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SB-766 Private postsecondary education.(2021-2022)

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Date Published: 02/20/2021 04:00 AM


Senate Bill
No. 766

Introduced by Senator Eggman
(Principal coauthors: Assembly Members Berman, Chiu, Low, and McCarty)

February 19, 2021

An act to add Article 11.1 (commencing with Section 94914) to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, relating to private postsecondary education.


SB 766, as introduced, Eggman. Private postsecondary education.
The federal Higher Education Act of 1965 prohibits, as a condition of participating in federal student aid programs, a for-profit private postsecondary educational institution from deriving less than 10 percent of its revenues for each fiscal year from sources other than federal financial assistance, as defined. Under the federal act, if an institution fails to comply with the requirement for 2 consecutive fiscal years, it loses its eligibility to participate in federal financial assistance programs for at least two fiscal years. The California Private Postsecondary Education Act of 2009 provides for the regulation of private postsecondary educational institutions by the Bureau for Private Postsecondary Education in the Department of Consumer Affairs.
This bill would prohibit private postsecondary educational institutions, commencing with the 2023–24 academic year, from enrolling California residents if, pursuant to that federal law, for the previous 2 consecutive fiscal years or 2 out of the previous 3 fiscal years it derived less than 10 percent of its revenues from sources other than federal financial assistance.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


 Article 11.1 (commencing with Section 94914) is added to Chapter 8 of Part 59 of Division 10 of Title 3 of the Education Code, to read:
Article  11.1. 90/10 Rule

 (a) As used in this section, the following definitions apply:
(1) “Annual revenue” means the revenue generated during a fiscal year that can be included in its calculation related to compliance with 20 U.S.C. § 1094(a)(24).
(2) “Federal funds” means any federal financial assistance provided to an institution through a grant, a contract, a subsidy, a loan, a guarantee, an insurance policy, or any other means. It includes federal financial assistance that is disbursed to an institution under any federal law on behalf of a student to be used to attend the institution or school.
(3) “Federal Funds” does not include any monthly housing stipend provided under the federal Post-9/11 Veterans Educational Assistance Act of 2008.
(b) Commencing with the 2023–24 academic year, an institution shall not enroll California residents in any program if the institution meets one of the following:
(1) In two out of three of the immediately preceding fiscal years the institution fails to satisfy subdivision (c).
(2) For the previous two consecutive fiscal years the institution fails to satisfy subdivision (c).
(c) At least 10 percent of the institution’s annual revenue shall be from a source other than federal funds.
(d) The Bureau of Private Postsecondary Education shall adopt regulations necessary for implementing this section by January 1, 2023.