BILL NUMBER: AB 573 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 4, 2015
AMENDED IN SENATE AUGUST 31, 2015
AMENDED IN SENATE AUGUST 18, 2015
AMENDED IN SENATE JULY 9, 2015
AMENDED IN SENATE JUNE 2, 2015
AMENDED IN ASSEMBLY MAY 11, 2015
AMENDED IN ASSEMBLY MAY 7, 2015
AMENDED IN ASSEMBLY MAY 4, 2015
INTRODUCED BY Assembly Members Medina and McCarty
(Principal coauthor: Senator Block)
(Coauthors: Assembly Members Alejo, Atkins, Baker, Bonilla, Brown,
Calderon, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Eggman,
Frazier, Gipson, Hadley, Kim, O'Donnell, Olsen, Quirk, Ridley-Thomas,
Rodriguez, Santiago, Thurmond, and Ting)
(Coauthors: Senators Gaines, Galgiani, Hill, Runner, and
Wieckowski)
FEBRUARY 24, 2015
An act to amend Sections 76300, 94925, and 94926
Section 94925 of, to amend the heading
of Article 15 (commencing with Section 94926) of Chapter 8 of Part 59
of Division 10 of Title 3 of, and to add Sections
69433.61, 69999.19, 94051, and 94926.5 to, the Education Code,
relating to higher education, making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 573, as amended, Medina. Higher education: campus closures:
Corinthian Colleges.
(1) Existing law establishes the California Community Colleges
under the administration of the Board of Governors of the California
Community Colleges, and establishes community college districts
throughout the state that operate community colleges and provide
instruction to students. Existing law requires community college
districts to charge each student a fee of $46 per unit per semester.
Existing law requires the waiver of this fee for students meeting
prescribed requirements.
This bill would, until July 1, 2018, require the board of
governors to waive the fee for students who meet prescribed
requirements, were enrolled at a California campus of a Corinthian
Colleges, Inc., institution, and were either unable to complete an
educational program offered by the campus due to the campus's closure
on April 27, 2015, or withdrew from an educational program offered
by a Corinthian Colleges campus after the earlier of either (A) 120
days before the closure, or an earlier date as may determined by the
Bureau for Private Postsecondary Education, or (B) the date set by
the United States Department of Education for closed school loan
discharge eligibility, and have demonstrated financial need, as
determined by the enrolling campus. To the extent this provision
would impose additional duties on community college districts, it
would constitute a state-mandated local program.
(2) 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. The act requires an institution
subject to its provisions to follow certain requirements prior to
closing.
This bill would provide that, until January 1, 2020, the Governor
shall establish a single point of contact to respond to each closure
of an institution that does not comply with these closure and related
requirements prior to closing. The bill would require the single
point of contact to assist the students who were enrolled at, or in
an online program offered by, an institution that closes in, among
other things, receiving information on obtaining refunds, loan
discharges, and tuition recovery.
(3)
(1) 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. The act also
establishes the Student Tuition Recovery Fund and requires the bureau
to adopt regulations governing the administration and maintenance of
the fund, including requirements relating to assessments on students
and student claims against the fund, and establishes that the moneys
in this fund are continuously appropriated to the bureau for
specified purposes. The act caps the amount that may be in the fund
at any time at $25,000,000.
This bill would raise the cap for the fund to
$50,000,000. The bill would, upon the unlawful closure of an
institution, require the Attorney General, or a qualified entity
under contract with the Attorney General, to provide timely grant
funds to eligible nonprofit community service organizations, as
defined, to assist students of that institution with loan discharge
and other student loan-related requests and tuition recovery-related
claims, as specified. The bill would provide that the aggregate
amount of these grants and the reasonable administrative costs to the
Attorney General's office related to the grants would be made
available from the Student Tuition Recovery Fund, thereby making an
appropriation. $30,000,000.
(4)
(2) This bill would appropriate the sum of $1,300,000
from the Student Tuition Recovery Fund to the Bureau of
Private Postsecondary Education Attorney General
for the purposes of providing grants to eligible nonprofit community
service organizations to assist eligible students
affected by the closure of Corinthian Colleges, Inc., as defined,
with loan discharge and other student loan-related requests and
tuition recovery-related claims, and to pay an amount not to
exceed $150,000 for the reasonable administrative costs of the
Attorney General's office related to these grants, as specified,
thereby making an appropriation. The bill would require the
bureau to ensure that these grant funds are made available within 30
days of its enactment. The bill would require the
bureau to notify the Attorney General of all unlawful Corinthian
Colleges, Inc., closures within 15 days of the effective date of
these provisions. The bill would require the Attorney General to,
among other things, within 90 days of the notification,
solicit grant applications from eligible nonprofit community service
organizations, select one or more of these organizations deemed to be
qualified, and set additional terms and conditions of the grants as
necessary. The bill would set a schedule for how grant funds are to
be distributed. The bill would require the grantee to submit
specified information to the Attorney General on a quarterly basis,
and require the Attorney General to make these reports available to
the Legislature and the bureau upon request. The bill would require
the Attorney General to provide the Legislature and the bureau a
final report summarizing all the information submitted to it by
grantees, promptly following the time when all funds are expended by
the grantees, or by Au gust, 1, 2018, whichever is
earlier. The bill would authorize the Attorney General to contract
with another qualified entity to perform the Attorney General's
duties under these provisions.
(3) This bill would, for a period not to exceed 2 years from April
27, 2015, authorize state agencies that provide certification,
registration, or licensure necessary to promote the safety and
protection of the public to, on a case-by-case basis, consider for
certification, registration, or licensure students who were enrolled
in a program of Corinthian Colleges, Inc., that provided education or
training aimed towards these students receiving certification,
registration, or licensure from the state agency, and who did not
receive that certification, registration, or licensure due to the
closure of that institution.
(5)
(4) The Cal Grant Program prohibits an applicant from
receiving Cal Grant awards totaling in excess of the amount
equivalent to the award level for a total of four years of full-time
attendance in an undergraduate program, except as provided.
This bill would partially exempt from this limitation on Cal Grant
awards a student who was enrolled and received a Cal Grant award at
a California campus of Heald College, and who was unable to complete
an educational program offered by the campus due to its closure.
(6)
(5) The California National Guard Education Assistance
Award Program authorizes the renewal of California National Guard
Education Assistance Awards, for a maximum of the greater of either
four years of full-time equivalent enrollment or the duration for
which the qualifying member would otherwise be eligible pursuant to
the Cal Grant Program, if specified conditions are met.
This bill would partially exempt from this limitation on
California National Guard Education Assistance Awards a student who
was enrolled and received a California National Guard Education
Assistance Award at a California campus of Heald College, and who was
unable to complete an educational program offered by the campus due
to its closure.
(7) This bill would appropriate $100,000 from the General Fund to
the Chancellor of the California Community Colleges for allocation to
a community college district for the purpose of conducting a
statewide media campaign to inform students affected by the closure
of Corinthian Colleges, Inc., of the education opportunities
available at community colleges, thereby making an appropriation.
Funds appropriated by this bill to a community college district
would be applied toward the minimum funding requirements for school
districts and community college districts imposed by Section 8 of
Article XVI of the California Constitution.
(8) 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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
(9)
(6) This bill would declare that it is to take effect
immediately as an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) It is the intent of the
Legislature that the California Community Colleges shall utilize
available resources to provide matriculation services, including, but
not limited to, assessments, counseling, and academic planning, to
students who were enrolled at a California campus of a Corinthian
Colleges, Inc., institution, including Heald College, and California
students enrolled in one or more online programs offered by an
out-of-state campus of a Corinthian Colleges, Inc., institution who
were harmed by the closure of Corinthian Colleges, Inc., that took
place on April 27, 2015.
(b) (1) The sum of one hundred thousand dollars ($100,000) is
hereby appropriated from the General Fund to the Chancellor of the
California Community Colleges for allocation to a community college
district to conduct a statewide media campaign to inform students
affected by the closure of Corinthian Colleges, Inc., of education
opportunities available at community colleges.
(2) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, the funds appropriated
pursuant to this section shall be deemed to be "General Fund
revenues appropriated for community college districts," as defined in
subdivision (d) of Section 41202 of the Education Code, for the
2014-15 fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202 of the Education Code,
for the 2014-15 fiscal year.
SEC. 2. SECTION 1. It is the intent
of the Legislature that unencumbered restitution funds awarded to the
state from a lawsuit involving Corinthian Colleges, Inc., and its
affiliate institutions, including Heald College, shall be used to
repay any funds provided to those students
pursuant to this act.
SEC. 3. SEC. 2. Section 69433.61 is
added to the Education Code, to read:
69433.61. (a) Notwithstanding any other law, a student who was
enrolled and received a Cal Grant award in the 2013-14 or 2014-15
academic year at a California campus of Heald College, and was unable
to complete an educational program offered by the campus due to the
campus's campus ' closure on
April 27, 2015, shall not have the award years used at a Heald
College campus considered for purposes of the limitation on the
number of years of Cal Grant award eligibility. This restoration of
award years for Cal Grant eligibility shall not exceed two years.
(b) A student shall be eligible for the restoration of award
years if the student was enrolled at a campus of Heald College on
April 27, 2015, or withdrew from enrollment between July 1, 2014, and
April 27, 2015. The Bureau for Private Postsecondary Education shall
provide the commission with confirmation of
information, if available, to confirm student enrollment for
purposes of this section.
(c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award years
provided under this section and to enroll in an institution eligible
for initial and renewal Cal Grant awards to be eligible for that
restoration.
SEC. 4. SEC. 3. Section 69999.19 is
added to the Education Code, to read:
69999.19. (a) Notwithstanding any other law, a student who was
enrolled and received a California National Guard Education
Assistance Award in the 2013-14 or 2014-15 academic year at a
California campus of Heald College, and was unable to complete an
educational program offered by the campus due to the campus'
s campus ' closure on April 27, 2015,
shall not have the award years used at a Heald College campus
considered for purposes of the limitation on the number of years of
California National Guard Education Assistance Award eligibility.
This restoration of award years for California National Guard
Education Assistance Award eligibility shall not exceed two years.
(b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Heald College on April
27, 2015, or withdrew from enrollment between July 1, 2014, and April
27, 2015. The Bureau for Private Postsecondary Education shall
provide the commission with confirmation of
information, if available, to confirm student enrollment for
purposes of this section.
(c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award years
provided under this section and to enroll in an institution eligible
for initial and renewal California National Guard Education
Assistance Awards to be eligible for that restoration.
SEC. 5. Section 76300 of the Education Code is
amended to read:
76300. (a) The governing board of each community college district
shall charge each student a fee pursuant to this section.
(b) (1) The fee prescribed by this section shall be forty-six
dollars ($46) per unit per semester, effective with the summer term
of the 2012 calendar year.
(2) The board of governors shall proportionately adjust the amount
of the fee for term lengths based upon a quarter system, and also
shall proportionately adjust the amount of the fee for summer
sessions, intersessions, and other short-term courses. In making
these adjustments, the board of governors may round the per unit fee
and the per term or per session fee to the nearest dollar.
(c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750.5, the board of governors
shall subtract, from the total revenue owed to each district, 98
percent of the revenues received by districts from charging a fee
pursuant to this section.
(d) The board of governors shall reduce apportionments by up to 10
percent to any district that does not collect the fees prescribed by
this section.
(e) The fee requirement does not apply to any of the following:
(1) Students enrolled in the noncredit courses designated by
Section 84757.
(2) California State University or University of California
students enrolled in remedial classes provided by a community college
district on a campus of the University of California or a campus of
the California State University, for whom the district claims an
attendance apportionment pursuant to an agreement between the
district and the California State University or the University of
California.
(3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course,
including administrative costs, is paid by the public or private
agency, corporation, or association with which the district is
contracting and if these students are not included in the calculation
of the full-time equivalent students (FTES) of that district.
(f) The governing board of a community college district may exempt
special part-time students admitted pursuant to Section 76001 from
the fee requirement.
(g) (1) The fee requirements of this section shall be waived for
any student who meets all of the following requirements:
(A) Meets minimum academic and progress standards adopted by the
board of governors, which fulfill the requirements outlined in this
paragraph and paragraphs (2) to (5), inclusive. Any minimum academic
and progress standards adopted pursuant to this section shall be
uniform across all community college districts and campuses. These
standards shall not include a maximum unit cap, and community college
districts and colleges shall not impose requirements for fee waiver
eligibility other than the minimum academic and progress standards
adopted by the board of governors and the requirements of
subparagraph (B).
(B) Meets at least one of the following criteria:
(i) At the time of enrollment, is a recipient of benefits under
the Temporary Assistance for Needy Families program, the Supplemental
Security Income/State Supplementary Payment Program, or a general
assistance program.
(ii) Demonstrates eligibility according to income standards
established by regulations of the board of governors.
(iii) Demonstrates financial need in accordance with the
methodology set forth in federal law or regulation for determining
the expected family contribution of students seeking financial aid.
(iv) Was enrolled at a California campus of a Corinthian Colleges,
Inc., institution, was unable to complete an education program
offered by the campus due to the campus's closure on April 27, 2015,
and has demonstrated financial need, as determined by the enrolling
campus. This clause shall become inoperative on July 1, 2018.
(v) Was enrolled at a California campus of a Corinthian Colleges,
Inc., institution, withdrew from an education program offered by the
campus after the earlier of either (1) 120 days before the April 27,
2015, closure, or an earlier date as may be determined by the Bureau
for Private Postsecondary Education pursuant to Section 94923, or (2)
the date set by the United States Department of Education for closed
school loan discharge eligibility, and has demonstrated financial
need, as determined by the enrolling campus. This clause shall become
inoperative on July 1, 2018.
(2) (A) The board of governors, in consultation with students,
faculty, and other key stakeholders, shall consider all of the
following in the development and adoption of minimum academic and
progress standards pursuant to subparagraph (A) of paragraph (1):
(i) Minimum uniform academic and progress standards that do not
unfairly disadvantage financially needy students in pursuing their
education.
(ii) Criteria for reviewing extenuating circumstances and granting
appeals that, at a minimum, take into account and do not penalize a
student for circumstances outside his or her control, such as
reductions in student support services or changes to the economic
situation of the student.
(iii) A process for reestablishing fee waiver eligibility that
provides a student with a reasonable opportunity to continue or
resume his or her enrollment at a community college.
(B) To ensure that students are not unfairly impacted by the
requirements of subparagraph (A) of paragraph (1), the board of
governors shall establish a reasonable implementation period that
commences no sooner than one year from adoption of the minimum
academic and progress standards, or any subsequent changes to these
standards, pursuant to subparagraph (A) of paragraph (1) and that is
phased in to provide students adequate notification of this
requirement and information about available support resources.
(3) It is the intent of the Legislature that minimum academic and
progress standards adopted pursuant to subparagraph (A) of paragraph
(1) be implemented only as campuses develop and implement the student
support services and interventions necessary to ensure no
disproportionate impact to students based on ethnicity, gender,
disability, or socioeconomic status. The board of governors shall
consider the ability of community college districts to meet the
requirements of this paragraph before adopting minimum academic and
progress standards, or any subsequent changes to these standards,
pursuant to subparagraph (A) of paragraph (1).
(4) It is the intent of the Legislature to ensure that a student
shall not lose fee waiver eligibility without a community college
campus first demonstrating a reasonable effort to provide a student
with adequate notification and assistance in maintaining his or her
fee waiver eligibility. The board of governors shall adopt
regulations to implement this paragraph that ensure all of the
following:
(A) Students are provided information about the available student
support services to assist them in maintaining fee waiver
eligibility.
(B) Community college district policies and course catalogs
reflect the minimum academic and progress standards adopted pursuant
to subparagraph (A) of paragraph (1) and that appropriate notice is
provided to students before the policies are put into effect.
(C) A student does not lose fee waiver eligibility unless he or
she has not met minimum academic and progress standards adopted
pursuant to subparagraph (A) of paragraph (1) for a period of no less
than two consecutive academic terms.
(5) The board of governors shall provide notification of a
proposed action to adopt regulations pursuant to this subdivision to
the appropriate policy and fiscal committees of the Legislature in
accordance with the requirements of paragraph (1) of subdivision (a)
of Section 70901.5. This notification shall include, but not be
limited to, all of the following:
(A) The proposed minimum academic and progress standards and
information detailing how the requirements of paragraphs (1) to (4),
inclusive, have been or will be satisfied.
(B) How many students may lose fee waiver eligibility by
ethnicity, gender, disability, and, to the extent relevant data is
available, by socioeconomic status.
(C) The criteria for reviewing extenuating circumstances, granting
appeals, and reestablishing fee waiver eligibility pursuant to
paragraph (2).
(h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. "Active service of the state,"
for the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of the
Military and Veterans Code.
(i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.
(j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate program,
who is the dependent of any individual killed in the September 11,
2001, terrorist attacks on the World Trade Center and the Pentagon or
the crash of United Airlines Flight 93 in southwestern Pennsylvania,
if that dependent meets the financial need requirements set forth in
Section 69432.7 for the Cal Grant A Program and either of the
following applies:
(1) The dependent was a resident of California on September 11,
2001.
(2) The individual killed in the attacks was a resident of
California on September 11, 2001.
(k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 of Division 5 for determining
nonresident and resident tuition.
(l) (1) "Dependent," for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as a
result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV (commencing
with Section 401) of Public Law 107-42).
(2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.
(3) A dependent who is the surviving child, natural or adopted, of
an individual killed in the terrorist attacks of September 11, 2001,
is entitled to the waivers under subdivision (j) until that person
attains 30 years of age.
(4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board, is also
entitled to the waivers provided in this section until January 1,
2013.
(m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g) to
(j), inclusive.
(2) From funds provided in the annual Budget Act, the board of
governors shall allocate to community college districts, pursuant to
this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the board of governors shall allocate to
community college districts, pursuant to this subdivision, an amount
equal to ninety-one cents ($0.91) per credit unit waived pursuant to
subdivisions (g) to (j), inclusive. It is the intent of the
Legislature that funds provided pursuant to this subdivision be used
to support the determination of financial need and delivery of
student financial aid services, on the basis of the number of
students for whom fees are waived. It also is the intent of the
Legislature that the funds provided pursuant to this subdivision
directly offset mandated costs claimed by community college districts
pursuant to Commission on State Mandates consolidated Test Claims
99-TC-13 (Enrollment Fee Collection) and 00-TC-15 (Enrollment Fee
Waivers). Funds allocated to a community college district for
determination of financial need and delivery of student financial aid
services shall supplement, and shall not supplant, the level of
funds allocated for the administration of student financial aid
programs during the 1992-93 fiscal year.
(n) The board of governors shall adopt regulations implementing
this section.
(o) This section shall become operative on May 1, 2012, only if
subdivision (b) of Section 3.94 of the Budget Act of 2011 is
operative.
SEC. 6. SEC. 4. Section 94051 is
added to the Education Code, to read:
94051. Notwithstanding any provision of law, for a period not to
exceed two years from the date of the closure of Corinthian Colleges,
Inc., a state agency that provides certification, registration, or
licensure necessary to promote the safety and protection of the
public may, on a case-by-case basis, consider for certification,
registration, or licensure students who were enrolled in a program of
Corinthian Colleges, Inc., that provided education or training aimed
towards these students receiving certification, registration, or
licensure from the state agency, and who did not receive that
certification, registration, or licensure due to the closure of
Corinthian Colleges, Inc. This consideration shall be provided at the
discretion of the state agency in accordance with its public
protection mandate and applicable criteria established by the agency
for consumer safety.
SEC. 7. SEC. 5. Section 94925 of the
Education Code is amended to read:
94925. (a) The amount in the Student Tuition Recovery Fund shall
not exceed fifty thirty million dollars
($50,000,000) ($30,000,000) at any
time.
(b) If the bureau has temporarily stopped collecting the Student
Tuition Recovery Fund assessments because the fund has approached the
fifty thirty million dollar
($50,000,000) (30,000,000) limit in subdivision
(a), the bureau shall resume collecting Student Tuition Recovery Fund
assessments when the fund falls below forty
twenty million dollars ($40,000,000).
($20,000,000).
(c) An otherwise eligible student who enrolled during a period
when institutions were not required to collect Student Tuition
Recovery Fund assessments is eligible for Student Tuition Recovery
Fund payments despite not having paid any Student Tuition Recovery
Fund assessment.
SEC. 8. The heading of Article 15 (commencing
with Section 94926) of Chapter 8 of Part 59 of Division 10 of Title 3
of the Education Code is amended to read:
Article 15. Institutional Closure and Teach-outs
SEC. 9. Section 94926 of the Education Code is
amended to read:
94926. (a) At least 30 days prior to closing, the institution
shall notify the bureau in writing of its intention to close. The
notice shall be accompanied by a closure plan, which shall include,
but not necessarily be limited to, all of the following:
(1) A plan for providing teach-outs of educational programs,
including any agreements with any other postsecondary educational
institutions to provide teach-outs.
(2) If no teach-out plan is contemplated, or for students who do
not wish to participate in a teach-out, arrangements for making
refunds within 45 days from the date of closure, or for institutions
that participate in federal student financial aid programs
arrangements for making refunds and returning federal student
financial aid program funds.
(3) If the institution is a participant in federal student
financial aid programs, it shall provide students information
concerning these programs and institutional closures.
(4) A plan for the disposition of student records.
(b) Until January 1, 2020, the Governor shall establish a single
point of contact to respond to each closure of an institution that
does not comply with closure and related requirements established
under state and federal law. The goal of the point of contact shall
be to ensure that students who were enrolled at, or in an online
program offered by, an institution that has closed receive accurate
and timely information regarding the school closure process and the
students' rights and responsibilities under federal and state law.
The point of contact's primary duty shall be to advocate on behalf of
and represent the interest of California students who attended the
closed institutions; other duties shall include, but not necessarily
be limited to, all of the following:
(1) Coordinating and working in consultation with state and
federal agencies, including, but not limited to, the Bureau for
Private Postsecondary Education, the Student Aid Commission, the
Attorney General's Office, the Office of the Chancellor of the
California Community Colleges, the Department of Veterans Affairs,
the federal Consumer Financial Protection Bureau, and the United
States Department of Education to determine both of the following:
(A) Options and resources available to students.
(B) Criteria which indicate additional steps are necessary for
state agencies to take to ensure the protection of the public from
school closures.
(2) Establishing and maintaining an Internet Web site to provide
information to students about options available in the event of a
school closure, including information necessary to help a student
make an informed decision about whether to seek a loan discharge or
to transfer credits. The Internet Web site shall list the names of
institutions that are on the United States Department of Education's
list for heightened cash monitoring.
(3) Assisting students in obtaining important documentation from a
closed institution, including, but not limited to, their enrollment
agreements, records, transcripts, and loan information.
(c) (1) For unlawful closures of large institutions regarding
which the Attorney General has a pending investigation or ongoing
litigation, consideration should be given to establishing the single
point of contact within the Attorney General's office.
(2) The Legislature finds that the Attorney General's office has
expertise in complex legal situations such as those facing students
impacted by the sudden and abrupt closure of their educational
institutions and has established an online tool for students to
receive a personalized resource sheet regarding the types of relief
available to them.
(3) The Legislature finds that the Attorney General's office
is situated to continue playing a central role in the effort to
assist students of an institution that has unlawfully closed.
(4) This subdivision shall not be construed to authorize the
Attorney General's office to breach any of its responsibilities or to
provide individual legal assistance or representation to students of
an institution that has closed. If the single point of contact is
established within the Attorney General's office, the
responsibilities of the single point of contact shall be separate and
distinct from the office's efforts to uphold state law, represent
state agencies, and undertake related actions.
SEC. 10. SEC. 6. Section 94926.5 is
added to the Education Code, to read:
94926.5. (a) The Legislature finds and declares all of the
following:
(1) Corinthian Colleges, Inc., has been the target of consumer and
taxpayer protection enforcement efforts by the federal government,
the Attorney General, and other state and federal authorities.
(2) Based on findings of harm to students enrolled at Corinthian
Colleges, Inc., campuses, the United States Department of Education
has announced debt relief programs to assist students, including all
of the following:
(A) A student who attended a Corinthian Colleges, Inc., campus
that closed on April 27, 2015, and withdrew any time after June 20,
2014, is eligible to apply for a closed school loan discharge, so
long as the student does not transfer earned credit and subsequently
complete a comparable program at another institution.
(B) A student who believes he or she was a victim of fraud or
other violations of state law by Corinthian Colleges, Inc., can apply
for debt relief under borrower defense to repayment. The United
States Department of Education has determined that Corinthian
Colleges, Inc., misrepresented job placement rates for a majority of
programs at its Heald College campuses between 2010 and 2014 and is
in the process of establishing a specific process for federal loan
discharge for these Heald students.
(C) A Corinthian student who intends to submit a borrower defense
claim may request loan forbearance while a claims review process is
established and his or her claim is reviewed.
(3) Pursuant to Section 94923, the Student Tuition Recovery Fund
exists to relieve or mitigate a student's economic loss caused by a
documented violation of certain laws or by institutional closure, as
specified.
(4) On October 10, 2013, the Attorney General filed a lawsuit
against Corinthian Colleges, Inc., for false and predatory
advertising, intentional misrepresentations to students, securities
fraud, and unlawful use of military seals in advertisements, in
violation of the 2007 final judgment of the Los Angeles Superior
Court in the People of the State of California v. Corinthian Schools,
Inc.
(5) On April 16, 2015, the bureau issued an emergency decision
ordering Corinthian Colleges, Inc., to cease enrollment of any new
students in all programs at Everest College and WyoTech locations in
California effective upon close of business April 23, 2015.
(6) It is consistent with the purpose of the Student Tuition
Recovery Fund to provide assistance to Corinthian Colleges, Inc.,
students to obtain federal and private loan discharge and other
financial aid relief.
(b) Upon appropriation by the
Legislature, in response to the student
harm caused by the practices and unlawful closure of
an institution, Corinthian Colleges, Inc.,
grant funds shall be timely provided in accordance with this
section to eligible nonprofit community service
organizations, including, but not limited to, legal aid organizations
and organizations offering free services for counseling on student
financial aid and loan debt problems, organizations,
to assist the eligible students of that closed
institution, including veterans, for no less than one year
following the closure of the institution, by relieving or
mitigating the economic and educational opportunity loss
associated with the closure of the incurred by
eligible students of that institution. Services
(c) Services provided by eligible
nonprofit community services organizations shall include assistance
with loan discharge and other student financial aid, veterans
education benefits, loan-related relief, and tuition recovery-related
claims. Assistance may include, but is not limited to, outreach and
education, screening requests for assistance, referring students for
additional legal assistance through pro bono referral programs, and
legal services. The
(d) The terms and conditions of
the grant funds may permit recipients to use excess grant
funds to provide assistance to other clients related to school
closure or student debt.For agreements shall ensure
that grant funds are used for the exclusive purpose of assisting
eligible students with federal and private loan discharge and other
financial aid relief, and that students eligible to claim recovery
through the Student Tuition Recovery Fund are referred to the bureau
for assistance with claim processing.
(e) For purposes of this section,
an "eligible nonprofit community service organization" is an
organization that satisfies all of the following conditions:
(1) The organization is a 501(c)(3) tax-exempt organization in
good standing with the Internal Revenue Service and in compliance
with all applicable laws and requirements.
(2) The organization demonstrates expertise in assisting students
with, and currently provides free direct legal services to students
for, or will work in partnership with or under the supervision of an
attorney or a nonprofit legal services organization that has
demonstrated expertise in assisting students with, student loan and
tuition recovery-related matters.
(3) The organization does not charge students for services,
including services provided pursuant to this section.
(b) (1) The aggregate amount of these grant funds, which shall be
made available from the Student Tuition Recovery Fund, shall be
calculated by multiplying the number of students affected by the
institution's closure by one hundred dollars ($100).
(2) The reasonable administrative costs of the Attorney General's
office pursuant to this section shall be made available from the
Student Tuition Recovery Fund.
(f) For purposes of this section, an "eligible student" is a
student who was enrolled at a California campus of, or a California
student who was enrolled in an online campus of, a Corinthian
Colleges, Inc., institution, and who is eligible to apply for debt
relief from the United States Department of Education or other
student financial aid relief.
(c)
(g) (1) The bureau shall notify the Attorney General of
all unlawful school Corinthian Colleges,
Inc., closures within 15 days of the closure.
effective date of this section.
(2) The notification shall include the name and location of the
school, the programs, and the number of students affected at each
site of the school, as appropriate. The bureau shall provide the
Attorney General with all additional information that the Attorney
General may request. request, provided that
the bureau has access to the requested information.
(3) The Attorney General shall, within 90 days of receipt of the
notification, solicit grant applications from eligible nonprofit
community service organizations as described in subdivision
(a), (e), select one or more of these
organizations from among the applicants who are deemed to be
qualified by the Attorney General, set additional terms and
conditions of the grants as necessary, and notify the bureau and the
recipient organization or organizations of the selection.
selection and the share of grant funds available that
the organization shall recei ve. The Attorney
General may enter into a contract with another qualified entity to
perform the Attorney General's duties under this subdivision.
(d)
(h) An eligible nonprofit community service
organization that receives funds pursuant to this section shall enter
into a grant agreement with the Attorney General, or a qualified
entity entrusted with this authority pursuant to paragraph (3) of
subdivision (c), (g), as applicable,
and shall use grant funds exclusively for the purposes set forth in
this section in accordance with the agreement. Any unused funds shall
be returned to the Attorney General unless the parties of
the agreement enter into a new agreement authorizing the organization
to expend the unused funds. General, for return to
the Student Tuition Recovery Fund. The Attorney General, or a
contracted qualified entity, may terminate the grant
agreement for material breach. breach,
and may require repayment of fund s provided to the
nonprofit community service organization during the time that the
agreement was being materially breached. However, the Attorney
General, or a qualified entity, shall provide the grantee with
written notice of the breach and a reasonable opportunity of not less
than 30 days to resolve the breach.
(e)
(i) An eligible nonprofit community service
organization that receives a grant may give priority to low-income
students if demand exceeds available grant funds. Otherwise, the
organization may provide assistance regardless of student income
level.
(f)
(j) (1) An eligible nonprofit
community service organization that receives a grant shall report to
the Attorney General, or a qualified entity pursuant to paragraph (3)
of subdivision (c), (g), as
applicable, quarterly through the grant period on the number
of students served from the date funds are distributed.
all of the following:
(A) The number of eligible students served pursuant to the grant
agreement.
(B) A detailed summary of services provided to those students.
(C) The number of Student Tuition Recovery Fund claims referred to
the bureau.
(D) The number of federal loan forgiveness claims filed and the
number of those claims approved, denied, and pending.
(E) Any other information that is deemed appropriate by the
Attorney General or qualified entity, as applicable.
(2) The Attorney General or qualified entity, as applicable, shall
make the reports submitted pursuant to paragraph (1) available to
the Legislature and the bureau upon request.
(3) The Attorney General or qualified entity, as applicable, shall
provide the Legislature and the bureau a final report summarizing
the information submitted pursuant to paragraph (1) promptly
following the time when all funds are expended by the grantees or by
August 1, 2018, whichever is earlier.
(g)
(k) Funds shall be distributed to preapproved nonprofit
community service organizations as follows:
(1) For a school closure involving fewer than 250 students, 100
percent of the grant funds shall be distributed within 30 days of the
grantee entering into a grant agreement.
(2) For a school closure involving 250 or more students:
(A)
(1) Fifty percent shall be distributed to the
grantee within 30 days of the grantee entering into a grant
agreement.
(B)
(2) Twenty-five percent shall be distributed to
the grantee upon the submission of the grantee's second
quarterly report.
(C)
(3) Twenty-five percent shall be distributed to
the grantee upon the submission of the grantee's third
quarterly report.
(l) Eligible nonprofit community service organizations may use
grant funds received pursuant to this section to pay the costs of
assisting eligible students who have been served after the date of
closure until June 30, 2018, or until any later date as may be
determined necessary by the Attorney General.
(m) The adoption of any regulation pursuant to this section shall
be deemed to be an emergency and necessary for the immediate
preservation of the public health and safety, or general welfare.
SEC. 11. SEC. 7. (a) The sum of one
million three hundred thousand dollars ($1,300,000) is hereby
appropriated from the Student Tuition Recovery Fund to the
Bureau of Private Postsecondary Education Attorney
General for the purposes of providing grants to
eligible nonprofit community service organizations to assist eligible
students affected by the closure of Corinthian Colleges, Inc.,
pursuant to Section 94926.5 of the Education Code,
and to pay an amount not to exceed one hundred fifty
thousand dollars ($150,000) for the reasonable administrative
costs of the Attorney General's office related to these
grants, as provided in subdivision (b). Eligible nonprofit community
service organizations may use grant funds received pursuant to this
section for affected students who have been served from the date of
closure. grants.
(b) Grants shall be issued consistent with the procedures
specified in Section 94926.5 of the Education Code, except that the
Bureau of Private Postsecondary Education shall ensure that these
grant funds are made available within 30 days of the enactment of
this section.
(c) The adoption of any regulation pursuant to this section shall
be deemed to be an emergency and necessary for the immediate
preservation of the public, health, and safety, or general welfare.
(d) For purposes of this section the following definitions shall
apply:
(1) "Eligible nonprofit community service organization" shall have
the same meaning as specified in subdivision (a) of Section 94926.5
of the Education Code.
(2) "Eligible students affected by the closure of Corinthian
Colleges, Inc." means either of the following:
(A) A student who was enrolled at a California campus of a
Corinthian Colleges, Inc., institution and was unable to complete an
education program offered by the campus due to the campus's closure
on April 27, 2015.
(B) A student who was enrolled at a California campus of a
Corinthian Colleges, Inc., institution and withdrew from an education
program offered by the campus after the earlier of either (i) 120
days before the April 27, 2015, closure, or an earlier date as may be
determined by the Bureau for Private Postsecondary Education
pursuant to Section 94923, or (ii) the date set by the United States
Department of Education for closed school loan discharge eligibility.
SEC. 12. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SEC. 13. SEC. 8. This act is an
urgency statute necessary for the immediate preservation of the
public peace, health, or safety within the meaning of Article IV of
the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order to provide immediate educational and economic relief to
the thousands of students harmed by the closure of Corinthian
Colleges, Inc., it is necessary for this act to take effect
immediately.