BILL ANALYSIS �
AB 2099
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Date of Hearing: April 22, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 2099 (Frasier) - As Introduced: March 3, 2014
SUBJECT : Postsecondary Education: Title 38 Awards.
SUMMARY : Establishes minimum student outcome requirements for
postsecondary institutions approved by the California State
Approving Agency for Veterans Education (CSAAVE) to participate
in federal veteran's education benefits. Specifically, this
bill :
1)Finds and declares that federal regulations require
postsecondary institutions operating in California seeking to
enroll veterans eligible for Title 38 awards to meet federal
criteria and additional reasonable criteria in order to be
approved by CSAAVE, and that it is reasonable to establish
state-level specified quality and oversight requirements.
2)Establishes the Title 38 Funding Program and establishes
CSAAVE as responsible for approving courses at qualifying
institutions seeking to enroll veterans or others eligible for
Title 38 awards in accordance with federal law, the provisions
of this bill, and any other reasonable criteria established by
CSAAVE.
3)Defines a qualifying institution to mean an institution that
does all of the following:
a) Provides information on where to access California
license examination passage rates for undergraduates
enrolled in programs for which licensure is required, if
that data is electronically available through the licensure
agency. Requires the institution to certify compliance to
CSAAVE;
b) Provides evidence of accreditation to CSAAVE from an
accrediting agency recognized by the US Department of
Education (USDE). Unaccredited degree granting
institutions are authorized to remain Title 38 eligible if
they receive pre-accreditation status by 2016 and
accreditation status by 2017;
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c) Provides data to CSAAVE regarding the institution's
veteran student retention rate and graduation rate, time to
degree, cohort default rate, and graduate placement and
graduate starting salary. CSAAVE is required, to the
extent feasible, to ensure collection and reporting
calculations comply with federal and state reporting
requirements; and,
d) Provides to CSAAVE evidence of compliance with the
federal Principles of Excellence program.
e) Meets one of the following requirements:
i) CSAAVE certifies the institution meets specified
performance standards.
(1) The institution meets one of the following
requirements:
(a) The institution maintains a three-year
Cohort Default Rate (CDR) of less than 15.5% and a
graduation rate of greater than 30%; or,
(b) The institution maintains a three-year CDR
of less than 10% and a graduation rate of above 20%
(eligible until 2018-19); or,
(c) Less than 40% of undergraduate students
borrow federal loans.
(2) Requires, if USDE corrects or revises an
institution's CDR or graduation rate and the revised
rate satisfies the standard, the institution to
immediately regain eligibility.
(3) Provides that a private postsecondary
educational institution that becomes ineligible under
these requirements is provided the opportunity to gain
eligibility through application to, and approval from,
the Bureau for Private Postsecondary Education
(Bureau).
ii) The institution is a private postsecondary
institution issued an approval to operate from the
Bureau.
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EXISTING LAW :
1)Establishes the California Department of Veterans Affairs
(CalVet) to provide support to veterans living in California
by ensuring that veterans and their families receive the state
and federal benefits and services to which they are entitled.
2)Establishes, among other requirements, CDR and graduation rate
performance requirements, virtually identical to those
contained in this bill, for educational institutions
participating in the Cal Grant Program, administered by the
California Student Aid Commission (CSAC).
3)Establishes the Bureau to provide oversight of private
postsecondary educational institutions operating in
California. Established by Assembly Bill 48 (Portantino,
Chapter 310, Statutes of 2009), the bill took effect January
1, 2010, to make many substantive changes that created a
foundation for oversight and gave the new Bureau an array of
enforcement tools to ensure schools comply with the law.
FISCAL EFFECT : Unknown
COMMENTS : Background on military aid . The GI Bill, signed in
1944 by President Roosevelt, gave servicemen and women the
opportunity of resuming their education or technical training
after discharge with tuition assistance and a monthly living
allowance while pursuing their studies. Educational benefits are
currently available both to active duty personnel and veterans
through two key programs: the Tuition Assistance program
administered and run by the Department of Defense (DOD) and the
Post-9/11 Veterans Educational Assistance Act administered by
the Department of Veterans Affairs (VA). According to data from
the National Center for Education Statistics, during Fiscal Year
2011, 923,836 U.S. service members received over $10 billion in
assistance from military and veteran educational benefit
programs, with 9.6% living in California.
Veterans and the for-profit sector . There have been multiple
reports and hearings focused on the experience of veterans at
private for-profit institutions. According to a 2010 report
issued by the U.S. Senate Health, Education, Labor and Pensions
(HELP) Committee, between 2009 and 2010, revenue from military
educational benefits at 20 for-profit education companies
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increased 211%. The report also noted that because neither DOD
nor VA benefits originate through Title IV, money that
institutions received through these programs was not counted as
federal financial aid, thus not subject to a key regulatory
requirement governing for-profit schools that no more than 90%
of revenues come from federal financial aid. This so-called
"90/10" rule essentially considers DOD and Veterans funds as
non-federal aid by allowing these funds to be counted in the 10
percent of the calculation, despite the fact that the money
comes from federal taxpayers. The report found that four of the
five for-profit schools receiving the most Post-9/11 GI Bill
funding in the first year had loan repayment rates of only 31 to
37 percent. The report further found that the same four of five
schools receiving the most Post-9/11 GI funding had at least one
campus with a student default rate above 24 percent over three
years.
For-profit schools have come under particular scrutiny for
practices used to recruit military veterans. Recently,
California State Attorney General Kamala Harris filed suit
against Corinthian Colleges, Inc. (CCI) for false and predatory
advertising, intentional misrepresentations to students,
securities fraud and unlawful use of military seals in
advertisements. According to the complaint, CCI included
official military seals in mailings and on websites.
CSAAVE oversight of veteran serving institutions . CSAAVE,
housed within CalVet, is federally funded and operates under an
annual reimbursement contract with the VA. In its role as the
approval agency, the primary function of CSAAVE is to review,
evaluate and approve quality educational and training programs
for veteran's benefits. CSAAVE is intended to approve colleges
and universities, vocational schools, business schools,
professional schools, and licensing and certification training
and tests, all of which must lead to an educational,
professional or vocational objective. There is no current
requirement for CSAAVE to provide recourse for students
attending approved institutions and in the event that a student
was misled or unable to become employed following enrollment at
a program.
Purpose of this bill . According to the author, this bill will
tighten requirements that colleges must meet in order to be
approved by CSAAVE to enroll Title 38 recipients, providing
additional protection to veterans from unscrupulous colleges
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that often leave students with high debt and without a degree or
certificate of any value.
Cal Grant Program standard . In an effort to increase
accountability over public financial aid expenditures and
address the budget deficit, in 2011 California established
requirements linking participation in the Cal Grant Program to
the percentage of students borrowing federal loans and the
number of students defaulting on those federal loans within
three years of entering repayment (CDR). In 2012, the CDR
requirements were tightened and a graduation rate requirement
was established. In January 2013, the Legislative Analyst's
Office (LAO) reported on the Cal Grant requirements and found
that default and graduation rates provide rough proximities of
how well an institution is serving students. This bill would
require, among other provisions, an institution to meet the
program quality standards (CDR and graduation rate) of the Cal
Grant Program, or be approved and regulated by the Bureau.
Bureau standard . The Bureau provides oversight of private
postsecondary educational institutions operating in California
through granting approval of institutions and programs,
enforcing minimum operating standards for quality, providing for
student complaint resolution, and requiring institutional
disclosures to prospective students. While some institutions
receiving Title 38 funds are subject to the Bureau's oversight,
many institutions are provided an exemption from the Bureau's
enforcement authority. This bill would require an institution
that does not meet the aforementioned program quality standards
to seek and obtain an approval to operate from the Bureau;
thereby ensuring the Bureau can take action to protect a veteran
student.
Unaccredited degree granting institutions . Accreditation is a
voluntary, non-governmental peer review process used to
determine academic quality. Under federal law, the United
States Department of Education (USDE) establishes the general
standards for accreditation agencies and is required to publish
a list of recognized accrediting agencies that are deemed
reliable authorities on the quality of education provided by
their accredited institutions. While accredited and
unaccredited education and training programs are allowed to
operate in California, only accredited institutions are
authorized to participate in virtually all federal and state
financial aid programs. One exception to the accreditation
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requirement is under Title 38 veterans funds.
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.
This bill would require institutions offering unaccredited
degrees to obtain accreditation, or discontinue degree programs
(possibly create approved certificate programs). Unaccredited
programs would still be authorized to operate in California;
however, institutions would not be approved for Title 38 award
use at those institutions.
Proposed amendments . Committee staff proposes the following
amendments clarifying the accreditation requirement consistent
with the author's intent:
(3) The institution shall provide evidence of
accreditation of all degree programs to CSAAVE from an
accrediting agency recognized by the United States
Department of Education. An institution offering an
unaccredited degree that is participating in Title 38
award programs on January 1, 2015, shall have until
January 1, 2016, to obtain and provide evidence to
CSAAVE of its candidacy or pre-accreditation status
for accreditation with an accrediting agency
recognized by the United States Department of
Education in order for the institution to be eligible
for Title 38 awards for the academic year of 2015-16,
or 2016-17, or both, and to obtain and provide
evidence to CSAAVE of full accreditation from the
accrediting agency by January 1, 2017 to be eligible
for Title 38 awards for the academic year of 2017-18,
and each academic year thereafter.
State authorization clarification . Several organizations have
requested a clarification regarding federal requirements for
state authorization. Specifically, of concern, existing federal
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regulation requires all colleges seeking federal Title IV
financial aid to be authorized in the state in which they
operate. The author has agreed to accept an amendment
clarifying that CSAAVE approval is not intended to constitute
state authorization for the purpose of federal Title IV
eligibility.
Technical amendments . Committee staff also recommends several
technical and clarifying amendments, which the author has agreed
to accept.
REGISTERED SUPPORT / OPPOSITION :
Support
American Legion, Department of California
AMVETS, Department of California
California Association of County Veterans Service Officer
California Labor Federation
California State Commanders Veterans Council
Center for Public Interest Law (CPIL) at the University of San
Diego School of Law
Children's Advocacy Institute (CAI) at the University of San
Diego School of Law
Consumers Union
Military Officers Association of America, California Council of
Chapters
Public Advocates
The Institute for College Access and Success
VetJobs
Veterans Education Success
Veterans of Foreign Wars, Department of California
Vietnam Veterans of America, California State Council
Young Invincibles
Opposition
California Association of Private Postsecondary Schools
San Diego Chamber of Commerce
University of Phoenix
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
AB 2099
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