deemed reliable authorities on the quality of
education or training provided by their accredited institutions.
Only those institutions accredited by a DOE-recognized accrediting
organization are eligible to participate in the federal student
financial assistance programs. Unaccredited degrees can limit a
student's career options. Some career fields and employers require
degrees from accredited colleges; this is especially true in
professions like education and health care, where certification or
licensure is a pre-requisite for employment. While California
licensure requirements in the health care field vary, physicians,
dentists, clinical social workers, optometrists, and chiropractors
must obtain their required degrees from accredited institutions or
institutions approved by their respective licensing boards.
5. Similar and Related Legislation. This bill contains the same
technical, clarifying provisions as AB 1889 (Portantino, 2010). In
addition, AB 1889 contained provisions regarding doctoral degrees
offered by unaccredited institutions, the calculation of placement
rates, and Bureau employment requirements. AB 1889 was vetoed by
Governor Schwarzenegger due to concerns over Bureau employment
requirements.
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AB 1013 (Assembly Committee on Higher Education) of 2011 makes
clarifying changes to the Act and related Bureau oversight. This
bill is set for hearing in this Committee on June 6, 2011.
SB 498 (Liu) of 2011 abolishes the Bureau and transfers the
Bureau's powers and duties under the Act to the California
Postsecondary Education Commission. The bill is a two-year bill
pending hearing in this Committee.
SB 619 (Fuller) of 2011 exempts flight instructors or flight
schools that do not require the upfront payment of tuition or fees,
and that do not require students to enter into a contract of
indebtedness in order to receive training, from Bureau regulation.
The bill is pending in the Assembly.
SB 675 (Wright) of 2011 requires that private postsecondary
institutions subject to the Act administer a test of English
language proficiency to a nonnative speaker of English, as defined,
prior to enrolling the student. The bill failed passage in this
Committee.
AB 797 (Conway) of 2011 exempts schools of cosmetology, as defined,
from the Act. The bill has not been set for hearing in the
Assembly Committee on Higher Education.
AB 2393 (Ammiano, 2010) altered the definition of "graduates
employed in the field" for apprenticeship and nursing programs.
The bill was vetoed by the Governor.
6. Arguments in Support. According to the California Psychological
Association (CPA), this bill is "a step in the right direction to
re-affirm current law ensuring that students who attend approved
schools will know the limitations of their degrees once they enter
the workplace." CPA also believes that graduates from
non-accredited institutions with state approval have faced problems
in obtaining full employment and that these individuals were never
aware of any barriers to practice.
The California Physical Therapy Association (CPTA) writes in
support of this bill, noting that this bill is necessary to protect
prospective students from enrolling in a doctoral degree program
they believe is accredited when in fact it is not.
NOTE: Double-referral to Education Committee (second).
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SUPPORT AND OPPOSITION:
Support:
California Psychological Association (CPA)
California Physical Therapy Association (CPTA)
Opposition:
None on file as of May 31, 2011
Consultant:Sarah Mason