94710.
The definitions set forth in this article govern the construction of this chapter, unless the context requires otherwise.
94711.
“Academic Year” for a degree-granting institution means a period including a minimum of 30 weeks of instruction.
94712.
“Accredited” means that an institution has been recognized or approved as meeting the standards established by an accrediting agency recognized by the United States Department of Education, or the Committee of Bar Examiners for the State of California. It does not include those institutions that have applied for accreditation, or are identified by accrediting associations as candidates for accreditation or have provisional accreditation.
94713.
“Agency” means any person or business entity, regardless of the form of organization, that employs, or in any manner contracts with, one or more agents. “Agency” does not include an institution.
94714.
“Agency approval” means a written document issued by the council authorizing a business entity or an institution to engage in the recruitment of students for enrollment in private postsecondary and vocational institutions approved under this chapter.
94715.
“Agent” means any person who, at a place away from the institution’s premises or site of instruction, but within the United States, for consideration, solicits, promotes, advertises, offers, or attempts to secure enrollment for an institution, refers any person to that institution, either for enrollment or to receive a solicitation for enrollment, or accepts application fees or admissions fees for education in that institution. Administrators and faculty who make informational public appearances, but whose primary task does not include service as a paid recruiter, are not agents. Publishers of directories that contain general information on institutions and their offerings and who do not otherwise engage in any of the activities described in this section are not agents.
94716.
“Agent’s permit” means a nontransferable written document issued to an agent pursuant to this chapter by the council.
94717.
“Applicant” means a new institution that has submitted an application but has not been evaluated by the council. An applicant institution shall not enroll students or offer educational services.
94718.
“Approval” or “approval to operate” means that the council has determined and certified that an institution meets minimum standards established by the council for integrity, financial stability, and educational quality, including the offering of bona fide instruction by qualified faculty and the appropriate assessment of students’ achievement prior to, during, and at the end of its program.
94719.
“Branch” means a site other than the main location or a satellite. Only educational services approved at the main location may be offered at the branch.
94719.5.
“Bureau” means the Bureau for Private Postsecondary and Vocational Education in the Department of Consumer Affairs established pursuant to Section 94770.
94720.
“Certificate of authorization for service” means a written, nontransferable document issued by the council authorizing an individual to be an instructor or administrator in any private vocational postsecondary educational institution in California that is approved under Section 94915.
94721.
“Change of location” means a move of up to 25 miles of the location at which an institution offers any education, training, or instruction. A change of location of 25 or more miles is deemed the establishment of a new location of instruction requiring a separate approval to operate, unless otherwise provided by the council.
94722.
(a)
Except as provided in subdivision (b), “continuing education” means instruction in any of the following circumstances:
(1)
Only in subjects licensees are required to take as a condition of continued licensure and solely for that purpose.
(2)
Only in subjects necessary to continue to practice or work in a profession such as law or medicine and solely for that purpose.
(3)
To persons who are already in a particular profession, trade, or job category for the sole purpose of enhancing their skills or knowledge within that particular profession, trade, or job category.
(b)
“Continuing education” does not include any of the following:
(1)
Vocational diploma programs.
(2)
Degree programs.
(3)
An educational service any part of the charge for which is paid from the proceeds of a loan or grant subject to a governmental student financial aid program.
94723.
“Correspondence school” or “home study school” means any institution that provides correspondence lessons for study and completion by a student at a location separate from the institution, including those institutions which offer that instruction by correspondence in combination with in-residence instruction.
94724.
“Council” means the Bureau for Private Postsecondary and Vocational Education in the Department of Consumer Affairs established pursuant to Section 94770.
94725.
“Course of study” means either a single course or a set of related courses for which a student enrolls.
94726.
“Degree” means any type of degree or honorary degree or title of any designation, mark, appellation, series of letters or words such as, but not limited to, associate, bachelor, master, doctor, or fellow which signifies, purports, or is generally taken to signify satisfactory completion of the requirements of an academic, educational, technological, or professional program of study beyond the secondary school level or is an honorary title conferred for recognition of some meritorious achievement.
94727.
“Degree title” means the designated subject area of study that also appears on the face of the document awarded to a student signifying the conferring of a “degree.”
94728.
“Diploma” means any diploma, certificate, document, or other writing in any language other than a degree which signifies, purports, or is generally taken to signify satisfactory completion of the requirements of an academic, educational, technological, or professional program of study beyond the secondary school level.
94728.5.
“Director” means the Director of Consumer Affairs.
94729.
“Education,” “educational services,” or “educational program” includes, but is not limited to, any class, course, or program of training, instruction, or study.
94730.
“Institution” means any private postsecondary educational institution. An “institution” includes its branch and satellite campuses, unless otherwise provided by the council.
94731.
“Institutional approval” means an institution that has been evaluated by the council and has been found to be in compliance with the council’s standards pursuant to this chapter.
94732.
“Instruction” includes any specific, formal arrangement by an institution or its enrollees to participate in learning experiences in which the institution’s faculty or contracted instructors present a planned curriculum appropriate to the enrollee’s educational program.
94733.
“Intensive English language program” means an educational service approved by the United States Immigration and Naturalization Service solely to provide English instruction to international students for a designated period of study in the United States and that offers instruction that is nondegree granting, nonvocational, and is not represented to lead to, or offered for the purpose of preparing a student for employment in, any occupation or job title. Additionally, the educational service shall meet all of the following criteria:
(a)
Students enrolling in this type of educational service are not residents of this state or citizens of the United States and are not eligible for federal or state financial aid, including loans.
(b)
Coursework in this type of educational service is limited to English instruction in all areas of language skills development, including reading, writing, speaking, listening, grammar, and test preparation.
94734.
“License and exam preparation” means that the educational program is either of the following:
(a)
Designed to assist students to prepare for an examination for licensure.
(b)
Offered for the sole purpose of providing continuing education in subjects licensees are required to take as a condition of continued licensure.
94735.
“Main location” or “main site” means the institution’s primary teaching location. If an institution operates at only one site, that site shall be considered its main location or main site.
94736.
“Occupational Associate Degree,” “Associate of Occupational Studies,” or “Associate of Applied Science” designated by terms including, but not limited to, AOS (Associate Occupational Studies), AAS (Associate Applied Science), AST (Associate Specialist Technical), or ASB (Associate Specialist Business) means an associate degree that may be awarded to students who complete an occupational program that provides preparation for employment in an occupational field.
94737.
“Out-of-state school” means any private postsecondary or vocational educational institution offering career or job training programs, including both an in-residence institution and a home-study institution that has its place of instruction or its principal location outside the boundaries of the state, or that offers or conducts programs of instruction or subjects on premises maintained by the school outside the boundaries of the state, or that provides correspondence or home-study lesson materials from a location outside the boundaries of this state, or that evaluates completed lesson materials or otherwise conducts its evaluation service from a location outside the boundaries of this state, or that otherwise offers or provides California students with programs of instruction or subjects through activities engaged in or conducted outside the boundaries of the state.
94738.
“Person” means a natural person or any business entity, regardless of the form or organization.
94739.
(a)
“Private postsecondary educational institution” means any person doing business in California that offers to provide or provides, for a tuition, fee, or other charge, any instruction, training, or education under any of the following circumstances:
(1)
A majority of the students to whom instruction, training, or education is provided during any 12-month period is obtained from, or on behalf of, students who have completed or terminated their secondary education or are beyond the age of compulsory high school attendance.
(2)
More than 50 percent of the revenue derived from providing instruction, training, or education during any 12-month period is obtained from, or on behalf of, students who have completed or terminated their secondary education or are beyond the age of compulsory high school attendance.
(3)
More than 50 percent of the hours of instruction, training, or education provided during any 12-month period is provided to students who have completed or terminated their secondary education or are beyond the age of compulsory high school attendance.
(4)
A substantial portion, as determined by the council, by regulation, of the instruction, training, or education provided is provided to students who have completed or terminated their secondary education or are beyond the age of compulsory high school attendance.
(b)
The following are not considered to be private postsecondary educational institutions under this chapter:
(1)
Institutions exclusively offering instruction at any or all levels from preschool through the 12th grade.
(2)
Institutions offering education solely avocational or recreational in nature, and institutions offering this education exclusively.
(3)
Institutions offering education sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organization’s membership.
(4)
Postsecondary or vocational educational institutions established, operated, and governed by the federal government or by this state, or its political subdivisions.
(5)
Institutions offering continuing education where 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, trade, or job category.
(B)
A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, trade, or job category.
(C)
A bona fide trade, business, or professional organization.
(6)
A nonprofit institution owned, controlled, and operated and maintained by a bona fide church, religious denomination, or religious organization comprised of multidenominational members of the same well-recognized religion, 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, if the education is limited to instruction in the principles of that church, religious denomination, or religious organization, or to courses offered pursuant to Section 2789 of the Business and Professions Code, and the diploma or degree is limited to evidence of completion of that education, and the meritorious recognition upon which any honorary degree is conferred is limited to the principles of that church, religious denomination, or religious organization. Institutions operating under this paragraph shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization. The enactment of this paragraph expresses the legislative intent that the state shall not involve itself in the content of degree programs awarded by any institution operating under this paragraph, as long as the institution awards degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization. Institutions operating under this paragraph shall not award degrees in any area of physical science. Any degree or diploma granted in any area of study under these provisions 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. Degrees awarded under this paragraph shall reflect the nature of the degree title, such as “Associate of Religious Studies,” or “Bachelor of Religious Studies,” or “Master of Divinity” or “Doctor of Divinity.” The use of the degree titles “Associate of Arts” or “Associate of Science,” “Bachelor of Arts” or “Bachelor of Science,” “Master of Arts” or “Master of Science,” or “Doctor of Philosophy” or “Ph.D.” shall only be awarded by institutions approved to operate under Article 8 (commencing with Section 94900) or meeting the requirements for an exemption under Section 94750. The enactment of this paragraph is intended to prevent any entity claiming to be a nonprofit institution owned, controlled, and operated and maintained by a bona fide church, religious denomination, or religious organization comprised of multidenominational members of the same well-recognized religion, 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, from marketing and granting degrees or diplomas that are represented as being linked to their church, religious denomination, or religious organization, but which, in reality, are degrees in secular areas of study. An institution operating under this paragraph shall file annually with the council evidence to demonstrate its status as a nonprofit religious corporation under the Corporations Code. A college or university operating under this paragraph shall file annually with the council evidence to demonstrate its status as a nonprofit religious corporation under the Corporation Code.
(7)
(A)
Public institutions accredited by the senior commission or the junior commission of the Western Association of Schools and Colleges.
(B)
Institutions accredited by the senior commission or the junior commission of the Western Association of Schools and Colleges that are incorporated and lawfully operating as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code and that are not managed by any entity for profit.
(C)
For-profit institutions accredited by the senior or the junior commission of the Western Association of Schools and Colleges, if the institution exclusively confers degrees upon the completion of a course of study of two or more years.
(D)
Institutions accredited by the Western Association of Schools and Colleges that do not meet all of the criteria in subparagraph (B) and that are incorporated and lawfully operating as a nonprofit public benefit corporation pursuant to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code, that have been in continuous operation since April 15, 1997, and that are not managed by any entity for profit. Notwithstanding this subdivision, institutions that meet the criteria in this subparagraph shall be subject to Section 94831, except subdivision (c) of that section, and Sections 94832, 94834, 94838, and 94985.
94740.
“Program” or “program of instruction” means a program of training, set of related courses, or education for which a student enrolls.
94740.1.
“Registered,” “registered institution,” or “registered educational service” means any individual or organization that offers an educational service and is registered to operate under Article 9.5 (commencing with Section 94931).
94741.
“Representative” means an employee, an agent as defined in Section 2295 of the Civil Code, an agent subject to Section 94940, an agency subject to Section 94942, or any person who, for compensation, does either of the following:
(a)
Solicits, promotes, advertises, or refers or recruits students or prospective students for an institution.
(b)
Is involved with enrollment, admissions, student attendance, administration, financial aid, instruction, or job placement assistance on behalf of an institution.
94742.
“Satellite” means an auxiliary classroom or a teaching site. All of the following apply to a satellite:
(a)
Only educational services that are approved at the main location shall be offered at the satellite.
(b)
The institution shall maintain no permanent records of attendance or academic progress at the satellite.
(c)
Advertisement of a satellite shall indicate that the satellite is an auxiliary classroom or a teaching site.
94742.1.
(a)
“Short-term career training” means an educational service consisting of all of the following:
(1)
The total charge to the student is two thousand dollars ($2,000) or less.
(2)
The length of training is less than 250 hours.
(3)
The course is represented as preparing the student for any occupation or job title.
(b)
“Short-term career training” does not include any of the following:
(1)
Instruction leading to a degree.
(2)
Instruction financed by a federal or state loan or grant.
(3)
Any educational service, other than provided for in subdivision (a), consisting of more than 250 hours of instruction or costing two thousand dollars ($2,000) or more in total charges that is divided or structured into one or more segments that consists of 250 or fewer hours of instruction, the total charge for which is less than two thousand dollars ($2,000).
(4)
Any educational service represented to lead to, or offered for the purpose of preparing a student for, employment as a certified nursing assistant, a private security guard, or a private patrol operator.
(c)
Short-term career training may include an educational service licensed by another state agency so long as that educational service complies with subdivision (a) and Article 9.5 (commencing with Section 94931).
94742.2.
(a)
“Short-term seminar training” means an educational service offered at a main location, branch, or satellite, or any other location, consisting of 100 hours or less of instruction, the total charge for which is less than one thousand dollars ($1,000).
(b)
“Short-term seminar training” does not include any of the following:
(1)
Instruction leading to a degree.
(2)
Instruction financed by a federal or state loan or grant.
(3)
Instruction in how to prepare for, take, or pass a licensing examination or other test qualifying a person for employment.
(4)
Instruction that is represented to lead to an occupation or job title.
(5)
Any educational service consisting or more than 100 hours of instruction or costing one thousand dollars ($1,000) or more in total charges that is divided or structured into one or more segments that consist of 100 or fewer hours of instruction, the total charge for which is less than one thousand dollars ($1,000).
(c)
Short-term seminar training may include an educational service licensed by another state agency so long as that educational service complies with subdivision (a) and Article 9.5 (commencing with Section 94931).
94743.
“Site” means a main location, branch, or satellite campus.
94744.
“To offer” includes, in addition to its usual meanings, advertising, publicizing, soliciting, or encouraging any person, directly or indirectly, in any form, to perform the act described.
94745.
“To operate” an educational institution, or like term, means to establish, keep, or maintain any facility or location in this state where, or from or through which, educational services are offered or educational degrees or diplomas are offered or granted.
94746.
“Vocational diploma program” means an educational program having all of the following characteristics:
(a)
The educational program consists of a job-training program or other instruction, training, or education that the institution represents will lead to, fit, or prepare students for employment in any occupation.
(b)
The program is offered to students who do not possess a bachelor’s or graduate degree in the field of training.
(c)
Students who complete all or a portion of the program are awarded a diploma, certificate, or occupational associate degree.
Article
6. General Standards for All Postsecondary Institutions Approved Under This Chapter
94800.
All institutions approved 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:
(a)
That the institution is financially capable of fulfilling its commitments to its students.
(b)
That upon satisfactory completion of training, the student is given an appropriate degree, diploma, or certificate by the institution, indicating that the course or courses of instruction or the program or programs of instruction or study have been satisfactorily completed by the student.
(c)
That the institution provides instruction as part of its educational program. Instruction shall include any specific, formal arrangement by an institution for its enrollees to participate in learning experiences wherein the institution’s faculty or contracted instructors present a planned curriculum appropriate to the enrollee’s educational program.
94802.
(a)
Each institution desiring to operate in this state shall make application to the council, upon forms to be provided by the council. The application shall include, as a minimum, at least 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 council. The catalog shall include specific dates as to when the catalog applies.
(2)
A description of the institution’s placement assistance, if any.
(3)
Copies of media advertising and promotional literature.
(4)
Copies of all student enrollment agreement or contract forms and instruments evidencing indebtedness.
(5)
The name and California address of a designated agent upon whom any process, notice, or demand may be served.
(6)
The information specified in Section 94808.
(7)
The institution’s most current financial report as described in Section 94806.
(b)
Each application shall be signed and certified under oath by the owners of the school or, if the school is incorporated, by the principal owners of the school (those who own at least 10 percent of the stock), or by the corporate officers or their designee.
(c)
Following review of the application and any other further information submitted by the applicant, or required in conformity with Article 8 (commencing with Section 94900) and Article 9 (commencing with Section 94915), and any investigation of the applicant as the council deems necessary or appropriate, the council either shall grant or deny approval to operate to the applicant.
94804.
(a)
The review of a private postsecondary educational institution’s original application for approval, or a renewal application to the council, or an approved institution already in operation, shall include a determination of the institution’s financial responsibility. An institution shall be considered financially responsible if it has sufficient assets to do all of the following:
(1)
Provide the educational services stated in its official publications and statements.
(2)
Comply with the standards and requirements specified in Article 8 (commencing with Section 94900), Article 9 (commencing with Section 94915), or Article 9.5 (commencing with Section 94931), whichever is applicable.
(3)
Provide the administrative and financial resources to fully comply with this article.
(4)
Comply with any applicable provisions of Section 94855.
(b)
An institution shall not be considered financially responsible under any of the following conditions:
(1)
The institution fails to have available sufficient funds and accounts receivable to pay all operating expenses due within 30 days. For the purpose of this paragraph, “funds” means cash or assets that can be converted into cash within seven days.
(2)
Under generally accepted accounting principles, the institution had, at the end of its latest fiscal year, a ratio of current assets to current liabilities of less than 1.25 to 1. For the purpose of this paragraph, “current assets” does not include any of the following: (A) intangible assets, including goodwill, going concern value, organization expense, startup costs, long-term prepayment of deferred charges, and nonreturnable deposits, or (B) state or federal grant funds that are not the property of the institution but are held for future disbursement for the benefit of students. Unearned tuition shall be accounted for in accordance with generally accepted accounting principles. When another government agency requires an institution to file annual financial audit prepared by a certified public accountant, that agency’s current ratio standard may apply in lieu of the ratio specified in this paragraph if the ratio of current assets to current liabilities under that standard is 1 to 1 or greater.
(c)
(1)
In determining an institution’s compliance with subdivision (a), the council, at the institution’s request, may consider the financial resources of a parent corporation if the parent corporation files with the council, and at all times complies with, an irrevocable and unconditional agreement approved by its board of directors that satisfies all of the requirements of paragraph (2):
(2)
The agreement described in paragraph (1) shall provide that the parent corporation do all of the following:
(A)
Consent to be sued in California.
(B)
Consent to be subject to the administrative jurisdiction of the council and the Student Aid Commission in connection with the institution’s compliance with this chapter.
(C)
Appoint an agent for service of process in California and all notices required by this chapter.
(D)
Agree to pay any refund, claim, penalty, or judgment that the institution is obligated to pay.
(E)
File financial reports, maintain financial records, and permit the inspection and copying of financial records to the same extent as is required of the institution.
(3)
For the purposes of this subdivision, a “parent corporation” means a corporation that owns more than 80 percent of the stock of the institution whose financial resources are at issue.
(d)
If the council determines that an institution is not financially responsible, the council, under terms and conditions prescribed by the council, may require the institution to submit for its latest complete fiscal year and its current fiscal year, each of the following:
(1)
A financial audit of the institution conducted by a licensed certified public accountant, in accordance with generally accepted auditing standards.
(2)
The institution’s financial plan for establishing financial responsibility.
(3)
Any other information requested by the council.
This subdivision does not prevent the council from taking any other actions authorized under this chapter.
94806.
(a)
This section applies to every audit, review, and statement prepared by an independent accountant and to every financial report required to be prepared or filed by this chapter.
(b)
Institutional audits and reviews of financial data, including the preparation of financial statements, shall comply with all of the following:
(1)
An institution that collected seven hundred fifty thousand dollars ($750,000) or more in total student charges in its preceding fiscal year shall file financial reports prepared in accordance with generally accepted accounting principles established by the American Institute of Certified Public Accountants, and audited or reviewed by an independent certified public accountant who is not an employee, officer, or corporate director or member of the governing board of the institution.
(2)
An institution that collected less than seven hundred fifty thousand dollars ($750,000) in total student charges in its preceding fiscal year shall file financial reports prepared in accordance with generally accepted accounting principles established by the American Institute of Certified Public Accountants. These financial reports may be prepared by an individual with sufficient training to adhere to the required accounting principles.
(3)
Financial reports prepared on an annual basis shall include a balance sheet, statement of operations, statement of cash flow, and statement of retained earnings or capital. Nonprofit institutions shall provide this information in the manner required under generally accepted accounting principles for nonprofit organizations.
(4)
The financial report shall establish whether the institution complies with subdivision (a) of Section 94804 or subdivision (a) of Section 94855, if applicable, and whether any of the circumstances described in subdivision (b) of Section 94804 or subdivision (b) of Section 94855, if applicable, exist.
(5)
If an audit that is performed to determine compliance with any federal or state student financial aid program reveals any failure to comply with the requirements of the program, and the noncompliance creates any liability or potential liability for the institution, the financial report shall reflect the liability or potential liability.
(6)
Work papers for the financial statements shall be retained for five years from the date of the reports and shall be made available to the council upon request after completion of the report.
(c)
Any audits shall be conducted in accordance with generally accepted auditing standards and shall include the matters described in subdivision (d).
(d)
If an audit is conducted, the accountant shall obtain an understanding of the institution’s internal financial control structure, assess any risks, and report any material deficiencies in the internal controls.
94808.
(a)
Each institution approved to operate under this chapter shall be required to report to the council, by July 1 of each year, or another date designated by the council, the following information for educational programs offered in the prior fiscal year:
(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)
Program completion rates.
(5)
The schedule of tuition and fees required for each term, program, course of instruction, or degree offered.
(6)
Financial information demonstrating compliance with subdivisions (b) and (c) of Section 94804 and subdivisions (b) and (c) of Section 94855, if applicable.
(7)
Institutions having a probationary or conditional status shall submit an annual report reviewing their progress in meeting the standards required for approval status.
(8)
Any additional information that the council may prescribe.
(b)
Colleges and universities operating under paragraph (6) of subdivision (b) of Section 94739 shall comply with the reporting requirements of paragraphs (1), (2), (3), and (5) of subdivision (a).
(c)
Program completion rates and placement data shall be reported in accordance with the standards and criteria prescribed by the council pursuant to paragraphs (1) to (4), inclusive, of subdivision (a) of Section 94816 and Section 94859, if applicable. Based on the review of information submitted to fulfill the requirements of this section, the council may initiate a compliance review and may place the institution on probation pursuant to subdivision (h) of Section 94901 and subdivision (i) of Section 94915, and may require evidence of financial stability and responsibility pursuant to Sections 94804 and 94855, if applicable.
94809.
Each institution approved under this chapter shall provide the council 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 all preliminary reports, and the institution’s written responses to the reports described in this section, if applicable. The institution shall provide a copy of each report within 15 days of the institution’s receipt of the report and a copy of the institution’s response within 15 days of the institution’s submission of its response.
94810.
(a)
Any written contract or agreement for educational services with an institution shall include all of the following:
(1)
On the first page of the agreement or contract, in 12-point boldface print or larger, the following statement:
“Any questions or problems concerning this school which have not been satisfactorily answered or resolved by the school should be directed to the Council for Private Postsecondary and Vocational Education, (address), Sacramento, California 95814.”
(2)
In underlined capital letters on the same page of the contract or agreement in which the student’s signature is required, the total amount that the student is obligated to pay for the course of instruction and all other services and facilities furnished or made available to the student by the school, including any charges made by the school for tuition, room and board, books, materials, supplies, shop and studio fees, and any other fees and expenses that the student will incur upon enrollment.
(3)
A list of any charges and deposits that are nonrefundable clearly identified as nonrefundable charges.
(4)
The name and address of the school and the addresses where instruction will be provided.
(5)
The name and description of the program of instruction, including the total number of credits, classes, hours, or lessons required to complete the program of instruction.
(6)
A clear and conspicuous statement that the agreement or contract is a legally binding instrument when signed by the student and accepted by the school.
(7)
A clear and conspicuous caption, “BUYER’S RIGHT TO CANCEL” under which it is explained that the student has the right to cancel the enrollment agreement and obtain a refund, the form and means of notice that the student should use in the event that he or she elects to cancel the enrollment agreement, and the title and address of the school official to whom the notice should be sent or delivered.
(8)
A clear statement of the refund policy written in plain English.
(9)
The signature of the student under the following statement that is presented in 12-point boldface or larger print: “My signature below certifies that I have read, understood, and agreed to my rights and responsibilities, and that the institution’s cancellation and refund policies have been clearly explained to me.”
(10)
If the student is not a resident of California, a clear statement that the student is not eligible for protection under and recovery from the Student Tuition Recovery Fund.
(b)
All contracts and enrollment agreements signed by the student shall be written in language that is capable of being easily understood. If English is not the primary language spoken by the student, the student shall have the right to obtain a clear explanation of the terms and conditions of the agreement and all cancellation and refund policies in his or her primary language.
94812.
Any written contract or agreement signed by a prospective student shall not become operative until the student attends the first class or session of instruction. This provision does not apply to correspondence schools or other distance-learning programs.
94814.
(a)
The institution shall provide to students and other interested persons, prior to enrollment, a catalog or brochure containing at a minimum 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 council.
(b)
No written contract signed by the student shall be enforceable unless the information specified in subdivision (a) has been disclosed to the student.
94816.
(a)
Each 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. The rate shall be calculated by determining the percentage of students enrolled in the program who were originally scheduled, at the time of enrollment, to complete the program in that calendar year and who successfully completed the program.
(2)
The passage rates of graduates in the program for the most recent calendar year that ended not less than six months prior to the date of disclosure 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 under subdivision (a) of Section 94734 for which data is available.
(3)
The number and percentage of students who begin the program and secure employment in the field for which they were trained. In calculating this rate, the institution shall consider as not having obtained employment, any graduate for whom the institution does not possess evidence, documented in his or her file, showing that he or she has obtained employment in the occupation for which the program is offered.
(4)
The average annual starting wages or salary of graduates of the institution’s program, if the institution makes a claim to prospective students regarding the starting salaries of its graduates, or the starting salaries or local availability of jobs in a field. The institution shall disclose to the prospective student the objective sources of information necessary to substantiate the truthfulness of the claim.
Each school that offers or advertises placement assistance for any course of instruction shall file with the council its placement statistics for the 12-month period or calendar year immediately preceding the date of the school’s application for annual review for every course of instruction.
The council shall develop standards and criteria to be used by each institution in determining the statistical information required by this paragraph.
(b)
In addition to the fact sheet required by subdivision (a), each institution offering a degree program designed to prepare students for a particular vocation, trade, or career field and each institution subject to Article 7 (commencing with Section 94850) shall provide to each prospective student a statement in at least 12-point type that contains the following statement:
“NOTICE CONCERNING TRANSFERABILITY OF UNITS AND DEGREES EARNED AT OUR SCHOOL
Units you earn in our ____ (fill in name of program) program in most cases will probably not be transferable to any other college or university. For example, if you entered our school as a freshman, you will still be a freshman if you enter another college or university at some time in the future even though you earned units here at our school. In addition, if you earn a degree, diploma, or certificate in our ____ (fill in name of program) program, in most cases it will probably not serve as a basis for obtaining a higher level degree at another college or university.”
The disclosures required by this section shall be signed by the institution and the student and be dated. If the solicitation or negotiation leading to the agreement for a course of instruction was in a language other than English, the disclosures shall be in that other language.
(c)
The council shall take into consideration the character of the educational program in determining whether specific programs may be excluded from application of this section.
(d)
Except as provided in subdivision (b), this section does not apply to educational programs subject to Article 7 (commencing with Section 94850).
94818.
(a)
Every institution shall designate and maintain an agent for service of process within this state and provide the name, address, and telephone number of the agent to the council. The council shall furnish the agent’s name, address, and telephone number to any person upon request.
(b)
If an institution is not operating in California when it applies for approval to operate, the institution shall set forth the name, address, and telephone number of its agent for service of process in the institution’s application.
(c)
If an institution fails to designate or maintain an agent for service of process pursuant to subdivision (a) and if service on the institution cannot reasonably be effected in the manner provided in Section 415.10, 415.20, 415.30, or 415.40 of the Code of Civil Procedure, the institution may be served by leaving a copy of the process or any other document in an office of the council and by sending, by first-class mail, a notice of the service upon the council and a copy of the process or other document to the institution at its last address on file with the council. Service in this manner shall be deemed complete on the 10th day after that mailing to the institution. Proof of service may be made by a declaration showing compliance with this subdivision.
94819.
Within 30 days of any action by any accrediting agency that establishes, reaffirms, or publicly sanctions the accreditation of any private postsecondary educational institution operating in the state, including those institutions that satisfy the requirements of paragraph (7) of subdivision (b) of Section 94739, the accrediting agency shall notify the bureau of that action and shall provide a copy of any public statements regarding the reasons for the accrediting agency’s action.
94820.
(a)
The institution shall have and maintain the policy set forth in this article for the refund of the unused portion of tuition fees and other charges if the student does not register for the period of attendance or withdraws therefrom at any time prior to completion of the courses, or otherwise fails to complete the period of enrollment. The institutional refund policy for students who have completed 60 percent or less of the course of instruction shall be a pro rata refund.
(b)
Except as provided in subdivision (c), the refund shall be calculated as follows:
(1)
Deduct a registration fee not to exceed one hundred dollars ($100) from the total tuition charge.
(2)
Divide this figure by the number of hours in the program.
(3)
The quotient is the hourly charge for the program.
(4)
The amount owed by the student for the purposes of calculating a refund is derived by multiplying the total hours attended by the hourly charge for instruction plus the amount of the registration fee specified in paragraph (1).
(5)
The refund shall be any amount in excess of the figure derived in paragraph (4) that was paid by the student.
(c)
For an educational service offered by distance learning, home study, or correspondence, the refund shall be calculated as follows:
(1)
Deduct a registration fee not to exceed one hundred ($100) from the total tuition charge.
(2)
Divide this figure by the number of lessons in the program.
(3)
The quotient is the per-lesson charge.
(4)
The amount owed by the student for the purposes of calculating a refund is derived by multiplying the total number of lessons received by the per-lesson charge calculated in paragraph (3) plus the amount of the registration fee specified in paragraph (1).
(5)
The refund shall be any amount in excess of the figure derived in paragraph (4) that was paid by the student.
(d)
For the purposes of this section, institutions may specify in enrollment agreements the time limits within which students are required to complete the requirements of a course in a distance learning program.
94821.
Institutions offering distance learning, home study, or correspondence instruction may petition the council for an alternative method of calculating tuition refunds if they can demonstrate all of the following:
(a)
The method of calculation set forth in subdivision (c) of Section 94820 cannot be utilized.
(b)
The proposed alternative method will result in the calculation of a refund that is monetarily equivalent to or greater than the results achieved by the pro rata calculations described in this subdivision.
94822.
Institutions, for all students, without penalty or obligation, shall refund 100 percent of the amount paid for institutional charges, less a reasonable deposit or application fee not to exceed one hundred dollars ($100), if notice of cancellation is made prior to or on the first day of instruction. If the first lesson in a home study or correspondence course is sent to the student by mail, the institution shall send it by first-class mail, postage prepaid, documented by a certificate of mailing, and the student shall have the right to cancel until midnight of the eighth business day after the first lesson was mailed. The institution shall advise each student that any notification of withdrawal or cancellation and any request for a refund is required to be made in writing.
94823.
The 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.
94824.
The institution shall pay or credit refunds due on a reasonable or timely basis, not to exceed 30 days following the date upon which the student’s withdrawal has been determined.
94825.
The institution shall publish a current schedule of all student charges, a statement of the purpose for those charges, and a statement of the cancellation and refund policies with examples of the application of the policies, and shall provide the schedule to all current and prospective students prior to enrollment. The schedule shall clearly indicate and differentiate all mandatory and optional student charges. The institution shall include a clear statement written in English describing the procedures that a student is required to follow to cancel the contract or agreement and obtain a refund. If the institution solicited the student or negotiated the agreement in a language other than English, the notice to the student shall be in that same language. The schedule shall specify the total costs of attendance which shall include, but not be limited to, tuition, fees, equipment costs, housing, transportation, books, necessary supplies, materials, shop and studio fees, and any other fees and expenses that the student will incur upon enrollment.
The schedule shall clearly identify all charges and deposits that are nonrefundable.
94826.
Where the refund calculations set forth in this article cannot be utilized because of the unique way in which an educational program is structured, the council shall determine the details of an alternative refund policy, by regulation, and shall take into consideration the contract for educational services entered into with the student, as well as the length and character of the educational program in determining standards for refunds. The decision of the council shall be final. This section does not apply to the refunds subject to Sections 94869 and 94870.
94828.
In addition to withholding institutional services as described in Section 94948, an institution may withhold a student’s transcript or grades if the student is in default on a student tuition contract.
If the student has made partial payment of his or her tuition obligation, the institution may only withhold that portion of the grades or transcript that corresponds on a pro rata basis to the amount of tuition or loan obligation the student has not paid. If the course of study consists of only one course, the institution may withhold the grades or the transcript until the tuition or loan obligation is paid in full.
94829.
(a)
Adequate and accurate records shall be maintained by the institution, in accordance with regulations adopted by the council, and satisfactory standards shall be enforced relating to attendance, progress, and performance.
(b)
The institution shall maintain current records for a period of not less than five years at its principal place of business in California, that are immediately available during normal business hours for inspection and copying by the council or the Attorney General and showing all of the following:
(1)
The name and addresses, both local and home, of each of its students.
(2)
The programs of study offered by the institution.
(3)
The names and addresses of its faculty, together with a record of the educational qualifications of each.
(4)
The degrees or diplomas and honorary degrees and diplomas granted, the date of granting, together with the curricula upon which the diplomas and degrees were based.
94830.
The council may refuse to issue or renew any private postsecondary or vocational educational institution’s approval to operate, or may revoke any approval to operate for any one, or any combination, of the following causes:
(a)
A violation of this chapter, or any standard, rule, or regulation established under this chapter, or an order of the council made under this chapter.
(b)
Furnishing false, misleading, or incomplete information to the council, or the failure to furnish information requested by the council or required by this chapter.
(c)
A finding that an owner, a person in control, a director, or an officer of an institution is not in compliance with this chapter or was not in compliance with applicable law while serving as an owner, person in control, director, or officer of an institution within the previous five-year period.
(d)
A finding that a signatory to an application for an approval to operate was responsible for the closure of any institution in which there were unpaid liabilities to any state or federal government, or uncompensated pecuniary losses suffered by students without restitution.
(e)
A finding that the applicant, owner, or persons in control have been found previously in any judicial or administrative procedure to have violated this chapter or admitted to having violated this chapter.
(f)
A finding that there was either a denial of a previous application submitted by the same institution to the council or a revocation of the institution’s approval and that the conditions or violations that were the cause of the denial or revocation have not been corrected.
(g)
The failure of the institution to maintain the minimum educational standards prescribed by this chapter, or to maintain standards that are the same as, or substantially equivalent to, those represented in the school’s applications and advertising.
(h)
Presenting to prospective students information that is false or misleading relating to the school, to employment opportunities, or to enrollment opportunities in institutions of higher learning after entering into or completing courses offered by the school.
(i)
The failure to maintain financial resources adequate for the satisfactory conduct of the courses of instruction offered as required by statute.
(j)
The failure to provide timely and correct refunds to students.
(k)
Paying a commission or valuable consideration to any persons for acts or services in violation of this chapter.
(
l)
Attempting to confer a degree, diploma, or certificate to any student in violation of this chapter.
(m)
Misrepresenting to any students or prospective students that they are qualified, upon completion of any course, for admission to professional examination under any state occupational licensing provision.
(n)
The failure to correct any deficiency or act of noncompliance under this chapter, or the standards, rules, regulations, and orders established and adopted under this chapter within reasonable time limits set by the council.
(o)
The conducting of business or instructional services at any location not approved by the council.
(p)
Failure on the part of an institution to comply with provisions of law or regulations governing sanitary conditions of that institution specified in Division 2 (commencing with Section 500) and Division 3 (commencing with Section 5000) of the Business and Professions Code.
(q)
The failure to pay any fees, order for costs and expenses under Section 94935, assessments, or penalties owed to the council, as provided in this chapter.
94831.
No institution, or representative of that institution shall do any of the following:
(a)
Operate in this state a postsecondary educational institution not exempted from this chapter, unless the institution is currently approved to operate pursuant to this chapter. The council may institute an action, pursuant to Section 94955, to prevent any individual or entity from operating an institution in this state that has not been approved to operate pursuant to this chapter and to obtain any relief authorized by that section.
(b)
Offer in this state, as or through an agent, enrollment or instruction in, or the granting of educational credentials from, an institution not exempted from this chapter, whether that institution is within or outside this state, unless that agent is a natural person and has a currently valid agent’s permit issued pursuant to this chapter, or accept contracts or enrollment applications from an agent who does not have a current permit as required by this chapter. The council, however, may adopt regulations to permit the rendering of legitimate public information services without a permit.
(c)
Instruct or educate, or offer to instruct or educate, including soliciting for those purposes, enroll or offer to enroll, contract or offer to contract with any person for that purpose, or award any educational credential, or contract with any institution or party to perform any act, in this state, whether that person, agent, group, or entity is located within or without this state, unless that person, agent, group, or entity observes and is in compliance with the minimum standards set forth in this article and Article 7 (commencing with Section 94850), if it is applicable, the criteria established by the council pursuant to subdivision (b) of Section 94773, and the regulations adopted by the council pursuant to subdivision (c) of Section 94773.
(d)
Use, or allow the use of, any reproduction or facsimile of the Great Seal of the State of California on any diploma.
(e)
Promise or guarantee employment.
(f)
Advertise concerning job availability, degree of skill and length of time required to learn a trade or skill unless the information is accurate and in no way misleading.
(g)
Advertise, or indicate in any promotional material, that correspondence instruction, or correspondence courses of study are offered without including in all advertising or promotional material the fact that the instruction or programs of study are offered by correspondence or home study.
(h)
Advertise, or indicate in any promotional material, that resident instruction, or programs of study are offered without including in all advertising or promotional material the location where the training is given or the location of the resident instruction.
(i)
Solicit students for enrollment by causing any advertisement to be published in “help wanted” columns in any magazine, newspaper, or publication or use “blind” advertising that fails to identify the school or institution.
(j)
Advertise, or indicate in any promotional material, that the institution is accredited, unless the institution has been recognized or approved as meeting the standards established by an accrediting agency recognized by the United States Department of Education or the Committee of Bar Examiners for the State of California.
(k)
Fail to comply with federal requirements relating to the disclosure of information to students regarding vocational and career training programs, as described in Section 94816.
94832.
(a)
No institution or representative of an institution shall make or cause to be made any statement that is in any manner untrue or misleading, either by actual statement, omission, or intimation.
(b)
No institution or representative of an institution shall engage in any false, deceptive, misleading, or unfair act in connection with any matter, including the institution’s advertising and promotion, the recruitment of students for enrollment in the institution, the offer or sale of a program of instruction, course length, course credits, the withholding of equipment, educational materials, or loan or grant funds from a student, training and instruction, the collection of payments, or job placement.
(c)
An institution is liable in any civil or administrative action or proceeding for any violation of this article committed by a representative of the institution. An institution is liable in a criminal action for violations of this article committed by a representative of the institution to the extent permitted by law.
(d)
(1)
No institution or representative of an institution shall induce a person to enter into an agreement for a program of instruction by offering to compensate that person to act as the institution’s representative in the solicitation, referral, or recruitment of others for enrollment in the institution.
(2)
No institution or representative of an institution shall offer to pay or pay any consideration to a student or prospective student to act as a representative of the institution with regard to the solicitation, referral, or recruitment of any person for enrollment in the institution in either of the following:
(A)
During the 60-day period following the date on which the student began the program.
(B)
At any subsequent time, if the student has not maintained satisfactory academic progress in acquiring the necessary level of education, training, skill, and experience to obtain employment in the occupation or job title to which the program is represented to lead. The institution shall have the burden of proof to establish that the student has maintained satisfactory academic progress.
(e)
No institution shall compensate a representative involved in recruitment, enrollment, admissions, student attendance, or sales of equipment to students on the basis of a commission, commission draw, bonus, quota, or other similar method except as follows:
(1)
If the program of instruction is scheduled to be completed in 90 days or less, the institution shall pay compensation related to a particular student only if that student completes the course.
(2)
If the program of instruction is scheduled to be completed in more than 90 days, the institution shall pay compensation related to a particular student as follows:
(A)
No compensation shall be paid for at least 90 days after that student has begun the program.
(B)
Up to one-half of the compensation may be paid before the student completes the program only if the student has made satisfactory academic progress, documented by the institution in the student’s file, for more than 90 days.
(C)
The remainder of the compensation shall be paid only after the student’s completion of the program. This subdivision shall not prevent the payment at any time of an hourly, weekly, monthly, or annual wage or salary.
(f)
No institution or representative of an institution shall pay any consideration to a person to induce that person to sign an agreement for a program of instruction.
(g)
No institution shall use a misleading name in any manner implying any of the following:
(1)
The institution is affiliated with any governmental agency, public or private corporation, agency, or association.
(2)
The institution is a public institution.
(3)
The institution grants degrees.
(h)
(1)
No institution or any representative of an institution shall in any manner make any untrue or misleading change in, or untrue or misleading statement related to, any test score, grade, record of grades, attendance record, record indicating student completion or employment, financial information, including any of the following:
(A)
Any financial report required to be filed pursuant to Sections 94804 to 94808, inclusive.
(B)
Any information or record relating to the student’s eligibility for financial assistance or attendance at the institution.
(C)
Any other record or document required by this chapter or by the council.
(2)
No institution or any representative of an institution shall falsify, destroy, or conceal any record or other item described in paragraph (1)
while that record or item is required to be maintained by this chapter or by the council.
(i)
No institution or representative of an institution shall use the terms “approval,” “approved,” “approval to operate,” or “approved to operate” without stating clearly and conspicuously that approval to operate means compliance with minimum state standards and does not imply any endorsement or recommendation by the state or by the council. If the council has granted an institution approval to operate, the institution or its representative may indicate that the institution is “licensed” or “licensed to operate” but may not state or imply any of the following:
(1)
The institution or its programs of instruction are endorsed or recommended by the state or by the council.
(2)
The council’s grant to the institution of approval to operate indicates that the institution exceeds minimum state standards.
(3)
The council or the state endorses or recommends the institution.
(j)
No institution offering programs or courses of instruction represented to lead to occupations or job titles requiring licensure shall enter into an agreement for a course of instruction with a person whom the institution knows or, by the exercise of reasonable care, should know, would be ineligible to obtain licensure in the occupation or job title to which the course of instruction is represented to lead, at the time of the scheduled date of course completion, for reasons such as age, physical characteristics, or relevant past criminal conviction.
(k)
No institution shall divide or structure a program of instruction or educational service to avoid the application of any provision of this chapter.
(
l)
No institution or representative of an institution shall direct a representative to perform any unlawful act, to refrain from complaining or reporting unlawful conduct to the council or another government agency, or to engage in any unfair act to persuade a student not to complain to the council or another government agency.
94834.
(a)
Any person or business entity, regardless of the form of organization that willfully violates Section 94800, Sections 94810 to 94826, inclusive, or Section 94828, 94829, 94831, or 94832 is guilty of a crime and shall be subject to separate punishment for each violation either by imprisonment in a county jail not to exceed one year, by a fine not to exceed ten thousand dollars ($10,000), or by both that imprisonment and fine; or by imprisonment in the state prison, by a fine not to exceed fifty thousand dollars ($50,000), or by both that imprisonment and fine.
(b)
Notwithstanding any other law, any prosecution under this section shall be commenced within three years of the discovery of the facts constituting grounds for commencing the prosecution.
(c)
The penalties provided by this section supplement, but do not supplant, the remedies and penalties provided under other law.
(d)
In addition to any other fines or penalties imposed pursuant to this section, any person or business entity found guilty of a crime as described in subdivision (a) shall be ordered to pay the Attorney General, any district attorney, or any city attorney all of their costs and expenses in connection with any investigation incident to that prosecution. An institution shall not be required to pay the same costs and expenses to more than one investigating agency.
94835.
(a)
The council shall review and investigate all institutions, programs, and courses of instruction approved under this chapter. Consideration in the scheduling of reviews and investigations shall be afforded to student complaints and information collected by the Attorney General, the Student Aid Commission, any board within the Department of Consumer Affairs, or any other federal, state, or local agency. The council also shall conduct periodic unannounced reviews and investigations of institutions to determine compliance with this chapter.
(b)
At the council’s request in connection with an investigation to determine compliance with this chapter, an institution, during its normal business hours, shall immediately make available for inspection and copying all records required to be maintained by this chapter or that relate to the institution’s compliance with this chapter and permit the council’s representatives to have immediate access to the institution’s primary administrative location and sites of instruction during the institution’s normal business hours to examine and copy these records, to inspect the institution’s physical facilities, equipment, library and other learning resources, and to interview school administrators, faculty, and students.
(c)
The approval to operate shall be issued to the owners or the governing body of the applicant institution, and shall be nontransferrable. Any person that makes a proper application and complies with this chapter and each standard and regulation pertaining to this chapter shall be qualified to receive an approval to operate or an approval of the transfer of ownership.
94836.
(a)
If there is reasonable cause to believe that there has been a violation by a private postsecondary educational institution of the standards prescribed by this chapter, the council shall conduct an investigation of the institution.
(b)
Within a reasonable time after the commencement of the investigation required in subdivision (a), the council shall conclude its investigation and take action against the institution involved, as appropriate.
94838.
(a)
No note, other instrument of indebtedness, or contract relating to payment for educational services shall be enforceable by any institution within or outside this state governed by this chapter unless at the time of execution of that note, other instrument of indebtedness, or contract, the institution has a valid approval to operate pursuant to this chapter.
(b)
No note, other instrument of indebtedness, or contract relating to payment for educational services shall be enforceable by any institution within or outside this state governed by this chapter unless the agent, who enrolled persons to whom educational services were to be rendered or to whom degrees or diplomas were to be granted pursuant to this chapter, held a valid agent’s permit at the time of execution of the note, other instrument of indebtedness, or contract.
(c)
Any school or institution governed by this chapter extending credit or lending money to any person for tuition, fees, or any charges whatever for educational services to be rendered or furnished shall cause any note, instrument, or other evidence of indebtedness taken in connection with that loan or extension of that credit to be conspicuously marked on the face thereof with the following notice:
“NOTICE
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES THAT THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF, RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.”
In the event the school or institution fails to do so, it shall be liable for any damage or loss suffered or incurred by any subsequent assignee, transferee, or holder of that evidence of indebtedness on account of the absence of that notification.
(d)
Notwithstanding the presence or absence of that notification and notwithstanding any agreement in which the student waives the right to assert any claim or defense, the school or institution making that loan or extending that credit and the transferee, assignee, or holder of that evidence of indebtedness, shall be subject to all defenses and claims that could be asserted against the school or institution that was to render or furnish those educational services by any party to that evidence of indebtedness or by the person to whom these educational services were to be rendered or furnished up to the amount remaining to be paid thereon.
(e)
Institutions that participate in federal student assistance programs and that comply with the financial disclosure and notification requirements for those programs shall be deemed to be in compliance with the standards prescribed by this section.
94840.
At least 90 days prior to the expiration of an approval to operate, the institution shall complete and file with the council an application form for renewal of its approval to operate. The renewal application need only contain a description of any changes made by the institution since the time its last application was reviewed by the council. Fees for processing the renewal application shall be based on the number and types of changes it contains. The renewal application shall be reviewed and acted upon as provided in Sections 94802, 94804, and 94835, and Section 94900 or 94915, whichever is applicable.
94841.
Before any institution may be considered for approval or renewal of approval to operate, the institution, at a minimum, shall pay all annual fees, assessments to the Student Tuition Recovery Fund, orders for costs and expenses under Section 94935, and penalties in arrears retroactive to January 1, 1990. If an institution that has failed to make timely payments of fees and assessments is approved, the approval shall be conditional, subject to any restrictions the council deems appropriate, and shall be valid for a period not to exceed two years.
94842.
If a review and decision on a renewal application submitted pursuant to Section 94840 cannot be completed by the council prior to the expiration of the institution’s current pending approval, that expiration date shall be extended until the date that the council notifies the institution of its decision.
94846.
(a)
If a shift in control or change of ownership of an institution occurs, an application for a new approval to operate for the institution under the changed ownership or control shall be filed with the council at least 20 days prior to the shift in control or change in ownership. Whenever an institution is operated at different locations, an application for approval shall be filed for each location.
(b)
The application for approval to operate submitted in conjunction with a change of ownership may include pertinent portions of the institution’s previous application prepared in connection with programs or courses of instruction that remain unchanged or unaffected by the change in ownership.
(c)
No application for ownership or transfer of ownership shall be approved for any applicant that has been found previously in any judicial or administrative proceeding to have violated this chapter, or if there exists any of the grounds for denial set forth in Section 480 of the Business and Professions Code.
(d)
No change in ownership of the institution shall be made until the application is approved. If an application for a new approval to operate is not timely filed as required by this section, the institution’s approval to operate shall terminate. Upon approval of a change in ownership, the council shall give written notice to the Student Aid Commission.
(e)
For the purposes of this section, a change in ownership occurs when there is a change of control of the institution, or where a person that previously did not own at least 25 percent of the stock or controlling interest of an institution or its parent corporation, acquires ownership of at least 25 percent of the stock of the institution or its parent corporation, or when a for-profit business converts to nonprofit corporation status or forms a nonprofit corporation as a subsidiary to provide the educational services for which the for-profit business is approved to operate.
94848.
An institution may not claim an exception pursuant to Section 94739 or 94785 if the bureau finds, after notice and hearing as provided in Section 94975, that the institution adopted a form of organization or method of operation for the purpose of avoiding any provision of this chapter.
Article
7. Maxine Waters Student Protection Act
94850.
(a)
This article shall be known, and may be cited, as the Maxine Waters School Reform and Student Protection Act of 1989.
(b)
The Legislature finds and declares that students have been substantially harmed and the public perception of reputable institutions has been damaged because of the fraudulent, deceptive, and unfair conduct of some institutions that offer courses of instruction for a term of two years or less that are supposed to prepare students for employment in various occupations. Students have been induced to enroll in these schools through various misrepresentations including misrepresentations related to the quality of education, the availability and quality of equipment and materials, the language of instruction and employment and salary opportunities. Some of the most egregious misrepresentations are made by representatives who recruit students at places other than the institution’s premises. Some students have been enrolled who do not have the ability to benefit from the instruction. In addition, the quality of the education offered is often inadequate to enable students to obtain jobs after the completion of instruction.
(c)
The Legislature further finds and declares that many students who enroll in these schools pay their tuition from the proceeds of loans and grants guaranteed or provided by the state and federal governments. Students who leave schools before the completion of instruction, often because of misrepresentations and inadequate instruction, do not receive adequate refunds of tuition for the instruction not received. Students remain liable to repay student loans but are frequently unable to do so in part because they were unable to obtain the proper educational preparation for jobs. Students are also harmed by the closure of institutions, often caused by the fraud or mismanagement of the institution’s operators, because the students neither obtain the education promised nor a refund of tuition and the cost of materials. As a result of all of the foregoing, the state and federal governments spend many millions of dollars annually to satisfy loan guarantees for often inadequate and misrepresented vocational school courses.
(d)
It is the intent and purpose of this article to protect students and reputable institutions, ensure appropriate state control of business and operational standards, ensure minimum standards for educational quality, prohibit misrepresentations, require full disclosures, prohibit unfair dealing, and protect student rights. It is the intent and purpose of this article to save millions of dollars of taxpayer’s funds from being misused to underwrite the activities of institutions that depart from the standards of fair dealing and the requirements of this article.
(e)
This article shall be liberally construed to effectuate its intent and achieve its purposes.
(f)
To the extent of any conflict between any other law and this article, this article shall prevail.
94851.
(a)
The Legislature further finds and declares that students have been harmed by some institutions because of the financial improprieties and mismanagement of those institutions, their failure to fully disclose the student’s financial and contractual obligations, and their failure to have sufficient resources to provide the promised training. The Legislature also finds that the tuition refund policies of institutions often encourage unfair practices by creating a financial benefit to the institution if a student drops out, and do not encourage institutions to provide adequate counseling or to adopt policies designed to curb student dropouts. In addition, the Legislature finds that many institutions have poor records of student completion and job placement, even though these institutions expressly or implicitly represent that students will receive sufficient training and skills to obtain well-paid employment in the field that is the subject of the training, and that a reputable institution is one that complies with this chapter. Consequently, the Legislature finds that the business of providing occupational training, instruction, and related equipment by commercial enterprises has a substantial impact on the economy of this state and the welfare of its citizens.
(b)
It is the further intent and purpose of this article to establish incentives to reduce student dropouts, minimum fiscal standards, minimum standards for admission based on the student’s ability to be successfully trained, and minimum standards for institutional accountability for course completion and student employment in the occupations or job titles to which the training is represented to lead. The Legislature finds that the accountability standards for completion and employment reflect a reasonable tolerance for factors outside an institution’s control. It is also the intent and purpose of this article to ensure that the cost to taxpayers of loans and grants for vocational instruction is commensurate with the benefits obtained by students and flowing to the state’s economy.
94852.
The following definitions and provisions apply to this article:
(a)
“Class” means a subject, such as English or mathematics, that is taught as part of a course of instruction. “Class session” means the part of a day that an institution conducts instruction or training in a particular class, such as an hour of instruction in English or mathematics offered on a particular day of the week.
(b)
“Council” means the Council for Private Postsecondary and Vocational Education established pursuant to Section 94770.
(c)
“Educational service” means any education, training, or instruction offered by an institution, including any equipment.
(d)
“Equipment” includes all textbooks, supplies, materials, implements, tools, machinery, computers, electronic devices, or any other goods related to any education, training, or instruction, or an agreement for educational services or a course of instruction.
(e)
“Licensure” includes any license, certificate, permit, or similar credential that a person must hold to lawfully engage in any occupation or activity.
(f)
“Owner” means any person who has a legal or equitable interest in 10 percent or more of an institution’s stock or assets.
(g)
“Person” means a natural person or any business entity, regardless of the form of organization.
(h)
“Person in control” means a person who has sufficient capacity, directly or indirectly, to direct or influence the management, policies, or conduct of the institution so that the person can cause or prevent violations of this chapter. There is a rebuttable presumption affecting the burden of proof that an owner, director, or office of an institution is a person in control.
(i)
“Private postsecondary educational institution” or “institution” means any person doing business in California who offers to provide or provides, for a tuition, fee, or other charge, any instruction, training or education primarily to people who have completed or terminated their secondary education or are beyond the age of compulsory high school attendance. An “institution” includes its branch and satellite campuses, unless otherwise provided.
(j)
“Program” or “program of instruction” or “course” or “course of instruction,” except as otherwise provided, means the program of instruction, training, set of related courses or education represented to lead to an occupation or job title.
(k)
“Total charge” means the total charge for a course of instruction or other education, instruction, or training, including the charge for tuition, equipment, finance charges, and all other fees, charges, costs, and expenses.
(
l)
“Year” means a calendar year.
94853.
(a)
In addition to making any other required disclosures, a representative of an institution who in any manner solicits or recruits any person in person at any place other than the institution’s premises or by telephone for enrollment in a course of instruction shall disclose the following, orally, and, if the solicitation is in person, in a correctly dated written document given to the person and printed in at least 10-point type and signed by the representative.
(1)
The representative is a paid recruiter for an institution and the institution is not a public school.
(2)
The representative is not offering a job, making job referrals, or conducting a survey.
(3)
There is no guarantee of a job after a student graduates from the course of instruction.
(4)
The total charge for the course of instruction or if the solicitation or recruitment is for more than one course, the range of the total charges for the courses offered.
(b)
The representative shall make the disclosures required by paragraphs (1) to (3), inclusive, of subdivision (a) before attempting to solicit or recruit any person. The representative shall make the disclosure required by paragraph (4) of subdivision (a) before the end of a solicitation or attempt to recruit any person.
(c)
A representative who solicits or recruits any person as described in subdivision (a) shall provide the person with a copy of the institution’s current catalog or brochure, containing the information described in paragraph (4) of subdivision (a) of Section 94859, which the person may obtain without charge. The institution or its representative shall provide the catalog or brochure required by this subdivision at the time of an in-person solicitation or recruitment or send the catalog brochure within two days of a telephonic solicitation or recruitment.
(d)
No institution shall enter an agreement for a course of instruction with, or prepare or assist in preparation of a student loan or grant application for, a person solicited or recruited as described in subdivision (a)
within three days of the date on which the person was solicited or recruited.
(e)
This section does not apply to solicitations or presentations made at informational public appearances directed to five or more people or to advertisements in print or broadcast media.
94854.
(a)
Every institution shall meet all of the following performance standards for each program offered during the applicable time period described in subdivision (
l):
(1)
Sixty percent or more of the students who began the program, did not cancel pursuant to Section 94867, and were originally scheduled at the time of enrollment to complete the course during that period, shall complete it.
(2)
Seventy percent or more of the students who completed the program within that period shall obtain employment starting within six months after completing the course in the occupations or job titles to which the course of instruction was represented to lead. For the purpose of this subdivision, “program” or “program of instruction” or “course” or “course of instruction” includes all courses of instruction, however denominated, that are represented to lead to the same or closely related occupations or job titles.
(b)
Every institution shall meet all of the following performance standards for all programs in the aggregate offered by the institution at each of its campuses during the applicable time period described in subdivision (
l):
(1)
Sixty percent or more of all the students who began the programs did not cancel pursuant to Section 94867, and were originally scheduled at the time of enrollment to complete these programs during that time period, shall complete these programs.
(2)
Seventy percent or more of all the students who completed the programs within that time period shall obtain employment, starting within six months after completing the programs, in the occupations or job titles to which the programs of instruction were represented to lead.
(c)
For the purposes of subdivisions (a) and (b), students who, as documented by the institution, have been prevented from completing the program or programs of instruction due to death, disability, illness, pregnancy, military service, or participation in the Peace Corps or Domestic Volunteer Service shall be excluded from the computations used to determine whether an institution has met the performance standards prescribed by those subdivisions. Except as provided in Section 94874, an institution shall not disclose the records maintained pursuant to this subdivision unless production of those records are required by any law, subpoena, or court order, or are necessary for a certified public accountant to prepare a compliance report pursuant to subdivision (g) of Section 94870.
(d)
An institution shall meet the standards prescribed in subdivisions (a)
and (b)
at each site at which the program or programs are offered. A determination of whether a particular site meets the standards prescribed in subdivisions (a) and (b) shall be based only on students who attended that site. An institution shall be subject to subdivisions (f) and (g) only with respect to its sites that fail to meet the standards prescribed in subdivisions (a) and (b).
(e)
(1)
This subdivision applies only to institutions in which 15 or fewer students began a program or programs, did not cancel pursuant to Section 94867, and were originally scheduled to complete the program or programs within the applicable time period described in subdivision (
l).
(2)
If an institution described in paragraph (1) fails to meet any of the standards prescribed in subdivision (a) or (b), but would have met that standard if one additional student had completed or obtained employment, the institution shall be deemed to comply with this section. If an institution described in paragraph (1) fails to meet the standard for review established in subdivision (f), but would have met the standard if one additional student had completed or obtained employment, the institution shall be deemed subject to subdivision (f).
(f)
(1)
This subdivision applies only to an institution or any site that fails to meet any of the following:
(A)
Any of the standards established in subdivision (a) or (b) by 10 percent or less.
(B)
Any of the standards established in subdivision (a), but has a placement rate of 42 percent or more for the course in which the standard was failed.
(C)
Any of the standards established in subdivision (b), but has a placement rate of 42 percent or more for all courses in the aggregate.
(2)
If the institution’s failure to meet the standards prescribed in subdivision (a) or (b) was not caused by a violation of this chapter, the council shall order, after notice and, if requested, after a hearing, that the institution implement a program to achieve compliance with subdivisions (a) and (b). The program may include any of the following:
(A)
Limitations on enrollment for specific courses of instruction.
(B)
Revision of admission policies and screening practices to ensure that students have a reasonable expectation of completing courses and obtaining employment.
(C)
Increased academic counseling and other student support services.
(D)
Improved curricula, facilities, and equipment.
(E)
Revisions to the qualifications and number of faculty.
(F)
Improved job placement services, including revisions to the qualifications and number of job placement personnel and the expansion of contacts with employees and state and federal employment development agencies.
(G)
Submission of a compliance report prepared by a certified public accountant, who is not an officer, director, shareholder, or employee of the institution, any parent corporation or any subsidiary, prepared pursuant to an attestation engagement in accordance with the Statements on Standards for Attestation Engagements of the American Institute of Certified Public Accounts, which states that the institution has complied with the performance standards in this section within the period set forth in paragraph (4).
(H)
Any other reasonable procedure required by the council.
(3)
If an institution is subject to an order pursuant to paragraph (2), the council may require that the institution file information or reports requested by the council. The council may also monitor the institution in the manner provided in subdivision (d) of Section 94878.
(4)
(A)
An institution subject to an order pursuant to paragraph (2) shall satisfy the standards established in subdivisions (a) and (b) within the period designated by the council. This period shall not extend more than one year beyond the length of the program for noncompliance with the standards prescribed by subdivision (a) or more than one year beyond the longest program for noncompliance with the standards prescribed in subdivision (b).
(B)
If the institution fails to satisfy the standards of subdivision (a) within the period designated by the council, the council shall order the institution to cease offering the course of instruction at the campus where that program was offered. If the institution fails to satisfy the standards of subdivision (b) within the period designated by the council, the council shall revoke the institution’s approval to operate, or approval to operate the branch or satellite campus where the programs were offered. No action shall be taken pursuant to this paragraph without notice, and, if requested by the institution, a hearing. In taking action pursuant to this subparagraph, the bureau shall consider the impact, if any, of changes in the employment rate in the area served by this institution.
(g)
If an institution fails to meet any of the standards established in subdivision (a) and does not have a placement rate of 42 percent or more for the program in which the standard was failed, the council shall order the institution to cease offering the program of instruction at the campus where the course was offered. If the institution fails to meet any of the standards prescribed in subdivision (b) and does not have a placement rate of 42 percent or more for all programs in the aggregate, the council shall revoke the institution’s approval to operate, or approval to operate the branch or satellite campus where the programs were offered. No action shall be taken pursuant to this subdivision without notice and, if requested by the institution, a hearing.
(h)
(1)
The institution shall have the burden of proving its compliance with this section.
(2)
The council shall investigate the institution whenever the council deems appropriate to verify the institution’s compliance with this section. The investigation shall include an examination of the records maintained by the institution pursuant to subdivision (j) and contacts with the students and employers.
(3)
If an institution willfully falsifies, alters, destroys, conceals, or provides untrue or misleading information relating to compliance with this section, including records maintained pursuant to subdivision (j), the council shall revoke the institution’s approval to operate. No action shall be taken pursuant to this paragraph without notice and, if requested by the institution, a hearing. This provision supplements but does not supplant any other penalty or remedy provided by law.
(4)
The institution shall pay all reasonable costs and expenses incurred by the council in connection with this section at a time designated by the council.
(i)
If the council, pursuant to subdivision (f) or (g), orders an institution to cease offering a program of instruction or revokes the approval of an institution to operate or operate a branch or satellite campus, the institution may apply, no sooner than two years after the order to cease or the revocation became effective, for approval to offer that program or for approval to operate. Before the council may grant any approval, the institution shall establish that it complies with this chapter, each program satisfies all of the minimum standards prescribed by this chapter, and the circumstances surrounding the institution’s failure to meet the requirements of this section have sufficiently changed so that the institution will be substantially likely to comply with this section.
(j)
An institution shall maintain records of the name, address, and telephone number of students who enroll in a program of instruction, including students who begin the program and students who cancel pursuant to Section 94867, and of students who graduate from that program of instruction. An institution shall inquire whether students who complete a program of instruction obtain employment starting within six months of completing the program in the occupation to which the program of instruction is represented to lead and continue in employment for a period of at least 60 days. The inquiry shall be documented by a list indicating each student’s name, address, and telephone number; the employer’s name, address, and telephone number; the name, address, and telephone number of the person who provided the information regarding the student’s employment to the institution; the name, title, or description of the job; the date the student obtained employment; the duration of the student’s employment; information concerning whether the student was employed full-time or part-time including the number of hours worked per week; and the names, addresses, and telephone numbers of students who choose not to seek employment and instead enroll in another program to earn a higher degree, as well as the name and address of the institution in which they enroll. If the student is self-employed, the list shall include reliable indices of self-employment such as contracts, checks for payment, tax returns, social security contribution records, records of accounts receivable or customer payments, invoices for business supplies, rent receipts, appointment book entries, business license, or any other information required by the bureau that is a reliable indicator of self-employment.
(k)
For the purposes of this section, the following definitions shall apply:
(1)
“Annual report” means the report required to be filed pursuant to Section 94861.
(2)
(A)
“Employment” means either of the following:
(i)
Full-time employment for at least 32 hours per week for a period of at least 60 days in the occupations or job titles to which the program of instruction is represented to lead.
(ii)
Part-time employment for at least 17.5 hours, but less than 32 hours, per week for a period of at least 60 days in the occupations or job titles to which the program of instruction is represented to lead, provided the student completes a handwritten statement at the beginning of the program and at the end of the program which states that the student’s educational objective is part-time employment. The institution shall not require that any student complete such a statement or provide any incentive, financial or otherwise, to any student for signing such a statement.
(B)
The bureau shall adopt regulations to specify the job tasks, other than those directly related to generating income, which may be counted towards meeting the hour requirements for full-time and part-time employment for students who are self employed.
(3)
“Hearing” means a hearing pursuant to the requirements of either Section 94965 or 94975.
(4)
“Placement rate” means the percentage of students who fulfilled the provisions of the following two subparagraphs:
(A)
Began the program, did not cancel pursuant to Section 94867, and were originally scheduled at the time of enrollment to complete the program during the applicable time period described in subdivision (
l).
(B)
Completed the program, within the applicable time period described in subdivision (
l) and started employment within six months of completing the program or, if employment requires taking a state licensure examination for which only graduates of the program may apply, then (i) started employment within six months of the date on which the state licensing agency announces the results of the first licensure examination reasonably available to students who completed the program, or (ii) started employment within six months of the next reasonably available licensure examination date for any student who did not receive passing results on the first exam. The time period determined pursuant to this subparagraph shall not exceed 10 months beyond the date of completion of the program of instruction. The institution shall retain a record of the date of the first reasonably available licensure exam following the completion date of each student, the date the licensure agency announces the results of the first reasonably available licensure exam, and the date of the next reasonably available licensure exam for each student who did not pass the first exam.
(5)
“Reporting period” means the institution’s fiscal year or any year period designated by the council to be covered in the institution’s annual report.
(6)
“Time period” means the two most recent calendar years that ended at least eight months before the end of the institution’s applicable reporting period.
(
l)
(1)
An institution’s compliance with the standards prescribed in subdivisions (a) and (b) shall be determined as of the date on which the institution’s reporting period ends.
(2)
The institution shall report its determination of its compliance with the standards established in subdivisions (a) and (b) in each annual report.
(3)
The council may adjust the meaning of “time period” if the council finds that an adjustment is necessary for the efficient administration of this section. If any adjustment is made in the annual reporting periods, the council may adjust when the time period commences but shall not alter the two-year length of the period.
(m)
In determining the placement rate for a particular time period as described in subdivision (
l), an institution may exclude from the determination a student whose completion date was extended beyond that time period if the extension was requested by the student in writing on an enrollment agreement modification request form that meets specifications established by the council. The form shall include instructions to the student indicating that, when signed by both the student and the institution, the request modifies the existing agreement. The form shall not be valid unless it provides space for the student to complete a handwritten description, in the student’s handwriting, of the reasons necessitating the extension that are distinctly personal to the student and unrelated to the provision of educational services or activities of the institution, contains the new expected completion date of the program, and is signed and dated by the student and the institution. The institution shall provide the student a copy of the signed modification request form. The institution shall retain the student’s original written request to modify the enrollment agreement with the original enrollment agreement. A student excluded from the placement rate determination for a particular time period pursuant to this subdivision shall be included in the placement rate determination for the next immediately following time period. The institution shall state in the institution’s annual report the number of students for whom an extension was granted.
(n)
In determining the placement rate for a particular time period as described in subdivision (
l), an institution may exclude from the calculation a student who either:
(1)
Decides not to obtain employment and within six months of completing the program enrolls in a program to continue his or her education to obtain a higher level degree that is related to, or provides for the student to use, the same skills or knowledge obtained in the program the student completed.
(2)
Is in possession at the completion of the program of a valid United States Immigration and Naturalization Service Form I-20.
(o)
In determining the placement rate for a particular time period as described in subdivision (
l), an institution may count a student who drops out of the program after completing at least 75 percent of the program because the student has obtained employment which lasts for a period of at least 60 days in the occupations or job titles to which the program of instruction is represented to lead. No more than 10 percent of the institution’s total number of placed students may be counted pursuant to this subdivision.
(p)
If an order to cease offering a program or a revocation is issued pursuant to this section, the council may permit the institution to continue to offer the program or programs of instruction to the students who had begun the course or courses before the effective date of the order or revocation or may order the institution to cease instruction and provide a refund of tuition and all other charges to students.
94855.
(a)
As a condition of maintaining its approval to operate, an institution offering any educational programs or educational services subject to this article shall meet the following financial resource requirements in addition to the financial requirements of Section 94804.
(1)
Satisfy minimum standards prescribed by Section 94900, 94905, or 94915, whichever is applicable.
(2)
Provide the education, training, skill, and experience that the institution, in any manner represented it would provide.
(3)
Pay timely refunds as required by Sections 94867, 94869, 94870, 94873, and 94877.
(b)
(1)
In determining an institution’s compliance with subdivision (a), the council, at the institution’s request, may consider the financial resources of a parent corporation if the parent corporation files with the council, and at all times complies with, an irrevocable and unconditional agreement approved by its board of directors that satisfies all of the requirements of paragraph (2).
(2)
The agreement described in paragraph (1) shall provide that the parent corporation do all of the following:
(A)
Consent to be sued in California.
(B)
Consent to be subject to the administrative jurisdiction of the council and the Student Aid Commission in connection with the institution’s compliance with this chapter.
(C)
Appoint an agent for service of process in California and all notices required by this chapter.
(D)
Agree to pay any refund, claim, penalty, or judgment that the institution is obligated to pay.
(E)
File financial reports, maintain financial records, and permit the inspection and copying of financial records to the same extent as is required of the institution.
(3)
For the purposes of this subdivision, a “parent corporation” means a corporation that owns more than 80 percent of the stock of the institution whose financial resources are at issue.
(c)
If an institution does not comply with Section 94804, the council may do any or any combination of the following:
(1)
Require the institution to establish and implement a financial plan to ensure compliance with Section 94804.
(2)
Require the institution to post satisfactory security for the performance of its financial obligations pursuant to Section 94804.
(3)
Require the institution to furnish additional information such as an audit report of financial statements prepared by a California licensed certified public accountant who is not an employee, officer, or director of the institution.
(4)
Proceed pursuant to Section 94879.
(d)
In any action or proceeding involving an institution’s failure to comply with Section 94804, there shall be a presumption affecting the burden of proof that the institution does not have sufficient financial resources if the institution fails to meet any of the standards set forth in Section 94804.
94856.
If any person willfully violates this article and the violation results in the closure of an institution, that person shall pay to all students of the closed institution full refunds or full compensation for actual damages resulting from the closure that were not paid by the closed institution.
94857.
(a)
No institution shall establish a branch or satellite campus unless the council approves the branch or satellite campus before any students are enrolled for instruction, or any instruction is offered, at that campus.
(b)
The council shall not approve a branch or satellite campus if any of the following conditions exist:
(1)
The institution or the branch or satellite campus fail to satisfy all of the standards and requirements of Sections 94900 and 94901, or Section 94915, whichever applies.
(2)
The institution proposes to offer a course of instruction at the branch or satellite campus that could not be offered at another site operated by the institution because of the institution’s failure to satisfy the standards prescribed in Section 94854.
(3)
If the institution participates in a federal student loan program, the student loan default rate attributable to the institution for the two most recent years, as preliminarily announced or finally determined by the United States Department of Education, is 25 percent or more.
(4)
The establishment of a branch or satellite campus would, in any manner, facilitate the institution’s avoidance or evasion of this chapter or of any state or federal law applicable to a student financial aid program in which the institution participates.
94859.
(a)
Before a person executes an agreement obligating that person to pay any money to an institution for a program of instruction or related equipment, the institution shall provide the person with all of the following:
(1)
A copy of the agreement containing all of the information required by Section 94871.
(2)
If the institution has offered the course of instruction for at least one calendar year, it shall provide orally and in writing all of the following information:
(A)
The percentage of students completing that program of instruction as determined pursuant to Section 94854, for the time period that is required to be covered in the last annual report that institution was required to file with the council pursuant to Section 94861.
(B)
The percentage of students who completed the program of instruction and obtained employment as determined pursuant to Section 94854, for the time period that is required to be covered in the last annual report that the institution was required to file with the council pursuant to Section 94861.
(C)
Any other information necessary to substantiate the truth of any claim made by the institution as to job placement.
(D)
If the institution or a representative of the institution makes any express or implied claim about the salary that may be earned after completing a program of instruction, such as a claim that the student may be able to repay a student loan from the salary received at a job obtained following completion of the program of instruction, the following disclosures, orally and in writing:
(i)
The percentage of students who were originally scheduled, at the time of enrollment, to complete the program of instruction in the most recent calendar year that ended not less than six months prior to the date of disclosure who earn salaries at or above the claimed level.
(ii)
The ranges of monthly salaries earned by these students in two hundred dollar ($200)
increments and the number of these students in each salary range.
(E)
If the institution or a representative of the institution in any manner represents that the program of instruction might lead to employment in an occupation or job title for which a state licensing examination is required, the following disclosures, orally and in writing:
(i)
All licensure or certification requirements established by the state for the occupation or job title category.
(ii)
The pass rate of graduates of the program of instruction offered by that institution for the most recent calendar year that ended not less than six months prior to the date of disclosure on any licensure or certification examination required by the state for the particular occupation or job title.
(3)
If the institution has offered the program of instruction for less than one calendar year, the following statement: “This program is new. We are not able to tell you how many students graduate, how many students find jobs, or how much money you can earn after finishing this course.”
(4)
A current catalog or brochure containing information describing the courses offered, all of the occupations or job titles, if any, to which the program of instruction is represented to lead, length of program, faculty and their qualifications, schedule of tuition payments, fees, and all other charges and expenses necessary for completion of the course of instruction, cancellation and refund rights, the total cost of tuition over the entire period, a description of the student’s rights under the Student Tuition Recovery Fund established pursuant to Section 94944, and all other material facts concerning the institution and the program of instruction that might reasonably affect the student’s decision to enroll.
(5)
If applicable, the following disclosures, orally and in writing:
(A)
If the student obtains a loan to pay for the course of instruction, the student will have the responsibility to repay the full amount of the loan plus interest, less the amount of any refund.
(B)
If the student is eligible for a loan guaranteed or reinsured by the state or federal government and the student defaults on the loan:
(i)
The federal or state government or the loan guarantee agency can take action against the student, including applying any income tax refund to which the person is entitled to reduce the balance owed on the loan.
(ii)
The student may not be eligible for any other federal financial assistance for education at a different school or for government housing assistance until the loan is repaid.
(C)
The institution is not a public institution.
(D)
The institution has filed, or has had filed against it, a petition in bankruptcy.
(6)
A written statement set forth in a table of the amount of the refund to which the student would be entitled if the student withdrew from the program after completing a period of days or weeks of instruction equivalent to 10 percent, 25 percent, 50 percent, 60 percent, and 75 percent of the program of instruction. The disclosures required by this paragraph may be set forth in the agreement for the course.
(b)
The information required by paragraph (2) of subdivision (a) shall be documented by the institution with all facts needed to substantiate that information. Any information regarding a student’s employment shall be based on an inquiry by the institution and shall be documented by a list indicating the student’s name, address, and telephone number; the employer’s name, address, and telephone number; the name and address or telephone number of the person who provided the information regarding the student’s employment to the institution; the name, title, or description of the job; the date the student obtained the job; the duration of the student’s employment; and the amount of the salary, if any salary claim has been made. Except as provided in Section 94874, an institution shall not disclose the records maintained pursuant to this subdivision unless production of those records are required by any law or by subpoena or court order, or are necessary for a certified public accountant to prepare a compliance report pursuant to subdivision (g) of Section 94870.
(c)
No institution which has offered a course of instruction for less than one year shall make any express or implied claims about the salary that a student may earn after completing the course of instruction.
(d)
The institution shall provide the catalog or brochure described in paragraph (4) of subdivision (a) to any person upon request.
(e)
The written disclosure of information required by subparagraphs (A), (B), and (C) of paragraph (2) of subdivision (a) may be made in accordance with the chart in Appendix A of Part 668 of Title 34 of the Code of Federal Regulations, or any other similar form prescribed by law for the disclosure of that information.
(f)
No institution shall obtain the signature of any person to an agreement obligating that person to pay any money to the institution until the person has had a reasonable opportunity to read and review all of the items described in subdivision (a).
(g)
The disclosure of any information pursuant to Section 94853 shall not relieve any institution of any obligation to make any disclosure required under this section.
(h)
Notwithstanding any provision of this section, an institution offering a home study or correspondence course need not orally make the disclosures required by this section in connection with that course if the institution did not orally solicit or recruit the student for enrollment and the student enrolled by mail.
94860.
If a state board, bureau, department, or agency has established the minimum number of classes or class hours or the minimum criteria of a course of instruction necessary for licensure in an occupation and an institution offers a course of instruction differing from the state entity’s minimum requirements, the institution shall disclose orally and in writing the state entity’s minimum requirements and how the course of instruction differs from those criteria. The institution shall make this disclosure before a prospective student executes an agreement obligating that person to pay any money to the institution for the course of instruction.
94861.
(a)
Every institution shall file annually with the council, on July 1, or another date designated by the council, a report subscribed under penalty of perjury that contains all of the following:
(1)
The information described in subdivisions (a) and (b) of Section 94854.
(2)
The information described in paragraph (2) of subdivision (a) of Section 94859.
(3)
A statement that the information is documented as provided in subdivision (c) of Section 94854 and subdivision (b) of Section 94859.
(4)
Financial information demonstrating compliance with Section 94855.
(5)
Any additional information that the council may prescribe.
(b)
The council shall maintain each report for 10 years and shall provide copies of the reports to any person upon request.
(c)
Based on the review of the information submitted pursuant to this section, the council may initiate a compliance review, may take action including placing the institution on probation as provided in Section 94878, or may require evidence of compliance with this article in a form satisfactory to the council.
(d)
The bureau shall develop standards and procedures for submission by institutions of the information pursuant to this section electronically or on computer disk, in a standardized format.
(e)
If the institution uses any of the categories identified in subparagraph (B) of paragraph (2) of subdivision (k) of, or subdivision (n) or (o) of, Section 94854 in determining compliance with that section, the information submitted pursuant to this section shall include the number of students that were included in each of the categories identified in those provisions.
94862.
The institution shall file biennially with the council a financial report prepared pursuant to Section 94806. The report shall include the financial information required by Section 94855 and average monthly expenditures. Work papers for the audit shall be retained for five years from the date of the audit report and shall be made available to the council upon request after the completion of the audit.
94863.
(a)
No institution shall pay any consideration to any agent subject to Section 94940 who has not complied with that section, or enter into an agreement, as described in Section 94871, with any person who was recruited or solicited to enroll in that institution by an agent who was not in compliance with Section 94940 at the time of the recruitment or solicitation.
(b)
No institution shall pay any consideration to any agency subject to Section 94942 that has not complied with that section, or enter into an agreement, as described in Section 94871, with any person who was recruited or solicited to enroll in that institution by an agency or by an agent employed by or under contract with the agency if the agency was not in compliance with Section 94942 at the time of the recruitment or solicitation.
94864.
The enrollment, course completion, and employment data used to determine compliance with subdivisions (a) and (b) of Section 94854 and paragraph (2) of subdivision (a) of Section 94859 shall continue to apply to an institution notwithstanding a change in the institution’s ownership, name, or identification number.
94865.
(a)
As used in this section, “ESL instruction” means any educational service involving instruction in English as a second language.
(b)
No institution shall offer ESL instruction without the prior approval of the bureau.
(c)
The bureau shall not approve an institution’s offering of ESL instruction unless that institution complies with the minimum standards established in subdivision (a) of Section 94915.
(d)
An institution that offers ESL instruction to a student shall not enroll the student in any educational service presented in the English language unless the student passes a test indicating that he or she has attained adequate proficiency in oral and written English to comprehend instruction in English.
(e)
A student who has completed ESL instruction at an institution shall not be enrolled in any course of instruction presented in the English language at that institution unless the student passes a test indicating that he or she has attained adequate proficiency in oral and written English to be successfully trained by English language instruction to perform tasks associated with the occupations or job titles to which the educational program is represented to lead.
(f)
If an institution offers ESL instruction to a student to enable the student to use already existing knowledge, training, or skills in the pursuit of an occupation, the institution shall test the student after the student completes the ESL instruction to determine that the student has attained adequate proficiency in oral and written English to use his or her existing knowledge, training, or skills. Before enrolling the student in ESL instruction, the institution shall document the nature of the student’s existing knowledge, training, or skills and that the ESL instruction is necessary to enable the student to use that existing knowledge, training, or skills.
(g)
If an institution offers ESL instruction to a student in connection with a course of instruction leading to employment in any occupation requiring licensure awarded after the passage of an examination offered in English, the institution shall test the student after the student completes the ESL instruction to determine that the student has attained a level of proficiency in English reasonably equivalent to the level of English in which the licensure examination is offered.
(h)
If the results of a test administered pursuant to subdivision (d), (e), (f), or (g) indicate that the student has not attained adequate English language proficiency after the completion of ESL instruction, the institution shall offer the student additional instruction without charge, for a period of up to 50 percent of the number of hours of instruction previously offered by the institution to the student, to enable the student to attain adequate English language proficiency.
(i)
This section does not apply to educational services exempted from this article under subdivision (c) of Section 94790 or to grantees funded under Section 1672 of Title 29 of the United States Code.
(j)
The institution, for five years, shall retain an exemplar of each language proficiency test administered pursuant to this section, an exemplar of the answer sheet for each test, a record of the score for each test, the answer sheets or other responses submitted by each person who took each test, and the documentation required by subdivision (f).
(k)
(1)
In addition to any applicable provisions of this chapter, this article, except for Section 94854, subparagraph (B) of paragraph (2) of subdivision (a) of Section 94859, and Section 94872, applies to any program in which ESL instruction is offered.
(2)
For the purpose of determining compliance with this article, ESL instruction shall be deemed a course, and a charge shall be deemed to be made for ESL instruction if a student is obligated to make any payment in connection with the educational service, including, but not limited to, the ESL instruction that is offered by the institution.
(
l)
The tests used by an institution pursuant to this section shall be tests that are approved by the United States Department of Education or tests such as the Test of English as a Foreign Language and the Comprehensive Adult Student Assessment System that are generally recognized by public and private institutions of higher learning in this state for the evaluation of English language proficiency. An institution shall demonstrate to the bureau that the tests and passing scores that it uses establish that students have acquired the degree of proficiency in oral and written English required by subdivision (d), (e), (f), or (g), whichever is applicable. The required level of proficiency in oral and written English shall not be lower than the sixth grade level.
(m)
All tests shall be independently administered, without charge to the student and in accordance with the procedures specified by the test publisher. The tests shall not be administered by a previous or current owner, director, consultant, or representative of the institution or by any person who previously had, or currently has, a direct or indirect financial interest in the institution other than the arrangement to administer the test. The bureau shall adopt regulations that contain criteria to ensure independent test administration including the criteria established by the United States Department of Education and set forth on pages 52160 and 52161 of Volume 55 of the Federal Register, dated December 19, 1990.
(n)
The bureau shall adopt regulations concerning the manner of documenting the nature of a student’s existing knowledge, training, and skill and that ESL instruction offered by the institution is necessary to enable the student to use that existing knowledge, training, and skill, as prescribed in subdivision (f). The regulations shall specify all of the following:
(1)
Reliable sources of information, independent of the student and the institution, from which documentation of a student’s existing knowledge, training, and skill shall be obtained.
(2)
Circumstances that must be documented by the institution to establish that information from a designated reliable source of information cannot reasonably be obtained.
(3)
Alternate acceptable sources of information if designated reliable sources are not available.
(4)
The nature of all required types of documentation.
(o)
The bureau shall develop and distribute instructions, informational materials, or forms to assist institutions in developing the documentation described in this section. These instructions, materials, and forms shall not be subject to review or approval by the Office of Administrative Law pursuant to any provision of the Government Code.
94866.
(a)
When a person executes an agreement obligating that person to pay any money to an institution for a course program of instruction or related equipment, the institution shall provide the person with a document containing only the following notice:
“NOTICE OF STUDENT RIGHTS (12-point bold type)
“1.
You may cancel your contract for school, without any penalty or obligations on the fifth business day following your first class session as described in the Notice of Cancellation form that will be given to you at (insert “the first class you go to” or “with the first lesson in a home study or correspondence course,” whichever is applicable). A different cancellation policy applies for home study or correspondence courses. Read the Notice of Cancellation form for an explanation of your cancellation rights and responsibilities. If you have lost your Notice of Cancellation form, ask the school for a sample copy.
“2.
After the end of the cancellation period, you also have the right to stop school at any time, and you have the right to receive a refund for the part of the course not taken. Your refund rights are described in the contract. If you have lost your contract, ask the school for a description of the refund policy.
“3.
If the school closes before you graduate, you may be entitled to a refund. Contact the Council for Private Postsecondary and Vocational Education at the address and telephone number printed below for information.
“4.
If you have any complaints, questions, or problems that you cannot work out with the school, write or call the Council for Private and Postsecondary Education:
|
|
|
(insert address and telephone number of the Council for
Private Postsecondary and Vocational Education)”
|
(b)
Except as otherwise provided in subdivision (a), the notice required by subdivision (a) shall be printed in 10-point type in English and, if any solicitation or negotiation leading to the agreement for a course of instruction was in a language other than English, in that other language.
(c)
A copy of the notice, in each language in which the notice was printed pursuant to subdivision (b), shall be posted at all times in a conspicuous place at the main entrance of the institution, in each admissions office, and in each room used for instruction. The council may prescribe the size and format of the posted notice. This subdivision does not apply to an institution that exclusively offers correspondence or home study courses.
(d)
Upon request, the institution shall provide a student with a copy of a Notice of Cancellation form, a written description of the student’s refund rights, a copy of the contract executed by the student, a copy of documents relating to loans or grants for the student, and a copy of any document executed by the student.
(e)
The council may provide for the inclusion of additional information in the notice set forth in subdivision (a).
94867.
(a)
(1)
In addition to any other right of rescission, for programs in excess of 50 days, the student shall have the right to cancel an agreement for a program of instruction including any equipment, until midnight of the fifth business day after the day on which the student did any of the following:
(A)
Attended the first class of the program of instruction that is the subject of the agreement or received the first lesson in a home study or correspondence course.
(B)
Received a copy of the notice of cancellation as provided in Section 94868.
(C)
Received a copy of the agreement and the disclosures as required by subdivision (a) of Section 94859, whichever is later.
(2)
For programs of 50 or fewer days, the student shall have the right to cancel the agreement until midnight of the date that is one business day for every 10 days of scheduled program length, rounded up for any fractional increments thereof.
If the first lesson in a home-study or correspondence course is sent to the student by mail, the institution shall send it by first-class mail, postage prepaid, documented by a certificate of mailing, and the student shall have a right to cancel until midnight of the eighth business day after the first lesson was mailed.
(b)
Cancellation shall occur when the student gives written notice of cancellation to the institution at the address specified in the agreement.
(c)
The written notice of cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.
(d)
The written notice of cancellation need not take a particular form and, however expressed, is effective if it indicates the student’s desire not to be bound by the agreement.
(e)
Except as provided in subdivision (f), if the student cancels the agreement, the student shall have no liability, and the institution shall refund any consideration paid by the student within 10 days after the institution receives notice of the cancellation.
(f)
If the institution gave the student any equipment, the student shall return the equipment within 10 days following the date of the Notice of Cancellation. If the student fails to return the equipment within this 10 day-period, the institution may retain that portion of the consideration paid by the student equal to the documented cost to the institution of the equipment and shall refund the portion of the consideration exceeding the documented cost to the institution of the equipment within 10 days after the period within which the student is required to return the equipment. The student may retain the equipment without further obligation to pay for it.
(g)
For the purpose of determining the time within which a student may cancel that student’s agreement for a course, as described in Sections 94866, 94867, and 94868, “business day” means the following:
(1)
Except as provided in paragraph (2), a day on which that student is scheduled to attend a class session.
(2)
For home-study or correspondence courses, any calendar day except Saturday, Sunday, or any holiday enumerated in Section 6700 of the Government Code.
94868.
The institution shall provide the student with two cancellation forms at the first class attended by the student or with the first lesson in a home study course submitted by the student. The form shall be completed in duplicate, captioned “Notice of Cancellation,” and shall contain the following statement:
|
“Notice of Cancellation
|
|---|
|
|
(Date)
[Enter date of first class, date first lesson received, or date first lesson was mailed, whichever is applicable]
|
“You may cancel this contract for school, without any penalty or obligation by the date stated below.
“If you cancel, any payment you have made and any negotiable instrument signed by you shall be returned to you within 30 days following the school’s receipt of your cancellation notice.
“But, if the school gave you any equipment, you must return the equipment within 30 days of the date you signed a cancellation notice. If you do not return the equipment within this 30-day period, the school may keep an amount out of what you paid that equals the cost of the equipment. The total amount charged for each item of equipment shall be separately stated. The amount charged for each item of equipment shall not exceed the equipment’s fair market value. The institution shall have the burden of proof to establish the equipment’s fair market value. The school is required to refund any amount over that as provided above, and you may keep the equipment.
“To cancel the contract for school, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, or send a telegram to:
|
, at
(name of institution)
|
.
(address of institution)
|
|
“NOT LATER THAN
|
|
|
|
[Enter midnight of the date that is the fifth business day following the day of the first class or the day the first lesson was received; or, if the program is fifty or fewer days, midnight of the date that is one business day for every 10 days of scheduled program length, rounded up for any fractional increment thereof; or, if the lesson was sent by mail, the eighth business day following the day of mailing, whichever is applicable]
|
“I cancel the contract for school.
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_____
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(Date)
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|
_____
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(Student’s signature)
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“REMEMBER, YOU MUST CANCEL IN WRITING. You do not have the right to cancel by just telephoning the school or by not coming to class.
“If you have any complaints, questions, or problems which you cannot work out with the school, write or call the Council for Private Postsecondary and Vocational Education:
|
(insert address and telephone number of the Council
for Private Postsecondary and Vocational Education)”
|
94869.
(a)
Each student of an institution has the right to withdraw from a program of instruction at any time.
(b)
If a student withdraws from a program of instruction after the period described in subdivision (a) of Section 94867, the institution shall remit a refund as provided in Section 94870 within 30 days following the student’s withdrawal.
(c)
If any portion of the tuition was paid from the proceeds of a loan, the refund shall be sent to the lender or, if appropriate, to the state or federal agency that guaranteed or reinsured the loan. Any amount of the refund in excess of the unpaid balance of the loan shall be first used to repay any student financial aid program from which the student received benefits, in proportion to the amount of the benefits received, and any remaining amount shall be paid to the student.
(d)
Within 10 days of the day on which the refund is made, the institution shall notify the student in writing of the date on which the refund was made, the amount of the refund, the method of calculating the refund, and the name and address of the entity to which the refund was sent. The following statement shall be placed at the top of the notice in at least 10-point boldface type: “This Notice is Important. Keep It For Your Records.”
(e)
Except for subdivision (a), this section shall not apply to a student if both of the following occur:
(1)
All of that student’s tuition and fees are paid by a third-party organization, such as a Job Training Partnership Act agency, a Regional Occupational Program or Regional Occupational Center, a Private Industry Council, or a vocational rehabilitation program, if the student is not obligated to repay the third-party organization or does not lose time-limited educational benefits.
(2)
The third-party organization and the institution have a written agreement, entered into on or before the date the student enrolls, that no refund will be due to the student if the student withdraws prior to completion.
The institution shall provide a copy of the written agreement to the bureau. The institution shall disclose to any student whose refund rights are affected by this agreement, in all disclosures required to be given to the student by this chapter, that the student is not entitled to a refund. It is the intent of the Legislature that this subdivision not apply to any student whose tuition and fees are paid with funds provided to the third-party organization for the student’s benefit as part of any program that provides funds for training welfare recipients or that is related to welfare reform.
94870.
(a)
(1)
Except as provided in paragraph (2), the refund to be paid to a student for a program of instruction subject to this article shall be calculated as follows:
(A)
Deduct a registration fee not exceeding seventy-five dollars ($75) from the total tuition charge.
(B)
Divide this figure by the number of hours in the program.
(C)
The quotient is the hourly charge for the program.
(D)
The amount owed by the student for purposes of calculating a refund is derived by multiplying the total hours attended by the hourly charge for instruction.
(E)
The refund would be any amount in excess of the figure derived in subparagraph (D) that was paid by the student.
(F)
The refund amount shall be adjusted as provided in subdivision (b) or (c) for equipment, if applicable.
(2)
For an educational service offered by home study or correspondence, the refund shall be the amount the student paid for lessons less a registration fee not exceeding seventy-five dollars ($75), multiplied by a fraction, the numerator of which is the number of lessons for which the student has paid but which the student has not completed and submitted, and the denominator of which is the total number of lessons for which the student has paid. The refund amount shall be adjusted as provided in subdivision (b) or (c) for equipment and as provided in subdivision (d) for resident instruction, if applicable.
(3)
Notwithstanding any provision in any agreement, all of the following shall apply:
(A)
All amounts that the student has paid, however denominated, shall be deemed to have been paid for instruction, unless the student has paid a specific charge for equipment set forth in the agreement for the program of instruction.
(B)
In the case of an educational service offered by home study or correspondence, all amounts that the student has paid, however denominated, shall be deemed to have been paid for lessons unless the student has paid a specific charge for equipment or resident instruction as set forth in the agreement for the educational service.
(C)
The total number of hours necessary to complete each lesson of home study or correspondence instruction shall be substantially equivalent to each other lesson unless otherwise permitted by the council.
(D)
An equal charge shall be deemed to have been made for each hour of instruction or each lesson.
(b)
If the institution specifies in the agreement a separate charge for equipment that the student actually obtains and the student returns that equipment in good condition, allowing for reasonable wear and tear, within 30 days following the date of the student’s withdrawal, the institution shall refund the charge for the equipment paid by the student. If the student fails to return that equipment in good condition, allowing for reasonable wear and tear, within 30 days following the date of the student’s withdrawal, the institution may offset against the refund calculated under subdivision (a) the documented cost to the institution of that equipment. The student shall be liable for the amount, if any, by which the documented cost for equipment exceeds the refund amount calculated under subdivision (a). For the purpose of this subdivision, equipment cannot be returned in good condition if the equipment cannot be reused because of clearly recognized health and sanitary reasons and this fact is clearly and conspicuously disclosed in the agreement.
(c)
If the institution specifies in the agreement a separate charge for equipment, which the student has not obtained at the time of the student’s withdrawal, the refund also shall include the amount paid by the student that is allocable to that equipment.
(d)
If an agreement for educational service offered by home study or correspondence includes a separate charge for resident instruction, which the student has not begun at the time of the student’s withdrawal, the institution shall refund the charge for the resident instruction paid by the student. If the student withdraws from the educational service after beginning the resident instruction, the institution shall pay a refund equal to the amount the student paid for the resident instruction multiplied by a fraction, the numerator of which is the number of hours of resident instruction which the student has not received but for which the student has paid, and the denominator of which is the total number of hours of resident instruction for which the student has paid.
(e)
For the purpose of determining a refund under this section, a student shall be deemed to have withdrawn from a program of instruction when any of the following occurs:
(1)
The student notifies the institution of the student’s withdrawal or of the date of the student’s withdrawal, whichever is later.
(2)
The institution terminates the student’s enrollment as provided in the agreement.
(3)
The student has failed to attend classes for a three-week period. For the purpose of subdivision (a) of Section 94869 and for determining the amount of the refund, the date of the student’s withdrawal shall be deemed the last date of recorded attendance. For the purpose of determining when the refund must be paid pursuant to subdivision (b) of Section 94869, the student shall be deemed to have withdrawn at the end of the three-week period.
(4)
The student has failed to submit three consecutive lessons or has failed to submit a completed lesson within 60 days of its due date as set by an educational service offered by home study or correspondence. For the purpose of this paragraph, the date of the student’s withdrawal shall be deemed to be the date on which the student submitted the last completed lesson.
(f)
An institution shall have the burden of proof to establish the validity of the amount of every refund. The institution shall maintain records for five years of all the evidence on which the institution relies.
(g)
Any institution that meets each of the criteria in paragraph (1) shall be subject to the refund requirements in this section only for those students who withdraw from a course of instruction after having completed 60 percent or less of the course of instruction.
(1)
To qualify under this subdivision, an institution shall submit to the bureau a compliance report prepared by a certified public accountant, who is not an officer, director, shareholder, or employee of the institution, any parent corporation, or any subsidiary, prepared pursuant to an attestation engagement in accordance with the Statements on Standards for Attestation Engagements of the American Institute of Certified Public Accountants, which states that for a period of two years prior to the compliance report, the beginning and ending dates of which shall be determined by the bureau, the institution has:
(A)
Complied with Section 94824 or subdivision (b) of Section 94869 and with this section for refunds owed by the institution.
(B)
Complied with subdivision (b) of Section 94854 for each of the two years covered by the audit except that:
(i)
The institution shall have an aggregate completion rate of 70 percent or more pursuant to paragraph (1) of subdivision (b) of Section 94854.
(ii)
The institution shall have an aggregate placement rate of 80 percent or more pursuant to paragraph (2) of subdivision (b) of Section 94854.
(iii)
As an alternative to clauses (i) and (ii), the institution shall have a combined aggregate completion and placement rate of 56 percent or more.
(iv)
In attesting to the institution’s compliance with the requirements of this subparagraph, the certified public accountant, at a minimum, shall review a random statistically valid sample of the students to whom the institution owed a refund, the students counted by the institution towards its completion rate and its placement rate, and the students excluded from the calculation of the completion and placement rates, review the institution’s placement log or files and contact students and employers to verify information in the placement records, whether the student was employed in the job for which the training was represented to lead, and whether the student was employed for at least 60 days.
(2)
(A)
The bureau shall review the compliance report submitted by the institution pursuant to this subdivision.
(B)
The bureau shall review any complaints against the institution by current or former students, any civil lawsuit in which the institution is a defendant or any lawsuit, action, charges, proceeding, or investigation by any government agency or any accrediting agency in which the institution is a party which were filed, pending, or resolved during the two-year period covered by the compliance report. After reviewing such complaints, lawsuits, actions, charges, proceedings, or investigations, as well as any other information available to the bureau and performing whatever other investigation it deems appropriate, the bureau shall make a determination, in writing, of whether the institution has materially violated Section 94831, 94832, 94834, 94853, 94859, 94860, 94866, 94868, 94869, 94870, 94871, 94873, 94875, 94881, or their predecessor sections, based on a preponderance of the evidence. The bureau’s determination shall contain a summary of the evidence relied upon in making the determination and the sections for which a material violation exists. The bureau’s determination shall have no probative value in connection with any lawsuits, actions, charges, or proceedings pending before any court or any other agency.
(C)
If the bureau determines that the institution has met all of the criteria in paragraph (1) and that no material violation exists pursuant to subparagraph (B) of this paragraph, it shall notify the institution that it qualifies under this subdivision. Following such notification, the refund provisions of this subdivision shall apply to the institution for a period of two years, unless revoked by the bureau.
(D)
If the bureau determines that the institution has not met all of the criteria in paragraph (1) or that a material violation exists pursuant to subparagraph (B) of this paragraph, it shall notify the institution that it does not qualify under this subdivision.
(E)
The institution shall receive notice of any determination with a summary of evidence pursuant to this paragraph and, if requested in writing, a hearing. The institution may appeal the bureau’s adverse decision under this paragraph. To the extent feasible, the bureau shall adopt regulations to provide for a streamlined appeal process for purposes of appeals pursuant to this subparagraph. Pending resolution of the appeal, the institution is not eligible to qualify under this subdivision. If the institution prevails on appeal, it may obtain relief limited to a determination that it is eligible for the refund provisions of this subdivision at the next time when it starts new students in its programs following the determination of the appeal. If the institution does not prevail on appeal, it may not seek to qualify under this subdivision for one year following the determination of the appeal.
(3)
Prior to notifying an institution pursuant to paragraph (2), the bureau shall adopt regulations to implement this subdivision, including regulations to establish the dates each year for submission of compliance reports by institutions, notification of institutions by the bureau of the applicable refund policy for the institution, the effective date of that refund policy, appropriate standards and procedures for conducting any review by a certified public accountant or any other person pursuant to this subdivision, including a description of the information and materials to be reviewed and appropriate standards for review which shall be based on the American Institute of Certified Public Accountants’ Statements on Standards for Attestation Engagements.
(4)
(A)
Any institution that has been notified by the bureau that it qualifies for the refund provisions in this subdivision shall lose its qualification if the bureau determines either of the following:
(i)
The institution has materially violated Section 94831, 94832, 94834, 94853, 94859, 94860, 94866, 94868, 94869, 94870, 94871, 94873, 94875, or 94881, or has failed to meet the criteria in paragraph (1) during the period covered by the compliance report upon which the bureau based its determination of qualification.
(ii)
The institution has been found by any court or any other governmental agency in any proceeding, to have violated any of the provisions set forth in clause (i) and that violation was material or the institution has been found by any court or any other governmental agency in any proceeding, to have failed to meet the criteria in paragraph (1) during the period covered by the compliance report upon which the bureau based its determination of eligibility.
(B)
If the bureau, a court, or other government agency finds that the institution willfully supplied information required by this subdivision which it knew or should have known was inaccurate or misleading, the institution’s approval to operate may be subject to termination, suspension, or probation.
(C)
The institution shall receive notice of any determination with a summary of evidence and, if requested in writing, a hearing prior to any action being taken pursuant to this paragraph. To the extent feasible, the bureau shall adopt regulations to provide for a streamlined appeal process for purposes of appeals pursuant to this subparagraph. Pending resolution of the appeal, the institution may not reapply pursuant to paragraph (9). If the institution prevails on appeal, it may obtain relief limited to a determination that it continues to qualify under this subdivision for the period of time covered by the bureau’s most recent determination of qualification. If the institution does not prevail on appeal, the institution may not seek to qualify for the refund provisions of this subdivision for three years following the determination of the appeal and shall be subject to the refund requirements in subdivision (a), and not the refund provisions in this subdivision, for all students who enrolled during the entire time period covered by the bureau’s most recent determination of qualification.
(D)
The penalties in this paragraph supplement, but do not supplant, any other sanction or remedy allowed by law.
(5)
If an institution does not qualify under this subdivision because it fails to meet the requirement of subparagraph (A) of paragraph (1) by three students out of all students to whom it owed refunds during the period examined by the compliance report or 1 percent of all students to whom it owed refunds during the period covered by the compliance report, whichever is greater, the bureau may determine that the institution qualifies under this subdivision.
(6)
The certified public accountant shall submit any initial compliance report prepared pursuant to this subdivision to both the institution and the bureau. The institution shall submit any comments, suggested corrections, or exceptions to the initial compliance report to the certified public accountant and the bureau. The certified public accountant shall submit a final compliance report to both the institution and the bureau. The certified public accountant shall maintain possession of all work papers for a period of five years following completion of the final compliance report. The bureau shall make a copy of the compliance report available to any student, prospective student, or former student of the institution upon request.
(7)
If the bureau determines that the institution has met the criteria in this subdivision based on the information contained in a compliance report prepared by a certified public accountant pursuant to this subdivision, the following shall be deemed to be the intended beneficiaries of that compliance report:
(A)
The bureau.
(B)
The Student Aid Commission.
(C)
The United States Department of Education.
(D)
Any student who enrolls in the institution during the time period the institution qualifies under this subdivision.
(8)
In lieu of the attestation engagement referred to in paragraph (1), an institution that qualifies as a small institution under this paragraph may show that it has complied with each of the criteria in paragraph (1) pursuant to a review performed by the bureau, or any other alternative review that meets all of the requirements for an attestation by a certified public accountant pursuant to this subdivision which shall conform with the bureau’s regulations. If the bureau performs the review requested by the institution, the institution shall pay the bureau all of its costs and expenses associated with conducting the review. The bureau shall, by regulation, define “small institution” for the purposes of this paragraph in terms of assets, number of students, gross revenues, other appropriate criteria, as determined by the bureau, or any combination thereof.
(9)
An institution may apply to the bureau for a renewal of the bureau’s determination that the institution qualifies under this subdivision subject to the same terms and conditions as required for the bureau’s initial determination.
(10)
If an institution qualifies under this subdivision, it shall disclose that refund policy in any disclosure, catalogue, notice, or agreement in which disclosure of a refund policy is required by this chapter. The institution may not state in any advertising, disclosure, catalogue, notice, or agreement that it qualifies for a “good school” or a “high performance” exemption, that it qualifies for a “good school” or “high performance” refund policy, or that it has been determined by the state to be a “good school” or a “high performing school,” or use any similar words or phrases.
(11)
If a request for approval under this subdivision is filed concurrently with an initial or renewal application, no additional fees shall be charged. If a request for approval is not filed concurrently with an initial or renewal application, fees shall be charged as authorized by Section 94932 and the bureau’s regulations.
94871.
(a)
No institution shall offer any program of instruction to any person, or receive any consideration from any person for a course of instruction, except pursuant to a written agreement as described in this section. Every agreement for a program of instruction shall provide the following:
(1)
A general description of the program of instruction and any equipment to be provided.
(2)
The total number of classes, hours, or lessons required to complete the program of instruction.
(3)
The total amount that the student is obligated to pay including all fees, charges, and expenses separately itemized that must be paid to complete the program of instruction. The total amount shall be underlined and shall appear immediately above the following notice, which shall be printed above the space on the agreement that is reserved for the student’s signature:
“YOU ARE RESPONSIBLE FOR THIS AMOUNT. IF YOU GET A STUDENT LOAN, YOU ARE RESPONSIBLE FOR REPAYING THE LOAN AMOUNT PLUS ANY INTEREST.”
(4)
The total amount charged for each item of equipment shall be separately stated. The amount charged for each item of equipment shall not exceed the equipment’s fair market value. The institution shall have the burden of proof to establish the equipment’s fair market value.
(5)
A schedule of payments.
(6)
The student’s right to withdraw from the program of instruction and obtain a refund and an explanation of refund rights and of how the amount of the refund will be determined including a hypothetical example.
(7)
A detailed explanation of the student’s right to cancel the agreement as provided in Section 94867.
(8)
If the student is not a resident of California, a clear statement that the student is not eligible for protection under, and recovery from, the Student Tuition Recovery Fund.
(9)
The following statement shall be printed in 12-point boldface type on the first page of the agreement: “If you have any complaints, questions, or problems which you cannot work out with the school, write or call the Council for Private Postsecondary and Vocational Education:
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(insert address and telephone number of the Council for
Private Postsecondary and Vocational Education)”
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(b)
Unless otherwise provided in subdivision (a), the institution shall provide the information required under Sections 94859, 94867, and 94868, in at least 10-point type in English and, if any solicitation or negotiation leading to the agreement for a course of instruction was in a language other than English, in that other language.
(c)
When a student is a client of a third-party organization and that organization pays all of the student’s tuition and fees, the institution may substitute for the enrollment agreement required by this section a form provided to the student that contains the information required by subdivision (b) and paragraphs (1), (2), and (9) of subdivision (a). The form also shall contain a statement that students whose entire tuition and fees are paid by a third party organization are not eligible for payments from the Student Tuition Recovery Fund.
94872.
(a)
An institution shall not enter into an agreement for a program of instruction with a student unless the institution first administers to the student and the student passes a test as provided in subdivision (b).
(b)
(1)
The test required by subdivision (a) shall be a standardized test that is designed to measure and that reliably and validly measures the student’s ability to be successfully trained to perform the tasks associated with the occupations or job titles to which the program of instruction is represented to lead. The student’s performance on the test must demonstrate that ability.
(2)
Nothing in paragraph (1) precludes an institution from using additional tests to determine a student’s ability to be trained to perform tasks associated with the occupations and job titles for which training is offered as described in paragraph (1).
(3)
(A)
If no standardized test is available that satisfies paragraph (1), the institution shall use other appropriate tests to determine the student’s ability to be trained to perform the tasks associated with the occupations and job titles for which training is offered as described in paragraph (1). Within 30 days of determining that no standardized test satisfies paragraph (1), the institution shall so inform the council and shall describe and, if possible, furnish the council with the test to be used in lieu of the test required by paragraph (1).
(B)
Upon reasonable notice to the institution, the council may order the institution to demonstrate to the reasonable satisfaction of the council that the test and passing score are an appropriate measure of the student’s ability to be trained to perform the tasks associated with the occupations or job titles to which the course is represented to lead. If the test is not an appropriate measure, the council, after notice, and if requested, a hearing as provided in Section 94965 or 94975, shall order that the institution cease administering the test.
(c)
The institution shall have the burden of proof that the test complies with subdivision (b). If no minimum passing score is established by the test developer or if the minimum passing score used by the institution is below the minimum passing score established by the test’s developer, the institution shall have the burden of proof that the student’s achievement of the minimum passing score reasonably measures the student’s ability to be successfully trained to perform the tasks associated with the occupations and job titles to which the course of instruction is represented to lead. The test shall be administered in accordance with the test’s instructions, rules, and time limits.
(d)
(1)
The test shall be completed solely by the student.
(2)
No institution or any person in any manner associated with the institution shall do any of the following:
(A)
Answer any of the test questions.
(B)
Read any of the test questions to the student.
(C)
Provide any assistance whatsoever to the student in answering test questions.
Nothing in this subparagraph prevents an institution from providing nonsubstantive assistance to accommodate the disability of a handicapped person otherwise qualified to take the test.
(3)
The test shall be given by the institution on its premises or by an independent testing service. The site requirement does not apply to an institution offering a home study or correspondence course.
(4)
If a prospective student has failed a test, the institution or the testing service that administered the test shall not administer another test to that prospective student for at least the period specified by the test developer or one week, whichever is longer. Any subsequent test administered by an institution to the same prospective student shall be a substantially different form of the same test or a substantially different test than the preceding test and shall satisfy the requirements of paragraph (1) or, if applicable, paragraph (3) of subdivision (b).
(e)
An institution’s application for approval to operate shall do all of the following:
(1)
Identify the test used to comply with this section.
(2)
State the minimum score, if any, that the test’s developer indicates a prospective student must achieve to demonstrate an ability to be successfully trained to perform the tasks associated with the occupations or job titles to which the course is represented to lead.
(3)
State the minimum passing score used by the institution.
(4)
If the institution accepts a lower minimum passing score than is indicated by the test’s developer, state an explanation of why the institution accepts a lower minimum passing score.
(f)
The institution shall, for five years, retain an exemplar of each test administered by the institution pursuant to this section, an exemplar of the answer sheet for each test, a record of the passing score for each test, and the answer sheets or other responses submitted by each person who took each test.
94873.
(a)
If a program of instruction is based on a sequence of classes, class sessions, or lessons and the learning experience to be derived from any class, class sessions, or lesson within the sequence is based in any manner on a student’s attendance at or completion of a prior class, class session, or lesson, an institution shall not enroll a student in that program of instruction unless the instruction begins with the first class, class session, or lesson and proceeds in the appropriate sequence.
(b)
(1)
If a program of instruction is based on a series of modules comprised of class sessions or lessons and the learning experience to be derived from any module is based in a manner on a student’s attendance at, or completion of, any class sessions or lessons in any other module, an institution shall not enroll a student in that course of instruction unless the student begins and proceeds in the appropriate sequence.
(2)
If a program of instruction is based on a series of modules comprised of class sessions or lessons and the learning experience to be derived from any module is not based on a student’s attendance at, or completion of, any classes or lessons in any other module, an institution shall only enroll a student in the program of instruction if the student begins with the first class session or lesson in a module.
(c)
Notwithstanding subdivisions (a) and (b), if a class or a module consists of more than 60 days of instruction, the institution may enroll a student to begin no later than the fifth class session of the first class or the fifth class session in the appropriate module.
(d)
The council, at any time, may determine whether the learning experience to be derived from any class session or lesson in a sequence of class sessions or lessons or from any module is based in any manner on a student’s attendance at, or completion of, a prior class session or lesson in the sequence or any class sessions or lessons in any other module. The council may make the determination described in this subdivision upon the application of any person or when the council deems that a determination is appropriate. The institution shall have the burden to establish compliance with this section.
(e)
The institution shall not merge classes unless all of the students have received the same amount of instruction and training. This subdivision does not prevent the placement of students, who are enrolled in different programs of instruction, in the same class if that class is part of each of the courses and the placement in a merged class will not impair the students’ learning of the subject matter of the class.
(f)
After a student has enrolled in a program of instruction, the institution shall not do any of the following:
(1)
Make any unscheduled suspension of any class unless caused by circumstances completely beyond the institution’s control.
(2)
Change the day or time in which any class is offered to a day when the student is not scheduled to attend the institution or to a time that is outside of the range of time that the student is scheduled to attend the institution on the day for which the change is proposed unless at least 90 percent of the students who are enrolled consent to the change and the institution offers full refunds to the students who do not consent to the change. For the purpose of this paragraph, “range of time” means the period beginning with the time at which the student’s first scheduled class session for the day is set to start and ending with the time the student’s last scheduled class session for that day is set to finish.
(g)
If an institution enrolls a student in a program of instruction that is not offered or designed as a home study or correspondence course at the time of enrollment, the institution shall not convert the program of instruction from classroom instruction to a home study or correspondence course.
(h)
An institution shall not move the class instruction to a location more than five miles from the location of instruction at the time of enrollment unless any of the following occur:
(1)
The institution discloses orally and clearly and conspicuously in writing to each student before enrollment in the program that the location of instruction will change after the program begins and the address of the proposed location.
(2)
The institution applies for, and the council grants, approval to change the location. The council shall grant the application within 30 days if the council, after notice to affected students and an opportunity for them to be heard as prescribed by the council, concludes that the change in location would not be unfair or unduly burdensome to students. The council may grant approval to change the location which shall be subject to reasonable conditions, such as requiring the institution to provide transportation, transportation costs, or refunds to adversely affected students.
(3)
The institution offers a full refund to students enrolled in the program of instruction who do not voluntarily consent to the change.
94874.
(a)
Every institution shall maintain for a period of not less than five years at its principal place of business in California accurate records that show all of the following:
(1)
The names, telephone numbers, and home and local addresses of each student.
(2)
The courses of instruction offered by the institution and the curriculum for each course.
(3)
The name, address, and educational qualifications of each member of its faculty.
(4)
The information required by subdivision (j) of Section 94854 and subdivision (b) of Section 94859.
(5)
All information and records required by this chapter or required by the council.
(b)
All records that an institution is required to maintain by this chapter or that relate to the institution’s compliance with this chapter shall be made immediately available by the institution for inspection and copying during normal business hours by the council, the Attorney General, any district attorney or city attorney, and the Student Aid Commission.
(c)
An institution shall make available to a student, or a person designated by the student, all of the student’s records, except for transcripts of grades as described in subdivision (d) and (e).
(d)
As provided in Section 94948, an institution may withhold a student’s transcript or grades if the student is in default on a student tuition contract.
(e)
If the student has made partial payment of his or her tuition obligation, the institution may only withhold that portion of the grades or transcript that corresponds to the amount of tuition or loan obligation that the student has not paid. If the course of study consists of only one course, the institution may withhold the grades or the transcript until the tuition or loan obligation is paid in full.
(f)
Each institution shall be deemed to have authorized the accrediting agency that accredited the institution to provide to the council, the Attorney General, any district attorney or city attorney, or the Student Aid Commission, within 30 days of written notice, copies of all documents and other material concerning the institution that is maintained by the accrediting agency.
(g)
Within 30 days of receiving written notice from the council, the Attorney General, any district attorney or city attorney, or the Student Aid Commission, an accrediting agency shall provide the requesting official with all documents or other material concerning an institution accredited by that accrediting agency that are designated specifically or by category in the written notice.
(h)
If the council, the Attorney General, any district attorney or city attorney, or the Student Aid Commission is conducting a confidential investigation of an institution and so informs the accrediting agency, the accrediting agency shall not inform that institution of the investigation.
(i)
If an accrediting agency willfully fails to comply with this section, the accrediting agency shall be liable for a civil penalty of not less than two thousand five hundred dollars ($2,500) or more than twenty-five thousand dollars ($25,000) for each violation. Penalties awarded pursuant to this section shall be deposited in the Private Postsecondary and Vocational Education Administration Fund or any successor fund.
94875.
(a)
The institution shall provide sufficient instruction and materials pursuant to a planned curriculum appropriate to the student’s educational program and establish sufficient student attendance, progress, and performance standards to reasonably ensure that students acquire the necessary level of education, training, skill, and experience to obtain employment in the occupation or job title to which the course of instruction is represented to lead.
(b)
The institution shall provide each student with sufficient materials, including current publications and equipment, not later than the time the materials are appropriate for use in the course of instruction.
(c)
If a student has begun a course of instruction and any portion of the student’s tuition is to be paid from the proceeds of a loan or grant, the institution shall not withhold any instruction, equipment, or materials from the student pending approval of the loan or grant or the disbursement of any portion of the proceeds of the loan or grant.
94876.
No student may waive any provision of this article. Any waiver or limitation of any substantive or procedural right or remedy is in violation of this section and is void and unenforceable.
94877.
(a)
If an institution violates this article or Section 94832 or commits an act as set forth in Section 94830 in connection with an agreement for a course of instruction, that agreement shall be unenforceable, and the institution shall refund all consideration paid by or on behalf of the student.
(b)
Notwithstanding any provision in an agreement, a student may bring an action for a violation of this article or Section 94832 or an institution’s failure to perform its legal obligations and upon prevailing shall be entitled to the recovery of damages, equitable relief, any other relief authorized by this article, and reasonable attorney’s fees and costs.
(c)
If a court finds that a violation was willfully committed or that the institution failed to refund all consideration as required by subdivision (a) on the student’s written demand, the court, in addition to the relief awarded under subdivision (b), shall award a civil penalty of up to two times the amount of the damages sustained by the student.
(d)
The remedies provided in this article supplement, but do not supplant, the remedies provided under other provisions of law.
(e)
An action brought under this section shall be commenced within three years of the discovery of the facts constituting grounds for commencing the action.
(f)
Any provision in any agreement that purports to require a student to invoke any grievance dispute procedure established by the institution or any other procedure before bringing an action to enforce any right or remedy is void and unenforceable.
(g)
A student may assign his or her causes of action for a violation of this article to the council, or to any state or federal agency that guaranteed or reinsured a loan for the student or provided any grant or other financial aid.
(h)
This section applies to any action pending under former Chapter 7 (commencing with Section 94700) on January 1, 1990.
94878.
(a)
An institution is legally authorized to provide courses of instruction if the institution complies with both this article and Sections 94831, 94832, and 94985, or former Section 94320 as that section was in effect on January 1, 1991, has received approval from the council, and has not been found to be in violation of this article by the council, the Student Aid Commission, or a court. No institution shall offer any course of instruction if the institution’s approval to offer that course of instruction has been suspended or revoked.
(b)
(1)
The council, after notice and, if requested by the institution, a hearing as provided in Section 94965 or 94975, may suspend or revoke an institution’s approval to operate or approval to operate a branch or satellite campus or may order that an institution cease offering a class or course of instruction because of any violation of this article, Section 94831, 94832, or 94985, or former Section 94320 as that section was in effect on January 1, 1991, or any regulation or order issued pursuant to this article.
(2)
If the council takes any of the actions described in paragraph (1), the council may permit the institution to continue to offer the class or course of instruction to students already enrolled or may order the institution to cease instruction and provide a refund of tuition and all other charges to students.
(c)
If the council determines after notice and if requested by the institution, a hearing, that an institution has violated this article, Section 94831, 94832, or 94985, or former Section 94320 as that section was in effect on January 1, 1991, but that the institution’s approval to operate, or approval to operate a branch or satellite campus should not be suspended or revoked, or that the institution should not be ordered to cease offering a class or program of instruction, the council may do any or all of the following:
(1)
Place the institution, or branch or satellite campus, on probation under reasonable terms and conditions for a specified period of time not to exceed two years.
(2)
Order the institution to post a bond.
(3)
Order the institution not to enter into new agreements for courses of instruction.
(d)
During the period of probation, the institution, or the branch or satellite or both the institution and the branch or satellite campus, shall be subject to monitoring that may include the required submission of periodic reports, as prescribed by the council and special onsite inspections to determine progress toward compliance. The onsite inspections may include an inspection of the institution’s facilities and records, interviews of administrators, faculty, and students, and observation of class instruction. The council shall order the institution to reimburse all reasonable costs and expenses incurred by the council in connection with this subdivision. The council may make the payment of the order for reimbursement a condition of probation.
(e)
If, at the period of probation, the council is not satisfied with the steps taken by the institution to eliminate the violations of this article, Sections 94831, 94832, and 94985, or former Section 94320 as that section was in effect on January 1, 1991, upon which the probation was based, the council may revoke the institution’s approval to operate or the institution’s approval to operate a branch or satellite campus.
(f)
The council may assess a penalty of up to ten thousand dollars ($10,000) as part of a probation order for violations of this article, Sections 94831, 94832, and 94985, or former Section 94320 as that section was in effect on January 1, 1991. In determining the amount of that penalty, the council shall consider the number and gravity of the violations, the degree of the institution’s good faith or culpability, the history of the institution’s previous violations, and the institution’s ability to pay. If the institution fails to pay a penalty within the time prescribed by the council the institution’s approval to operate the institution, or approval to operate a branch or satellite campus, shall be automatically suspended until the penalty is paid in full.
(g)
(1)
Any bond ordered by the council shall be issued by an admitted surety insurer in an amount established at the discretion of the council that is sufficient to protect students from the potential consequences of the violation.
(2)
The bond shall be in favor of the State of California for the indemnification of any person for any loss, including the loss of prepaid tuition, suffered as a result of the occurrence of any violation of this chapter during the period of coverage.
(3)
Liability on the bond may be enforced after a hearing before the council, after 30 days’ advance written notice to the principal and surety. The council shall adopt regulations establishing the procedure for administrative enforcement of liability. This paragraph supplements, but does not supplant, any other rights or remedies to enforce liability on the bond.
(4)
The council may order the institution to file reports at any interval the council deems necessary to enable the council to monitor the adequacy of the bond coverage and to determine whether further action is appropriate.
(h)
The council shall determine an institution’s compliance, including the compliance of its branch and satellite campuses, with this article, Sections 94831, 94832, and 94985, or former Section 94320 as that section was in effect on January 1, 1991, and shall not be bound by the findings or conclusions of any accrediting agency.
(i)
The council may revoke the approval to operate of any institution that fails to pay an order imposing a penalty or an order for the reimbursement of costs and expenses. The council may enforce any administrative order requiring the payment of money in the same manner as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 1 of the Code of Civil Procedure. All penalties and reimbursements paid pursuant to this section shall be deposited in the vocational education account in the Private Postsecondary and Vocational Education Administration Fund established pursuant to Section 94932.
(j)
Proceedings by the council under this section shall be conducted in accordance with regulations adopted by the council or, if there are no regulations establishing hearing procedures, Section 94965 or 94975, and the council shall have all of the powers granted therein.
94879.
The council may suspend or revoke an institution’s approval to operate or order probation or the posting of a bond, as provided in Section 94878, for any of the following reasons:
(a)
The institution has failed to make timely refunds to, or on behalf of students, as required by Sections 94867, 94869, 94870, and 94877, or has not satisfied, within 30 days of its issuance, a final judgment obtained by a student against the institution.
(b)
The institution or an owner, person in control, director, or officer of the institution is, or has been, found in any criminal, civil, or administrative proceeding, after notice and an opportunity to be heard, to have violated any law regarding the obtaining, maintenance, or disbursement of state or federal loan or grant funds, or any other law substantially related to the operation of the institution.
(c)
The institution, or a person in control of the institution is, or has been, found in any criminal, civil, or administrative proceeding, after notice and an opportunity to be heard, to have unpaid financial liabilities involving the refund or unlawful acquisition, use, or expenditure of state or federal financial aid funds.
(d)
(1)
All of the following are, or have been, found in any criminal, civil, or administrative proceeding:
(A)
A person in control of the institution was a person in control of another institution within one year before that institution’s closure.
(B)
While the person was acting as a person in control of the other institution, the person knew or, by the exercise of reasonable care, should have known that the institution violated this chapter.
(C)
That violation was a cause of that institution’s closure or of damage to students.
(D)
That institution did not pay to all students refunds owed as a result of the closure and full compensation for actual damages from that violation.
(E)
The person in control has not paid to all students of the closed institution refunds owed and full compensation for actual damages resulting from the closure that were not paid by the closed institution. For the purpose of this subdivision, “closure” includes closure of a branch or satellite campus, the termination of either the correspondence or residence portion of a home-study or correspondence course, and the termination of a course of instruction for some or all of the students enrolled in the course before the time these students were originally scheduled to complete it, or before a student who has been continually enrolled in a course of instruction has been permitted to complete all the educational services, and the classes that comprise the course.
94880.
(a)
The council may bring an action for equitable relief for any violation of this article in addition to, or instead of, any other remedy or procedure.
(b)
The suspension or revocation of an institution’s approval to operate also may be embraced in any action otherwise proper in any court involving the institution’s compliance with this chapter or performance of its legal obligations.
94881.
(a)
For the purposes of this section, the following definitions apply:
(1)
“Document or record” means any test score, grade, record of grades, attendance record, record indicating student course completion or employment, financial information, including any financial report required to be filed pursuant to Sections 94861 and 94862, information or records relating to the student’s eligibility for financial assistance or attendance at the institution, or any other record or document required by this chapter or by the council.
(2)
“Person” means a natural person and any business entity, regardless of the form of organization.
(b)
Any person who, in any manner, makes or causes to be made any untrue or misleading statement in connection with offering or providing a course of instruction, or who makes or causes to be made any untrue or misleading change in any document or record and who knows or, by the exercise of reasonable care, should know that the statement or change is untrue or misleading is guilty of a crime, punishable as provided in subdivision (e).
(c)
Any person who willfully falsifies, destroys, fails to maintain, or conceals any document or record that is required to be maintained by this chapter or by the council is guilty of a crime, punishable as provided in subdivision (e).
(d)
Any person who is required to file any report required by paragraph (3) of subdivision (f) of Section 94854, or Section 94861 or 94862 and who willfully fails to file that report as required, or willfully violates or causes the violation of subdivision (b) of Section 94874, is guilty of a crime and is subject to punishment for each violation as provided in paragraph (2) of subdivision (e).
(e)
Any person who violates subdivision (b) or (c), or who willfully violates Section 94831, 94832, 94853, or 94985, or former Section 94320 as that section was in effect January 1, 1991, is guilty of a crime and is subject to separate punishment for each violation either by:
(1)
Imprisonment in the state prison, by a fine not to exceed fifty thousand dollars ($50,000), or by both that imprisonment and fine.
(2)
Imprisonment in a county jail not to exceed one year, by a fine not to exceed ten thousand dollars ($10,000), or by both that imprisonment and fine.
(f)
Notwithstanding any other law, any prosecution under this section shall be commenced within three years of the discovery of the facts constituting grounds for commencing the prosecution.
(g)
The penalties provided by this section supplement, but do not supplant, the remedies and penalties provided under other law.
94882.
The council may adopt and enforce regulations as may be necessary, appropriate, or useful to interpret and otherwise implement this article. Pending the adoption of regulations, the council may adopt emergency regulations, which shall be immediately effective, notwithstanding any other provision of law, and which shall be superseded upon the adoption of subsequent regulations.
Article
12. Student Tuition Recovery Fund and Student Obligations
94944.
(a)
The Student Tuition Recovery Fund is continued in existence. All assessments collected pursuant Section 94945 shall be credited to this fund along with any interest on the money, for the administration of this article. Notwithstanding Section 13340 of the Government Code, the money in the fund is continuously appropriated to the council without regard to fiscal years for the purposes of this chapter. The fund shall consist of a degree-granting postsecondary educational institution account, a vocational educational institution account, and an account for institutions approved under any provision of this chapter that charge each enrolled student a total charge, as defined in subdivision (k) of Section 94852, of less than one thousand dollars ($1,000), for the purpose of relieving or mitigating pecuniary losses suffered by any California resident who is a student of an approved institution and who meets either of the following conditions:
(1)
The student was enrolled in an institution, prepaid tuition, and suffered loss as a result of, (A) the closure of the institution, (B) the institution’s failure to pay refunds or charges on behalf of a student to a third party for license fees or any other purposes, or to provide equipment or materials for which a charge was collected within 180 days before the institution’s closure, (C) the institution’s failure to pay or reimburse loan proceeds under a federally guaranteed student loan program as required by law or to pay or reimburse proceeds received by the institution prior to closure in excess of tuition and other costs, (D) the institution’s breach or anticipatory breach of the agreement for the course of instruction, or (E) a decline in the quality or value of the course of instruction within the 30-day period before the institution’s closure or, if the decline began before that period, the period of decline determined by the council. For the purpose of this section, “closure” includes closure of a branch or satellite campus, the termination of either the correspondence or residence portion of a home study or correspondence course, and the termination of a course of instruction for some or all of the students enrolled in the course before the time these students were originally scheduled to complete it, or before a student who has been continuously enrolled in a course of instruction has been permitted to complete all the educational services and classes that comprise the course.
(2)
The student obtained a judgment against the institution for any violation of this chapter and the student certifies that the judgment cannot be collected after diligent collection efforts.
(b)
Payments from the fund to any student shall be made from the appropriate account with the fund, as determined by the type of institution into which the student has paid his or her fees, and shall be subject to any regulations and conditions as the council shall prescribe.
(c)
(1)
The institution shall provide to the council, at the time of the institution’s closure, the names and addresses of persons who were students of an institution within 60 days prior to its closure, and shall notify these students, within 30 days of the institution’s closure, of their rights under the fund and how to apply for payment. If the institution fails to comply with this subdivision, the council shall attempt to obtain the names and addresses of these students and shall notify them, within 90 days of the institution’s closure, of their rights under the fund and how to apply for payment.
The council shall develop a form in English and Spanish fully explaining a student’s rights, which shall be used by the institution or the council to comply with this paragraph. The form shall include, or be accompanied by, a claim application and an explanation of how to complete the application.
(2)
If an institution fails to comply with paragraph (1), the council shall order the institution, or any person responsible for the failure to provide notice as required by paragraph (1), to reimburse the council for all reasonable costs and expenses incurred in notifying students as required in paragraph (1). In addition, the council may impose a penalty of up to five thousand dollars ($5,000) against the institution and any person found responsible for the failure to provide notice. The amount of the penalty shall be based on the degree of culpability and the ability to pay. Any order may impose joint and several liability. Before any order is made pursuant to this paragraph, the council shall provide written notice to the institution and any person from whom the council seeks recovery of the council’s claim and of the right to request a hearing within 30 days of the service of the notice.
If a hearing is not requested within 30 days of service of the notice, the council may order payment in the amount of the claim. If a hearing is requested, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code shall apply, and the council shall have all of the powers therein prescribed. Within 30 days after the effective date of the issuance of an order, the council may enforce the order in the same manner 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. All penalties and reimbursements paid pursuant to this section shall be deposited in the Private Postsecondary and Vocational Education Administration Fund established pursuant to Section 94932 or any successor fund.
(d)
(1)
Students entitled to payment as provided in paragraph (1) of subdivision (a) shall file with the council a verified application indicating each of the following:
(A)
The student’s name, address, telephone number, and social security number.
(B)
If any portion of the tuition was paid from the proceeds of a loan, the name of the lender, and any state or federal agency that guaranteed or reinsured the loan.
(C)
The amount of the prepaid tuition, the amount and description of the student’s loss, and the amount of the student’s claim.
(D)
The date the student started and ceased attending the institution.
(E)
A description of the reasons the student ceased attending the institution.
(F)
If the student ceased attending because of a breach or anticipatory breach or because of the decline in the quality or value of the course of instruction as described in subparagraph (E) of paragraph (1) of subdivision (a), a statement describing in detail the nature of the loss incurred. The application shall be filed within one year of the council’s service on the student of the notice described in paragraph (1) of subdivision (c) or, if no notice is served, within four years of the institution’s closure.
(2)
Students entitled to payment as provided in paragraph (2) of subdivision (a) shall file with the council a verified application indicating the student’s name, address, telephone number, and social security number, the amount of the judgment obtained against the institution, a statement that the judgment cannot be collected, and a description of the efforts attempted to enforce the judgment. The application shall be accompanied by a copy of the judgment and any other documents indicating the student’s efforts made to enforce the judgment.
The application shall be filed within two years after the date upon which the judgment became final.
(3)
The council may require additional information designed to facilitate payment to entitled students. The council shall relieve a student from the requirement to provide all of the information required by this subdivision if the council has the information or the information is not reasonably necessary for the resolution of a student’s claim.
(e)
Within 60 days of the council’s receipt of a completed application for payment, the council shall pay the claim from the Student Tuition Recovery Fund or deny the claim. The council, for good cause, may extend the time period for up to an additional 90 days to investigate the accuracy of the claim.
(f)
(1)
If the council pays the claim, the amount of the payment shall be (A) the greater of either (i) the total guaranteed student loan debt incurred by the student in connection with attending the institution, or (ii) the total of the student’s tuition and the cost of equipment and materials related to the course of instruction, less (B) the amount of any refund, reimbursement, indemnification, restitution, compensatory damages, settlement, debt forgiveness, discharge, cancellation, or compromise, or any other benefit received by, or on behalf of, the student before the council’s payment of the claim in connection with the student loan debt or cost of tuition, equipment, and materials. The payment also shall 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. However, if the claim is based solely on the circumstances described in subparagraph (B) or (C) of paragraph (1) of subdivision (a), the amount of the payment shall be the amount of the loss suffered by the student.
In addition to the amount determined under this paragraph, the amount of the payment shall include all interest and collection costs on all student loan debt incurred by the student in connection with attending the institution.
(2)
The council may reduce the total amount specified in paragraph (1) by the value of the benefit, if any, of the education obtained by the student before the closure of the institution. If the council makes any reduction pursuant to this paragraph, the council shall notify the claimant in writing at the time the claim is paid of the basis of its decision and provide a brief explanation of the reasons upon which the council relied in computing the amount of the reduction.
(3)
No reduction shall be made to the amount specified in paragraph (1) if (A) the student did not receive adequate instruction to obtain the training, skills, or experience, or employment to which the instruction was represented to lead, or (B) credit for the instruction obtained by the student is not generally transferable to other institutions approved by the council.
(4)
The amount of the payment determined under this subdivision is not dependent on the amount of the refund to which the student would have been entitled after a voluntary withdrawal.
(5)
Upon payment of the claim, all of the student’s rights against the institution shall be deemed assigned to the council to the extent of the amount of the payment.
(g)
(1)
The director of the council may negotiate with a lender, holder, guarantee agency, or the United States Department of Education for the full compromise or write-off of student loan obligations to relieve students of loss and thereby reduce the amount of student claims.
(2)
The director of the council, with the student’s permission, may pay a student’s claim directly to the lender, holder, guarantee agency, or the United States Department of Education under a federally guaranteed student loan program only if the payment of the claim fully satisfies all of the student’s loan obligations related to attendance at the institution for which the claim was filed.
(3)
Notwithstanding subdivision (e), the council may delay the payment of a claim pending the resolution of the council’s attempt to obtain a compromise or write-off of the claimant’s student loan obligation. However, the council shall immediately pay the claim in the event any adverse action that is not stayed is taken against the claimant, including the commencement of a civil or administrative action, tax offset, the enforcement of a judgment, or the denial of any government benefit.
(h)
If the council denies the claim, or reduces the amount of the claim pursuant to paragraph (2) of subdivision (f), the council shall notify the student of the denial or reduction and of the student’s right to request a hearing within 60 days or any longer period permitted by the council. If a hearing is not requested within 60 days or any additional period reasonably requested by the student, the council’s decision shall be final. If a hearing is requested, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code shall apply.
It is the intent of the Legislature that, when a student is enrolled in an institution that closes prior to the completion of the student’s program, the student shall have the option for a teach-out at another institution approved by the council. The council shall seek to promote teach-out opportunities wherever possible and shall inform the student of his or her rights, including payment from the fund, transfer opportunities, and available teach-out opportunities, if any.
(i)
This section applies to all claims filed or pending under former Chapter 7 (commencing with Section 94700) after January 1, 1990.
94945.
(a)
The council shall assess each institution that collects any moneys in advance of rendering services.
(1)
The amount assessed each institution shall be calculated only for those students who are California residents and who are eligible to be reimbursed from the fund. It shall be based on the actual amount charged each of these students for total course cost, regardless of the portion that is prepaid. The assessment shall be as follows:
(A)
For a total course cost of one cent ($0.01) to nine hundred ninety-nine dollars and ninety-nine cents ($999.99), inclusive, the assessment is one dollar ($1) per student.
(B)
For a total course cost of one thousand dollars ($1,000) to two thousand nine hundred ninety-nine dollars and ninety-nine cents ($2,999.99), inclusive, the assessment is two dollars and fifty cents ($2.50) per student.
(C)
For a total course cost of three thousand dollars ($3,000) to five thousand nine hundred ninety-nine dollars and ninety-nine cents ($5,999.99), inclusive, the assessment is three dollars and fifty cents ($3.50) per student.
(D)
For a total course cost of six thousand dollars ($6,000) to eight thousand nine hundred ninety-nine dollars and ninety-nine cents ($8,999.99), inclusive, the assessment is four dollars and fifty cents ($4.50) per student.
(E)
For a total course cost of nine thousand dollars ($9,000) or more, the assessment is five dollars and fifty cents ($5.50) per student.
(2)
The council shall levy additional reasonable assessments only if they are required to ensure that sufficient funds are available to satisfy the anticipated costs of paying student claims pursuant to Section 94944.
(3)
The assessments shall be paid into the Student Tuition Recovery Fund and credited to the appropriate account in the fund, and the deposits shall be allocated, except as otherwise provided for in this chapter, solely for the payment of valid claims to students. Unless additional reasonable assessments are required, no assessments for the degree-granting postsecondary educational institution account shall be levied during any fiscal year if, as of June 30 of the prior fiscal year, the balance in that account of the fund exceeds one million dollars ($1,000,000). Unless additional reasonable assessments are required, no assessments for the vocational educational institution account shall be levied during any fiscal year if, as of June 30 of the prior fiscal year, the balance in that account exceeds three million dollars ($3,000,000). Unless additional reasonable assessments are required, no assessments for the account for institutions approved under any provision of this chapter that charge each enrolled student a total charge, as defined in subdivision (k) of Section 94852, of less than one thousand dollars ($1,000) shall be levied during any fiscal year if, as of June 30 of the prior fiscal year, the balance in that account exceeds three hundred thousand dollars ($300,000). However, regardless of the balance in the fund, assessments shall be made on any newly approved institution for a period established pursuant to regulation by the council. Notwithstanding Section 13340 of the Government Code, the moneys so deposited in the fund are continuously appropriated to the council for the purpose of paying claims to students pursuant to Section 94944. The bureau shall adjust the amounts in this subdivision to reflect changes in the United States Cost of Living Index published by the United States Bureau of Labor Statistics subsequent to January 1, 1990. The adjustments shall be made on January 1 of each year.
(b)
The council may deduct from the fund the reasonable costs of administration of the tuition recovery program authorized by Section 94944 and this section. The maximum amount of administrative costs that may be deducted from the fund, in a fiscal year, shall not exceed one hundred thousand dollars ($100,000) from the degree-granting postsecondary educational institution account, three hundred thousand dollars ($300,000) from the vocational educational institution account, and thirty thousand dollars ($30,000) from the account for institutions approved under any provision of this chapter that charge each enrolled student a total charge, as defined in subdivision (k) of Section 94852, of less than one thousand dollars ($1,000), plus the interest earned on money in the fund that is credited to the fund. Prior to the council’s expenditure of any amount in excess of one hundred thousand dollars ($100,000) from the fund for administration of the tuition recovery program, the council shall develop a plan itemizing that expenditure. The plan shall be subject to the approval of the Department of Finance. Institutions, except for schools of cosmetology licensed pursuant to Article 8 (commencing with Section 7362) of Chapter 10 of Division 3 of the Business and Professions Code and institutions that offer vocational or job training programs, that meet the student tuition indemnification requirements of a California state agency, or that demonstrate to the council that an acceptable alternative method of protecting their students against loss of prepaid tuition has been established, shall be exempted from this section.
(c)
Reasonable costs in addition to those permitted under subdivision (b) may be deducted from the fund for any of the following purposes:
(1)
To make and maintain copies of student records from institutions which close.
(2)
To reimburse the council or a third party serving as the custodian of records.
(3)
To review records in order to determine whether a student improperly received a loan due to false certification, in which case the student would be eligible for a loan write-off or discharge in lieu of reimbursement in whole or in part from the fund.
(d)
In the event of a closure by any approved institution under this chapter, any assessments that have been made against those institutions, but have not been paid into the fund, shall be recovered. Any payments from the fund made to students on behalf of any institution shall be recovered from that institution.
(e)
In addition to civil remedies, the council may order an institution to pay previously unpaid assessments or to reimburse the council for any payments made from the fund in connection with the institution. Before any order is made pursuant to this section, the council shall provide written notice to the institution and notice of the institution’s right to request a hearing within 30 days of the service of the notice. If a hearing is not requested within 30 days of the service of the notice, the council may order payment. If a hearing is requested, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code shall apply, and the council shall have all powers prescribed in that chapter. Within 30 days after the effective date of the issuance of the order, the council may enforce the order in the same manner 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.
(f)
In addition to any other action that the council may take under this chapter, the council may suspend or revoke an institution’s approval to operate because of the institution’s failure to pay assessments when due or failure to pay reimbursement for any payments made from the fund within 30 days of the council’s demand for payment.
(g)
The moneys deposited in the fund shall be exempt from execution and shall not be the subject of litigation or liability on the part of creditors of those institutions or students.
(h)
Claims for approved institutions that charge each enrolled student a total charge, as defined in subdivision (k) of Section 94852, of less than one thousand dollars ($1,000) shall be paid from (1) the account established for these institutions if the claim relates to a period of student enrollment beginning on or after the effective date of this section, or (2) the vocational educational institution account if the claim relates to a period of student enrollment that began before the effective date of this section.
(i)
This section shall become inoperative on January 1, 1999, and on that date is repealed unless a later enacted statute that becomes effective on or before January 1, 1999, deletes or extends that date.
94945.
(a)
The council shall assess each institution that collects any moneys in advance of rendering services.
(1)
The amount assessed each institution shall be calculated only for those students who are California residents and who are eligible to be reimbursed from the fund. It shall be based on the actual amount charged each of these students for total course cost, regardless of the portion that is prepaid. The assessment shall be as follows:
(A)
For a total course cost of one cent ($0.01) to two thousand nine hundred ninety-nine dollars and ninety-nine cents ($2,999.99), inclusive, the assessment is two dollars and fifty cents ($2.50) per student.
(B)
For a total course cost of three thousand dollars ($3,000) to five thousand nine hundred ninety-nine dollars and ninety-nine cents ($5,999.99), inclusive, the assessment is three dollars and fifty cents ($3.50) per student.
(C)
For a total course cost of six thousand dollars ($6,000) to eight thousand nine hundred ninety-nine dollars and ninety-nine cents ($8,999.99), inclusive, the assessment is four dollars and fifty cents ($4.50) per student.
(D)
For a total course cost of nine thousand dollars ($9,000) or more, the assessment is five dollars and fifty cents ($5.50) per student.
(2)
The council shall levy additional reasonable assessments only if they are required to ensure that sufficient funds are available to satisfy the anticipated costs of paying student claims pursuant to Section 94944.
(3)
The assessments shall be paid into the Student Tuition Recovery Fund and credited to the appropriate account in the fund, and the deposits shall be allocated, except as otherwise provided for in this chapter, solely for the payment of valid claims to students. Unless additional reasonable assessments are required, no assessments for the degree-granting postsecondary educational institution account shall be levied during any fiscal year if, as of June 30 of the prior fiscal year, the balance in that account of the fund exceeds one million dollars ($1,000,000). Unless additional reasonable assessments are required, no assessments for the vocational educational institution account shall be levied during any fiscal year if, as of June 30 of the prior fiscal year, the balance in that account exceeds three million dollars ($3,000,000). However, regardless of the balance in the fund, assessments shall be made on any newly approved institution. Notwithstanding Section 13340 of the Government Code, the moneys so deposited in the fund are continuously appropriated to the council for the purpose of paying claims to students pursuant to Section 94944.
(b)
The council may deduct from the fund the reasonable costs of administration of the tuition recovery program authorized by Section 94944 and this section. The maximum amount of administrative costs that may be deducted from the fund, in a fiscal year, shall not exceed one hundred thousand dollars ($100,000) from the degree-granting postsecondary educational institution account and three hundred thousand dollars ($300,000) from the vocational educational institution account, plus the interest earned on money in the fund that is credited to the fund. Prior to the council’s expenditure of any amount in excess of one hundred thousand dollars ($100,000) from the fund for administration of the tuition recovery program, the council shall develop a plan itemizing that expenditure. The plan shall be subject to the approval of the Department of Finance. Institutions, except for schools of cosmetology licensed pursuant to Article 8 (commencing with Section 7362) of Chapter 10 of Division 3 of the Business and Professions Code and institutions that offer vocational or job training programs, that meet the student tuition indemnification requirements of a California state agency, or that demonstrate to the council that an acceptable alternative method of protecting their students against loss of prepaid tuition has been established, shall be exempted from this section.
(c)
Reasonable costs in addition to those permitted under subdivision (b) may be deducted from the fund for any of the following purposes:
(1)
To make and maintain copies of student records from institutions which close.
(2)
To reimburse the council or a third party serving as the custodian of records.
(d)
In the event of a closure by any approved institution under this chapter, any assessments that have been made against those institutions, but have not been paid into the fund, shall be recovered. Any payments from the fund made to students on behalf of any institution shall be recovered from that institution.
(e)
In addition to civil remedies, the council may order an institution to pay previously unpaid assessments or to reimburse the council for any payments made from the fund in connection with the institution. Before any order is made pursuant to this section, the council shall provide written notice to the institution and notice of the institution’s right to request a hearing within 30 days of the service of the notice. If a hearing is not requested within 30 days of the service of the notice, the council may order payment. If a hearing is requested, Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code shall apply, and the council shall have all powers prescribed in that chapter. Within 30 days after the effective date of the issuance of the order, the council may enforce the order in the same manner 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.
(f)
In addition to any other action that the council may take under this chapter, the council may suspend or revoke an institution’s approval to operate because of the institution’s failure to pay assessments when due or failure to pay reimbursement for any payments made from the fund within 30 days of the council’s demand for payment.
(g)
The moneys deposited in the fund shall be exempt from execution and shall not be the subject of litigation or liability on the part of creditors of those institutions or students.
(h)
This section shall become operative on January 1, 1999.
94946.
(a)
Any institution that willfully violates Section 94945 shall be subject to all of the following:
(1)
The institution shall lose all rights to enforce the terms of any contract or agreement arising from the transaction in which the violation occurred.
(2)
The institution shall refund to the student any fees that it has collected from that student.
(b)
An institution’s willful violation of Section 94945 may be grounds for the revocation of that institution’s approval to operate in this state.
94947.
Students enrolling in institutions that come under Sections 94944 and 94945, shall disclose in writing, if applicable, the source of any and all guaranteed or insured loans granted for the purposes of paying tuition to that institution. In the event of a closure of any institution, the council shall provide any lending institution that is the source of any guaranteed or insured student loan with the names of students maintaining loans with that lending institution.
94948.
(a)
The governing board or other governing authority of any private postsecondary or vocational educational institution shall adopt rules providing for the withholding of institutional services from students or former students who have been notified, in writing, at the student’s or former student’s last known address, that he or she is in default on a loan or loans under either of the following loan programs:
(1)
The Stafford Student Loan program.
(2)
The Supplemental Loans for Students program.
(3)
Any program directly or indirectly financed by the California Educational Facilities Authority.
“Default,” as used in this section, with respect to a loan under the Stafford Student Loan program or Supplemental Loans for Students program means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments. “Default,” as used in this section, with respect to a program directly or indirectly financed by the California Educational Facilities Authority, means the failure of a borrower to make an installment payment when due, or to meet other terms of the loan, within that period and under the circumstances determined by the California Educational Facilities Authority with respect to that program.
(b)
The rules adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute and when the student or former student demonstrates to either the governing board or other appropriate governing authority of the institution, or the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The rules shall specify the services to be withheld from the student and may include, but are not limited to, the following:
(1)
The provision of grades.
(2)
The provision of transcripts.
(3)
The provision of diplomas.
The rules shall not include the withholding of registration privileges.
(c)
When it has been determined that an individual is in default on a loan or loans under either of the loan programs specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.
(d)
Guarantors, or those who act as their agents or act under their control, who provide information to institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board or other governing authority of the institutions from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the institution by the guarantors, their agents, or those acting under the control of the guarantors.
Article
13. Administrative and Judicial Procedures
94950.
(a)
The procedures set forth in Section 94965 or, alternatively, in Section 94975 govern the following types of administrative actions:
(1)
Denial of an application for an approval or renewal of an approval.
(2)
Suspension or revocation of an existing approval.
(3)
Appeals of conditional approvals.
(b)
In lieu of the procedures set forth in Section 94965 or 94975, an institution may voluntarily elect to utilize the procedures set forth in Section 94980 if it appeals a conditional approval by the council.
(c)
The procedures set forth in Section 94970 govern emergency suspensions of an institution’s approval to operate initiated by the council.
(d)
Sections 94952 and 94955 authorize the council and the Attorney General to seek various forms of judicial relief in order to enforce this chapter.
(e)
Section 94960 governs actions based on student complaints.
(f)
Section 94985 authorizes civil remedies for individual students in addition to those available under other provisions of law.
(g)
Procedures established pursuant to regulations adopted by the council shall govern the following types of administrative appeals:
(1)
Probationary actions.
(2)
Decisions by the council denying an institution’s claim for an exemption or exclusion from this chapter or any provision thereof.
94952.
(a)
The Attorney General, or any district attorney, or city attorney, may make investigations as may be necessary to carry out this chapter, including, but not limited to, investigations of complaints. The council may jointly bring actions as necessary to enforce this chapter, including, but not limited to, civil actions for injunctive relief. In actions brought pursuant to this subdivision, the council shall be represented by the Attorney General.
(b)
The Attorney General shall represent the council in the following administrative proceedings arising under this chapter:
(1)
Suspension or revocation of an institution’s approval.
(2)
Denial of an institution’s application for approval.
(3)
An appeal of a conditional approval to operate issued following a review of an institution’s application for approval.
(c)
Nothing in this section or this chapter shall preclude the Attorney General, or any district attorney or city attorney, from any of the following:
(1)
Bringing any action on behalf of the people as he or she is empowered by law to bring, including, but not limited to, actions based upon alleged violations of Chapter 5 (commencing with Section 17200) of Part 2, and Chapter 1 (commencing with Section 17500) of Part 3, of Division 7 of the Business and Professions Code.
(2)
Conducting investigations necessary to determine whether there have been violations of law specified in paragraph (1).
(3)
Conducting any investigations that he or she is authorized to conduct, including, but not limited to, investigations authorized under Section 11180 of the Government Code.
(4)
In the case of the Attorney General, delegating his or her representation authority under subdivision (b) to staff attorneys of the council.
(5)
Entering into an agreement or understanding with the council with respect to representation in any judicial or administrative proceeding not expressly enumerated herein.
94955.
(a)
The council may bring an action for equitable relief for any violation of this chapter. The equitable relief may include restitution, a temporary restraining order, the appointment of a receiver, and a preliminary or permanent injunction. The action may be brought in the county in which the defendant resides or in which any violation has occurred or may occur.
(b)
The remedies provided in this section supplement, and do not supplant, the remedies and penalties under other provisions of law.
(c)
In actions brought pursuant to this section, the council shall be represented by the Attorney General.
94957.
(a)
In addition to or in lieu of any other remedy or penalty, the council may issue a citation to an institution for committing any violation of this chapter or regulation adopted under this chapter.
(b)
The citation may contain an order of abatement or the assessment of an administrative fine. The administrative fine may not exceed two thousand five hundred dollars ($2,500) for each violation. The council shall base its assessment of the administrative fine on the nature and seriousness of the violation, the persistence of the violation, the good faith of the institution, the history of previous violations, and the purposes of this chapter.
(c)
The citation shall be in writing and shall describe the nature of the violation and the specific provision of law determined to have been violated. The citation shall inform the institution of its right to request a hearing in writing within 15 days of the date that the citation was issued. If a hearing is not requested, payment of the administrative fine shall not constitute an admission of the violation charged. If a hearing is requested, the council shall provide a hearing as described in Section 94965, 94975, or 94980. Payment of the administrative fine is due 15 days after the citation was issued if a hearing is not requested, or when a final order is entered if a hearing is requested. The council may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.10) of Part 2 of the Code of Civil Procedure.
(d)
All administrative fines shall be deposited in the Private Postsecondary and Vocational Education Administration Fund.
94960.
(a)
Any person claiming damage or loss as a result of any act or practice by a postsecondary or vocational educational institution or its agent, or both, that is a violation of this chapter or of the regulations adopted pursuant to this chapter, may file with the council a verified complaint against that institution or its agent, or both.
The complaint shall set forth the alleged violation and shall contain any other information as may be required by the council.
(b)
The council shall investigate any complaint and may attempt to effectuate settlement by persuasion and conciliation.
(c)
If, upon all the evidence at a hearing, the council finds that an institution or its agent, or both, have engaged in, or are engaging in, any act or practice that violates this chapter or the regulations adopted pursuant to this chapter, the council shall report that evidence to the Attorney General. The council, based on its own investigation or the evidence adduced at a hearing, or both, also may commence an action to revoke an institution’s approval to operate or an agent’s permit.
(d)
Complaints received by the council pertaining to institutions accredited by the Western Association of Schools and Colleges shall be forwarded to the association. Actions by the council relating to complaints against these institutions shall be limited to the transmittal of this information.
(e)
A person entitled to bring an action for the recovery of damages or other relief shall not be required to file a complaint pursuant to this section, or to pursue or exhaust any administrative process or remedy before bringing the action.
94965.
(a)
Proceedings in connection with the denial of an application to operate, the grant of a conditional approval to operate, or the revocation of an approval to operate shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the council shall have all of the powers granted in that chapter. Any action by the council to place an institution on probation shall be subject to appeal to the full council, and the council shall establish procedures that provide the institution with adequate notice and an opportunity to be heard and to present evidence as to why the action recommended by staff or by a visiting committee shall not be taken.
(b)
Upon taking any action to suspend or revoke an institution’s approval to operate, or to deny an application for renewal of an approval to operate, the council shall provide written notice to the Student Aid Commission, the United States Department of Education, and to any appropriate accrediting association.
94970.
(a)
If an institution has violated this chapter and determines that immediate action is necessary to protect students, prevent misrepresentations to the public, or prevent the loss of public funds, tuition, or other money paid by students, the council may institute an emergency action to suspend the approval of an institution to operate, or the approval to operate a branch or satellite campus, for not more than 30 days unless the council initiates a proceeding to suspend or revoke the approval to operate within that period.
(b)
(1)
The council shall provide notice of the emergency action to the institution by certified mail, if the effective date of the emergency action is 10 or more working days after mailing, or personal service, if the effective date of the emergency action is five or more days after service.
(2)
The notice shall specify all of the following:
(A)
The violations upon which the emergency action is based.
(B)
The nature and grounds of the emergency action, including whether the action applies to the continuation of instruction to enrolled students or to the enrollment of new students.
(C)
The effective date of the action, which shall not be less than five days after the notice is provided.
(D)
The institution’s right to show cause that the emergency action is unwarranted by submitting to the council, at least two days before the effective date of the emergency action, declarations, documentary evidence, and written arguments demonstrating that the violations did not occur or that immediate action is not required.
(E)
The right of the institution to request, in writing, within 30 days of the service of the notice, a hearing.
(c)
The council may (1) continue the effective date of an emergency action or (2) terminate the emergency action at any time if the council concludes that the institution has shown cause that the emergency action is unwarranted or that the grounds for instituting the emergency action no longer remain. The council shall provide written notice of a continuance or termination of an emergency action to the institution.
(d)
(1)
If the institution does not take the opportunity to show cause why the emergency action is unwarranted, the emergency action shall become effective on the date specified in the notice or notice of continuance.
(2)
If the institution takes the opportunity to show cause and the council decides, after a consideration of the declarations, documentary evidence and written argument submitted by the institution, that the emergency action should become effective, the emergency action shall be effective on the date specified in the notice or notice of continuance. The council shall notify the institution of the decision at least one day before the effective date, and the institution may thereafter seek judicial relief upon notice to the council and the Attorney General.
(e)
(1)
If a hearing is requested within the 30-day period specified in subdivision (b) the council shall set a date for the hearing within 20 days after receipt of the request.
(2)
If the institution does not request a hearing within the 30-day period specified in subdivision (b) or if the council concludes after a hearing requested by the institution that grounds exist for the suspension or revocation of the institution’s approval to operate or approval to operate a branch or satellite campus, the council may extend the suspension or revoke the institution’s approval to operate or approval to operate a branch or satellite campus, order probation and a penalty, order the posting of a bond, or condition the institution’s approval to operate or approval to operate a branch or satellite campus as the council deems appropriate.
(f)
During the pendency of an emergency action, the council may investigate the institution’s compliance with this chapter, including an onsite inspection, and may institute a proceeding pursuant to Section 94878, if applicable, or Section 94965 or 94975 to suspend or revoke an institution’s approval to operate or approval to operate a branch or satellite campus, order a bond, or order probation and a penalty, based on any violation of this chapter.
(g)
This section supplements, but does not supplant, the authority of the council to seek judicial relief, including a temporary restraining order and injunction, to redress any violation of this chapter.
94975.
(a)
This section establishes the procedure for notice and hearing required under this chapter and, except as provided in Section 94970, may be used in lieu of other notice or hearing requirements provided in this chapter.
(b)
If notice of administrative action is required by this chapter, the council shall serve notice stating the following:
(1)
The action, including the penalties and administrative sanctions sought.
(2)
The grounds for the action with sufficient particularity to give notice of the transactions, occurrences, violations, or other matters on which the action is based.
(3)
The right to a hearing and the time period within which the party subject to the notice may request a hearing in writing. The time period shall not be less than 15 days after service of the notice unless a longer period is provided by statute.
(4)
The right to be present at the hearing, to be represented by counsel, to cross-examine witnesses, and to present evidence.
(5)
That, if the party subject to the notice does not request a hearing in writing within the time period expressed in the notice, he or she will waive or forfeit his or her right to an administrative hearing and the action will become final.
(c)
If a party subject to a notice provided pursuant to subdivision (b) requests a hearing in writing within the time period specified in subparagraph (3) of paragraph (b), then within 10 days of receiving this request, the council shall schedule a hearing. The hearing shall be held in a location determined pursuant to Section 11508 of the Government Code. The council shall serve reasonable notice of the time and place for the hearing at least 10 days before the hearing. The council may continue the date of the hearing upon a showing of good cause.
(d)
(1)
Any party, including the council, may submit a written request to any other party before the hearing to obtain the names and addresses of any person who has personal knowledge, or who the party receiving the request claims to have personal knowledge, of any of the transactions, occurrences, violations, or other matters that are the basis of the administrative action. In addition, the requesting party shall have the right to inspect and copy any written statement made by that person and any writing, as defined by Section 250 of the Evidence Code, or thing that is in the custody, or under the control, of the party receiving the request and that is relevant and not privileged. This subdivision shall constitute the exclusive method for prehearing discovery. However, nothing in this paragraph shall affect the council’s authority, at any time, to investigate, inspect, monitor, or obtain and copy information under any provision of this chapter.
(2)
The written request described in paragraph (1) shall be made before the hearing and within 30 days of the service of the notice described in subdivision (b). Each recipient of a request shall comply with the request within 15 days of its service by providing the names and addresses requested and by producing at a reasonable time at the council’s office, or other mutually agreed reasonable place, the requested writings and things. The council may extend the time for response upon a showing of good cause.
(3)
Except as provided in this paragraph, no party may introduce the testimony or statement of any person or any writing or thing into evidence at the hearing if that party failed to provide the name and address of the person or to produce the writing or thing for inspection and copying as provided by this subdivision. A party may introduce the testimony, statement, writing, or thing that was not identified or produced as required herein only if there is no objection or if the party establishes that the person, writing, or thing was unknown at the time when the response was made to the written request, the party could not have informed other parties within a reasonable time after learning of the existence of the person, writing, or thing, and no party would be prejudiced by the introduction of the evidence.
(e)
Before the hearing has commenced, the council shall issue subpoenas at the written request of any party for the attendance of witnesses or the production of documents or other things in the custody or under the control of the person subject to the subpoena. Subpoenas issued pursuant to this section are subject to Section 11510 of the Government Code.
(f)
(1)
The council shall designate an impartial hearing officer to conduct the hearing. The hearing officer may administer oaths and affirmations, regulate the course of the hearing, question witnesses, and otherwise investigate the issues, take official notice according to the procedure provided in Division 4 (commencing with Section 450) of the Evidence Code of any technical or educational matter in the council’s special field of expertise and of any matter that may be judicially noticed, set the time and place for continued hearings, fix the time for the filing of briefs and other documents, direct any party to appear and confer to consider the simplification of issues by consent, and prepare a statement of decision.
(2)
Neither a hearing officer nor any person who has a direct or indirect interest in the outcome of the hearing shall communicate directly or indirectly with each other regarding any issue involved in the hearing while the proceeding is pending without notice and opportunity for all parties to participate in the communication. A hearing officer who receives any ex parte communication shall immediately disclose the communication to the council and all other parties. The council may disqualify the hearing officer if necessary to eliminate the effect of the ex parte communication. If the council finds that any party willfully violated, or caused the violation of, this paragraph, the council shall enter that party’s default and impose the administrative sanction set forth in the notice provided pursuant to subdivision (b).
(g)
(1)
Each party at the hearing shall be afforded an opportunity to present evidence, respond to evidence presented by other parties, cross-examine, and present written argument or, if permitted by the hearing officer, oral argument on the issues involved in the hearing. The council may call any party as a witness who may be examined as if under cross-examination.
(2)
Each party may appear through its representative or through legal counsel.
(3)
The technical rules relating to evidence and witnesses shall not apply. However, only relevant evidence is admissible.
(4)
Oral evidence shall be taken only upon oath or affirmation. The hearing shall be conducted in the English language. The proponent of any testimony to be offered by a witness who is not proficient in English shall provide, at the proponent’s cost, an interpreter proficient in English and the language in which the witness will testify.
(5)
The hearing shall be recorded by tape recording or other phonographic means unless all parties agree to another method of recording the proceedings.
(6)
(A)
At any time 10 or more days before the hearing, any party may serve on the other parties a copy of any declaration that the party proposes to introduce in evidence.
(B)
The declaration shall be accompanied by a notice indicating the date of service of the notice and stating that the declarations will be offered into evidence, the declarants will not be called as witnesses, and there will be no right of cross-examination unless the party receiving the notice requests the right to cross-examine, in writing, within seven days of the service of the declarations and notice.
(C)
If no request for cross-examination is served within seven days of the service of the declarations and notice described in subparagraph (B), the right to cross-examination is deemed waived and the declaration shall have the same effect as if the declarant testified orally. Notwithstanding this paragraph, a declaration may be admitted as hearsay evidence without cross-examination.
(7)
Disposition of any issues involved in the hearing may be made by stipulation or settlement.
(8)
If a party fails to appear at a hearing, that party’s default shall be taken and the party shall be deemed to have waived the hearing and agreed to the administrative action and the grounds for that action described in the notice given pursuant to subdivision (b). The council shall serve the party with an order of default including the administrative action ordered. The order shall be effective upon service or at any other time designated by the council. The council may relieve a party from an order of default if the party applies for relief within 15 days after the service of an order of default and establishes good cause for relief. An application for relief from default shall not stay the effective date of the order unless expressly provided by the council.
(h)
(1)
At any time before the matter is submitted for decision, the council may amend the notice provided pursuant to subdivision (b) to set forth any further grounds for the originally noticed administrative action or any additional administrative action and the grounds therefor. The statement of the further grounds for the originally noticed administrative action, or of the grounds for any additional administrative action, shall be made with sufficient particularity to give notice of the transactions, occurrences, violations, or other matters on which the action or additional action is based. The amended notice shall be served on all parties. All parties affected by the amended notice shall be given reasonable opportunity to respond to the amended notice as provided in this section.
(2)
The council may amend the notice after the case is submitted for decision. The council shall serve each party with notice of the intended amendment and shall provide the party with an opportunity to show that the party will be prejudiced by the amendment unless the case is reopened to permit the party to introduce additional evidence. If prejudice is shown, the council shall reopen the case to permit the introduction of additional evidence.
(i)
(1)
Within 30 days after the conclusion of the hearing or at another time established by the council, the hearing officer shall submit a written statement of decision setting forth a recommendation for a final decision and explaining the factual and legal basis for the decision as to each of the grounds for the administrative action set forth in the notice or amended notice. The council shall serve the hearing officer’s statement of decision on each party and its counsel within 10 days of its submission by the hearing officer.
(2)
The council shall make the final decision which shall be based exclusively on evidence introduced at the hearing. The final decision shall be supported by substantial evidence in the record. The council also shall issue a statement of decision explaining the factual and legal basis for the final decision as to each of the grounds for the administrative action set forth in the notice or amended notice. The council shall issue an order based on its decision which shall be effective upon service or at any other time designated by the council. The council shall serve a copy of the final decision and order, within 10 days of their issuance, on each party and its counsel.
(3)
The council may hold a closed session to deliberate on a decision to be reached based upon evidence introduced at the hearing.
(4)
The council shall serve a certified copy of the complete record of the hearing, or any part thereof designated by a party, within 30 days after receiving the party’s written request and payment of the cost of preparing the requested portions of the record. The complete record shall include all notices and orders issued by the council, a transcript of the hearing, the exhibits admitted or rejected, the written evidence and any other papers in the case, the hearing officer’s statement of decision, and the final decision and order.
(j)
The council shall serve all notices and other documents that are required to be served by this section on each party by personal delivery, by certified mail, return receipt requested, or by any other means designated by the council.
(k)
(1)
Any party aggrieved by the council’s final decision and order may seek judicial review by filing a petition for a writ of mandate pursuant to Section 1085 of the Code of Civil Procedure within 30 days of the issuance of the final decision and order. If review is not sought within that period, the party’s right to review shall be deemed waived.
(2)
The aggrieved party shall present the complete record of the hearing or all portions of the record necessary for the court’s review of the council’s final decision and order. The court shall deny the petition for a writ of mandate if the record submitted by the party is incomplete. The court shall not consider any matter not contained in the record. The factual basis supporting the final decision set forth in the council’s statement of decision shall be conclusive if supported by substantial evidence on the record considered as a whole.
(3)
The final order shall not be stayed or enjoined during review except upon the court’s grant of an order on a party’s application after due notice to the council and the Attorney General. The order shall be granted only if the party establishes the substantial likelihood that it will prevail on the merits and posts a bond sufficient to protect fully the interests of the students, the council, and the fund, from any loss.
(
l)
The council may adopt regulations establishing alternative means of providing notice and an opportunity to be heard in circumstances in which a full hearing is not required by law.
(m)
For the purposes of this section, “good cause” shall require sufficient ground or reason for the determination to be made by the council.
94980.
(a)
If the council, through the program administrator, denies an institution’s application for approval, grants a conditional approval, or initiates a proceeding to suspend or revoke an institution’s approval to operate, the institution may request a hearing pursuant to this section in lieu of the hearing procedure designated by the council under Section 94965 or 94975.
(b)
At the time the council provides notice to an institution of its right to a hearing under Section 94965 or 94975 in connection with the denial of an application for approval to operate, the issuance of a conditional approval to operate, or a proposed suspension or revocation of approval to operate, the council also shall provide notice of the provisions of this section.
(c)
Within 15 days after service of the notice described in subdivision (b), the institution may request in writing a hearing under this section in lieu of the hearing procedure in Section 94965 or 94975. The request shall acknowledge that by electing to proceed under this section, the institution is knowingly waiving all rights under the hearing procedure otherwise provided by the council.
(d)
After receiving the institution’s request for a hearing under this section, the council shall provide the institution or its representative with copies of all the documents, testimony in declaration form, and written arguments on which the council relies to support its proposed administrative action.
(e)
The institution shall have 30 days from the service of the council’s written evidence and arguments to submit all the documents, testimony in declaration form, and written arguments on which the institution relies in opposition to the council’s proposed administrative action.
(f)
Neither the council nor the institution has any right to discovery or to compel the production of documents or the testimony of witnesses by subpoena.
(g)
The program administrator shall review all of the documents, declarations, and arguments and shall render a proposed decision in writing based solely on the written evidence and arguments that set forth the proposed administrative action and the factual and legal bases for it.
(h)
Within 10 days of the service of the program administrator’s decision, the institution may request in writing to have the matter reviewed by the members of the council and may also request oral argument, as described in subdivision (i). If a timely request for review is not submitted, the program administrator’s decision shall be deemed the final decision of the council. If a timely request for review is submitted without a request for oral argument, the right to make oral argument is deemed waived.
(i)
If a timely request for review is made, the matter shall be considered by the members of the council based solely on the written evidence and arguments submitted to the program administrator and, if oral argument was timely requested, any oral argument permitted by the council. No new evidence may be presented during oral argument. An institution requesting oral argument shall receive at least 10 days advance notice of the council meeting at which time oral argument may be made. The council members may deliberate on the decision to be reached in a closed session as provided in paragraph (3) of subdivision (c) of Section 11126 of the Government Code. The council shall issue its final decision within 30 days after the council meeting at which the matter was reviewed. The program administrator’s proposed decision shall be sustained if it is supported by substantial evidence on the record considered as a whole.
(j)
The council shall serve the institution with a written decision setting forth the administrative action taken and the legal and factual bases for it. The decision shall become final within 30 days unless another time is specified by the council.
(k)
The council shall serve a certified copy of the complete record, or any part thereof designated by an institution, within 30 days after receiving the institution’s written request and payment of the cost of preparing the requested record or portions thereof. The complete record shall consist of all notices and orders of the council, the documents, declarations, and written argument submitted, a transcript of any oral argument, and the final decision and order.
(
l)
Any party aggrieved by the council’s final decision and order may seek judicial review as provided in, and subject to, the requirements of subdivision (k) of Section 94975.
(m)
All documents required by this section to be served by the council shall be served on the institution, its counsel, or authorized representative by any means authorized for service pursuant to Chapter 5 (commencing with Section 1010) of Title 14 of Part 2 of the Code of Civil Procedure.
94985.
(a)
Any institution that willfully violates any provision of Section 94800, 94810, 94814, or 94816, Sections 94820 to 94826, inclusive, Section 94829, 94831, or 94832 may not enforce any contract or agreement arising from the transaction in which the violation occurred, and any willful violation is a ground for revoking an approval to operate in this state or for denying a renewal application.
(b)
Notwithstanding any provision of the contract or agreement, a student may bring an action for a violation of this article or for an institution’s failure to perform its legal obligations and, upon prevailing thereon, is entitled to the recovery of damages, equitable relief, or any other relief authorized by this article, and reasonable attorney’s fees and costs.
(c)
If a court finds that a violation was willfully committed or that the institution failed to refund all consideration as required by subdivision (b) on the student’s written demand, the court, in addition to the relief authorized under subdivision (b), shall award a civil penalty of up to two times the amount of the damages sustained by the student.
(d) The remedies provided in this article supplement, but do not supplant, the remedies provided under any other provision of law.
(e)
An action brought under this section shall be commenced within three years of the discovery of the facts constituting grounds for commencing the action.
(f)
Any provision in any agreement that purports to require a student to invoke any grievance dispute procedure established by the institution before enforcing any right or remedy is void and unenforceable.
(g)
A student may assign his or her cause of action for a violation of this article to the council, or to any state or federal agency that guaranteed or reinsured a loan for the student or that provided any grant or other financial aid.
(h)
This section applies to any action pending on the effective date of this section.
(i)
This section supplements, but does not supplant, the authority granted the Division of Labor Law Enforcement under Section 1700.4 of the Labor Code to the extent that placement activities of trade schools are subject to regulation by the division under the Labor Code.