BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 611|
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CONSENT
Bill No: AB 611
Author: Gordon (D)
Amended: 3/22/11 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 8-0, 6/6/11
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Negrete
McLeod, Vargas, Wyland
NO VOTE RECORDED: Walters
SENATE EDUCATION COMMITTEE : 8-0, 6/15/11
AYES: Lowenthal, Alquist, Blakeslee, Hancock, Huff, Liu,
Price, Vargas
NO VOTE RECORDED: Runner, Simitian, Vacancy
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 70-0, 5/12/11 (Consent) - See last page
for vote
SUBJECT : Private postsecondary education: unaccredited
doctoral
degree program
SOURCE : Author
DIGEST : This bill sets forth certain disclosure
requirements pertaining to accreditation status, licensure,
and related limitations for unaccredited doctoral programs.
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ANALYSIS :
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 Section 101 and Education Code Section 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 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. (Education Code Section 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.
(Education Code Section 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
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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.
(Education Code Section 94905)
This bill 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.
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
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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 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).
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 United States 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 United
States 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
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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, 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.
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, the 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
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/27/11)
California Physical Therapy Association
California Psychological Association
ARGUMENTS IN SUPPORT : According to the author's office,
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's office believes that this bill will improve access
to information for potential consumers before they make
investments in their education.
The author's office 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's office, from 1998 to 2008, enrollment in
for-profit schools jumped 236 percent, far outpacing growth
in public and nonprofit private schools which grew by
around 20 percent. On average, only 22 percent of students
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at for-profit schools will earn degrees from those
institutions within six years, compared to 55 percent and
65 percent at public and private nonprofit colleges and
universities, respectively. The author's office 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.
ASSEMBLY FLOOR : 70-0, 5/12/11
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Hill, Huber, Hueso, Huffman, Jeffries,
Jones, Knight, Lara, Logue, Ma, Mansoor, Mendoza, Miller,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Silva, Skinner, Smyth, Solorio,
Swanson, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Alejo, Cedillo, Conway, Garrick, Gorell,
Roger Hern�ndez, Bonnie Lowenthal, Mitchell, Portantino,
Torres
JJA:mw 6/28/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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