Bill Text: CA SB1192 | 2015-2016 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Private postsecondary education: California Private
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2016-09-24 - Chaptered by Secretary of State. Chapter 593, Statutes of 2016. [SB1192 Detail]
Download: California-2015-SB1192-Amended.html
Bill Title: Private postsecondary education: California Private
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2016-09-24 - Chaptered by Secretary of State. Chapter 593, Statutes of 2016. [SB1192 Detail]
Download: California-2015-SB1192-Amended.html
BILL NUMBER: SB 1192 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 15, 2016
AMENDED IN ASSEMBLY JUNE 16, 2016
AMENDED IN SENATE APRIL 6, 2016
INTRODUCED BY Senator Hill
(Principal coauthors: Assembly Members Medina and Salas)
FEBRUARY 18, 2016
An act to amend Sections 94809, 94874, 94874.2, 94874.5, 94874.7,
94874.8, 94878, 94880, 94885, 94885.1, 94885.5, 94889,
94905, 94909, 94923, 94930.5, 94932, 94936, 94937,
and 94944 94944, and 94950 of, to add
Sections 94801.5 94801.5, 94850.5, and
94934.5 to, to add and repeal Article 20.5 (commencing with
Section 94949.5) and Article 20.6 (commencing with Section
94949.7) to of Chapter 8 of Part 59 of
Division 10 of Title 3 of, and to repeal Section 94879 of, the
Education Code, relating to private postsecondary education, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 1192, as amended, Hill. Private postsecondary education:
California Private Postsecondary Education Act of 2009.
Existing law, the California Private Postsecondary Education Act
of 2009, provides, among other things, for student protections and
regulatory oversight of private postsecondary institutions in the
state. The act is enforced by the Bureau for Private Postsecondary
Education within the Department of Consumer Affairs. The act exempts
an institution from its provisions if any of a list of specific
criteria are met. Existing law repeals the act on January 1,
2017.
This bill would recast and revise various provisions of the act.
The bill would require the Director of Consumer Affairs to
appoint an enforcement monitor, no later than March 1, 2017, to,
among other duties, monitor and evaluate the bureau's enforcement of
the act and submit written reports to the department and the
Legislature on his or her findings and conclusions, as specified.
The bill would increase the amount of a fine that may be
issued to a person for operating an institution without proper
approval to operate from $50,000 to $100,000. The bill
would, to the extent authorized by federal law, would
require a private postsecondary institution that does
not maintain a physical presence in California and offers distance
education to California students an out-of-state
private postsecondary educational institutions, as defined, to
comply with specified requirements, including register with
the bureau. providing the bureau evidence of the
institution's accreditation. The bill would authori ze the
bureau to adopt, by regulation, a process that allows an institution
with approval to operate to request and receive inactive status.
The bill would require an institution with approval to operate
that knows or reasonably should know that it is being investigated,
is the subject of a judgment, a regulatory action, or increased
oversight or monitoring by, or is the subject of a settlement with,
an oversight entity other than the bureau to report it to the bureau,
as specified. The bill would adjust annual fees charged to an
institution with approval to operate, as specified.
This bill would establish an Office of Student Assistance and
Relief within the department to advance and
promote the rights of private postsecondary educational institution
students, as specified. The bill would require the office to
report quarterly by posting on the bureau's Internet Web site,
through September 1, 2018, specified information related to
assistance it provides to these students. The bill would require the
office to submit a report to the Legislature, the department, and the
bureau summarizing that information by January 1, 2019.
This bill would appropriate the sum of $1,300,000 from the Student
Tuition Recovery Fund to the office for providing grants to eligible
nonprofit community service organizations to assist eligible
students affected by the closure of Corinthian Colleges, Inc., as
defined, with loan discharge and other student loan-related requests
and tuition recovery-related claims, as specified. The bill would
require the office to solicit grant applications from eligible
nonprofit community service organizations and select one or more of
these organizations deemed to be qualified. The bill would require
the grantee to submit specified information to the office on a
quarterly basis and would require the office to make these reports
available to the Legislature and the department upon request. The
bill would require the office to provide the Legislature and the
department a final report summarizing all the information submitted
to it by grantees, promptly following the time when all funds are
expended by the grantees, or by January 1, 2020, whichever is
earlier.
The act establishes the Student Tuition Recovery Fund and requires
the bureau to adopt regulations governing the administration and
maintenance of the fund, including requirements relating to
assessments on students and student claims against the fund, and
establishes that the moneys in this fund are continuously
appropriated to the bureau for specified purposes.
This bill would make a California student of a Corinthian
Colleges, Inc., institution, who meets all of the other eligibility
requirements, eligible for recovery from the fund. To the extent that
the bill expands the purposes of the fund, the bill would make an
appropriation.
Existing law repeals the act on January 1, 2017.
This bill would instead repeal the act on January 1, 2021, thus
extending the operation of the act by 4 years. By extending operation
of the Student Tuition Recovery Fund, a continuously appropriated
fund, this bill would make an appropriation.
Under existing law, the act specifies conduct by regulated
institutions that, if undertaken, is a crime.
Because this bill would extend the application of those criminal
provisions, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 94801.5 is added to the Education Code, to
read:
94801.5. (a) Effective July 1, 2017, a private entity
with no physical presence in this state that provides postsecondary
education to California students for an institutional charge shall
an out-of-state private postsecondary educational
institution shall register with the bureau, pay a f ee in
an amount commensurate with the cost of registration, as determined
by the bureau, and comply with all of the following:
(1) The institution shall register with the bureau and
provide information required by the bureau. The bureau shall adopt,
by regulation, a process and procedure whereby the institution may
apply for and obtain registration. provide the bureau
with all of the following information:
(2) The institution shall be accredited.
(A) Evidence of accreditation.
(3) The institution shall be
(B) Evidence that the institution is
approved to operate in the state where the institution
is incorporated. maintains its main administrative
location.
(C) The agent for service of process consistent with Section
94943.5.
(D) A copy of the institution's catalog and sample enrollment
agreement.
(4)
(2) The institution shall comply with the requirements
of the Student Tuition Recovery Fund, established in Article 14
(commencing with Section 94923), and implementing regulations
adopted by the bureau related to the fund, for its
California students. students residing in California.
(5)
(3) The institution shall provide a
disclosure, approved by the bureau, to its California students on
their rights and obligations under the Student Tuition Recovery Fund.
disclosures pursuant to the requirements for the
Student Tuition Recovery Fund, established in Article 14 (commencing
with Section 94923), and implementing regulations adopted by the
bureau related to the fund, for its students residing in California.
(b) This section does not apply to nonpublic higher education
institutions that grant undergraduate degrees, graduate degrees, or
both, and that are formed as nonprofit corporations and are
accredited by an agency recognized by the United States Department of
Education.
(c) An institution described in subdivision (a) that fails to
comply with this section is not authorized to operate in this state.
(d) The bureau shall adopt emergency regulations for purposes of
implementing this section. The adoption of these regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code. These emergency regulations shall become law through
the regular rulemaking process by January 1, 2018.
(d) The bureau shall adopt emergency regulations for purposes of
implementing this section. The adoption of these regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code. These emergency regulations shall become law through
the regular rulemaking process by January 1, 2018.
SEC. 2. Section 94809 of the Education Code is amended to read:
94809. (a) An institution that had an application for an approval
to operate pending with the former Bureau for Private Postsecondary
and Vocational Education on June 30, 2007, may continue to operate
until a decision is made in regard to the institution regarding the
application for approval to operate, but shall comply with, and is
subject to, this chapter.
(b) An institution that did not have a valid approval to operate
issued by, and did not have an application for approval to operate
pending with, the former Bureau for Private Postsecondary and
Vocational Education on June 30, 2007, that began operations between
July 1, 2007, and January 1, 2010, and filed an application to
operate by August 2, 2010, may continue to operate unless a denial of
approval to operate has been issued and has become final, but shall
comply with, and is subject to, this chapter.
(c) Students seeking to enroll in institutions operating under
subdivisions (a) and (b) shall be notified by the institution, in
writing and prior to executing an enrollment agreement, that the
institution's application for approval to operate has not been
reviewed by the bureau.
(d) (1) An institution that is denied an approval to operate
pursuant to subdivision (a) or (b) may file an appeal pursuant to the
procedures established in Section 94888.
(2) An institution that has filed an appeal pursuant to paragraph
(1) may continue to operate during the appeal process but must
disclose in a written statement approved by the bureau, to all
current and prospective students, that the institution's application
for approval to operate was denied by the bureau because the bureau
determined the application did not satisfy the requirements to
operate in California, that the institution is appealing the bureau's
decision, and that the loss of the appeal may result in the
institution's closure.
(3) If the bureau determines that the continued operation of an
institution poses a significant risk of harm to students, the bureau
shall make an emergency decision pursuant to Section 94938.
SEC. 3. Section 94850.5 is added to the
Education Code , to read:
94850.5. "Out-of-state private postsecondary educational
institution" means a private entity without a physical presence in
this state that offers distance education to California students for
an institutional charge.
SEC. 3. SEC. 4. Section 94874 of the
Education Code is amended to read:
94874. Except as provided in Sections 94874.2 and 94874.7, the
following are exempt from this chapter:
(a) An institution that offers solely avocational or recreational
educational programs.
(b) (1) An institution offering educational programs sponsored by
a bona fide trade, business, professional, or fraternal organization,
solely for that organization's membership.
(2) (A) Except as provided in subparagraph (B), a bona fide
organization, association, or council that offers preapprenticeship
training programs, on behalf of one or more Division of
Apprenticeship Standards-approved labor-management apprenticeship
programs that satisfies one of the following conditions:
(i) It is not on the Eligible Training Provider List established
and maintained by the California Workforce Investment Board but has
met the requirements for placement on the list.
(ii) It is on the Eligible Training Provider List established and
maintained by the California Workforce Investment Board and meets the
requirements for continued listing.
(B) If an organization, association, or council has been removed
from the Eligible Training Provider List established and maintained
by the California Workforce Investment Board for failure to meet
performance standards, it is not exempt until it meets all applicable
performance standards.
(c) A postsecondary educational institution established, operated,
and governed by the federal government or by this state or its
political subdivisions.
(d) An institution offering either of the following:
(1) Test preparation for examinations required for admission to a
postsecondary educational institution.
(2) Continuing education or license examination preparation, if
the institution or the program is approved, certified, or sponsored
by any of the following:
(A) A government agency, other than the bureau, that licenses
persons in a particular profession, occupation, trade, or career
field.
(B) A state-recognized professional licensing body, such as the
State Bar of California, that licenses persons in a particular
profession, occupation, trade, or career field.
(C) A bona fide trade, business, or professional organization.
(e) (1) An institution owned, controlled, and operated and
maintained by a religious organization lawfully operating as a
nonprofit religious corporation pursuant to Part 4 (commencing with
Section 9110) of Division 2 of Title 1 of the Corporations Code, that
meets all of the following requirements:
(A) The instruction is limited to the principles of that religious
organization, or to courses offered pursuant to Section 2789 of
Business and Professions Code.
(B) The diploma or degree is limited to evidence of completion of
that education.
(2) An institution operating under this subdivision shall offer
degrees and diplomas only in the beliefs and practices of the church,
religious denomination, or religious organization.
(3) An institution operating under this subdivision shall not
award degrees in any area of physical science.
(4) Any degree or diploma granted under this subdivision shall
contain on its face, in the written description of the title of the
degree being conferred, a reference to the theological or religious
aspect of the degree's subject area.
(5) A degree awarded under this subdivision shall reflect the
nature of the degree title, such as "associate of religious studies,"
"bachelor of religious studies," "master of divinity," or "doctor of
divinity."
(f) An institution that does not award degrees and that solely
provides educational programs for total charges of two thousand five
hundred dollars ($2,500) or less when no part of the total charges is
paid from state or federal student financial aid programs. The
bureau may adjust this cost threshold based upon the California
Consumer Price Index and post notification of the adjusted cost
threshold on its Internet Web site, as the bureau determines, through
the promulgation of regulations, that the adjustment is consistent
with the intent of this chapter.
(g) A law school that is accredited by the Council of the Section
of Legal Education and Admissions to the Bar of the American Bar
Association or a law school or law study program that is subject to
the approval, regulation, and oversight of the Committee of Bar
Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and
Professions Code.
(h) A nonprofit public benefit corporation that satisfies all of
the following criteria:
(1) Is qualified under Section 501(c)(3) of the United States
Internal Revenue Code.
(2) Is organized specifically to provide workforce development or
rehabilitation services.
(3) Is accredited by an accrediting organization for workforce
development or rehabilitation services recognized by the Department
of Rehabilitation.
(i) An institution that is accredited by the Accrediting
Commission for Senior Colleges and Universities, Western Association
of Schools and Colleges, or the Accrediting Commission for Community
and Junior Colleges, Western Association of Schools and Colleges.
(j) Flight instruction providers or programs that provide flight
instruction pursuant to Federal Aviation Administration regulations
and meet both of the following criteria:
(1) The flight instruction provider or program does not require
students to enter into written or oral contracts of indebtedness.
(2) The flight instruction provider or program does not require or
accept prepayment of instruction-related costs in excess of two
thousand five hundred dollars ($2,500).
SEC. 4. SEC. 5. Section 94874.2 of
the Education Code is amended to read:
94874.2. Beginning January 1, 2016, an institution that is
approved to participate in veterans' financial aid programs pursuant
to Section 21.4253 of Title 38 of the Code of Federal Regulations
that is not an independent institution of higher education, as
defined in subdivision (b) of Section 66010, shall not be exempt from
this chapter.
SEC. 5. SEC. 6. Section 94874.5 of
the Education Code is amended to read:
94874.5. An institution that is otherwise exempt from this
chapter shall comply with the requirements of Section 94927.5.
SEC. 6. SEC. 7. Section 94874.7 of
the Education Code is amended to read:
94874.7. The bureau shall establish, by regulation, a process
pursuant to which an institution that is exempt from this chapter may
request, and obtain, from the bureau verification that the
institution is exempt. The verification shall be valid for a period
of up to two years, as long as the institution maintains full
compliance with the requirements of the exemption. The bureau shall
establish a reasonable fee to reimburse the bureau's costs associated
with the implementation of this section.
SEC. 7. SEC. 8. Section 94874.8 of
the Education Code is amended to read:
94874.8. (a) An institution exempt from all or part of this
chapter pursuant to subdivision (i) of Section 94874 or Section
94874.1 may apply to the bureau for an approval to operate pursuant
to this section, but only subject to all of the following provisions:
(1) The bureau may approve the operation of an institution that is
exempt from all or part of this chapter as specified above in
accordance with the authority granted pursuant to Article 6
(commencing with Section 94885). Upon issuing an approval to operate
to an institution pursuant to this section, the bureau is authorized
to regulate that institution through the full set of powers granted,
and duties imposed, by this chapter, as those powers and duties would
apply to an institution that is not exempt from this chapter.
(2) Notwithstanding any other law, upon issuance of an approval to
operate pursuant to this section, the institution is no longer
eligible for exemption, from the provisions of this chapter pursuant
to subdivision (i) of Section 94874 or Section 94874.1, unless
authorized by subsequent legislation.
(3) Upon issuance of an approval to operate pursuant to this
section, an institution is subject to all provisions of this chapter,
and any regulations adopted pursuant to this chapter, that apply to
an institution subject to this chapter, except as expressly provided
in paragraph (4).
(4) (A) With respect to the placement and salary or wage data
required to be collected, calculated, and reported by Article 16
(commencing with Section 94928), an institution issued an approval to
operate pursuant to this section is not required to report on its
first School Performance Fact Sheet any data from the period prior to
the date of the issuance of the approval to operate that the
institution was not required to collect and does not have available
to it. An institution shall, however, report available data collected
and calculated in accordance with this chapter and applicable
regulations, regardless of the purpose for which the data was
collected. If the required data is unavailable, the institution shall
also disclose the unavailability of the data on all documents
required by this chapter and regulations adopted pursuant to this
chapter. Upon receiving an approval to operate pursuant to this
section, an institution shall commence to collect and calculate all
information necessary to comply with Article 16 (commencing with
Section 94928).
(B) An institution receiving an approval to operate pursuant to
this section shall provide to prospective students the School
Performance Fact Sheet, file that fact sheet with the bureau, and
post it on the institution's Internet Web site no later than the
first August 1 after the institution is approved to operate and no
later than August 1 of each year thereafter. These School Performance
Fact Sheets shall report data for the previous two calendar years
based upon the number of students who began the program or the number
of graduates for each reported calendar year. If two calendar years
have not passed since the issuance of the approval to operate by the
August 1 deadline for the School Performance Fact Sheet, unless data
for two years is available, the institution shall report the required
data for the period subsequent to the date of the issuance of the
notice of approval.
(b) An institution exempt from all or part of this chapter
pursuant to subdivision (i) of Section 94874 or Section 94874.1 that
was approved to operate by the bureau before the effective date of
this section shall be deemed to have been approved pursuant to this
section.
SEC. 8. SEC. 9. Section 94878 of the
Education Code is amended to read:
94878. (a) The bureau shall establish an Internet Web site that
includes at least all of the following information:
(1) An explanation of the bureau's scope of authority.
(2) (A) A directory of approved institutions, and a link, if
feasible, to the Internet Web site of each institution.
(B) For each institution, the directory shall be developed in a
manner that allows the user to search by institution and shall
include all of the following information:
(i) The status of the institution's approval to operate.
(ii) The information provided by the institutions, including, but
not limited to, the annual report, as required by Section 94934,
including the school catalog and the School Performance Fact Sheet.
The School Performance Fact Sheet shall be maintained on the
directory for at least five years after the date of its submission to
the bureau.
(iii) If a law school satisfies the requirements of this chapter
regarding a School Performance Fact Sheet by complying with the
requirements of Section 94910.5, the bureau shall include the
information provided by the institution pursuant to Section 94910.5
on its Internet Web site and shall maintain the information in the
same manner as required by clause (ii).
(iv) The disciplinary history of the institution, which shall
include, but shall not be limited to, all of the following:
(I) Pending formal accusations filed by the bureau.
(II) Suspensions, revocations, citations, fines, infractions,
probations, pending litigation filed by the bureau, and final
judgments resulting from litigation filed by the bureau.
(III) Pending or final civil or criminal cases filed by the
Attorney General, a city attorney, or a district attorney in this
state, or filed in any state by an attorney general or a federal
regulatory or prosecutorial agency of which the bureau has received
notice.
(IV) Final administrative actions by the United States Department
of Education, including orders requiring restitution to students.
(V) All disciplinary actions ordered by an accreditation agency,
including any order to show cause, of which the bureau has received
notice pursuant to Section 94934 or other information otherwise
publicly available of which the bureau has received notice.
(b) The bureau shall maintain the Internet Web site described in
subdivision (a). The bureau shall ensure that the information
specified in subdivision (a) is kept current. The bureau shall update
the Internet Web site at least annually, to coincide with the
submission of annual reports by the institutions pursuant to Section
94934.
(c) (1) The bureau shall post on its Internet Web site a list of
all institutions that were denied approval to operate, after the
denial is final, and describe in clear and conspicuous language the
reason the institution was denied approval. The bureau shall include
with this list the statement provided in paragraph (2) on its
Internet Web site.
(2) "The following institutions were denied approval to operate by
the Bureau for Private Postsecondary Education for failing to
satisfy the standards relating to educational quality, or consumer
protection, or both. These unlicensed institutions are not operating
in compliance with the law, and students are strongly discouraged
from attending these institutions."
SEC. 9. SEC. 10. Section 94879 of the
Education Code is repealed.
SEC. 10. SEC. 11. Section 94880 of
the Education Code is amended to read:
94880. (a) There is within the bureau a 12-member advisory
committee. The members of the committee shall be appointed as
follows:
(1) Three members, who shall have a demonstrated record of
advocacy on behalf of consumers, of which the director, the Senate
Committee on Rules, and the Speaker of the Assembly shall each
appoint one member.
(2) Two members, who shall be current or past students of
institutions, appointed by the director.
(3) Three members, who shall be representatives of institutions,
appointed by the director.
(4) One public member appointed by the Senate Committee on Rules.
(5) One public member appointed by the Speaker of the Assembly.
(6) Two nonvoting, ex officio members as follows:
(A) The chair of a policy committee of the Assembly with
jurisdiction over legislation relating to the bureau appointed by the
Speaker of the Assembly. The chair may designate a representative
for any meeting or meetings he or she is unable to attend.
(B) The chair of a policy committee of the Senate with
jurisdiction over legislation relating to the bureau appointed by the
Senate Committee on Rules. The chair may designate a representative
for any meeting or meetings he or she is unable to attend.
(b) (1) A member appointed pursuant to paragraph (2), (4), or (5)
of subdivision (a) shall not, either at the time of his or her
appointment or during his or her tenure in office, have any financial
interest in any organization currently or previously subject to
regulation by the bureau, be a close family member of an employee,
officer, or the director of any institution subject to regulation by
the bureau, or currently have, or previously have had, a business
relationship, in the five years preceding his or her appointment,
with any institution subject to regulation by the bureau.
(2) A member appointed pursuant to paragraph (2), (4), or (5) of
subdivision (a) shall not, within the five years immediately
preceding his or her appointment, have engaged in pursuits on behalf
of an institution or institutional accreditor or have provided
representation to the postsecondary educational industry or a
profession regulated by the bureau, if he or she is employed in the
industry or a member of the profession, respectively, and he or she
shall not engage in those pursuits or provide that representation
during his or her term of office.
(c) The advisory committee shall examine the oversight functions
and operational policies of the bureau and advise the bureau with
respect to matters relating to private postsecondary education and
the administration of this chapter, including annually reviewing the
fee schedule and the equity of the schedule relative to the way
institutions are structured, and the licensing and enforcement
provisions of this chapter. The advisory committee shall make
recommendations with respect to policies, practices, and regulations
relating to private postsecondary education, and shall provide any
assistance as may be requested by the bureau.
(d) The bureau shall actively seek input from, and consult with,
the advisory committee regarding the development of regulations to
implement this chapter prior to the adoption, amendment, or repeal of
its regulations, and provide the advisory committee with sufficient
time to review and comment on those regulations. The bureau shall
take into consideration and respond to all feedback provided by
members of the advisory committee.
(e) The bureau chief shall attend all advisory committee meetings
and shall designate staff to provide ongoing administrative support
to the advisory committee.
(f) Until January 1, 2017, the director shall personally attend,
and testify and answer questions at, each meeting of the advisory
committee.
(g) The ombudsperson chief of the
Office of Student Assistance and Relief established in Article 20.6
(commencing with Section 94949.7), appointed pursuant to
Section 94949.71, 94949.7) shall attend, and
testify and answer questions at, each meeting of the advisory
committee.
(h) The advisory committee shall have the same access to records
within the Department of Consumer Affairs related to the operation
and administration of this chapter as do members of constituent
boards of the department in regard to records related to their
functions.
(i) Advisory committee meetings shall be subject to the
Bagley-Keene Open Meeting Act (Article 9 (commencing with Section
11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the
Government Code). Advisory committee meeting materials shall be
posted on the Internet. A majority of the voting
appointed members of the committee shall constitute a
quorum for the committee's meetings.
(j) The advisory committee shall meet at least quarterly and shall
appoint a member of the committee to represent the committee for
purposes of communicating with the Legislature.
(k) The Department of Consumer Affairs shall review, and revise if
necessary, the department's conflicts of interest regulations to
ensure that each advisory committee member is required to disclose
conflicts of interest to the public.
SEC. 11. SEC. 12. Section 94885 of
the Education Code is amended to read:
94885. (a) The bureau shall adopt by regulation minimum operating
standards for an institution that shall reasonably ensure that all
of the following occur:
(1) The content of each educational program can achieve its stated
objective.
(2) The institution maintains specific written standards for
student admissions for each educational program and those standards
are related to the particular educational program.
(3) The facilities, instructional equipment, and materials are
sufficient to enable students to achieve the educational program's
goals.
(4) The institution maintains a withdrawal policy and provides
refunds.
(5) The directors, administrators, and faculty are properly
qualified.
(6) The institution is financially sound and capable of fulfilling
its commitments to students.
(7) That, upon satisfactory completion of an educational program,
the institution gives students a document signifying the degree or
diploma awarded.
(8) Adequate records and standard transcripts are maintained and
are available to students.
(9) The institution is maintained and operated in compliance with
this chapter and all other applicable ordinances and laws.
(b) Except as provided in Section 94885.1, an institution offering
a degree must satisfy one of the following requirements:
(1)
Accreditation by an accrediting agency recognized by the United
States Department of Education, with the scope of that accreditation
covering the offering of at least one degree program by the
institution.
(2) An accreditation plan, approved by the bureau, for the
institution to become fully accredited within five years of the
bureau's issuance of a provisional approval to operate to the
institution. The provisional approval to operate to an unaccredited
degree-offering institution shall be in compliance with Section
94885.5.
SEC. 12. SEC. 13. Section 94885.1 of
the Education Code is amended to read:
94885.1. (a) An institution that is not accredited by an
accrediting agency recognized by the United States Department of
Education and offering at least one degree program, and that has
obtained an approval to operate from the bureau on or before January
1, 2015, shall be required to satisfy at least one of the following
no later than July 1, 2015:
(1) Accreditation by an accrediting agency recognized by the
United States Department of Education, with the scope of that
accreditation covering the offering of at least one degree program by
the institution.
(2) Compliance with subdivision (b).
(b) The bureau shall identify institutions that are subject to
subdivision (a) and notify those institutions by February 1, 2015, of
the accreditation requirements pursuant to this section and that the
institution is required to provide the following
information to the bureau if the institution plans to continue to
offer a degree program after July 1, 2015:
(1) An accreditation plan that, at a minimum, identifies an
accrediting agency recognized by the United States Department of
Education from which the institution will seek accreditation, with
the scope of that accreditation covering the offering of at least one
degree program, and outlines the process by which the institution
will achieve accreditation candidacy or pre-accreditation by July 1,
2017, and full accreditation by July 1, 2020.
(2) Evidence of having achieved accreditation candidacy or
pre-accreditation by July 1, 2017.
(3) Evidence of having obtained full accreditation by July 1,
2020.
(4) Any additional documentation the bureau deems necessary.
(c) An institution that satisfies the requirements of subdivision
(b) shall comply with all of the following:
(1) Notify students seeking to enroll in the institution, in
writing, prior to the execution of the student's enrollment
agreement, that the institution's approval to offer a degree program
is contingent upon the institution being subsequently accredited.
(2) A visiting committee, empaneled by the bureau pursuant to
Section 94882, shall review the institution by January 1, 2017, and
determine if the institution is likely to achieve full accreditation
by July 1, 2020. If the visiting committee finds the institution
deficient in its accreditation plan, the bureau may prohibit the
institution from enrolling new students in its degree program or
programs, and require the execution of a teach-out plan for its
enrolled students.
(d) (1) The bureau shall, upon the timely submission of sufficient
evidence that an unaccredited institution is making strong progress
toward obtaining accreditation, grant an institution's request for an
extension of time, not to exceed two years, to meet the requirements
of this section.
(2) Evidence submitted to the bureau pursuant to paragraph (1)
shall include, but is not limited to, an amended accreditation plan
adequately identifying why pre-accreditation, accreditation
candidacy, or accreditation outlined in the original plan submitted
to the bureau was not achieved, active steps the institution is
taking to comply with this section, and documentation from an
accrediting agency demonstrating the institution's likely ability to
meet the requirements of this section.
(3) The bureau may establish policies and procedures to comply
with the requirements in this subdivision. Establishment of these
policies and procedures are exempt from Chapter 3.5 (commencing with
Section 11340), Chapter 4 (commencing with Section 11370), Chapter
4.5 (commencing with Section 11400), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(e) Any institution that fails to comply with the requirements of
this section by the dates provided, as required, shall have its
approval to operate automatically suspended on the applicable date.
The bureau shall issue an order suspending the institution and that
suspension shall not be lifted until the institution complies with
the requirements of this section. A suspended institution shall not
enroll new students in any of its degree programs, and shall execute
a teach-out plan for its enrolled students.
(f) The bureau shall adopt emergency regulations for purposes of
implementing this section. The adoption of these regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code. These emergency regulations shall become law through
the regular rulemaking process within one year of the enactment of
this section.
(g) This section shall remain in effect until January 1, 2023, and
as of that date is repealed, unless a later enacted statute, that is
enacted before January 1, 2023, deletes or extends that date.
SEC. 13. SEC. 14. Section 94885.5 of
the Education Code is amended to read:
94885.5. (a) If an institution that has not been accredited by an
accrediting agency recognized by the United States Department of
Education seeks to offer one or more degree programs, the institution
shall satisfy the following requirements in order to be issued a
provisional approval to operate from the bureau:
(1) The institution may not offer more than two degree programs
during the term of its provisional approval to operate.
(2) The institution shall submit an accreditation plan, approved
by the bureau, for the institution to become fully accredited within
five years of issuance of its provisional approval to operate. The
plan shall include, at a minimum, identification of an accreditation
agency recognized by the United States Department of Education, from
which the institution plans to seek accreditation, and outline the
process by which the institution will achieve accreditation candidacy
or pre-accreditation within two years, and full accreditation within
five years, of issuance of its provisional approval.
(3) The institution shall submit to the bureau all additional
documentation the bureau deems necessary to determine if the
institution will become fully accredited within five years of
issuance of its provisional approval to operate.
(b) If an institution is granted a provisional approval to operate
pursuant to subdivision (a), the following is required:
(1) Students seeking to enroll in that institution shall be
notified in writing by the institution, prior to the execution of the
student's enrollment agreement, that the institution's approval to
operate is contingent upon it being subsequently accredited.
(2) Within the first two years of issuance of the provisional
approval, a visiting committee, empaneled by the bureau pursuant to
Section 94882, shall review the institution's application for
approval and its accreditation plan, and make a recommendation to the
bureau regarding the institution's progress to achieving full
accreditation.
(3) The institution shall provide evidence of accreditation
candidacy or pre-accreditation within two years of issuance of its
provisional approval, and evidence of accreditation within five years
of issuance of its provisional approval, with the scope of that
accreditation covering the offering of at least one degree program.
(c) An institution required to comply with this section that fails
to do so by the dates provided, as required, shall have its
provisional approval to operate automatically suspended on the
applicable date. The bureau shall issue an order suspending the
institution and that suspension shall not be lifted until the
institution complies with the requirements of this section. A
suspended institution shall not enroll new students in any of its
degree programs and shall execute a teach-out plan for its enrolled
students.
(d) (1) The bureau shall, upon the timely submission of sufficient
evidence that an unaccredited institution is making strong progress
toward obtaining accreditation, grant an institution's request for an
extension of time, not to exceed two years, to meet the requirements
of this section.
(2) Evidence submitted to the bureau pursuant to paragraph (1)
shall include, but is not limited to, an amended accreditation plan
adequately identifying why preaccreditation, accreditation candidacy,
or accreditation outlined in the original plan submitted to the
bureau was not achieved, active steps the institution is taking to
comply with this section, and documentation from an accrediting
agency demonstrating the institution's likely ability to meet the
requirements of this section.
(3) The bureau may establish policies and procedures to comply
with the requirements in this subdivision. Establishment of these
policies and procedures are exempt from Chapter 3.5 (commencing with
Section 11340), Chapter 4 (commencing with Section 11370), Chapter
4.5 (commencing with Section 11400), and Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(e) An institution issued a provisional approval under this
section is required to comply with all other laws and regulations.
(f) The bureau shall adopt emergency regulations for purposes of
implementing this section. The adoption of these regulations shall be
deemed to be an emergency and necessary for the immediate
preservation of the public peace, health and safety, or general
welfare for purposes of Sections 11346.1 and 11349.6 of the
Government Code. These emergency regulations shall become law through
the regular rulemaking process within one year of the enactment of
this section.
SEC. 15. Section 94889 of the Education
Code is amended to read:
94889. (a) Except as provided in
subdivision (b) of Section 94890, 94890 and
subdivision (b) of this section, an approval to operate shall
be for a term of five years.
(b) The bureau may adopt, by regulation, a process by which an
institution with an approval to operate may request, and be approved
by the bureau for, an inactive status. The process shall ensure that
the institution, upon reinstatement of its active approval to
operate, satisfies the requirements of this chapter.
SEC. 14. SEC. 16. Section 94905 of
the Education Code is amended to read:
94905. (a) During the enrollment process, an institution offering
educational programs designed to lead to positions in a profession,
occupation, trade, or career field requiring licensure in this state
shall exercise reasonable care to determine if the student will not
be eligible to obtain licensure in the profession, occupation, trade,
or career field at the time of the student's graduation and shall
provide all students enrolled in those programs with a written copy
of the requirements for licensure established by the state, including
any applicable course requirements established by the state. If the
minimum course requirements of the institution exceed the minimum
requirements for state licensure, the institution shall disclose this
information, including a list of those courses that are not required
for state licensure. The institution shall not execute an enrollment
agreement with a student that is known to be ineligible for
licensure, unless the student's stated objective is other than
licensure.
(b) During the enrollment process, an institution may discuss
internships and student jobs available to the student during the
student's attendance at the institution. If the institution discusses
internships and student jobs, the institution shall disclose the
number of requests for internship and student job placement
assistance received by the institution during the immediately
preceding calendar year and the number of actual placements during
that year.
(c) During the enrollment process, an institution offering
educational programs designed to lead to positions in a profession,
occupation, trade, or career field where voluntary licensure by a
government agency is available, shall provide its students seeking to
enroll in those programs with a written copy of the requirements for
that voluntary licensure.
SEC. 15. SEC. 17. Section 94909 of
the Education Code is amended to read:
94909. (a) Except as provided in subdivision (d), prior to
enrollment, an institution shall provide a prospective student,
either in writing or electronically, with a school catalog
containing, at a minimum, all of the following:
(1) The name, address, telephone number, and, if applicable,
Internet Web site address of the institution.
(2) Except as specified in Article 2 (commencing with Section
94802), a statement that the institution is a private institution and
that it is approved to operate by the bureau.
(3) The following statements:
(A) "Any questions a student may have regarding this catalog that
have not been satisfactorily answered by the institution may be
directed to the Bureau for Private Postsecondary Education at
(address), Sacramento, CA (ZIP Code), (Internet Web site address),
(telephone and fax numbers)."
(B) "As a prospective student, you are encouraged to review this
catalog prior to signing an enrollment agreement. You are also
encouraged to review the School Performance Fact Sheet, which must be
provided to you prior to signing an enrollment agreement."
(C) "A student or any member of the public may file a complaint
about this institution with the Bureau for Private Postsecondary
Education by calling (toll-free telephone number) or by completing a
complaint form, which can be obtained on the bureau's Internet Web
site (Internet Web site address)."
(4) The address or addresses where class sessions will be held.
(5) A description of the programs offered and a description of the
instruction provided in each of the courses offered by the
institution, the requirements for completion of each program,
including required courses, any final tests or examinations, any
required internships or externships, and the total number of credit
hours, clock hours, or other increments required for completion.
(6) If the educational program is designed to lead to positions in
a profession, occupation, trade, or career field requiring licensure
in this state, a notice to that effect and a list of the
requirements for eligibility for licensure.
(7) Information regarding the faculty and their qualifications.
(8) A detailed description of institutional policies in the
following areas:
(A) Admissions policies, including the institution's policies
regarding the acceptance of credits earned at other institutions or
through challenge examinations and achievement tests, admissions
requirements for ability-to-benefit students, and a list describing
any transfer or articulation agreements between the institution and
any other college or university that provides for the transfer of
credits earned in the program of instruction. If the institution has
not entered into an articulation or transfer agreement with any other
college or university, the institution shall disclose that fact.
(B) Cancellation, withdrawal, and refund policies, including an
explanation that the student has the right to cancel the enrollment
agreement and obtain a refund of charges paid through attendance at
the first class session, or the seventh day after enrollment,
whichever is later. The text shall also include a description of the
procedures that a student is required to follow to cancel the
enrollment agreement or withdraw from the institution and obtain a
refund consistent with the requirements of Article 13 (commencing
with Section 94919).
(C) Probation and dismissal policies.
(D) Attendance policies.
(E) Leave-of-absence policies.
(9) The schedule of total charges for a period of attendance and
an estimated schedule of total charges for the entire educational
program.
(10) A statement reporting whether the institution participates in
federal and state financial aid programs, and if so, all consumer
information that is required to be disclosed to the student pursuant
to the applicable federal and state financial aid programs.
(11) A statement specifying that, if a student obtains a loan to
pay for an educational program, the student will have the
responsibility to repay the full amount of the loan plus interest,
less the amount of any refund, and that, if the student has received
federal student financial aid funds, the student is entitled to a
refund of the moneys not paid from federal student financial aid
program funds.
(12) A statement specifying whether the institution has a pending
petition in bankruptcy, is operating as a debtor in possession, has
filed a petition within the preceding five years, or has had a
petition in bankruptcy filed against it within the preceding five
years that resulted in reorganization under Chapter 11 of the United
States Bankruptcy Code (11 U.S.C. Sec. 1101 et seq.).
(13) If the institution provides placement services, a description
of the nature and extent of the placement services.
(14) A description of the student's rights and responsibilities
with respect to the Student Tuition Recovery Fund. This statement
shall specify that it is a state requirement that a student who pays
his or her tuition is required to pay a state-imposed assessment for
the Student Tuition Recovery Fund. This statement shall also describe
the purpose and operation of the Student Tuition Recovery Fund and
the requirements for filing a claim against the Student Tuition
Recovery Fund.
(15) The following statement:
"NOTICE CONCERNING TRANSFERABILITY OF CREDITS AND CREDENTIALS EARNED
AT OUR INSTITUTION
The transferability of credits you earn at (name of institution) is
at the complete discretion of an institution to which you may seek
to transfer. Acceptance of the (degree, diploma, or certificate) you
earn in (name of educational program) is also at the complete
discretion of the institution to which you may seek to transfer. If
the (credits or degree, diploma, or certificate) that you earn at
this institution are not accepted at the institution to which you
seek to transfer, you may be required to repeat some or all of your
coursework at that institution. For this reason you should make
certain that your attendance at this institution will meet your
educational goals. This may include contacting an institution to
which you may seek to transfer after attending (name of institution)
to determine if your (credits or degree, diploma, or certificate)
will transfer."
(16) A statement specifying whether the institution, or any of its
degree programs, are accredited by an accrediting agency recognized
by the United States Department of Education. If the institution is
unaccredited and offers an associate, baccalaureate, master's, or
doctoral degree, or is accredited and offers an unaccredited program
for an associate, baccalaureate, master's, or doctoral degree, the
statement shall disclose the known limitations of the degree program,
including, but not limited to, all of the following:
(A) Whether a graduate of the degree program will be eligible to
sit for the applicable licensure exam in California and other states
or become certified or registered as required for the applicable
profession, occupation, trade, or career field in California.
(B) A degree program that is unaccredited or a degree from an
unaccredited institution is not recognized for some employment
positions, including, but not limited to, positions with the State of
California.
(C) That a student enrolled in an unaccredited institution is not
eligible for federal financial aid programs.
(b) If the institution has a general student brochure, the
institution shall provide that brochure to the prospective student
prior to enrollment. In addition, if the institution has a
program-specific student brochure for the program in which the
prospective student seeks to enroll, the institution shall provide
the program-specific student brochure to the prospective student
prior to enrollment.
(c) An institution shall provide the school catalog to any person
upon request. In addition, if the institution has student brochures,
the institution shall disclose the requested brochures to any
interested person upon request.
(d) An accredited institution is not required to provide a School
Performance Fact Sheet to a prospective student who is not a
California resident, not residing in California at the time of his or
her enrollment, and enrolling in an accredited distance learning
degree program offered by the institution, if the institution
complies with all federal laws, the applicable laws of the state
where the student is located, and other appropriate laws, including,
but not limited to, consumer protection and student disclosure
requirements.
SEC. 16. SEC. 18. Section 94923 of
the Education Code is amended to read:
94923. (a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
institution not exempt from this article pursuant to Article 4
(commencing with Section 94874), who, at the time of his or her
enrollment, was a California resident or was enrolled in a California
residency program, prepaid tuition, and suffered economic loss.
(b) (1) The bureau shall adopt, by regulation, procedures
governing the administration and maintenance of the Student Tuition
Recovery Fund. The fund shall be used to provide awards to students
who suffer economic loss.
(2) The following students, and any other students deemed
appropriate, are eligible for payment from the Student Tuition
Recovery Fund:
(A) Any student who was enrolled at an institution, at a location
of the institution, or in an educational program offered by the
institution, at the time that institution, location, or program was
closed or discontinued, as applicable, who did not choose to
participate in a teach-out plan approved by the bureau or did not
complete a chosen teach-out plan approved by the bureau.
(B) Any student who was enrolled at an institution or a location
of the institution within the 120-day period before the closure of
the institution or location of the institution, or who was enrolled
in an educational program within the 120-day period before the
program was discontinued.
(C) Any student who was enrolled at an institution or a location
of the institution more than 120 days before the closure of the
institution or location of the institution, in an educational program
offered by the institution as to which the bureau determines there
was a significant decline in the quality or value of the program more
than 120 days before closure.
(D) A Notwithstanding the requirement that
a student attend an institution that is not exempt from this
article, pursuant to subdivision (a), a student who was
enrolled at a California campus of a Corinthian Colleges, Inc.,
institution or was a California student enrolled in an online program
offered by an out-of-state campus of a Corinthian Colleges, Inc.,
institution, who also meets all of the other eligibility
requirements, if the student was enrolled as of June 20, 2014, or
withdrew within 120 days of that date or any greater period
determined by the bureau pursuant to this section.
(E) A student to whom an institution has been ordered to pay a
refund by the bureau but has failed to do so.
(F) A student to whom an institution has failed to pay or
reimburse loan proceeds under a federal student loan program as
required by law, or has failed to pay or reimburse proceeds received
by the institution in excess of tuition and other costs.
(G) A student who has been awarded restitution, a refund, or other
monetary award by an arbitrator or court, based on a violation of
this chapter by an institution or representative of an institution,
but who has been unable to collect the award from the institution.
The bureau shall review the award or judgment and shall ensure the
amount to be paid from the fund does not exceed the student's
economic loss.
(H) Notwithstanding the definition of economic loss in subdivision
(f), for purposes of recovery from the Student Tuition Recovery
Fund, a student who has sought legal counsel that resulted in the
cancellation of one or more student loans in connection with his or
her Student Tuition Recovery Fund claim may seek reimbursement for
legal services rendered in an amount up to five hundred dollars
($500). The bureau shall review the invoice of the legal services
rendered and evidence of the cancellation of the student loan or
loans, and upon verifying that cancellation, pay the claim directly
to the student.
(c) Any student who is required to pay a Student Tuition Recovery
Fund assessment who pays tuition equal to or greater than the
required assessment shall be deemed to have paid the required
assessment, whether or not his or her enrollment agreement specifies
collection of the required assessment, and whether or not the
institution identifies any money collected from the student as a
Student Tuition Recovery Fund assessment.
(d) A student who suffers educational opportunity losses, whose
charges are paid by a third-party payer, is eligible for educational
credits under the fund.
(e) The bureau may seek repayment to the Student Tuition Recovery
Fund from an institution found in violation of the law for which a
student claim was paid. An institution shall not be eligible to renew
its approval to operate with the bureau if the repayment is not made
to the bureau as requested.
(f) For purposes of this section, "economic loss" includes, but is
not necessarily limited to, pecuniary loss, which is the sum of the
student's tuition, all other institutional charges as defined in
Section 94844, the cost of equipment and materials required for the
educational program as defined in Section 94837, interest on any
student loan used to pay for such charges, collection costs,
penalties, and any license or examination fees the student paid to
the institution but is unable
to recover. Economic loss shall also include the amount the
institution collected and failed to pay to third parties on behalf of
the student for license fees or any other purpose. Economic loss
does not include Student Tuition Recovery Fund assessments, unless
the student is entitled to a full refund under Section 94919 or
94920, room and board, supplies, transportation, application fees, or
nonpecuniary damages such as inconvenience, aggravation, emotional
distress, or punitive damages. Economic loss does not include legal
fees, attorney fees, court costs, or arbitration fees. Nothing in
this subdivision shall prevent the bureau from further defining
economic loss to include loss of educational opportunity.
(g) Any representation or agreement by a person or entity not to
collect a student loan obligation does not reduce a student's
eligibility for recovery from the Student Tuition Recovery Fund or
reduce the student's economic loss, unless the student loan
obligation is forgiven, discharged, or canceled.
(g) As a condition of the bureau satisfying a student loan
obligation on behalf of a Student Tuition Recovery Fund applicant,
the loan servicer or debtholder shall submit a letter stating that
the servicer or holder will no longer collect on the debt and shall
report the debt as "paid in full" to all credit reporting agencies.
The bureau shall retain a copy of that letter and provide the
original to the applicant.
(h) The Except as provided in subdivision
(i), the bureau shall require a student seeking reimbursement
from the Student Tuition Recovery Fund to file a written application
that shall be received by the bureau no later than four years after
the date of the action that made the student eligible for recovery
from the Student Tuition Recovery Fund.
(i) Any student whose loan is revived by a loan holder or debt
collector after a period of noncollection by the holder or collector
may, at any time, file a written application for recovery from the
Student Tuition Recovery Fund for the debt that would have been
otherwise eligible for recovery under this section.
SEC. 19. Section 94930.5 of the
Education Code is amended to read:
94930.5. Subject to Section 94930, an institution shall remit to
the bureau for deposit in the Private Postsecondary Education
Administration Fund the following fees, in accordance with the
following schedule:
(a) The following fees shall be remitted by an institution
submitting an application for an approval to operate, if applicable:
(1) Application fee for an approval to operate: five thousand
dollars ($5,000).
(2) Application fee for the approval to operate a new branch of
the institution: three thousand dollars ($3,000).
(3) Application fee for an approval to operate by means of
accreditation: seven hundred fifty dollars ($750).
(b) The following fees shall be remitted by an institution seeking
a renewal of its approval to operate, if applicable:
(1) Renewal fee for the main campus of the institution: three
thousand five hundred dollars ($3,500).
(2) Renewal fee for a branch of the institution: three thousand
dollars ($3,000).
(3) Renewal fee for an institution that is approved to operate by
means of accreditation: five hundred dollars ($500).
(c) The following fees shall apply to an institution seeking
authorization of a substantive change to its approval to operate, if
applicable:
(1) Processing fee for authorization of a substantive change to an
approval to operate: five hundred dollars ($500).
(2) Processing fee in connection with a substantive change to an
approval to operate by means of accreditation: two hundred fifty
dollars ($250).
(d) (1) In addition to any fees paid to the bureau pursuant to
subdivisions (a) to (c), inclusive, each institution that is approved
to operate pursuant to this chapter shall remit both of the
following:
(A) An annual institutional fee, fee for
each campus designated by the institution as a main campus location
in California, in an amount equal to three-quarters of
1 0.55 percent of the campus' total gross
revenue derived from students in California, but not
exceeding a total of twenty-five thousand dollars ($25,000) annually.
to be less than two thousand five hundred dollars
($2,500) and not to exceed sixty thousand dollars ($60,000).
(B) An annual branch campus fee
of one thousand dollars ($1,000) for each branch
or campus of the institution operating in
California. in an amount equal to 0.55 percent of the
branch's total gross revenue derived from students in California,
but not to be less than two thousand five hundred dollars ($2,500)
and not to exceed sixty thousand dollars ($60,000).
(2) The amount of the annual fees pursuant to paragraph (1) shall
be proportional to the bureau's cost of regulating the
institution institutions under this
chapter. chapter, but shall not exceed seven hundred
fifty thousand dollars ($750,000) for an y institution.
SEC. 17. SEC. 20. Section 94932 of
the Education Code is amended to read:
94932. The bureau shall determine an institution's compliance
with the requirements of this chapter. The bureau shall have the
power to require reports that institutions shall file with the bureau
in addition to the annual report, to send staff to an institution's
sites, and to require documents and responses from an institution to
monitor compliance. When the bureau has reason to believe that an
institution may be out of compliance, it shall conduct an
investigation of the institution. If the bureau determines, after
completing a compliance inspection or investigation, that an
institution has violated any applicable law or regulation, the bureau
shall take appropriate action pursuant to this article.
SEC. 18. SEC. 21. Section 94934.5 is
added to the Education Code, to read:
94934.5. (a) An institution with an approval to operate that
knows or reasonably should know that it is being investigated by an
oversight entity other than the bureau shall report that
investigation, including the nature of that investigation, to the
bureau within 30 days of the institution's first knowledge of the
investigation. An institution with an approval to operate that is the
subject of a judgment by, a regulatory action by, increased
oversight or monitoring by, or a settlement with, any oversight
entity other than the bureau shall report it to the bureau within 30
days. Failure to comply with this section may subject the institution
to an administrative citation pursuant to Section 94936.
(b) For the purposes of this section, "investigation" means any
inquiry into possible violations of any applicable laws or
accreditation standards.
(c) For the purposes of this section, "oversight entity" means
any federal government agency, government agency of any
state, or any accrediting agency. all of the
following:
(1) Any federal or state entity that provides financial aid to
students of an institution or approves an institution for
participation in a financial aid program.
(2) Any state or federal attorney general's office or department
of justice.
(3) Any regulator that approves the operation of the institution.
(4) The federal Consumer Financial Protection Bureau or the
federal Securities and Exchange Commission.
(5) Any accrediting agency.
(6) Any state professional licensing entity that exercises any
programmatic or institutional approval over an institution.
SEC. 19. SEC. 22. Section 94936 of
the Education Code is amended to read:
94936. (a) As a consequence of a compliance inspection
or an investigation, which may incorporate
any materials obtained or produced in connection with a compliance
inspection, and upon a finding that the institution has
committed a violation of this chapter or that the institution has
failed to comply with a notice to comply pursuant to Section 94935,
the bureau shall issue a citation to an institution for violation of
this chapter, or regulations adopted pursuant to this chapter.
(b) The citation may contain any of the following:
(1) An order of abatement that may require an institution to
demonstrate how future compliance with this chapter or regulations
adopted pursuant to this chapter will be accomplished.
(2) Notwithstanding Section 125.9 of the Business and Professions
Code, an administrative fine not to exceed five thousand dollars
($5,000) for each violation. The bureau shall base its assessment of
the administrative fine on:
(A) The nature and seriousness of the violation.
(B) The persistence of the violation.
(C) The good faith of the institution.
(D) The history of previous violations.
(E) The purposes of this chapter.
(F) The potential harm to students.
(3) An order to compensate students for harm, including a refund
of moneys paid to the institution by or on behalf of the student, as
determined by the bureau.
(c) (1) The citation shall be in writing and describe the nature
of the violation and the specific provision of law or regulation that
is alleged to have been violated.
(2) The citation shall inform the institution of its right to
request a hearing in writing within 30 days from service of the
citation.
(3) If a hearing is requested, the bureau shall select an informal
hearing pursuant to Article 10 (commencing with Section 11445.10) of
Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government
Code or a formal hearing pursuant to Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code.
(4) If a hearing is not requested, payment of the administrative
fine is due 30 days from the date of service, and shall not
constitute an admission of the violation charged.
(5) If a hearing is conducted and payment of an administrative
fine is ordered, the administrative fine is due 30 days from when the
final order is entered.
(6) The bureau may enforce the administrative fine as if it were a
money judgment pursuant to Title 9 (commencing with Section 680.010)
of Part 2 of the Code of Civil Procedure.
(d) All administrative fines shall be deposited in the Private
Postsecondary Education Administration Fund.
SEC. 20. SEC. 23. Section 94937 of
the Education Code is amended to read:
94937. (a) As a consequence of a compliance inspection
or an investigation, which may incorporate
any materials obtained or produced in connection with a compliance
inspection, and upon a finding that an institution has
committed a violation, the bureau may place an institution on
probation or may suspend or revoke an institution's approval to
operate for:
(1) Obtaining an approval to operate by fraud.
(2) A material violation or repeated violations of this chapter or
regulations adopted pursuant to this chapter that have resulted in
harm to students. For purposes of this paragraph, "material violation"
includes, but is not limited to, misrepresentation, fraud in the
inducement of a contract, and false or misleading claims or
advertising, upon which a student reasonably relied in executing an
enrollment agreement and that resulted in harm to the student.
(b) The bureau shall adopt regulations, within one year of the
enactment of this chapter, governing probation and suspension of an
approval to operate.
(c) The bureau may seek reimbursement pursuant to Section 125.3 of
the Business and Professions Code.
(d) An institution shall not be required to pay the cost of
investigation to more than one agency.
SEC. 21. SEC. 24. Section 94944 of
the Education Code is amended to read:
94944. Notwithstanding any other provision of law, the bureau
shall cite any person, and that person shall be subject to a fine not
to exceed one hundred thousand dollars ($100,000), for operating an
institution without proper approval to operate issued by the bureau
pursuant to this chapter.
SEC. 22. Article 20.5 (commencing with Section
94949.5) is added to Chapter 8 of Part 59 of Division 10 of Title 3
of the Education Code, to read:
Article 20.5. Enforcement Monitor
94949.5. (a) (1) The director shall appoint an enforcement
monitor no later than March 1, 2017. The director may retain a person
for this position by a personal services contract. In this
connection, the Legislature finds, pursuant to Section 19130 of the
Government Code, that this is a new state function.
(2) The director shall supervise the enforcement monitor and may
terminate or dismiss him or her from this position. If the monitor is
terminated or dismissed, the director shall appoint a replacement
monitor within two months.
(3) The monitoring duty of the enforcement monitor shall be on a
continuing basis for a period of no more than two years from the date
of the initial enforcement monitor's appointment.
(b) The enforcement monitor shall monitor and evaluate the bureau'
s enforcement efforts, with specific concentration on the adequacy of
bureau compliance inspections, handling and processing of student
complaints, and timely application of sanctions or discipline imposed
on institutions and persons in order to protect the public.
(c) The enforcement monitor shall exercise no authority over the
bureau's management or staff; however, the bureau and its staff shall
cooperate with the monitor and shall provide data, information, and
files as requested by the monitor to perform all of his or her
duties.
(d) The director shall assist the enforcement monitor in the
performance of his or her duties, and the monitor shall have the same
investigative authority as the director.
(e) The director shall specify additional duties of the
enforcement monitor.
(f) (1) The enforcement monitor shall submit to the department and
the Legislature, in compliance with Section 9795 of the Government
Code, an initial written report of his or her findings and
conclusions no later than July 1, 2018, and a subsequent written
report no later than November 1, 2018. The enforcement monitor shall
be available to make oral reports to the department or the
Legislature if requested to do so. The monitor may also provide
additional information to either the department or the Legislature at
his or her discretion or at the request of either the department or
the Legislature. The monitor shall make his or her reports available
to the public or the media. The monitor shall make every effort to
provide the bureau with an opportunity to reply to any facts,
findings, issues, or conclusions made in his or her reports to the
department or the Legislature with which the bureau may disagree.
(2) The enforcement monitor shall issue a final written report
before January 1, 2019. The final report shall include final findings
and conclusions on the topics addressed in the initial report
submitted by the monitor pursuant to paragraph (1).
(g) The bureau shall pay for all of the costs associated with the
employment of the enforcement monitor.
94949.6. This article shall remain in effect only until March 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before March 1, 2019, deletes or extends
that date.
SEC. 23. SEC. 25. Article 20.6
(commencing with Section 94949.7) is added to Chapter 8 of Part 59 of
Division 10 of Title 3 of the Education Code, to read:
Article 20.6. Office of Student Assistance and Relief
94949.7. There is hereby established within the
department an Office of Student Assistance and Relief for
the purpose of advancing and promoting the rights of prospective
students, current students, or past students of private postsecondary
educational institutions.
94949.71. (a) The duties of the office shall be vested in
an ombudsperson, a chief, who shall be
appointed by, and report to, by the
director. The ombudsperson chief, and each
staff employee of the office, shall have experience and
expertise expertise, commensurate with his or
her position, advocating on behalf of students and consumers
and shall have knowledge in the state and federal laws governing
student protection, student financial aid and loan programs, and the
policies and practices of private postsecondary educational
institutions.
(b) For purposes of this article, the following terms have the
following meanings:
(1) "Department" means the Department of Consumer Affairs.
(2) "Office" means the Office of Student Assistance and Relief.
(b) For purposes of this article, "office" means the Office of
Student Assistance and Relief.
94949.72. Duties of the office shall include, but are
not limited to, include all of the following:
(a) Conducting outreach to students and prospective
students to provide them with, among other information, information
on making an informed decision regarding the selection of a
postsecondary educational institution, student rights regarding
school performance disclosures, enrollment agreements, and
cancellation and refund policies, how to contact the office and the
bureau for assistance, student loan rights and assistance, and free
nonprofit community based resources. and providing
information and assistance to students who have been affected by the
unlawful activities or closure of an institution regarding their
rights under state and federal law and to ensure that those students
successfully access available state and federal relief programs. With
existing resources provided to the bureau and department, the office
shall prioritize and immediately conduct the activities outlined in
Section 94949.73.
(b) Coordinating with the bureau and facilitating
and the department to facilitate resolution of
student concerns related to the bureau's performance of its
responsibilities, including concerns that arise related to the bureau'
s handling of a complaint or its administration of the Student
Tuition Recovery Fund established in Article 14 (commencing with
Section 94923).
(c) Coordinating with the department, including the bureau,
regarding an Internet Web site that provides information to students
about the rights and protections available to them. The Internet Web
site shall include information about relevant services available from
other governmental organizations and local nonprofit community
service organizations.
(d)
(c) Serving as a primary point of contact to address
the needs of private postsecondary education students and working in
consultation with state and federal agencies, including, but not
limited to, the Student Aid Commission, the Office of the Chancellor
of the California Community Colleges, the Department of Veterans
Affairs, the federal Consumer Financial Protection Bureau, and the
United States Department of Education.
(e) Providing outreach and coordinating services for students
following the unlawful closure of an institution that was approved to
operate by the bureau.
(d) The office may also conduct both of the following activities:
(1) Provide outreach to students and prospective students to
provide them with, among other information, information on making
informed decisions in selecting postsecondary educational
institutions, student rights regarding school performance
disclosures, enrollment agreements, and cancellation and refund
policies, how to contact the office and the bureau for assistance,
student loan rights and assistance, and free nonprofit community
based resources.
(2) Conduct data and information research from various sources,
including, but not limited to, annual reports provided to the bureau
pursuant to Section 94934, the United States Department of Education,
accrediting agencies, and the California Department of Veterans
Affairs to identify potential violations of the act. The office shall
advise the director and bureau chief of its findings.
(e) The office shall provide, pursuant to Section 9795 of the
Government Code, to the Legislature an annual written update
regarding the office's progress in protecting students and conducting
the duties of the office.
94949.73. (a) A pilot program is hereby created to provide grant
funds in accordance with this section to eligible nonprofit community
service organizations to assist eligible students by relieving or
mitigating the economic and educational opportunity loss incurred by
those students who attended a Corinthian Colleges, Inc. institution.
(b) (1) The terms and conditions of the grant agreements shall
ensure that grant funds are used for the exclusive purpose of
providing outreach and assistance to eligible students with federal
and private loan discharges, recovery through the Student Tuition
Recovery Fund established in Article 14 (commencing with Section
94923), and other financial aid relief.
(2) Services provided by eligible nonprofit community service
organizations shall include, but are not to be limited to, outreach
and education, screening requests for assistance, referring students
for additional assistance through pro bono referral programs,
referring students to the bureau, as appropriate, and other services
related to obtaining financial aid relief for students.
(3) This subdivision is not intended to prohibit a nonprofit
community service organization from using grant funds to screen
student requests for assistance in order to determine if a student
meets assistance eligibility requirements.
94949.73. (a) The office shall provide
individualized assistance to students to relieve or mitigate the
economic and educational opportunity loss incurred by those students
who attended a Corinthian Colleges, Inc., institution or other
eligible institution.
(b) Specific services provided by the office shall include all of
the following:
(1) Outreach and education to students regarding the assistance
available from the office.
(2) Screening requests for assistance received by the office and
providing individualized assistance to help students determine their
relief eligibility, identify and obtain necessary documents, complete
and submit applications, and provide additional services as
necessary.
(c) For purposes of this section, an "eligible nonprofit community
service organization" is an organization that satisfies all of the
following conditions:
(1) The organization is a 501(c)(3) tax-exempt organization in
good standing with the federal Internal Revenue Service and in
compliance with all applicable laws and requirements.
(2) The organization demonstrates expertise in providing outreach
and assisting students with, and currently provides free direct
services to students for, student loan discharge and forgiveness, and
student tuition recovery-related matters.
(3) The organization does not charge students for any services,
including services provided pursuant to this section.
(d)
(c) For purposes of this section, an "eligible
student" is a student who was enrolled at a California campus of, or
a California student who was enrolled in an online campus of, a
Corinthian Colleges, Inc. institution, and who has been screened by
the nonprofit community service organization and determined to be
eligible for debt relief from the United States Department of
Education or other student financial aid relief.
"other eligible institution" means an institution identified by the
office whose unlawful activities or closure has resulted in its
students being eligible for repayment from the Student Tuition
Recovery Fund, debt relief from the United States Department of
Education, or other student financial aid relief.
(e) (1) By March 1, 2017, the office shall solicit grant
applications from eligible nonprofit community service organizations,
select one or more of these organizations from among the applicants
who are deemed to be qualified, set additional terms and conditions
of the grants as necessary to fulfill the requirements of this
section, and notify the recipient organization or organizations of
the selection and the share of grant funds available that the
organization shall receive.
(2) The office shall award the full amount of authorized grant
funds, unless it does not receive a sufficient number of applications
from eligible nonprofit community service organizations or it has
good cause to determine that an expenditure of the full amount
authorized is not necessary. If the office determines expenditure of
the full amount is not necessary, it shall provide a detailed
explanation of its determination to the Legislature.
(3) In selecting the grantees and awarding funds to each
grantee, the office shall ensure geographical distribution according
to the location of eligible students, as best can be determined.
(f) (1) Within 30 days of selection, an eligible nonprofit
community service organization that receives funds pursuant to this
section shall enter into a grant agreement with the office and shall
use grant funds exclusively for the purposes set forth in this
section and in accordance with the agreement.
(2) Any unused funds by the grantees shall be returned to the
office, except that, upon the approval of the office, an eligible
nonprofit community service organization may expend funds to provide
assistance to students who attended an institution that closed
unlawfully and was approved to operate by the bureau.
(3) The office may terminate the grant agreement for material
breach, and may require repayment of funds provided to the nonprofit
community service organization during the time that the agreement was
being materially breached. However, the office shall provide the
grantee with written notice of the breach and a reasonable
opportunity of not less than 30 days to resolve the breach.
(g) An eligible nonprofit community service organization that
receives a grant shall give priority to students who were enrolled in
Corinthian Colleges, Inc., and are eligible for a federal closed
school loan discharge or relief under the Student Tuition Recovery
Fund established in Article 14 (commencing with Section 94923), if
demand exceeds available grant funds. The organization may give
priority to low-income students or may provide assistance regardless
of student income level.
(h) (1) An eligible nonprofit community service organization that
receives a grant shall report to the office quarterly through the
grant period on all of the following:
(d) (1) The office shall quarterly report by posting on the bureau'
s Internet Web site, through September 1, 2018, on all of the
following:
(A) The number of
eligible students served pursuant to the grant agreement.
(A) A summary of the outreach and
education activities conducted by the office pursuant to the
requirements of paragraph (1) of subdivision (b) and the number of
students served from Corinthian Colleges, Inc.,
institutions and every other eligible institution.
(B) A detailed summary of services provided to those students, as
follows:
(i) The number of students assisted with submitting
Student Tuition Recovery Fund claims referred or submitted
to the bureau by the organization. To the degree
the organization has access to the following information, the report
shall include, office, and of the claims
submitted, the number that are pending, on appeal, or have been
approved or denied; for the claims that have been approved
or denied, denied. For the claims that have been
approved, the office shall report the amount of student loans
canceled, the total of student loans paid off, the total amount of
cash reimbursed to students, and the total amount of educational
credit granted.
(ii) The number of students assisted with submitting
federal loan forgiveness claims submitted. Of
claims, and of the claims submitted, the number of those
claims that are pending, on appeal, or have been approved or denied.
For the claims submitted by the organization on
behalf of the student, the organization shall also report
that have been approved, the office shall report the
estimated total in student loans canceled and the total amount of
funds refunded to students.
(iii) The number of students helped
assisted with private student loans,
loan relief, other than through Student Tuition Recovery Fund
claims, and a summary of assistance provided.
provided and relief outcomes obtained.
(iv) The number of students whom the organization helped
office helped to obtain income-dependent
repayment plans on their federal loans, and of those students, the
number of students helped out of default on the federal loans through
consolidation or rehabilitation.
(v) The number of students screened by the nonprofit community
service organization who were determined ineligible for assistance
with debt relief pursuant to subdivision (d), a summary of reasons
for ineligibility, and a summary of any services or referral
information provided to those students.
(vi) Any other information that is deemed reasonably necessary.
(2) The office shall make the reports submitted pursuant to
paragraph (1) available to the Legislature and the department upon
request.
(3)
(2) The office shall provide the Legislature
and the department provide, pursuant to Section 9795 of
the Government Code, the Legislature, the department, and the bureau
a final report summarizing the information submitted pursuant
to paragraph (1) promptly following the time when all funds
are expended by the grantees or by January 1,
2020, whichever is earlier. 2019.
(j) Funds shall be distributed to preapproved nonprofit community
service organizations as follows:
(1) Fifty percent shall be distributed to the grantee within 30
days of the grantee entering into a grant agreement.
(2) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee's second quarterly report.
(3) Twenty-five percent shall be distributed to the grantee upon
the submission of the grantee's third quarterly report.
(k) The adoption of any regulation pursuant to this section shall
be deemed to be an emergency and necessary for the immediate
preservation of the public health and safety, or general welfare.
(l) This section shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2021, deletes or extends
that date.
SEC. 26. Section 94950 of the Education
Code is amended to read:
94950. This chapter shall remain in effect only until January 1,
2017, 2021, and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2017, 2021, deletes or
extends that date.
SEC. 24. The sum of one million three hundred
thousand dollars ($1,300,000) is appropriated from the Student
Tuition Recovery Fund to the Office of Student Assistance and Relief,
as established in Section 94949.7 of the Education Code, for the
purposes of providing grants pursuant to the pilot program
established in Section 94949.73 of the Education Code.
SEC. 27. The Legislature finds and declares that
the reimbursement of legal fees, as provided in subparagraph (H) of
paragraph (2) of subdivision (b) of Section 94923 of the Education
Code, is intended to encourage and support the efforts of nonprofit
legal service organizations and pro bono attorneys to secure student
debt cancellation. Complicated student loan cases often require
extensive time and resources. The reimbursement provided is not
intended to reflect the work associated with successful student debt
cancellation.
SEC. 28. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
