BILL ANALYSIS �
AB 2099
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2099 (Frazier) - As Amended: May 7, 2014
Policy Committee: Higher
EducationVote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires postsecondary educational institutions to
meet minimum specified requirements to enroll students receiving
federal veterans' education (Title 38) benefits and to report
specified outcome measures for veteran students. Specifically,
this bill requires an institution, in order to qualify, to:
1) Provide evidence of accreditation to the California
State Approving Agency for Veterans Education (CSAAVE),
within the California Department of Veterans Affairs
(CalVet).
2) Provide data to CSAAVE, to the extent determined
feasible by 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.
3) Meet 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.
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An institution that becomes ineligible under above
requirements may instead gain eligibility under the
requirement in (4).
4) Be a private postsecondary institution issued an
approval to operate from, and be subject to the regulatory
oversight and enforcement of student protections provided
by, the Bureau for Private Postsecondary Education
(Bureau).
FISCAL EFFECT
1)Major statewide costs for every campus of the public
postsecondary segments to provide data to CSAAVE on veteran
student retention rate and graduation rate, time to degree,
cohort default rate, and graduate placement and graduate
starting salary, as none of this information is currently
collected or calculated specifically for veterans. Ongoing
costs would be around $200,000 for UC, around $400,000 at CSU
and over $10 million at the community colleges, which enroll
the vast majority of veteran students among the three
segments.
2)CalVet indicates that costs for CSAAVE should be absorbable,
however, the bill does not require CSAAVE to do anything with
the data to be submitted by public and private institutions.
Any effort to standardize reporting and to summarize and
analyze this information would likely entail significant
costs.
COMMENTS
1) Background . Federal 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.
2) CSAAVE is federally funded and housed within CalVet. In
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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.
3) Purpose . According to the author, this bill is intended
to 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 that often leave students with high
debt and without a degree or certificate of any value.
4) Conforming to Cal Grant Standards . In an effort to
increase accountability over public financial aid
expenditures and to help address the state's budget
deficit, in 2011 requirements were established 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 minimum 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 requires, among other
provisions, that an institution seeking to enroll students
under Title 38, meet the program quality standards (CDR and
graduation rate) of the Cal Grant Program, or be approved
and regulated by the Bureau.
5) Bureau Oversight . While some private postsecondary
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 seeking to enroll
students under Title 38, and that does not meet the Cal
Grant Program quality standards, to instead seek and obtain
an approval to operate from the Bureau; thereby ensuring
the Bureau can take action to protect a veteran student.
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6) Unaccredited 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 requirement is under Title 38 veterans
funds.This bill would require institutions offering
unaccredited degrees to obtain accreditation, or
discontinue degree programs (possibly create approved
certificate programs instead). Unaccredited programs would
still be authorized to operate in California, but such
institutions would not be approved for Title 38 award use.
7) Opposition . The University of Phoenix objects to the
reporting requirement as a costly, cumbersome and
unnecessary exercise that will be of little practical
value. UOPX notes that veterans, like most of their student
population, are non-traditional students that will likely
have similar outcomes to the general student population.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081