BILL ANALYSIS �
AB 2099
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CONCURRENCE IN SENATE AMENDMENTS
AB 2099 (Frazier)
As Amended August 22, 2014
Majority vote
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|ASSEMBLY: |62-4 |(May 29, 2014) |SENATE: |35-0 |(August 26, |
| | | | | |2014) |
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Original Committee Reference: HIGHER ED.
SUMMARY : Establishes minimum requirements for postsecondary
institutions approved by the California State Approving Agency
for Veterans Education (CSAAVE) to participate in federal
veteran's education benefits (Title 38).
The Senate amendments :
1)Altered institutional requirements; as amended by the Senate,
institutions must meet all of the following in order to be
approved by CSAAVE:
a) Provide information on where to access California
license examination passage rates for the most recent
available year from graduates of its undergraduate programs
leading to employment for which passage of a California
licensing examination is required, if that data is
electronically available through the Internet Web site of a
California licensing or regulatory agency.
b) Certify to CSAAVE, if the institution is
degree-granting, compliance with the following:
i) Accreditation of the institution and of all degree
programs. The accrediting agency must be recognized by
the United States Department of Education; or,
ii) An unaccredited degree-granting institution
participating in the Title 38 award program on January 1,
2015, must:
(1) Obtain and provide evidence to CSAAVE of its
candidacy or preaccreditation status, by January 1,
2016, for the institution to be eligible for Title 38
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awards for the academic year of 2015-16, or 2016-17,
or both; and,
(2) Obtain and provide evidence to CSAAVE of
accreditation from the accrediting agency with which
it had candidacy or preaccreditation status by January
1, 2017, for the institution to be eligible for Title
38 awards for the academic year of 2017-18, and each
academic year thereafter.
(3) An unaccredited degree-granting institution
that fails to satisfy the aforementioned requirements
is prohibited from receiving new Title 38 awards;
however, a continuing Title 38 student retains
eligibility in order to complete their degree program.
c) Be one of the following:
i) A campus of the California Community Colleges, the
California State University, or the University of
California;
ii) An independent institution of higher education, as
defined;
iii) A private postsecondary educational institution
that, for the purposes of the 2016-17 award year and
every year thereafter has an approval to operate from the
Bureau for Private Postsecondary Education (Bureau),
unless exempt, as specified.
EXISTING LAW 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; establishes, among other requirements, cohort default
rate 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);
and, 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
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and gave the new Bureau an array of enforcement tools to ensure
schools comply with the law.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)CSAAVE: Likely minor, but potentially significant workload
for CSAAVE to verify that institutions seeking to participate
in Title 38 awards meet all of the new requirements. Likely
minor costs to provide notifications to Title 38 award
recipients.
2)Bureau: In 2015-16, approximately $93,000 in net revenue
($200,000 in gross revenue, off-set by 1 PY at $106,000) from
application fees ($5,000 per institution) paid by any private
postsecondary institution that is currently exempt from
oversight, but will now need to seek an "approval to operate"
certification. Ongoing, this would also require those
institutions to pay an annual fee of 0.75% of their annual
revenue, not to exceed $25,000. The Bureau estimates annual
revenue of $1 million from these fees.
COMMENTS : 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 United
States Senate Health, Education, Labor and Pensions (HELP)
Committee, between 2009 and 2010, revenue from military
educational benefits at 20 for-profit education companies
increased 211%. 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%.
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 Web sites.
CSAAVE, housed within CalVet, is federally funded and operates
under an annual reimbursement contract with the Veterans
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Affairs. 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.
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 that often leave students
with high debt and without a degree or certificate of any value.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
FN: 0005422