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AB-1345 Private postsecondary education: California Private Postsecondary Education Act of 2009.(2019-2020)

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Date Published: 08/13/2019 10:00 AM
AB1345:v95#DOCUMENT

Amended  IN  Senate  August 13, 2019
Amended  IN  Senate  June 25, 2019
Amended  IN  Senate  June 11, 2019
Amended  IN  Assembly  April 11, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1345

Introduced by Assembly Members McCarty, Bauer-Kahan, Berman, Chiu, Eggman, and Low
(Coauthors: Assembly Members Boerner Horvath and Gloria)

February 22, 2019

An act to amend Sections 94874 and Section 94897 of, and to add Section 94841.2 to, the Education Code, relating to private postsecondary education.


LEGISLATIVE COUNSEL'S DIGEST


AB 1345, as amended, McCarty. Private postsecondary education: California Private Postsecondary Education Act of 2009.
Existing law establishes the California Private Postsecondary Education Act of 2009, which, among other things, provides for student protections and regulatory oversight of private postsecondary schools in the state. The act prohibits certain types of conduct by regulated institutions, including offering to compensate a student to act as an agent of the institution for the purposes of enrollment or recruitment of students, except as specified, and compensating an employee involved in recruitment and enrollment on the basis of commission, quota, bonus, or a similar method, also with exceptions. The act exempts certain institutions from compliance with the act upon the Bureau for Private Postsecondary Education’s verification that the institution is exempt.
This bill would define financial aid for the purposes of the act. The bill would prohibit an institution from providing, directly or indirectly, certain financial incentives to any person, including a student, involved engaged in student recruitment, enrollment, continued enrollment, admission, or attendance, or involved recruitment or admission activities, engaged in awarding of financial aid based on the enrollment of directly to a student, or engaged in the sales of any educational materials, by means of a commission, commission draw, bonus, quota, or other similar method contingent upon the recruitment, enrollment, continued enrollment, admissions, or attendance of a student, or financial aid or sales of educational materials to a student, as specified. The bill would exempt nonprofit, regionally accredited institutions that grant undergraduate or graduate degrees, or both, from the act. The bill would also make nonsubstantive changes. materials directly to a student, if that financial incentive is contingent upon quotas or the success of securing enrollments, admissions, awarding financial aid to a student, or sales of educational materials directly to a student.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 94841.2 is added to the Education Code, to read:

94841.2.
 “Financial aid” means any loan, grant, or award that is based on the enrollment of a student, provided by a federal or state government program, provided or arranged by the institution, or provided by or arranged by an entity to which the student was referred by the institution.

SEC. 2.Section 94874 of the Education Code is amended to read:
94874.

Except as provided in Sections 94874.2, 94874.7, and 94927.5, the following are exempt from this chapter:

(a)An institution that offers solely avocational or recreational educational programs.

(b)(1)An institution offering educational programs sponsored by a bona fide trade, business, professional, or fraternal organization, solely for that organization’s membership.

(2)(A)Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor management apprenticeship programs, that satisfies one of the following conditions:

(i)It is not on the Eligible Training Provider List established and maintained by the California Workforce Development Board but has met the requirements for placement on the list.

(ii)It is on the Eligible Training Provider List established and maintained by the California Workforce Development Board and meets the requirements for continued listing.

(B)If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Development Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.

(c)A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.

(d)An institution offering either of the following:

(1)Test preparation for examinations required for admission to a postsecondary educational institution.

(2)Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:

(A)A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.

(B)A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.

(C)A bona fide trade, business, or professional organization.

(e)(1)An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:

(A)The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of the Business and Professions Code.

(B)The diploma or degree is limited to evidence of completion of that education.

(2)An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.

(3)An institution operating under this subdivision shall not award degrees in any area of physical science.

(4)Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degree’s subject area.

(5)A degree awarded under this subdivision shall reflect the nature of the degree title, such as “associate of religious studies,” “bachelor of religious studies,” “master of divinity,” or “doctor of divinity.”

(f)An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its internet website, as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.

(g)A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.

(h)A nonprofit public benefit corporation that satisfies all of the following criteria:

(1)Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.

(2)Is organized specifically to provide workforce development or rehabilitation services.

(3)Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.

(i)An institution that is accredited by the WASC Senior College and University Commission, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.

(j)Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:

(1)The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.

(2)The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).

(k)(1)An institution owned, controlled, operated, and maintained by a community-based organization, as defined in Section 7801 of Title 20 of the United States Code, as that section exists on March 1, 2017, that satisfies all of the following criteria:

(A)The institution has programs on or is applying for some or all of their programs to be on the Eligible Training Provider List established and maintained by the California Workforce Development Board.

(B)The institution is registered as a nonprofit entity qualified under Section 501(c)(3) of the federal Internal Revenue Code.

(C)The institution does not offer degrees, as defined in Section 94830.

(D)The institution does not offer educational programs designed to lead directly or specifically to positions in a profession, occupation, trade, or career field requiring licensure, if bureau approval is required for the student to be eligible to sit for licensure.

(E)The institution would not otherwise be subject to oversight of the bureau under this chapter if it did not receive funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.). For purposes of this requirement, funds received through the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) do not count towards the total referenced in subdivision (f) or any other fee charge limitation condition for an exemption from this chapter.

(F)The institution can provide a letter from the local workforce development board that demonstrates the institution has met the initial criteria of that board.

(2)An institution granted an exemption pursuant to paragraph (1) shall comply with all of the following requirements:

(A)The institution shall provide to the Employment Development Department all required tracking information and data necessary to comply with performance reporting requirements under the federal Workforce Innovation and Opportunity Act, (29 U.S.C. Sec. 3101 et. seq.), for programs on the Eligible Training Provider List.

(B)The institution shall comply with the Eligible Training Provider List policy developed by the California Workforce Development Board.

(C)The institution shall not charge a student who is a recipient of funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) any institutional charges, as defined in Section 94844, for attending and participating in the program.

(l)An institution that meets all of the following criteria:

(1)Grants undergraduate degrees, graduate degrees, or both.

(2)Has been formed as a nonprofit corporation.

(3)Is accredited by a regional accreditation agency recognized by the United States Department of Education.

SEC. 3.SEC. 2.

 Section 94897 of the Education Code is amended to read:

94897.
 An institution shall not do any of the following:
(a) Use, or allow the use of, any reproduction or facsimile of the Great Seal of the State of California on a diploma.
(b) Promise or guarantee employment, or otherwise overstate the availability of jobs upon graduation.
(c) Advertise concerning job availability, degree of skill, or length of time required to learn a trade or skill unless the information is accurate and not misleading.
(d) Advertise, or indicate in promotional material, without including the fact that the educational programs are delivered by means of distance education if the educational programs are so delivered.
(e) Advertise, or indicate in promotional material, that the institution is accredited, unless the institution has been accredited by an accrediting agency.
(f) Solicit students for enrollment by causing an advertisement to be published in “help wanted” columns in a magazine, newspaper, or publication, or use “blind” advertising that fails to identify the institution.
(g) Pay any consideration to a person to induce that person to sign an enrollment agreement for an educational program.
(h) Use a name in any manner improperly implying any of the following:
(1) The institution is affiliated with any government agency, public or private corporation, agency, or association if it is not, in fact, thus affiliated.
(2) The institution is a public institution.
(3) The institution grants degrees, if the institution does not grant degrees.
(i) In any manner make an untrue or misleading change in, or untrue or misleading statement related to, a test score, grade or record of grades, attendance record, record indicating student completion, placement, employment, salaries, or financial information, including any of the following:
(1) A financial report filed with the bureau.
(2) Information or records relating to the student’s eligibility for student financial aid at the institution.
(3) Any other record or document required by this chapter or by the bureau.
(j) Willfully falsify, destroy, or conceal any document of record while that document of record is required to be maintained by this chapter.
(k) Use the terms “approval,” “approved,” “approval to operate,” or “approved to operate” without stating clearly and conspicuously that approval to operate means compliance with state standards as set forth in this chapter. If the bureau has granted an institution approval to operate, the institution may indicate that the institution is “licensed” or “licensed to operate,” but may not state or imply either of the following:
(1) The institution or its educational programs are endorsed or recommended by the state or by the bureau.
(2) The approval to operate indicates that the institution exceeds minimum state standards as set forth in this chapter.
(l) Direct any individual to perform an act that violates this chapter, to refrain from reporting unlawful conduct to the bureau or another government agency, or to engage in any unfair act to persuade a student not to complain to the bureau or another government agency.
(m) (1) Directly or indirectly compensate, or condition a contract or any benefit under a contract with, any of the following persons on the basis of a commission, commission draw, bonus, quota, or other similar method contingent upon recruitment, enrollment, continued enrollment, admissions, or attendance of, or financial aid or sales of educational materials to, a student: compensate or pay a bonus or other payment to any of the following persons, if that compensation or payment is contingent upon quotas or the success of securing enrollments, admissions, awarding financial aid to a student, or sales of educational materials directly to a student:
(A) A person involved engaged in student recruitment, enrollment, continued enrollment, admissions, or attendance. student recruitment or admission activities.
(B) A person involved engaged in awarding financial aid based on the enrollment of directly to a student.
(C) A person involved engaged in sales of any educational materials directly to a student.
(2) This subdivision shall not prohibit an institution from providing compensation or bonus compensation to an employee based on the number or percentage of students recruited by the employee who complete or graduate from a program in which the students were enrolled.

(n)For any of the persons described in subparagraphs (A) to (C), inclusive, of paragraph (1) of subdivision (m), condition employment contingent upon quotas or other similar metrics related to continued enrollment, admissions, attendance, financial aid, or sales of educational materials.

(n) Make employment contingent upon an employee meeting a quota of enrolling students, securing a specific amount of student financial aid, or selling educational materials directly to a student.
(o) Require a prospective student to provide personal contact information in order to obtain, from the institution’s internet website, educational program information that is required to be contained in the school catalog or any information required pursuant to the consumer information requirements of Title IV of the federal Higher Education Act of 1965, and any amendments thereto.
(p) Offer an associate, baccalaureate, master’s, or doctoral degree without disclosing to prospective students prior to enrollment whether the institution or the degree program is unaccredited and any known limitation of the degree, including, but not limited to, all of the following:
(1) Whether a graduate of the degree program will be eligible to sit for the applicable licensure exam in California and other states.
(2) A statement that reads: “A degree program that is unaccredited or a degree from an unaccredited institution is not recognized for some employment positions, including, but not limited to, positions with the State of California.”
(3) That a student enrolled in an unaccredited institution is not eligible for federal financial aid programs.