Amended in Senate June 2, 2015

Amended in Assembly May 11, 2015

Amended in Assembly May 7, 2015

Amended in Assembly May 4, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 573

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, begin insert Hadley, end insert Kim, O’Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Santiago, begin delete and Thurmond end delete begin insert Thurmond, and Ting end insert )

begin insert

(Coauthors: Senators Gaines and Galgiani)

end insert

February 24, 2015

An act to amend Sections 76300, 94923, and 94925 of, and to add Sections 69433.61 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 begin insert Corinthian Colleges end insert campus within 120 begin delete days, or a greater period determined by the Bureau for Private Postsecondary Education, of the campus’s closure on April 27, 2015. end delete begin insert days of that date. end insert 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 begin delete 2009, end delete begin insert 2009 end insert 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 require the bureau to establish a standing task force to respond to the closure of institutions that do not comply with these requirements prior to closing. The bill would require the task force to assist the students who were enrolled at, or in an online program offered by, an institution that closes in, among other things, obtaining refunds, loan discharges, and tuition recovery. The bill would, upon the unlawful closure of an institution, require the bureau to provide timely grant funds to local legal aid organizations to assist students of that institution with loan discharge begin insert and other student loan- end insert begin insert related end insert requests and tuition recovery related claims, as specified.

(3) This bill would appropriate the sum of $1,300,000 from the Private Postsecondary Education Administration Fund to the Bureau of Private Postsecondary Education for the purposes of providing financial grants to legal aid organizations, as described above, for students affected by the closure of begin delete Corinthians end delete begin insert Corinthian end insert Colleges, Inc., as specified, thereby making an appropriation.

(4) 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 deem a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution, or a California student who was enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, to be eligible for recovery from the fund under specified circumstances. By expanding the purpose for which moneys in the Student Tuition Recovery Fund may be used, this bill would make an appropriation. The bill would raise the cap for the fund to $50,000,000.

(5) 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 begin insert partially end insert exempt from this limitation on Cal Grant awards a student who was enrolled and received a Cal Grant award at a California campus of a Corinthian Colleges, Inc., institution, and who was unable to complete an educational program offered by the campus due to its closure.

(6) 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.

(7) 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.

(8) 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.

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 begin delete planning to a student end delete
begin insert planning, to students end insert who begin delete was end delete begin insert were end insert enrolled at a California campus
of a Corinthian Colleges, Inc., institution, including Heald College,
begin delete or was a end delete begin insert and end insert California begin delete student end delete begin insert students end insert enrolled in one or more
online programs offered by an out-of-state campus of a Corinthian
Colleges, Inc., institution begin delete and was end delete begin insert who were end insert 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.  

It is the intent of the Legislature that unencumbered
restitution funds awarded to the begin delete students of the state, who received
funds pursuant to Section 5 of this act, end delete begin insert state end insert from a lawsuit
involving Corinthian Colleges, begin delete Inc. end delete begin insert Inc., end insert and its affiliate
institutions, including Heald College, shall be used to repay any
funds provided to those students pursuant to begin delete Section 5 of end delete this act.

SEC. 3.  

Section 69433.61 is added to the Education Code, to
read:

69433.61.  

begin insert (a) end insert begin insert   end insert Notwithstanding any other law, a student who
was enrolled and received a Cal Grant award begin insert in the 2013-14 or
2014-15 academic year end insert at a California campus of a Corinthian
Colleges, Inc., institution, including Heald College, and was unable
to complete an educational program offered by the campus due to
the campus’s closure on April 27, 2015, shall not have the award
years used at a Corinthian Colleges, Inc., campus considered for
purposes of the limitation on the number of years of Cal Grant
award eligibility. begin insert This restoration of award years for Cal Grant
eligibility shall not exceed two years. end insert

begin insert

(b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Corinthian Colleges
Inc., on April 27, 2015, or had withdrawn from enrollment within
120 days of that date. The Bureau for Private Postsecondary
Education shall provide the commission with confirmation of
student enrollment for purposes of this section.

end insert begin insert

(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.

end insert

SEC. 4.  

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, begin delete Inc. end delete begin insert Inc., end insert institution and was unable to complete an
education program offered by the campus due to the campus’s
closure on April 27, 2015. This clause shall become inoperative
on July 1, 2018.

(v) Was enrolled at a California campus of a Corinthian
Colleges, begin delete Inc. end delete begin insert Inc., end insert institution and withdrew from an education
program offered by the campus within 120 days, or a greater period
determined by the Bureau for Private Postsecondary Education
pursuant to Section 94923, of the campus’s closure on April 27,
2015. 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. 5.  

Section 94923 of the Education Code is amended to
read:

94923.  

(a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
educational program, as defined in Section 94837, at an institution
not exempt from this article pursuant to Article 4 (commencing
with Section 94874), who, at the time of his or her enrollment,
was a California resident or was enrolled in a California residency
program, prepaid tuition, and suffered economic loss.

(b) The bureau shall adopt by regulation procedures governing
the administration and maintenance of the Student Tuition
Recovery Fund, including requirements relating to assessments
on students and student claims against the Student Tuition
Recovery Fund. The regulations shall provide for awards to
students who suffer economic loss.

The regulations shall ensure that the following students, and any
other students deemed appropriate, are eligible for payment from
the Student Tuition Recovery Fund:

(1) Any student who was enrolled at an institution, at a location
of the institution, or in an educational program offered by the
institution, at the time that institution, location, or program was
closed or discontinued, as applicable, who did not choose to
participate in a teach-out plan approved by the bureau or did not
complete a chosen teach-out plan approved by the bureau.

(2) Any student who was enrolled at an institution or a location
of the institution within the 120-day period before the closure of
the institution or location of the institution, or who was enrolled
in an educational program within the 120-day period before the
program was discontinued, if the bureau determines there was a
significant decline in the quality or value of that educational
program during that time period.

(3) Any student who was enrolled at an institution or a location
of the institution more than 120 days before the closure of the
institution or location of the institution, in an educational program
offered by the institution as to which the bureau determines there
was a significant decline in the quality or value of the program
more than 120 days before closure.

(4) A student to whom an institution has been ordered to pay a
refund by the bureau but has failed to do so.

(5) A student to whom an institution has failed to pay or
reimburse loan proceeds under a federal student loan program as
required by law, or has failed to pay or reimburse proceeds received
by the institution in excess of tuition and other costs.

(6) A student who has been awarded restitution, a refund, or
other monetary award by an arbitrator or court, based on a violation
of this chapter by an institution or representative of an institution,
but who has been unable to collect the award from the institution.
The bureau shall review the award or judgment and shall ensure
the amount to be paid from the fund does not exceed the student’s
economic loss.

(7) Notwithstanding the requirement of subdivision (a) that the
institution not be exempt from this article, a student who was
enrolled at a California campus of a Corinthian Colleges, Inc.,
institution or was a California student enrolled in an online program
offered by an out-of-state campus of a Corinthian Colleges, Inc.,
institution, who also meets all of the other eligibility requirements,
if the student was enrolled as of April 26, 2015, or withdrew within
120 days of that date or any greater period determined by the
bureau pursuant to this section.

(c) Any student who is required to pay a Student Tuition
Recovery Fund assessment who pays tuition equal to or greater
than the required assessment shall be deemed to have paid the
required assessment, whether or not his or her enrollment
agreement specifies collection of the required assessment, and
whether or not the institution identifies any money collected from
the student as a Student Tuition Recovery Fund assessment.

(d) The bureau shall establish regulations ensuring, as
permissible under California law, that a student who suffers
educational opportunity losses, whose charges are paid by a
third-party payer, is eligible for educational credits under the fund.

(e) The bureau may seek repayment to the Student Tuition
Recovery Fund from an institution found in violation of the law
for which a student claim was paid. An institution shall not be
eligible to renew its approval to operate with the bureau if the
repayment is not made to the bureau as requested.

(f) The bureau shall, by regulation, define “economic loss.” The
regulation shall ensure that the definition of “economic loss”
includes, but is not necessarily limited to, pecuniary loss, which
is the sum of the student’s tuition, all other institutional charges
as defined in Section 94844, the cost of equipment and materials
required for the educational program as defined in Section 94837,
interest on any student loan used to pay for such charges, collection
costs, penalties, and any license or examination fees the student
paid to the institution but is unable to recover. Economic loss shall
also include the amount the institution collected and failed to pay
to third parties on behalf of the student for license fees or any other
purpose. Economic loss does not include Student Tuition Recovery
Fund assessments, unless the student is entitled to a full refund
under Section 94919 or 94920, room and board, supplies,
transportation, application fees, or nonpecuniary damages such as
inconvenience, aggravation, emotional distress, or punitive
damages. Economic loss does not include legal fees, attorney fees,
court costs, or arbitration fees. Nothing in this subdivision shall
prevent the bureau from further defining economic loss to include
loss of educational opportunity.

SEC. 6.  

Section 94925 of the Education Code is amended to
read:

94925.  

(a) The amount in the Student Tuition Recovery Fund
shall not exceed fifty million dollars ($50,000,000) at any time.

(b) If the bureau has temporarily stopped collecting the Student
Tuition Recovery Fund assessments because the fund has
approached the fifty million dollar begin insert ($50,000,000) end insert limit in
subdivision (a), the bureau shall resume collecting Student Tuition
Recovery Fund assessments when the fund falls below forty-five
million dollars ($45,000,000).

(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.

(d) A student who is eligible for recovery from the Student
Tuition Recovery Fund pursuant to paragraph (7) of subdivision
(b) of Section 94923 shall be eligible for payments despite not
having paid any Student Tuition Recovery Fund assessment.

SEC. 7.  

Section 94926.5 is added to the Education Code, to
read:

94926.5.  

(a) (1) The bureau shall establish and coordinate a
standing closed school task force to respond to the closure of
institutions that do not comply with the requirements, as applicable,
of this article. The task force shall ensure that students who were
enrolled at, or in an online program offered by, the institution
receive accurate and timely information regarding the school
closure process and the students’ rights and responsibilities under
federal and state law. The task force shall ensure that these students
are provided assistance in all of the following:

(A) Obtaining refunds, loan discharges, and tuition recovery
for which the student is eligible.

(B) Obtaining information regarding the option to transfer credits
that the student earned while attending the institution, including
information necessary to help the student make an informed
decision about whether to seek a loan discharge or to transfer
credits.

(C) Providing other support deemed necessary by the task force
in accordance with the bureau's consumer protection mission.

(2) The members of the task force should include, but not
necessarily be limited to, representatives on behalf of the Student
Aid Commission, the Department of Justice, the Office of the
Chancellor of the California Community Colleges, the Department
of Veterans Affairs, begin delete and end delete one or more legal aid begin delete organizations. end delete
begin insert organizations, and two financial experts, one representing
community colleges and one representing a bureau-approved
institution that meets the performance requirements of the Cal
Grant program. end insert

(b)  begin insert (1) end insert begin insert   end insert Upon the unlawful closure of an institution, the bureau
shall provide timely grant funds to local legal aid begin delete organizations,
which may include local legal aid organizations designed
specifically to assist veteran students, end delete begin insert organizations end insert to assist the
students of that institution, begin insert including veterans, end insert for no less than one
year following the closure of the institution, with loan discharge
begin insert and other student loan- end insert begin insert related end insert requests and tuition recovery related
claims. begin delete The end delete begin insert Assistance shall 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. end insert

begin insert (2) end insert begin insert   end insert begin insert The end insert amount of grant funds shall be calculated by multiplying
the number of students affected by the institution’s closure by one
hundred dollars ($100). begin delete Legal aid organizations that receive grants
should be located in the areas of the state affected by the
institutional closure. Legal aid organizations that receive grants
may give priority to low income students if demand exceeds
available grant funds. Legal aid organizations that receive grants
shall report to the bureau after completing their obligations under
the grant on the number of students served from the date of the
institution’s closure. end delete

begin insert

(3) The bureau shall establish an approval process to ensure
each legal aid organization that receives a grant pursuant to this
section meets both of the following requirements:

end insert begin insert

(A) The legal aid 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,
including, if required, registration with the Attorney General’s
Registry of Charitable Trusts.

end insert begin insert

(B) The legal aid organization demonstrates expertise in
assisting students with, and currently provides direct legal services
to students for, student loan matters.

end insert begin insert

(4) A legal aid organization that receives funds pursuant to this
section shall enter into a grant agreement with the bureau 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 bureau unless the parties enter into a new
agreement authorizing the legal aid organization to expend the
unused funds. The bureau may terminate the agreement for
material breach. However, the bureau shall provide the grantee
with written notice of the breach and a reasonable opportunity of
less than 30 days to resolve the breach.

end insert begin insert

(5) A legal aid organization that receives a grant may give
priority to low-income students if demand exceeds available grant
funds. Otherwise, the legal aid organization may provide assistance
regardless of student income level.

end insert begin insert

(6) A legal aid organization that receives a grant shall report
to the bureau quarterly through the grant period on the number
of students served from the date funds are distributed.

end insert begin insert

(7) Funds shall be distributed by the bureau to preapproved
legal aid organizations as follows:

end insert begin insert

(A) Fifty percent shall be distributed within 30 days of the date
of the institution’s unlawful closure.

end insert begin insert

(B) Twenty-five percent shall be distributed upon the submission
of the legal aid organization’s second quarterly report.

end insert begin insert

(C) Twenty-five percent shall be distributed upon the submission
of the legal aid organization’s third quarterly report.

end insert

SEC. 8.  

(a) The sum of one million three hundred thousand
dollars ($1,300,000) is hereby appropriated from the Private
Postsecondary Education Administration Fund to the Bureau of
Private Postsecondary Education for the purposes of providing
financial grants pursuant to subdivision (b) of Section 94926.5 of
the Education Code to legal aid organizations for students affected
by the closure of begin delete Corinthians end delete begin insert Corinthian end insert Colleges, begin delete Inc., end delete begin insert Inc. end insert Legal
aid organizations may use grant funds received pursuant to
subdivision (b) of Section 94926.5 of the Education Code for
affected students served from the date of closure. begin delete The end delete
begin insert Notwithstanding paragraph (7) of subdivision (b) of Section
94926.5, the end insert Bureau of Private Postsecondary Education shall
ensure that these grant funds are made available within 30 days of
the enactment of this section. The adoption of any regulation
pursuant to this subdivision shall be deemed to be an emergency
and necessary for the immediate preservation of the public, health,
and safety, or general welfare.

(b) The amount appropriated in subdivision (a) may include
revenues derived from the assessment of fines and penalties
imposed, and expenditures of these funds is specifically authorized
for purposes of Section 13332.18 of the Government Code.

(c) The Private Postsecondary Education Administration Fund
reserve limit of six months of operating expenses pursuant to
subdivision (b) of Section 94930 of the Education Code shall be
suspended until July 1, 2016.

SEC. 9.  

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. 10.  

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.