BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 2296 (Block) - California Private Postsecondary Act of 2009
Amended: August 6, 2012 Policy Vote: Education 6-2
Urgency: No Mandate: No
Hearing Date: August 6, 2012
Consultant: Jacqueline Wong-Hernandez
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 2296 expands the disclosure and reporting
requirements to be met by private postsecondary educational
institutions subject to state oversight under the California
Private Postsecondary Education Act of 2009 (CPPEA).
Fiscal Impact: Potentially significant costs to the Bureau of
Private Postsecondary Education (BPPE), within the Department of
Consumer Affairs (DCA) depending on the extent to which the BPPE
is expected to review and enforce new standards beyond the
complaint process.
The DCA anticipates requiring one additional Associate
Governmental Program Analyst (AGPA) position to fulfill this
bill's requirements, at a cost of approximately $81,000 per
year. This special fund position would be paid from the
Private Postsecondary Education Administration Fund.
Background: Existing law, until January 1, 2016, establishes the
CPPEA, which provides for the approval, regulation, and
enforcement of private postsecondary educational institutions by
the BPPE. (Education Code � 94800-94950)
The CPPEA establishes fair business practices which prohibit a
private postsecondary educational institution subject to its
authority from, among other things, offering an unaccredited
doctoral degree program without disclosing to prospective
students that the degree program is unaccredited, and require
disclosure of known limitations of a degree, such as whether it
is recognized for licensure or certification in California and
other states, whether a graduate of the degree program will be
eligible to sit for the applicable licensure exam in California
and other states, that a degree from an unaccredited institution
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is not recognized for some employment positions, including, but
not necessarily limited to, positions with the State of
California; and that a student attending an unaccredited
institution is not eligible for federal student financial aid
programs. (Education Code � 94897)
The CPPEA 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 CPPEA establishes minimum
requirements and disclosures to be made in these documents.
(Education Code � 94902-94912)
It 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, the CPPEA 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. It 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
CPPEA also requires institutions to submit an annual report to
the BPPE that includes specified information. (Education Code �
94928-94899.8)
Proposed Law: AB 2296 expands requirements on private
postsecondary educational institutions subject to state
oversight. This bill expands disclosures related to unaccredited
programs; expands various disclosure requirements for all
regulated institutions; establishes more stringent criteria for
determining gainful employment and calculating job placement
rates; and increases institutional documentation and reporting
requirements around completion rates and salary/wage information
for graduates.
This bill requires the BPPE to define specific measures and
standards around student employment statistics, and further
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provides that the BPPE "has the authority to collect information
from an institution to comply with this section and ensure, by
regulation and other lawful means, that the information required
by this section, and the manner in which it is collected and
reported, is" useful to students and policy makers; based upon
the most credible and verifiable data available; and does not
impose undue compliance burdens on an institution.
Staff Comments: The CPPEA created the BPPE within DCA for the
purpose of regulating private postsecondary educational
institutions that provide educational services in California.
Under the CPPEA, all unaccredited colleges in California must be
approved by the BPPE, and all nationally accredited colleges
must comply with numerous student protections. Institutions that
are covered by the CPPEA are required to follow a BPPE
evaluation and approval process, to abide by numerous "fair
business practices" aimed at protecting students, and to
disclose information to students in enrollment agreements and
catalogs, among other regulations. The CPPEA also establishes
penalties for non-compliance, providing the BPPE authority to
perform site visits and investigations, order fines and student
tuition refunds, and ultimately suspend or revoke an
institution's approval to operate.
This bill significantly expands the requirements on institutions
subject to BPPE oversight, relative to their disclosures to
students (and reporting to the BPPE) around accreditation
status, job placements and salary/wage information, licensure
restriction and placement information. Those new requirements
are subject to the review and enforcement of the BPPE, which
will add workload to the Bureau; at a minimum, the BPPE will
need to define "gainful employment" (as the bill requires) and
determine how to enforce the new requirements. The extent of the
workload will be determined by the intention and interpretation
of the requirements on BPPE relative to this bill.
The bill's vague wording in Section 8 leaves questions about
additional expected duties of BPPE around the reporting
requirements. The section provides that nothing shall limit the
Bureau's authority to collect information from an institution to
comply with this section and ensure, by regulation and other
lawful means, that the information required, and the manner in
which it is collected and reported, is all of the following: a)
Useful to students; b) Useful to policymakers; c) Based upon the
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most credible and verifiable data available; and, d) Does not
impose undue compliance burdens on an institution. It is not
clear the extent to which BPPE will be responsible for reviewing
the proposed data requirements, and making the reporting
"useful" to students and policymakers. The DCA estimates that
increased involvement in this type of review will require an
additional AGPA position to fulfill this bill's requirements, at
a cost of approximately $81,000 per year (including benefits).
This position would be paid from the Private Postsecondary
Education Administration Fund, which is funded by fees from the
institutions subject to oversight.