BILL NUMBER: SB 489AMENDED BILL TEXT AMENDED IN SENATE APRIL 1, 2009 INTRODUCED BY Senator Liu FEBRUARY 26, 2009 An act to add Section 66907 to, and to add Chapter 7 (commencing with Section 94700) to Part 59 of Division 10 of Title 3 of , the Education Code, relating to private postsecondary education. LEGISLATIVE COUNSEL'S DIGEST SB 489, as amended, Liu. Private postsecondary education: Private Postsecondary and Vocational Education Reform and Student Consumer Protection Act of 2009. The former Private Postsecondary and Vocational Education Reform Act of 1989, which became inoperative on July 1, 2007, and was repealed on January 1, 2008, was administered by the Bureau for Private Postsecondary and Vocational Education in the Department of Consumer Affairs. The former act generally effectuated legislative intent to ensure minimum standards of instructional quality and institutional stability in private postsecondary educational institutions and required the bureau, among other things, to review and investigate all institutions, programs, and courses of instruction approved under the act. This bill would enact the Private Postsecondary and Vocational Education Reform and Student Consumer Protection Act of 2009, which would express the intent of the Legislature to, among other things, provide for the protection, education, and welfare of California's citizens, postsecondary educational institutions, and students, as specified. The bill would require the California Postsecondary Education Commission to establish a Bureau for Private Postsecondary Education to function as the statewide private postsecondary and vocational educational licensing and enforcement agency, in accordance with the act. The bill would require the commission, working through its executive director, to fulfill specified functions and responsibilities under the act. The bill would require each private postsecondary education institution desiring to operate in this state to apply to the bureau for licensure. The bill would establish procedures and standards for application and bureau licensure. The bill would authorize the commission to impose a school licensure fee on each institution making application to the bureau, in accordance with an unspecified fee schedule, and would requir e the costs of implementing the act to be covered by fee revenues. The bill would require the Legislative Analyst's Office, by January 1, 2013, to review the effectiveness of the bureau in implementing the act and submit a report of its findings to the commission, the Legislature, and the Governor. The bill would provide that a private postsecondary institution approved under the former Private Postsecondary and Vocational Education Reform Act of 1989 as of June 30, 2007, shall, at a minimum, be recognized as an approved institution through the reapproval period that the institution had as of June 30, 2007, plus 2 additional years beyond that date. Vote: majority. Appropriation: no. Fiscal committee:noyes . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 66907 is added to the Education Code , to read: 66907. (a) In addition to the functions and responsibilities described in Section 66903, the commission shall have the responsibility for developing policies and regulations and for overseeing the administration of policies and regulations for the approval and regulation of private postsecondary education institutions in California. (b) The commission, working through its executive director, shall fulfill the functions and responsibilities of the commission established in Chapter 7 (commencing with Section 94700) of Part 59 of Division 10.SECTION 1.SEC. 2. Chapter 7 (commencing with Section 94700) is added to Part 59 of Division 10 of Title 3 of the Education Code, to read: CHAPTER 7. THE PRIVATE POSTSECONDARY AND VOCATIONAL EDUCATION REFORM AND STUDENT CONSUMER PROTECTION ACT OF 2009 94700. This chapter shall be known, and may be cited, as the Private Postsecondary and Vocational Education Reform and Student Consumer Protection Act of 2009. 94705. The Legislature finds and declares all of the following: (a) It is the intent of the Legislature to promote the effective integration of private postsecondary education into all aspects of California's educational system and to foster and improve the educational programs and services of private postsecondary educational institutions while protecting the citizens of the state from fraudulent or substandard operations. (b) It is further the intent of the Legislature to recognize the enormous diversity and quality of California's private postsecondary educational expertise, with its approximately 1,600 privately supported institutions of academic and vocational education. These private colleges and universities play an important role in training California's workforce, enrolling approximately 400,000 students annually. (c) It is further the intent of the Legislature to assure that graduates of state approved colleges and universities are eligible to sit for state licensure exams provided by the Board of Behavioral Sciences and the Board of Psychology. (d) It is further the intent of the Legislature to provide for the protection, education, and welfare of California's citizens, postsecondary educational institutions, and students by providing for all of the following: (1) Ensuring minimum standards of instructional quality and institutional stability for all students in all types of institutions, and thereby encouraging the recognition by public and private institutions of completed coursework and degrees and diplomas issued by private institutions in order to provide students equal opportunities for equal accomplishment and ability. (2) Establishing minimum standards concerning the quality of education, ethical and business practices, health and safety, and fiscal responsibility to provide protection against substandard, transient, unethical, deceptive, or fraudulent institutions and practices. (3) Prohibiting the granting of false or misleading educational credentials. (4) Prohibiting misleading literature, advertising, solicitation, or representations by private educational institutions or their agents. (5) Recognizing the importance of providing adequate funding through application and renewal fees and federal funding for the veteran's approval process, in order to support the state's activities in implementing this chapter. (6) Protecting consumers and students against fraud, misrepresentation, or other practices that may lead to an improper loss of funds paid for educational costs, whether financed through personal resources or state and federal student financial aid. (7) Establishing a path for the development of institutions offering fields of study or methods of instruction and innovative educational delivery systems that have not been previously recognized, in order to encourage those institutions to become fully approved institutions. (8) Recognizing and encouraging quality nongovernmental accreditation, while not ceding to that or any other nongovernmental process the responsibility for state oversight for purposes of approval, if the accreditation process fails either to protect minimum standards of quality or to acknowledge legitimate innovative methods in postsecondary education. (9) Providing an administrative agency staffed by individuals who are knowledgeable about private academic and vocational education, and charged with the responsibility of developing policies and procedures for the oversight and approval of private postsecondary and vocational education. The administrative agency should have responsibility for managing a broadly construed policy and planning process that seeks to improve state accountability for private postsecondary and vocational education and to improve the articulation of private postsecondary and vocational education with the public and independent postsecondary educational community. The administrative agency should provide the leadership and planning needed to maintain and develop a strong private sector within the public and independent postsecondary educational community. (10) Developing and maintaining a strong, vigorous, and widely respected sector of private colleges, universities, and vocational training institutions. (e) It is further the intent of the Legislature that this function and the work of the bureau be funded solely through school licensure fees. 94706. As used in this chapter: (a) "Bureau" means the Bureau for Private Postsecondary Education established pursuant to Section 94707. (b) "Commission" means the California Postsecondary Education Commission. 94707. The commission shall establish a Bureau for Private Postsecondary Education to function as the statewide private postsecondary and vocational educational licensing and enforcement agency, in accordance with this chapter. The commission shall have all of the following functions and responsibilities: (a) Appointment of a director for the bureau and staff members working within the bureau. (b) Establishment of policies for the administration of this chapter. (c) Establishment of minimum criteria for the approval of private postsecondary or vocational educational institutions to operate in California and award degrees and diplomas, and for the approval of institutions that meet the criteria. (d) Publication of an Internet Web site directory of all private postsecondary and vocational educational institutions approved to operate in California under this chapter. (e) Monitoring participation by all institutions covered by this statute in the Integrated Postsecondary Education Data System (IPEDS) reporting system. (f) Empaneling of special committees of technically qualified persons to assist the bureau in the development of standards for education and educational institutions and the evaluation of an application or institutions pursuant to this chapter. (g) The commission, working with the bureau, and in consultation with the Attorney General, shall adopt regulations that are necessary and appropriate to exercise its authority under this chapter, including, but not limited to, minimum state standards for contracts, attendance policies, financial responsibility, and consumer disclosures. 94708. Protection of the public shall be the highest priority for the bureau in exercising its licensing, regulatory, and disciplinary functions. Whenever the protection of the public is inconsistent with other interests sought to be promoted, the protection of the public shall be paramount. 94709. The bureau shall take possession and control of all records and papers held for the benefit or use of the former Bureau of Private Postsecondary Education. 94710. (a) Each private postsecondary education institution desiring to operate in this state shall apply to the bureau for licensure, upon forms provided by the bureau. The application shall include, at a minimum, all of the following: (1) A catalog published, or proposed to be published, by the institution containing the information specified in the criteria adopted by the bureau. (2) Copies of media advertising and promotional literature. (3) Copies of all student enrollment agreement or contract forms and instruments evidencing indebtedness. (4) The name and California address of a designated agent upon whom any process, notice, or demand may be served. The agent address shall not be the same as the institution address. (5) The institution's most current financial report and proof of insurance or certificate of liability coverage. (b) All institutions licensed under this chapter shall be maintained and operated, or in the case of a new institution, shall demonstrate that it will be maintained and operated, in compliance with all of the following minimum standards: (1) That the institution is financially capable of fulfilling its commitments to its students. (2) That upon satisfactory completion of study or training, the student is given an appropriate degree or certification by the institution, indicating that the program or programs of instruction have been satisfactorily completed by the student. (3) That the institution provides quality instruction as an essential component of its educational program. (c) Each institution licensed under this chapter shall participate in and report to the United States Department of Education's Integrated Postsecondary Education Data System (IPEDS), through the commission, all of the following information for all educational programs offered: (1) The total number of students enrolled, by level of degree or type of diploma program. (2) The number of degrees and diplomas awarded, by level of degree. (3) The degree levels offered. (4) The schedule of tuition and fees required for each term, program, course of instruction, or degree offered. (5) Institutional financial information. (d) Each institution licensed under this chapter shall provide the bureau with copies of all accrediting agency reports, including preliminary reports and reports of visiting committees, all audit reports prepared by the United States Department of Education and student loan guaranty agencies, including preliminary reports, and the institution's written responses to these reports. (e) Any written contract or agreement with a licensed institution signed by a prospective student shall not become operative until the student attends the first class or session of instruction. (f) The institution shall provide to students and other interested persons, prior to enrollment, a catalog or brochure containing, at a minimum, all of the following information: (1) Descriptions of the instruction provided under each course offered by the institution including the length of programs offered. (2) The number of credit hours or clock hours of instruction or training per unit or units required for completion of the educational degree or certificate program. (3) The attendance, dropout, and leave-of-absence policies. (4) The faculty and their qualifications. (5) The schedule of tuition payments, fees, and all other charges and expenses necessary for the term of instruction and the completion of the course of study. (6) The cancellation and refund policies. (7) For institutions that participate in federal and state financial aid programs, all consumer information that the institution is required to disclose to the student. (8) All other material facts concerning the institution and the program or course of instruction that are reasonably likely to affect the decision of the student to enroll, as prescribed by rules and regulations adopted by the commission. (9) A description of the institution's placement assistance, if any. (g) Each licensed institution offering a degree or diploma program designed to prepare students for a particular vocational, trade, or career field shall provide to each prospective student a school performance fact sheet disclosing all of the following information: (1) The number and percentage of students who begin the institution's program and successfully complete the entire program. (2) The passage rates of graduates in the program for the most recent calendar year on any licensure or certificate examination required by the state for employment in the particular vocational, trade, or career field and for any licensing preparation examination as required by law. (3) The number and percentage of students who begin the program and secure employment in the field for which they were trained. (4) The average annual starting wages or salary of graduates of the institution's programs. The bureau may add any additional disclosure requirements as determined by the bureau. (h) Each licensed institution shall provide a written statement containing its refund policy, together with examples of the application of the policy, to each student prior to signing the enrollment contract, and shall make its policy known to currently enrolled students. (i) If the bureau determines after an investigation that a licensed institution has violated this chapter or regulations adopted pursuant to this chapter, the bureau, working through the commission, may order the institution to pay the costs and expenses incurred in connection with the investigation and any civil or administrative proceeding involving the violation that was investigated, including charges made by the Attorney General for his or her services, and any expenses incurred by a district attorney. 94711. (a) The costs of implementing this chapter shall be covered by revenues of school licensure fees paid to the bureau in accordance with the fee schedule set forth in Section 94712. (b) The commission, working with the director of the bureau, shall annually determine the funding level needed for the effective operation of the bureau in the approval and oversight of private postsecondary education in California and propose to the Legislature any change in existing school licensure fees needed to provide appropriate revenue levels to fund the effective work of the bureau in implementing this chapter. (c) On and after January 1, 2011, a minimum of 50 percent of the funds available to the bureau for this responsibility shall be used to cover the costs of the following: (1) Enforcing this chapter and regulations adopted pursuant to this chapter by taking actions against violators while ensuring due process for all licensed institutions. (2) Ensuring that independent onsite evaluations and random and targeted inspections and audits of licensed institutions are conducted, and that students have easy access to information concerning their rights to contract cancellation, withdrawal, refunds, and remedies. (d) Any institution more than 30 days delinquent in the payment of any fee or order for the recovery of costs and expenses under this chapter, may be assessed a penalty fee by the bureau. 94712. The commission may impose a school licensure fee on each institution making application to the bureau under this chapter, in accordance with the following schedule: (a) ____. (b) ____. 94713. By January 1, 2013, the Legislative Analyst's Office shall review the effectiveness of the bureau in implementing this chapter and submit a report of its findings to the commission, the Legislature, and the Governor. This performance review shall include specific recommendations for any changes in this chapter or in the operations of the commission or the bureau, or both, and the reasons for any recommended changes. 94714. A private postsecondary institution approved under the former Private Postsecondary and Vocational Education Reform Act of 1989 as of June 30, 2007, shall, at a minimum, be recognized as an approved institution through the reapproval period that the institution had as of June 30, 2007, plus two additional years beyond that date.