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General Information

Both the Private Postsecondary and Vocational Education Reform Act (Act), and the Bureau for Private Postsecondary and Vocational Education (Bureau) became inoperative on July 1, 2007. The Bureau is now closed.

To address the closure of the Bureau, the Legislature introduced 4 proposals. Two of the proposals, AB 1525 and SB 45, passed and were signed by the Governor. These bills are temporary solutions that provide very limited authority to the Department of Consumers and its oversight of private institutions. The two other bills, SB 843 and AB 1182, are intended to create a successor agency to regulate private institutions. These two bills are still pending in the Legislature. For more information about these bills, please see the Legislative Update.

Interim Solution – Current Law

On July 12, 2007, Governor Schwarzenegger signed AB 1525 (Cook), enacted as Chapter 67, Statutes of 2007, which took effect immediately.

A major provision of this chapter provided the Director of the Department of Consumer Affairs (Department) with the authority to enter into voluntary agreements with those institutions or non-WASC regionally accredited institutions that had, as of June 30, 2007, a valid approval to operate or authorization pursuant to Section 94905 of the California Education Code. These agreements state that the institutions agree to comply with state statutes, rules, and regulations in effect as of the close of business on June 30, 2007.

AB 1525 also provided that any matter pending before the Bureau as of the close of business on June 30, 2007, shall remain pending before the Bureau or a successor agency.

On October 13, 2007, Governor Schwarzenegger signed SB 45 (Senator Perata and Assembly Members Portantino and Cook). It was enacted as Chapter 635, Statutes of 2007, and took effect on January 1, 2008. This bill extends until July 1, 2008, the limited provisions of AB 1525.

SB 45 also extends until January 1, 2009, the approval of an institution that is necessary in order for a student to sit for a licensing examination. It also authorizes new institutions that were not approved by the Bureau prior to June 30, 2007, to enter into voluntary agreements with the Director of the Department of Consumer Affairs stating the school will comply with the law as it existed on June 30, 2007.

Also, any institution that is accredited by an accrediting agency recognized by the United States Department of Education that has entered into a voluntary agreement is authorized to modify a degree, diploma, or certificate program, to add or change a location, to change the institution's name, or undergo a change of ownership, provided the institution notifies the Department of Consumer Affairs, accompanied by documentation of the approval of that action by that institution's accrediting agency, if approval is required by the institution's accrediting agency.

Another provision authorizes the Board of Barbering and Cosmetology (Board) to approve a new school that has entered into a voluntary agreement if the school commenced operations between July 1, 2007, and December 31, 2008, provides a course of instruction approved by the Board, complies with all laws, rules and regulations applicable to schools approved by the Board, and obtains a license or approval from the Bureau or its successor agency no later than six months after the Bureau is reauthorized.

SB 45 also establishes a new Bureau for Private Postsecondary Education in the Department of Consumer Affairs. However, the Bureau cannot commence operations unless and until a statute is enacted that creates a new California Private Postsecondary Education Act that provides the functions and responsibilities of the Bureau.

When Governor Schwarzenegger signed SB 45, he stated in a letter to the Members of the California State Senate that the reason he signed SB 45 was "to address constitutional issues so that the Legislature can pass a new act, with urgency, in 2008 and, to allow legal actions filed prior to July 1, 2007 to still have a standing in the courts." In his signing letter, the Governor reiterated that a reform act must: (1) provide Californians with educational and vocational options in the private sector; (2) protect students from illegal, unscrupulous or unethical practices; (3) encourage students to make informed decisions; and (4) provide a streamlined approval process for schools.

A copy of the enacted legislation is available in it its entirety at www.leginfo.ca.gov/bilinfo.html.

Implementation of AB 1525 and SB 45

• Deems any institution, program, or course of study that is approved or authorized pursuant to Section 94905 of the Education Code as of June 30, 2007, to be approved as of July 1, 2008. This provision does not apply to any new institution, program, or course of study offered after, but not approved as of, June 30, 2007.
• Establishes that each matter pending before the Bureau as of June 30, 2007, will remain pending before the Bureau or a successor agency as of July 1, 2008. "Matter" includes an appeal, a complaint, an evaluation, a hearing, an investigation, or a Student Tuition Recovery Fund claim filed with the Bureau prior to July 1, 2007.
• Authorizes the Director of the Department of Consumer Affairs (Department) to enter into voluntary agreements from July 1, 2007 to July 1, 2008, with institutions that were approved as of June 30, 2007. As of January 1, 2008, the Director may enter into a voluntary agreement with a new institution that began operations after June 30, 2007. Each agreement states that the institution agrees to comply with state statutes, rules and regulations that were in effect as of June 30, 2007.
• Requires an approved institution to disclose to all of its current and prospective students whether it has agreed or declined to enter into a voluntary agreement with the Director.
• Requires an institution to remit to the Director any funds collected by an institution from its students on or before June 30, 2007 for the purpose of making payments to the Student Tuition Recovery Fund (STRF). From July 1, 2007 to July 1, 2008, an institution is not liable for payments to STRF and must not collect payments from its students for the purpose of making payments to the STRF. If any collections are made for an academic term within this period, the institution must refund the money to the student.
• Preserves, until July 1, 2008, any claim or cause of action based upon the Act that arose on or before June 30, 2007, whether or not reduced to a final judgment. The legislation also authorizes the continued availability of any legal remedy that was or could have been ordered to redress a violation of the Act on or before June 30, 2007.
• Permits institutions and instructors to retain their approvals or certificates of authorization for service (COAS) for specified purposes through January 1, 2009 (see Section 9 of SB 45.) The purpose of this provision is to assist affected state agencies whose programs contain licensing qualifications or other requirements that are dependent upon Bureau approval.

Voluntary Agreements

The Director has the authority to enter into a voluntary agreement with any institution that had a valid approval to operate as of June 30, 2007. As of January 1, 2008, the Director may enter into a voluntary agreement with any new institution that began operation after July 1, 2007.

The agreement requires an institution to comply with California statutes, rules and regulations pertaining to private postsecondary educational institutions or pertaining to non-WASC regionally accredited institutions (as defined in former Education Code section 94740.5) as they existed on June 30, 2007. A copy of the statutes, rules and regulations that were in effect as of June 30, 2007, can be obtained from the former Bureau's Web site at: http://www.bppve.ca.gov/reform_act/index.html

From June 30, 2007 until July 1, 2008, wherever in other laws there is a reference to an institution "approved by the Bureau for Private Postsecondary and Vocational Education," it means any institution that had an approval to operate prior to June 30, 2007 that has entered into and is complying with a voluntary agreement. This section does not apply to a new institution that began operation after June 30, 2007 and signs a voluntary agreement after January 1, 2008.

A voluntary agreement is available on the former Bureau's Web site (www.bppve.ca.gov), and posted on the Web site is a listing of institutions that were approved as of June 30, 2007, with an indication of whether or not the institution has signed an agreement with the Department. This list also includes any new institution that has signed an agreement, but because it is a new institution it will not have a school code.

An approved institution must disclose to all its current and prospective students whether it has or has not signed an agreement.

What happens if an institution that was approved prior to June 30, 2007 and signs the voluntary agreement, then wants to change its location? Change ownership? Wants to add a branch location? Add a program or course? Certify a new instructor?

The legislation does not require an institution to seek or maintain an approval for a change in location or ownership, or to add a new branch, program, or course, or certify a new instructor, to operate legally in California. Further, there is no authority for the Director to approve new institutions, changes of ownership, locations, programs or courses, or to certify new instructors after June 30, 2007. The agreement tendered acts only to demonstrate that the institution and its ownership, location, branches, satellites, and programs were approved as of June 30, 2007.

However, the recent enactment of SB 45 allows a new institution that began operation after June 30, 2007, to sign a voluntary agreement.

An institution that was approved by the Bureau prior to June 30, 2007, and is accredited by an accrediting agency recognized by the United States Department of Education, that has entered into a voluntary agreement is authorized to add or modify a degree, diploma, certificate, add or change a location, change or modify the institution's name, or undergo a change of ownership or control from July 1, 2007, to July 1, 2008, and thereafter, upon the filing of notice to the Department of Consumer Affairs, accompanied by documentation of the approval of that action by that institution's accrediting agency, if that approval is required by the institution's, accrediting agency. Send the notification to the former Bureau's address of P.O. Box 980818, West Sacramento, CA 95798-0818.

What happens if the institution was exempt from the licensing requirements under the prior Act? Do the "voluntary agreement" provisions in this legislation apply to such institutions?

Under the former Act, at Section 94739(b) of the Education Code, various schools were exempted from the State approval requirement. For example, for-profit and nonprofit schools accredited by the Western Association of Schools and Colleges (WASC) were exempted from State approval requirements. This legislation neither applies to nor changes the status of those exempt schools.

Do the provisions in this legislation impact non-WASC regionally accredited institutions?

Yes. This legislation applies to all institutions that were not exempt and had a valid approval to operate as of June 30, 2007, including non-WASC regionally accredited institutions approved pursuant to the provisions contained in former Section 94905 of the Education Code. Under the prior Act, "non-WASC regionally accredited institutions" were defined as institutions that were accredited by one of the following regional accrediting agencies: (1) Middle States Association of Colleges and Schools, Commission on Higher Education; (2) New England Association of Schools and Colleges, Commission on Institutions of Higher Education; (3) North Central Association of Colleges and Schools, the Higher Learning Commission; (4) Northwest Association of Schools and of Colleges and Universities, Commission on Colleges and Universities; and, (5) Southern Association of Colleges and Schools, Commission on Colleges.

Provisions Applicable to the Student Tuition Recovery Fund (STRF)

From July 1, 2007 to July 1, 2008, an institution is not liable for payments to the STRF and shall not collect payments from its students for the purpose of making payments to the STRF. If any collections are made for an academic term within this period, the institution must refund the money to the student.

Any funds collected by an institution from its students for the purpose of making payments to the STRF on or before June 30, 2007, must be remitted to the Director following receipt of the second quarter STRF assessment reporting forms.

Pending Applications, Temporary Approvals and Reapprovals

Any matter pending before the Bureau as of the close of business on June 30, 2007, shall remain pending before the Bureau or a successor agency as of July 1, 2008, irrespective of any applicable deadlines. If there is a deadline applicable to a pending matter, the law provides that no time shall have elapsed between July 1, 2007, and July 1, 2008. As a result, all pending applications and accompanying fees filed on or before June 30, 2007 have been retained by the Department, and the applications will be forwarded to any successor agency for handling.

Payment of Annual Fees, Filing of an Annual Report, Expired Reapprovals and Certificates of Authorization for Service (COAS)

During this time that the Bureau is closed and until such time that a successor agency is created, there is no requirement that annual fees be paid, that an annual report be filed and there is no authority for the submitting an application for reapproval of an institution or certificate of authorization for service that has expired or will expire. Do not send in any fees or applications.

Any approval of an institution and certification of authorization that was valid on June 30, 2007, will remain valid until July 1, 2008, or until legislation is passed and signed by the Governor creating a successor agency.