BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: AB 2296
AUTHOR: Block
AMENDED: June 13, 2012
FISCAL COMM: Yes HEARING DATE: June 20, 2012
URGENCY: No CONSULTANT:Kathleen Chavira
NOTE : This bill has been referred to the Committees on
Education and Business, Professions, and Economic
Development. A "do pass" motion should include referral to
the Business, Professions, and Economic Development
Committee.
SUBJECT : California Private Postsecondary Education Act of
2009.
SUMMARY
This bill expands the requirements to be met by private
postsecondary educational institutions subject to state
oversight under the California Private Postsecondary
Education Act of 2009 by:
a) Expanding disclosures related to
unaccredited programs.
b) Expanding disclosure requirements for all regulated
institutions.
c) Establishing more stringent criteria for
determining gainful
employment and calculating job placement rates.
d) Increasing institutional documentation and
reporting requirements
around completion rates, job placement/license
exam passage rates, and salary/wage information
for graduates.
BACKGROUND
Current law, until January 1, 2016, establishes the
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California Private Postsecondary Education Act (Act) of
2009, which provides for the approval, regulation, and
enforcement of private postsecondary educational
institutions by the Bureau for Private Postsecondary
Education (BPPE).
(Education Code � 94800-94950)
Among other things, the Act establishes fair business
practices which prohibit a private postsecondary
educational institution subject to the Act from, among
other things, offering an unaccredited doctoral degree
program without disclosing to prospective students, prior
to their enrollment, that the degree program is
unaccredited and whether the degree is issued in a field
that requires licensure in California, and any known
limitations of the degree, including whether or not it is
recognized for licensure or certification in California and
other states.
(Education Code � 94897)
The Act also establishes requirements regarding enrollment
agreements and disclosures including that a student enroll
solely by executing an enrollment agreement and that
prospective students be provided with a school catalog and
a School Performance Fact Sheet. The Act establishes
minimum requirements and disclosures to be made in these
documents. (Education Code � 94902-94912)
The Act also establishes various disclosure and reporting
requirements around completion, placement, licensure and
salary of students/graduates and establishes various
definitions for this purpose. Among other things, it
defines "graduates employed in the field" as graduates
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. The Act also requires
that the information used to substantiate the reported job
placement, license passage, and completion rates be
documented and maintained by the institution for five years
from the date of the publication of the rates and
authorizes this information to be retained by the
institution in an electronic format. The Act also requires
institutions to submit an annual report to the BPPE that
includes specified information. (Education Code �
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94928-94899.8)
ANALYSIS
This bill expands the requirements to be met by private
postsecondary educational institutions subject to state
oversight under the California Private Postsecondary
Education Act of 2009. Specifically it:
Unaccredited Programs
1) Expands the requirements to be met by an institution
that offers an unaccredited program. More specifically
it:
a) Extends the fair business practice
prohibitions related to unaccredited doctoral
programs to include unaccredited associate,
baccalaureate and masters degree programs.
b) Expands the disclosures required
of an institution to include disclosure of the
following:
i) Whether or not a
graduate of the degree program will be
eligible to sit for the applicable licensure
exam in California and other states.
ii) That a degree from an unaccredited
institution is not recognized for some
employment positions, including, but not
limited to, positions with the State of
California.
iii) That students attending an
unaccredited institution are ineligible for
federal financial aid programs
2) Requires the school catalog to disclose whether or not
the institution is accredited and if it is not, to
disclose all the information outlined above.
Additional Disclosure
3) Expands the information to be provided to students, in
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the enrollment agreement, school catalog, and Student
Fact Sheet. Specifically it:
a) Requires that the School Fact
Sheet provided by an institution, and its annual
report to the Bureau for Private Postsecondary
Education (BPPE), include the institution's most
recent three-year cohort default rate and the
percentage of students receiving federal student
loans (if the institution participates in federal
financial aid programs) and a list of occupations
for which each of the institution's educational
programs is intended to train students using US
Department of Labor Occupational Classification
codes.
b) Requires that the Enrollment
Agreement disclose to the student that the School
Fact Sheet is to include the cohort default rate
information and requires other conforming changes
in the enrollment agreement.
4) Expands disclosure to require the institution to
provide on its website, if one is maintained, the
school catalog, School Performance Fact Sheets,
student brochures, the institiution's most recent
annual report submitted to the BPPE, and a link to the
BPPE website, as specified.
Completion, Placement, Licensure and Salary Rates
5) Deletes the condition that an institution make an
express or implied claim of potential earnings after
completing the program to trigger the requirement that
they report salary and wage information.
6) Expands the authority of the BPPE to collect any
information from an institution for purposes of
reporting job placement and license exam passage
rates, salary information, and cohort default rates,
and ensure by regulation that the information is
collected and reported if the BPPE determines the
information is useful to students, based upon the most
credible and verifiable available data, and does not
impose undue compliance burdens on an institution.
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7) Modifies the definition of "graduates employed the
field" from employment within 6 months of graduation
to employment in a single position (within six months
of graduating or of passing a licensing exam) for at
least 13 weeks, working at least 17.5 hours per week,
as specified, and authorizes the BPPE to modify this
standard through regulation, subject to specified
public processes.
8) Expands the responsibilities of the institution to
maintain information used to substantiate the reported
completion, exam passage, and placement rates to:
a) Include records of employment for
all students including names, addresses, and
phone numbers, hiring employers, names, titles
and descriptions of jobs, starting and ending
employment dates, full-time or part-time status
and the number of hours worked per week.
b) Include names, addresses and phone
numbers of graduates who choose not to seek
employment and enroll in another educational
program, the subsequent institution, and the
degree/credential they intend to earn.
c) Require, rather than authorize,
that they be retained in electronic format and to
additionally require that they be made available
to the BPPE on request.
9) Makes various technical and clarifying changes.
STAFF COMMENTS
1) Need for the bill . According to the author, this bill
is intended to respond to issues raised in a joint
hearing of the Assembly Higher Education Committee and
the Senate Business, Professions and Economic
Development Committee in February 2012. Specific
issues raised included the need to increase
transparency among the private colleges and
universities regulated by the BPPE and to ensure that
prospective students have all the information
necessary to make informed decisions about their
pursuit of postsecondary education.
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2) Accreditation . Accreditation is a voluntary,
non-governmental peer review process utilized for the
purpose of determining academic quality of higher
education institutions and degree programs. Under
federal law, the United States Department of Education
(USDE) is required to publish a list of nationally
recognized accrediting agencies deemed to be reliable
authorities on the quality of education or training
provided by their accredited institutions. Only those
institutions accredited by a USDE-recognized
accrediting organization are eligible to participate
in the federal student financial assistance programs.
Generally speaking, professions that require
certification or licensure as a prerequisite for
employment (such as education, health care, or
counseling), require degrees from an accredited
institution of higher education.
3) Cohort default rates . A cohort default rate is the
percentage of a school's borrowers who enter repayment
on federal loans during a particular fiscal year and
default or meet other specified conditions prior to
the end of the next fiscal year. These default rates
are "officially" reported by the U.S Department of
Education once per year. At the federal level,
beginning in 2014, sanctions based upon the three year
cohort default rate will begin, and schools meeting
specified cohort default rate thresholds will lose
eligibility for specified federal loan programs for
the remainder of the fiscal year and for the following
two fiscal years. At the state level, SB 70 (Budget
Committee, Chapter 7, Statutes of 2011) established,
as a condition for voluntary participation in the Cal
Grant program, that each institution with more than 40
percent of its undergraduate enrollment borrowing
federal student loans must have a three-year 2008
cohort default rate less than 24.6% to be eligible for
new and renewal Cal Grant awards in the 2011-12
academic year, and less than 30% for each subsequent
year. The Governor's proposed budget for 2012-13
proposes the reduction of the cohort default rate for
Cal Grant participation from 30 percent to 15 percent
beginning in the 2012-13 academic year.
This bill establishes new disclosure requirements
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related to an institution's cohort default rate.
Cohort default rate information is provided by the
USDE to schools in draft form, and there are two
appeals before the information becomes "official".
Staff recommends the bill be amended to clarify that
it is the "official" cohort default rate which should
be disclosed.
4) Employment information . Current regulations specify
that the reported "graduates in the field" must be
identified by those who work in the field in a single
position that averages more and less than 32 hours per
week. The author is concerned this standard, and the
ambiguity in current law about the type of position
which qualifies as gainful employment relative to the
training received, lack the specificity to ensure
accurate job placement, wage, and salary information
is provided to prospective students. This bill
requires the use of specific federal job
classification codes for purposes of identifying
specific occupations and placements to calculate an
institution's job placement rates. In addition, it
implements very specific time periods and hours of
employment to be met for reporting purposes,
reportedly in an attempt to mirror recently enacted
federal regulations governing the definition of
"gainful employment." While more specific parameters
may be necessary, statutory requirements allow less
flexibility to adjust standards if and when, federal
regulations change or better sources of information
emerge.
Staff recommends the bill be amended to delete
language specifying weeks and hours of employment on
page 15, lines 1-16, and to delete lines 17-28, and to
delete lines 35-38 on page 16. Staff further
recommends the bill be amended to require the Bureau
for Private Postsecondary Education (BPPE) to define
specific measures and standards for determining
whether a student is gainfully employed and to
authorize the BPPE to set any hourly and weekly
employment standards and utilize any job
classification methodology it determines appropriate
for this purpose, including, but not limited to the US
Department of Labor Occupational Classification codes.
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5) BPPE data gathering responsibilities . The Act
authorizes the BPPE to collect various information
from the private postsecondary sector. This bill
clarifies that specifying information to be gathered
does not limit the bureau's authority to collect
information for specified purposes. With the
elimination of funding for the California
Postsecondary Education Commission, the BPPE appears
to be the only centralized source of information/data
on a sector which is an important component of
California's higher education system. To ensure the
BPPE has the authority to collect information that
informs state policy regarding the private for-profit
sector, staff recommends that the bill be amended on
page 17, between lines 4 and 5, to insert "2) Useful
to state policymakers."
Additionally, the bill currently outlines detailed
information to be maintained and documented by the
institution. Could the BPPE instead be authorized to
identify the information it determines is important
for the institution to maintain for this purpose?
Staff further recommends the bill be amended to delete
lines 14-27 on page 17 and to instead require the BPPE
to identify the specific information it deems
necessary that an institution maintain and document to
substantiate the rates and information calculated
pursuant to the relevant provisions of the Act.
6) Prior legislation .
a) AB 611 (Gordon, Chapter 103, Statutes of
2011) established certain disclosure requirements
pertaining to accreditation status, licensure,
and related limitations for unaccredited doctoral
programs.
b) AB 2393 (Ammiano, 2010) would have required
institutions regulated by the Bureau to comply
with various placement rate calculations for
specified programs. AB 2393 was vetoed by
Governor Schwarzenegger whose message read:
This bill would create varying standards for
determining
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post-graduate placement rates from different
vocational fields.
California needs uniform standards in this area
of law that can be consistently and fairly
applied by the Bureau of Private
Postsecondary Education, and that are predictable
for consumers and schools. This bill proposes to
put California on the same path to overly
confusing statutes and guidelines that existed
prior to the new Private Postsecondary Education
Act.
c) AB 48 (Portantino, Chapter 310, Statutes of
2009) revised and recasts the Private
Postsecondary and Vocational Education Reform Act
of 1989 into the California Private Postsecondary
Education Act of 2009, provided for the
transition to the BPPE, outlined its
responsibilities, provided for the approval,
regulation, and enforcement of private
postsecondary educational institutions,
established reporting requirements, and repeals
the Act on January 1, 2016.
SUPPORT
Asian Law Caucus
California Civil Rights Coalition
California Physical Therapy Association
California State Students Association
Center for Public Interest Law, University of San Diego
School of Law
Children's Advocacy Institute, University of San Diego
School of Law
Chinese for Affirmative Action
Consumer Action
Consumer Federation of California
Consumers Union of United States, Inc.
LAW Project of Los Angeles
Legal Aid Foundation of Los Angeles
Public Advocates
The Institute for College Access and Success
California Federation of Teachers
California Faculty Association
California Labor Federation
California Nurses Association
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OPPOSITION
California Coalition of Accredited Career Schools