Private postsecondary education: California Private Postsecondary Education Act of 2009.

(1) Existing law establishes the California Private Postsecondary Education Act of 2009, which provides for student protections and regulatory oversight of private postsecondary educational institutions, as defined, in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. Existing law, among other things, requires an out-of-state private postsecondary educational institution, as defined, to comply with specified requirements, including, among others, providing the bureau with certain information required for initial registration. This bill would exempt from this requirement a higher education institution that does not award degrees and that solely provides educational programs for total charges of $2,500 or less when no part of the total charges is paid from state or federal student financial aid programs, as specified. The bill would authorize the bureau to establish through regulation thresholds of California-based activity that constitute limited physical presence, with those institutions subject to registration requirements defined through regulation, as provided. (2) The act exempts specified private postsecondary educational institutions from all, or a portion of, its provisions, but requires those institutions that are subject to its provisions to apply for and obtain an approval to operate, as specified. Existing law defines "to operate" as establishing, keeping, or maintaining any facility or location in this state where, or from which, or through which, postsecondary educational programs are provided. Existing law requires prior authorization for certain changes to an approval to operate, including, among others, a change in ownership. This bill would also include in the definition of "to operate" enrolling California residents in postsecondary educational programs in an institution based outside of California via distance education. The bill would authorize the bureau to deny an application for an approval to operate institutions that would be owned by, have persons in control of, or employ institution managers that had knowledge of, should have known, or knowingly participated in any conduct that was the cause for revocation or unmitigated discipline at another institution. The bill would additionally require prior bureau authorization for a change of the person in control, as defined. The bill would authorize an institution that qualifies as a public institution of higher education, that is operated by another state, and that maintains a physical presence in this state to apply for an approval to operate from the bureau, as provided. (3) The act requires, except as provided, institutions covered by the act that offer a degree to receive accreditation by an accreditation agency recognized by the United States Department of Education or have an accreditation plan, approved by the bureau, for the institution to become fully accredited within 5 years of the bureau's issuance of a provisional approval to operate to the institution, as specified. For institutions that are approved by means of accreditation and accredited by an agency that loses recognition by the United States Department of Education, this bill would require an application for approval to operate an institution unaccredited to be submitted to the bureau within 6 months of the agency's loss of recognition, as provided. When an institution offering at least one degree program has ceased to be accredited by an accrediting agency recognized by the United States Department of Education, the bill would require the institution to notify the bureau immediately, and would require the institution's approval to operate degree programs to become provisional as of the date that the institution ceases to be accredited, as provided. The bill would require an institution with a provisional approval to operate degree programs to, among other things, submit an accreditation plan, to be approved by the bureau, for the institution to become fully accredited within 5 years of the date of its provisional approval to operate degree programs, as specified. (4) Existing law prohibits an institution that is subject to the act from, among other things, promising or guaranteeing employment, or otherwise overstating the availability of jobs upon graduation. This bill would additionally prohibit these institutions from, among other things, committing fraud against, or making a material untrue or misleading statement to, a student or prospective student under the institution's authority or the pretense or appearance of the institution's authority. The bill would prohibit a prospective, current, or former student or employee from signing a nondisclosure agreement pertaining to their relationship to, or experience with, the institution, but would authorize an institution to use a nondisclosure agreement to protect the institution's intellectual property and trade secrets. The bill would specify that a nondisclosure agreement that violates the prohibition is void and not enforceable. (5) If an institution offers an educational program in a profession, occupation, trade, or career field that requires licensure in this state, existing law requires the institution to have an educational program approval from the appropriate state licensing agency to conduct that educational program in order that a student who completes the educational program, except as provided, is eligible to sit for any required licensure examination. This bill would require an institution offering an educational program requiring approval from another licensing agency in this state that subsequently loses that approval to have their approval to operate the program automatically suspended by the bureau. The bill would require the institution to notify the bureau within 10 days of its loss of approval and to cease offering the program within 30 days of the loss of the approval, except as specified. (6) Under existing law, a note, instrument, or other evidence of indebtedness relating to payment for an educational program is not enforceable by an institution unless, at the time of execution of the note, instrument, or other evidence of indebtedness, the institution held an approval to operate. This bill instead would make a note, instrument, or other evidence of indebtedness relating to payment for an educational program void and not enforceable unless, at the time of execution of the note, instrument, or other evidence of indebtedness, the institution held an approval to operate or a valid out-of-state registration with the bureau, as provided. (7) Existing law requires an institution to notify the bureau in writing of its intention to close at least 30 days before closing and requires the notice to be accompanied by a closure plan, as specified. The bill would automatically terminate an institution's approval to operate on the date of closure or when the bureau verifies its exemption from the act. The bill would require the bureau to select a date of closure when an institution does not identify a date of closure. The bill would prohibit a terminated license from being reinstated. (8) The act requires the bureau to investigate and conduct site inspections of institutions, as provided. If the bureau finds after an investigation that an institution has violated the act or the bureau's regulations, existing law requires the bureau to issue a citation to the institution, and to take other actions, including providing the institution with the opportunity to remedy noncompliance or revoking the institution's approval to operate, as the bureau deems appropriate based on the severity of the institution's violations, and the harm caused to students. The act authorizes the bureau to include an order to compensate students for harm in a citation. This bill would instead authorize the bureau to include in a citation to an institution an order to compensate students for harm that resulted or may have resulted from an institution's violations. The bill would also require the bureau to take those other enforcement actions as the bureau deems appropriate based on the severity of the institution's violations, and the harm that results or may result to students from the institution's violations. Existing law requires bureau staff who, during an inspection of an institution, detect a violation of the act or regulations adopted pursuant to the act, that are a minor violation as determined by the bureau, to issue a notice to comply before leaving the institution. Existing law prohibits issuing a notice to comply for any minor violation that is corrected immediately in the presence of bureau staff. This bill instead would require bureau staff to issue the notice to comply at the conclusion of the inspection and would prohibit issuing a notice to comply for any minor violation that is corrected before the conclusion of the inspection. (9) Existing law requires the bureau to cite any person, and subjects that person to a fine of up to $100,000, for operating an institution without proper approval to operate issued by the bureau. This bill would specify that the maximum fine for unlicensed activity is separate and does not include fines for other violations or refunds ordered. (10) The act establishes the Student Tuition Recovery Fund, requires the bureau to adopt regulations governing the administration and maintenance of the fund, and continuously appropriates moneys in the fund to the bureau for specified purposes. Existing law repeals the act on January 1, 2023. This bill would extend the act until January 1, 2027. By extending the operation of a continuously appropriated fund, the bill would make an appropriation. (11) Under existing law, the act specifies conduct by regulated institutions that, if undertaken, is a crime. Because this bill would extend the application of those criminal provisions, it would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.