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AB-1611 Private postsecondary education.(2017-2018)

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Date Published: 04/17/2017 09:00 PM
AB1611:v98#DOCUMENT

Amended  IN  Assembly  April 17, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 1611

Introduced by Assembly Member McCarty

February 17, 2017

An act to amend Sections 94885 and 94928 of the Education Code, relating to private postsecondary education. An act to add Section 94801.6 to the Education Code, relating to private postsecondary education.


LEGISLATIVE COUNSEL'S DIGEST


AB 1611, as amended, McCarty. Private postsecondary education.
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 certain institutions from its provisions.
This bill would require each institution that is subject to the act’s provisions to submit to the bureau, for each of its debt-dependent programs, as defined, specified information regarding each person in a graduating cohort, as defined, of an academic year commencing with the graduating cohort for the 2010–11 academic year. The bill would require the bureau to obtain federal student loan debt and median and average earnings for each person of the graduating cohorts, as specified, determine the total amount of student loan debt incurred by these persons, and make available to the public certain data, including student loan debt and earnings data, for each debt-dependent program offered by the institution. The bill would authorize the bureau to, among other things, require the institution to provide warnings to current and prospective students regarding its programs with high debt burdens relative to earnings and deny approval to operate for a new program that is substantially similar to a program that has exhibited high debt burdens, as determined by the bureau. The bill would provide that its provisions shall be implemented only to the extent that implementation is in compliance with state and federal privacy laws. The bill would make its provisions operative only if specified federal regulations are suspended or repealed.

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 certain institutions from its provisions. The act requires the bureau to adopt by regulation minimum operating standards for institutions that are subject to the act’s provisions, as specified. The bill defines “graduates employed in the field,” for purposes of the act’s provisions.

This bill would require the bureau to include in the minimum operating standards a provision prohibiting an institution from enrolling new students who are using specified student loans for any program offered by the institution in which fewer than 70% of graduates of that program are graduates employed in the field, as redefined by the bill’s provisions.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 94801.6 is added to the Education Code, to read:

94801.6.
 (a) For the purposes of this section, the following terms have the following meanings:
(1) An “academic year” is from July 1 to June 30.
(2) “Classification of instructional program” or “CIP” means taxonomy of instructional program classifications and descriptions developed by the United States Department of Education’s National Center for Education Statistics (NCES). The CIP code for a program is six digits.
(3) “Earnings assessment year” means a period consisting of four consecutive quarters commencing not less than six quarters after the end of the period covered by a graduating cohort.
(4) “Graduating cohort” means the persons completing a program at an institution for a particular academic year, commencing with the 2010–11 academic year. If the number of students in a graduating cohort is fewer than 30, sufficient additional previous consecutive academic years of graduates shall be included to achieve a cohort of at least 30 students.
(5) “Graduate earnings cohort” means the persons in a graduating cohort who remain after the bureau has excluded, to the extent practicable using data available from sources independent of the institution, every person who has died or suffered a total and permanent disability, or at any time during the earnings assessment year was enrolled in any other educational program on a not less than half-time basis or was serving in the military.
(6) “Federal student loans” means loans under Title IV of the federal Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.), not including loans made to parents of dependent students.
(7) “Private student loans” means education loans as defined in 34 CFR 601.2, including private education loans provided by the institution, and any other credit, including unpaid charges, extended by or on behalf of the institution that the student is obligated to repay, including extensions of credit described in clauses (1) and (2) of the definition of, and excluded from, the term ‘‘private education loan’’ in 34 CFR 601.2.
(8) “Debt-dependent program” means a program in which at least one-half of the students enrolling in an academic year, or at least one-half of the graduating cohort, carried federal student loan balances, or private student loan balances, or both, after completing or withdrawing from the program.
(b) An institution shall submit to the bureau, for each of its debt-dependent programs, the following information regarding each person in a graduating cohort:
(1) Information needed to identify the person.
(2) The name, CIP code, credential level, and length of the program.
(3) The date the person completed the program.
(4) The total amount the person received from federal student loans for enrollment at the institution.
(5) The total amount the person received from private student loans that the institution is, or should reasonably be, aware of.
(6) The total amount of tuition and fees assessed to the person for his or her entire enrollment in the program.
(c) The bureau shall do all of the following:
(1) Obtain from the Employment Development Department, pursuant to subdivision (aj) of Section 1095 of the Unemployment Insurance Code, the data necessary to determine the median and average earnings of persons in the graduate earnings cohort for one or more earnings assessment years, not including persons for whom no earnings information was available.
(2) Obtain from the Student Aid Commission or, to the extent authorized by federal law, the United States Department of Education the amount borrowed in federal student loans for each person in the graduating cohort.
(3) Determine the total amount of student loan debt incurred by each person in the graduating cohort for enrollment at the institution.
(4) Make available to the public all of the following data for each debt-dependent program offered by each institution:
(A) The program’s CIP code.
(B) The median and average earnings of the graduate earnings cohort for one or more earnings assessment years.
(C) The number of persons represented in the graduating cohort, the number of persons represented in the graduate earnings cohort, and the number of persons for whom earnings data were available from the Employment Development Department.
(D) The median and average federal student loan debt, private student loan debt, and total student loan debt of the graduate earnings cohort.
(E) The average tuition and fees assessed to students in the graduating cohort.
(F) The number of persons with federal student loans, with private student loans, and the number with both.
(d) The bureau may do any or any combination, including all, of the following:
(1) Require institutions to provide warnings to current and prospective students regarding programs with high debt burdens relative to earnings.
(2) Require an institution, as a condition of maintaining approval to operate for a program or for the institution, to restrict new loan-financed enrollment in a program.
(3) Deny an approval to operate for a new program if the program is substantially similar to a program that has exhibited high debt burdens, as determined by the bureau.
(e) This section shall be implemented only to the extent that implementation is in compliance with all state and federal privacy laws.
(f) This section shall take effect only if Part 668 of Chapter VI of Subtitle B of Title 34 of the Code of Federal Regulations is suspended or repealed.

SECTION 1.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.

(10)The institution agrees not to enroll new students who are using student loans offered by the state, the federal government, the institution, or arranged by the institution from any other source for any program offered by the institution in which fewer than 70 percent of graduates of that program are graduates employed in the field, as defined in Section 94928.

(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. 2.Section 94928 of the Education Code is amended to read:
94928.

As used in this article, the following terms have the following meanings:

(a)“Cohort population” means the number of students that began a program on a cohort start date.

(b)“Cohort start date” means the first class day after the cancellation period during which a cohort of students attends class for a specific program.

(c)“On-time graduates” means the number of students who complete a program within 100 percent of the published program length. An institution may separately state completion information for students completing the program within 150 percent of the original contracted time, but that information may not replace completion information for students completing within the original scheduled time. Completion information shall be separately stated for each campus or branch of the institution.

(d)“Graduates available for employment” means the number of graduates minus the number of graduates unavailable for employment.

(e)(1)(A)“Graduates employed in the field” means graduates who are gainfully employed in a single position for which the institution represents the program prepares its graduates, beginning within six months after a student completes the applicable educational program. For occupations for which the state requires passing an examination, the period of employment shall begin within six months of the announcement of the examination results for the first examination available after a student completes an applicable educational program.

(B)For purposes of this paragraph, “gainfully employed” means graduates who are working at least 32 hours per week for at least 13 weeks.

(2)The bureau shall define by July 1, 2014, specific measures and standards for determining whether a student is gainfully employed in a full-time or part-time position for which the institution represents the program prepares its graduates, including self-employment or conducting freelance work, and may set the standards for the hours per week and duration of employment and utilize any job classification methodology the bureau determines appropriate for this purpose, including, but not limited to, the United States Department of Labor’s Standard Occupational Classification codes.

(3)This subdivision shall not prohibit the bureau from authorizing an institution to aggregate single positions held by a graduate for purposes of meeting the hours per week standards established by the bureau.

(f)“Graduates unavailable for employment” means graduates who, after graduation, die, become incarcerated, are called to active military duty, are international students that leave the United States or do not have a visa allowing employment in the United States, or are continuing their education at an accredited or bureau-approved postsecondary institution.

(g)“Students available for graduation” means the cohort population minus the number of students unavailable for graduation.

(h)“Students unavailable for graduation” means students who have died, been incarcerated, or called to active military duty.