BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2296|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 2296
Author: Block (D)
Amended: 8/21/12 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE : 7-2, 6/20/12
AYES: Lowenthal, Alquist, Hancock, Liu, Price, Simitian,
Vargas
NOES: Blakeslee, Huff
NO VOTE RECORDED: Runner, Vacancy
SENATE BUSINESS, PROF & ECON. DEVELOP. COMM. : 6-2, 7/2/12
AYES: Price, Corbett, Correa, Hernandez, Negrete McLeod,
Vargas
NOES: Strickland, Wyland
NO VOTE RECORDED: Emmerson
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/6/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : 47-26, 5/14/12 - See last page for vote
SUBJECT : California Private Postsecondary Education Act
of 2009
SOURCE : Author
DIGEST : This bill expands the requirements to be met by
private postsecondary educational institutions subject to
CONTINUED
AB 2296
Page
2
state oversight under the California Private Postsecondary
Education Act (CPPEA) by expanding disclosures related to
unaccredited programs; expanding disclosure requirements
for all regulated institutions; establishing more stringent
criteria for determining gainful employment and calculating
job placement rates; and, increasing institutional
documentation and reporting requirements around completion
rates, job placement/license exam passage rates, and
salary/wage information for graduates.
Senate Floor Amendments of 8/21/12 extend the timeframe for
the Bureau, from January 1, 2014 to July 1,2014, to define
(by regulation) specific measures and standards for
determining whether a student is gainfully employed in a
full-time or part-time position for which the institution
represents that the program prepares its graduates for
purposes of determining the job placement rate of an
institution.
ANALYSIS : Existing law, until January 1, 2016,
establishes the CPPEA, which provides for the approval,
regulation, and enforcement of private postsecondary
educational institutions by the Bureau of Private
Postsecondary Education (BPPE).
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 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.
The CPPEA also establishes requirements regarding
enrollment agreements and disclosures including that a
CONTINUED
AB 2296
Page
3
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.
Existing law 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.
This bill expands the requirements to be met by private
postsecondary educational institutions subject to state
oversight under CPPEA by expanding disclosures related to
unaccredited programs; expanding disclosure requirements
for all regulated institutions; establishing more stringent
criteria for determining gainful employment and calculating
job placement rates; and, increasing institutional
documentation and reporting requirements around completion
rates, job placement/license exam passage rates, and
salary/wage information for graduates.
Comments
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
CONTINUED
AB 2296
Page
4
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.
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.
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.
CONTINUED
AB 2296
Page
5
Prior Legislation
AB 611 (Gordon), Chapter 103, Statutes of 2011, established
certain disclosure requirements pertaining to accreditation
status, licensure, and related limitations for unaccredited
doctoral programs.
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 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.
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Potentially significant costs to the BPPE, within the
Department of Consumer Affairs depending on the extent to
which the BPPE is expected to review and enforce new
standards beyond the complaint process.
CONTINUED
AB 2296
Page
6
The Department anticipates requiring one additional
Associate Governmental Program Analyst 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.
SUPPORT : (Verified 8/14/12)
The Advancement Project
Asian Law Caucus
California Civil Right Coalition
California Faculty Association
California Federation of Teachers
California Labor Federation
California Nurses Association
California Physical Therapy Association
California Psychological Association
California State Commanders Veterans Council
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.
Institute for College Access and Success
LAW Project of Los Angeles
Legal Aid Foundation of Los Angeles
Public Advocates Inc.
Veterans of Foreign War, Department of California
Vietnam Veterans of America, California
OPPOSITION : (Verified 8/14/12)
American Career Colleges/West Coast University
ARGUMENTS IN SUPPORT : 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
CONTINUED
AB 2296
Page
7
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.
ARGUMENTS IN OPPOSITION : American Career Colleges/West
Coast University states in opposition, "When developing the
regulations to implement AB 48 (Portantino) the panel that
developed those regulations concluded that dictating hourly
and weekly employment standards was not a workable option.
Dictating that level of specificity for gainful employment
actually hinders gainful employment, because it makes it
more difficult for schools to place students.
"Employers will not work with schools that make it
difficult to hire their graduates. Requiring a school to
go after employers and demand specific information about
individual employees will create a burden for the employer
and discourages them from hiring graduates. Former students
will not want to be tracked by their school after
graduation. They will not want to continue to provide
specific data to their former school. This will make it
very difficult for schools to comply and will hurt students
seeking employment. It could actually increase the default
rate rather than improve it."
ASSEMBLY FLOOR : 47-26, 05/14/12
AYES: Alejo, Allen, Ammiano, Beall, Block, Blumenfield,
Bonilla, Bradford, Brownley, Buchanan, Butler, Charles
Calderon, Campos, Carter, Cedillo, Chesbro, Davis,
Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani,
Gordon, Hall, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Lara, Bonnie Lowenthal, Ma, Mendoza,
Mitchell, Monning, Pan, V. Manuel P�rez, Skinner,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
P�rez
NOES: Achadjian, Conway, Cook, Donnelly, Beth Gaines,
Garrick, Gatto, Gorell, Grove, Hagman, Halderman, Harkey,
Jeffries, Jones, Knight, Logue, Mansoor, Miller, Morrell,
Nestande, Nielsen, Norby, Olsen, Silva, Smyth, Wagner
NO VOTE RECORDED: Atkins, Bill Berryhill, Fletcher, Perea,
Portantino, Solorio, Valadao
CONTINUED
AB 2296
Page
8
PQ:n 8/22/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED