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

California Legislature—2015–16 Regular Session

Assembly BillNo. 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, Hadley, Kim, O’Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Santiago, Thurmond, and Ting)

(Coauthors: Senatorsbegin delete Gaines and Galgianiend deletebegin insert Gaines, Galgiani, Hill, Runner, and Wieckowskiend insert)

February 24, 2015


An act to amend Sections 76300, 94923,begin delete and 94925end deletebegin insert 94924, 94925, and 94926end insert of,begin insert to amend the heading of Article 15 (commencing with Section 94926) of Chapter 8 of Part 59 of Division 10 of Title 3 of,end insert and to add Sectionsbegin delete 69433.61end deletebegin insert 69433.61, 94051,end insert 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 within 120 days of that date. 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 wouldbegin delete require the bureau to establish a standing task forceend deletebegin insert provide that, until January 1, 2020, there shall be established a single point of contactend insert to respond to the closure of institutions that do not comply with these requirements prior to closing. The bill would requirebegin delete the task force toend deletebegin insert the single point of contact toend insert 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 thebegin delete bureauend deletebegin insert Attorney General, or a qualified entity under contract with the Attorney General,end insert to provide timely grant funds tobegin delete local legal aidend deletebegin insert eligible local nonprofit community serviceend insert organizations to assist students of that institution with loan discharge and other student loan-related requests and tuitionbegin delete recovery relatedend deletebegin insert recovery-end insertbegin insertrelatedend insert 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 tobegin delete legal aidend deletebegin insert eligible local nonprofit community serviceend insert organizations, as described above, for students affected by the closure of Corinthian 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.

begin insert

The bill would authorize a private postsecondary institution to submit Student Tuition Recovery Fund assessments to the bureau for its students who are enrolled at the institution, would prohibit the institution from advertising or marketing this as a benefit it provides for its students, and would establish additional requirements related to the fund, as specified.

end insert

(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 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 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: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

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

P4    1

SECTION 1.  

(a) It is the intent of the Legislature that the
2California Community Colleges shall utilize available resources
3to provide matriculation services, including, but not limited to,
4assessments, counseling, and academic planning, to students who
5were enrolled at a California campus of a Corinthian Colleges,
6Inc., institution, including Heald College, and California students
7enrolled in one or more online programs offered by an out-of-state
8campus of a Corinthian Colleges, Inc., institution who were harmed
9by the closure of Corinthian Colleges, Inc., that took place on April
1027, 2015.

11(b) (1) The sum of one hundred thousand dollars ($100,000)
12is hereby appropriated from the General Fund to the Chancellor
13of the California Community Colleges for allocation to a
14community college district to conduct a statewide media campaign
15to inform students affected by the closure of Corinthian Colleges,
16Inc., of education opportunities available at community colleges.

17(2) For purposes of making the computations required by Section
188 of Article XVI of the California Constitution, the funds
19appropriated pursuant to this section shall be deemed to be
20“General Fund revenues appropriated for community college
21districts,” as defined in subdivision (d) of Section 41202 of the
22Education Code, for the 2014-15 fiscal year, and included within
P5    1the “total allocations to school districts and community college
2districts from General Fund proceeds of taxes appropriated pursuant
3to Article XIII B,” as defined in subdivision (e) of Section 41202
4of the Education Code, for the 2014-15 fiscal year.

5

SEC. 2.  

It is the intent of the Legislature that unencumbered
6restitution funds awarded to the state from a lawsuit involving
7Corinthian Colleges, Inc., and its affiliate institutions, including
8Heald College, shall be used to repay any funds provided to those
9students pursuant to this act.

10

SEC. 3.  

Section 69433.61 is added to the Education Code, to
11read:

12

69433.61.  

(a) Notwithstanding any other law, a student who
13was enrolled and received a Cal Grant award in the 2013-14 or
142014-15 academic year at a California campus of a Corinthian
15Colleges, Inc., institution, including Heald College, and was unable
16to complete an educational program offered by the campus due to
17the campus’s closure on April 27, 2015, shall not have the award
18years used at a Corinthian Colleges, Inc., campus considered for
19purposes of the limitation on the number of years of Cal Grant
20award eligibility. This restoration of award years for Cal Grant
21eligibility shall not exceed two years.

22(b) A student shall be eligible for the restoration of award years
23if the student was enrolled at a campus of Corinthianbegin delete Collegesend delete
24begin insert Colleges,end insert Inc., on April 27, 2015, or had withdrawn from
25enrollment within 120 days of that date. The Bureau for Private
26Postsecondary Education shall provide the commission with
27confirmation of student enrollment for purposes of this section.

28(c) An eligible student shall, before January 1, 2017, notify the
29commission of his or her intent to use the restoration of award
30years provided under this section and to enroll in an institution
31eligible for initial and renewal Cal Grant awards to be eligible for
32that restoration.

33

SEC. 4.  

Section 76300 of the Education Code is amended to
34read:

35

76300.  

(a) The governing board of each community college
36district shall charge each student a fee pursuant to this section.

37(b) (1) The fee prescribed by this section shall be forty-six
38dollars ($46) per unit per semester, effective with the summer term
39of the 2012 calendar year.

P6    1(2) The board of governors shall proportionately adjust the
2amount of the fee for term lengths based upon a quarter system,
3and also shall proportionately adjust the amount of the fee for
4summer sessions, intersessions, and other short-term courses. In
5making these adjustments, the board of governors may round the
6per unit fee and the per term or per session fee to the nearest dollar.

7(c) For the purposes of computing apportionments to community
8college districts pursuant to Section 84750.5, the board of
9governors shall subtract, from the total revenue owed to each
10district, 98 percent of the revenues received by districts from
11charging a fee pursuant to this section.

12(d) The board of governors shall reduce apportionments by up
13to 10 percent to any district that does not collect the fees prescribed
14by this section.

15(e) The fee requirement does not apply to any of the following:

16(1) Students enrolled in the noncredit courses designated by
17Section 84757.

18(2) California State University or University of California
19students enrolled in remedial classes provided by a community
20 college district on a campus of the University of California or a
21campus of the California State University, for whom the district
22claims an attendance apportionment pursuant to an agreement
23between the district and the California State University or the
24University of California.

25(3) Students enrolled in credit contract education courses
26pursuant to Section 78021, if the entire cost of the course, including
27administrative costs, is paid by the public or private agency,
28corporation, or association with which the district is contracting
29and if these students are not included in the calculation of the
30full-time equivalent students (FTES) of that district.

31(f) The governing board of a community college district may
32exempt special part-time students admitted pursuant to Section
3376001 from the fee requirement.

34(g) (1) The fee requirements of this section shall be waived for
35any student who meets all of the following requirements:

36(A) Meets minimum academic and progress standards adopted
37by the board of governors, which fulfill the requirements outlined
38in this paragraph and paragraphs (2) to (5), inclusive. Any
39minimum academic and progress standards adopted pursuant to
40this section shall be uniform across all community college districts
P7    1and campuses. These standards shall not include a maximum unit
2cap, and community college districts and colleges shall not impose
3requirements for fee waiver eligibility other than the minimum
4academic and progress standards adopted by the board of governors
5and the requirements of subparagraph (B).

6(B) Meets at least one of the following criteria:

7(i) At the time of enrollment, is a recipient of benefits under the
8Temporary Assistance for Needy Families program, the
9Supplemental Security Income/State Supplementary Payment
10Program, or a general assistance program.

11(ii) Demonstrates eligibility according to income standards
12established by regulations of the board of governors.

13(iii) Demonstrates financial need in accordance with the
14methodology set forth in federal law or regulation for determining
15the expected family contribution of students seeking financial aid.

16(iv) Was enrolled at a California campus of a Corinthian
17Colleges, Inc., institution and was unable to complete an education
18program offered by the campus due to the campus’s closure on
19April 27, 2015. This clause shall become inoperative on July 1,
202018.

21(v) Was enrolled at a California campus of a Corinthian
22Colleges, Inc., institution and withdrew from an education program
23offered by the campus within 120 days, or a greater period
24determined by the Bureau for Private Postsecondary Education
25pursuant to Section 94923, of the campus’s closure on April 27,
262015. This clause shall become inoperative on July 1, 2018.

27(2) (A) The board of governors, in consultation with students,
28faculty, and other key stakeholders, shall consider all of the
29following in the development and adoption of minimum academic
30and progress standards pursuant to subparagraph (A) of paragraph
31(1):

32(i) Minimum uniform academic and progress standards that do
33not unfairly disadvantage financially needy students in pursuing
34their education.

35(ii) Criteria for reviewing extenuating circumstances and
36granting appeals that, at a minimum, take into account and do not
37penalize a student for circumstances outside his or her control,
38such as reductions in student support services or changes to the
39economic situation of the student.

P8    1(iii) A process for reestablishing fee waiver eligibility that
2provides a student with a reasonable opportunity to continue or
3resume his or her enrollment at a community college.

4(B) To ensure that students are not unfairly impacted by the
5requirements of subparagraph (A) of paragraph (1), the board of
6governors shall establish a reasonable implementation period that
7commences no sooner than one year from adoption of the minimum
8academic and progress standards, or any subsequent changes to
9these standards, pursuant to subparagraph (A) of paragraph (1)
10and that is phased in to provide students adequate notification of
11this requirement and information about available support resources.

12(3) It is the intent of the Legislature that minimum academic
13and progress standards adopted pursuant to subparagraph (A) of
14paragraph (1) be implemented only as campuses develop and
15implement the student support services and interventions necessary
16to ensure no disproportionate impact to students based on ethnicity,
17gender, disability, or socioeconomic status. The board of governors
18shall consider the ability of community college districts to meet
19the requirements of this paragraph before adopting minimum
20 academic and progress standards, or any subsequent changes to
21these standards, pursuant to subparagraph (A) of paragraph (1).

22(4) It is the intent of the Legislature to ensure that a student shall
23not lose fee waiver eligibility without a community college campus
24first demonstrating a reasonable effort to provide a student with
25adequate notification and assistance in maintaining his or her fee
26waiver eligibility. The board of governors shall adopt regulations
27to implement this paragraph that ensure all of the following:

28(A) Students are provided information about the available
29student support services to assist them in maintaining fee waiver
30eligibility.

31(B) Community college district policies and course catalogs
32 reflect the minimum academic and progress standards adopted
33pursuant to subparagraph (A) of paragraph (1) and that appropriate
34notice is provided to students before the policies are put into effect.

35(C) A student does not lose fee waiver eligibility unless he or
36she has not met minimum academic and progress standards adopted
37pursuant to subparagraph (A) of paragraph (1) for a period of no
38less than two consecutive academic terms.

39(5) The board of governors shall provide notification of a
40proposed action to adopt regulations pursuant to this subdivision
P9    1to the appropriate policy and fiscal committees of the Legislature
2in accordance with the requirements of paragraph (1) of subdivision
3(a) of Section 70901.5. This notification shall include, but not be
4limited to, all of the following:

5(A) The proposed minimum academic and progress standards
6and information detailing how the requirements of paragraphs (1)
7to (4), inclusive, have been or will be satisfied.

8(B) How many students may lose fee waiver eligibility by
9ethnicity, gender, disability, and, to the extent relevant data is
10available, by socioeconomic status.

11(C) The criteria for reviewing extenuating circumstances,
12granting appeals, and reestablishing fee waiver eligibility pursuant
13to paragraph (2).

14(h) The fee requirements of this section shall be waived for any
15student who, at the time of enrollment, is a dependent or surviving
16spouse who has not remarried, of any member of the California
17National Guard who, in the line of duty and while in the active
18service of the state, was killed, died of a disability resulting from
19an event that occurred while in the active service of the state, or
20is permanently disabled as a result of an event that occurred while
21in the active service of the state. “Active service of the state,” for
22the purposes of this subdivision, refers to a member of the
23California National Guard activated pursuant to Section 146 of
24the Military and Veterans Code.

25(i) The fee requirements of this section shall be waived for any
26student who is the surviving spouse or the child, natural or adopted,
27of a deceased person who met all of the requirements of Section
2868120.

29(j) The fee requirements of this section shall be waived for any
30student in an undergraduate program, including a student who has
31previously graduated from another undergraduate or graduate
32program, who is the dependent of any individual killed in the
33September 11, 2001, terrorist attacks on the World Trade Center
34and the Pentagon or the crash of United Airlines Flight 93 in
35southwestern Pennsylvania, if that dependent meets the financial
36need requirements set forth in Section 69432.7 for the Cal Grant
37A Program and either of the following applies:

38(1) The dependent was a resident of California on September
3911, 2001.

P10   1(2) The individual killed in the attacks was a resident of
2California on September 11, 2001.

3(k) A determination of whether a person is a resident of
4California on September 11, 2001, for purposes of subdivision (j)
5shall be based on the criteria set forth in Chapter 1 (commencing
6with Section 68000) of Part 41 of Division 5 for determining
7nonresident and resident tuition.

8(l) (1) “Dependent,” for purposes of subdivision (j), is a person
9who, because of his or her relationship to an individual killed as
10a result of injuries sustained during the terrorist attacks of
11September 11, 2001, qualifies for compensation under the federal
12September 11th Victim Compensation Fund of 2001 (Title IV
13(commencing with Section 401) of Public Law 107-42).

14(2) A dependent who is the surviving spouse of an individual
15killed in the terrorist attacks of September 11, 2001, is entitled to
16the waivers provided in this section until January 1, 2013.

17(3) A dependent who is the surviving child, natural or adopted,
18of an individual killed in the terrorist attacks of September 11,
192001, is entitled to the waivers under subdivision (j) until that
20person attains 30 years of age.

21(4) A dependent of an individual killed in the terrorist attacks
22of September 11, 2001, who is determined to be eligible by the
23California Victim Compensation and Government Claims Board,
24is also entitled to the waivers provided in this section until January
251, 2013.

26(m) (1) It is the intent of the Legislature that sufficient funds
27be provided to support the provision of a fee waiver for every
28student who demonstrates eligibility pursuant to subdivisions (g)
29to (j), inclusive.

30(2) From funds provided in the annual Budget Act, the board
31of governors shall allocate to community college districts, pursuant
32to this subdivision, an amount equal to 2 percent of the fees waived
33pursuant to subdivisions (g) to (j), inclusive. From funds provided
34in the annual Budget Act, the board of governors shall allocate to
35community college districts, pursuant to this subdivision, an
36amount equal to ninety-one cents ($0.91) per credit unit waived
37pursuant to subdivisions (g) to (j), inclusive. It is the intent of the
38Legislature that funds provided pursuant to this subdivision be
39used to support the determination of financial need and delivery
40of student financial aid services, on the basis of the number of
P11   1students for whom fees are waived. It also is the intent of the
2Legislature that the funds provided pursuant to this subdivision
3directly offset mandated costs claimed by community college
4districts pursuant to Commission on State Mandates consolidated
5Test Claims 99-TC-13 (Enrollment Fee Collection) and 00-TC-15
6(Enrollment Fee Waivers). Funds allocated to a community college
7district for determination of financial need and delivery of student
8financial aid services shall supplement, and shall not supplant, the
9level of funds allocated for the administration of student financial
10aid programs during the 1992-93 fiscal year.

11(n) The board of governors shall adopt regulations implementing
12this section.

13(o) This section shall become operative on May 1, 2012, only
14if subdivision (b) of Section 3.94 of the Budget Act of 2011 is
15operative.

16begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 94051 is added to the end insertbegin insertEducation Codeend insertbegin insert, to read:end insert

begin insert
17

begin insert94051.end insert  

Notwithstanding any provision of law, for a period not
18to exceed two years from the date of the closure of Corinthian
19Colleges, Inc., a state agency that provides certification,
20registration, or licensure necessary to promote the safety and
21protection of the public may, on a case-by-case basis, consider
22for certification, registration, or licensure students who were
23enrolled in a program of Corinthian Colleges, Inc., that provided
24education or training aimed towards these students receiving
25certification, registration, or licensure from the state agency, and
26who did not receive that certification, registration, or licensure
27due to the closure of Corinthian Colleges, Inc. This consideration
28shall be provided at the discretion of the state agency in
29accordance with its public protection mandate and applicable
30criteria established by the agency for consumer safety.

end insert
31

begin deleteSEC. 5.end delete
32begin insertSEC. 6.end insert  

Section 94923 of the Education Code is amended to
33read:

34

94923.  

(a) The Student Tuition Recovery Fund relieves or
35mitigates economic loss suffered by a student while enrolled in an
36educational program, as defined in Section 94837, atbegin delete an institution
37not exempt from this article pursuant to Article 4 (commencing
38with Section 94874),end delete
begin insert a campus or through a distance education
39program offered by an institution with a physical presence in this
40state, including any affiliates of that institution, except at an
P12   1independent institution of higher education, as defined in Section
266010, that is exempt from this chapter pursuant to subdivision
3(i) of Section 94874,end insert
who, at the time of his or her enrollment, was
4a California resident or was enrolled in a California residency
5program, prepaid tuition, and suffered economic loss.

6(b) The bureau shall adopt by regulation procedures governing
7the administration and maintenance of the Student Tuition
8Recovery Fund, including requirements relating to assessments
9on students and student claims against the Student Tuition
10Recovery Fund. The regulations shall provide for awards to
11students who suffer economic loss.

12The regulations shall ensure that the following students, and any
13other students deemed appropriate, are eligible for payment from
14the Student Tuition Recovery Fund:

15(1) Any student who was enrolled at an institution, at a location
16of the institution, or in an educational program offered by the
17institution, at the time that institution, location, or program was
18closed or discontinued, as applicable, who did not choose to
19participate in a teach-out plan approved by the bureau or did not
20complete a chosen teach-out plan approved by the bureau.

21(2) Any student who was enrolled at an institution or a location
22of the institution within the 120-day period before the closure of
23the institution or location of the institution, or who was enrolled
24in an educational program within the 120-day period before the
25program was discontinued, if the bureau determines there was a
26significant decline in the quality or value of that educational
27program during that time period.

28(3) Any student who was enrolled at an institution or a location
29of the institution more than 120 days before the closure of the
30institution or location of the institution, in an educational program
31offered by the institution as to which the bureau determines there
32was a significant decline in the quality or value of the program
33more than 120 days before closure.

34(4) A student to whom an institution has been ordered to pay a
35refund by the bureau but has failed to do so.

36(5) A student to whom an institution has failed to pay or
37reimburse loan proceeds under a federal student loan program as
38required by law, or has failed to pay or reimburse proceeds received
39by the institution in excess of tuition and other costs.

P13   1(6) A student who has been awarded restitution, a refund, or
2other monetary award by an arbitrator or court, based on a violation
3of this chapter by an institution or representative of an institution,
4but who has been unable to collect the award from the institution.
5The bureau shall review the award or judgment and shall ensure
6the amount to be paid from the fund does not exceed the student’s
7economic loss.

8(7) Notwithstanding the requirement of subdivision (a) that the
9institution not be exempt from this article, a student who was
10enrolled at a California campus of a Corinthian Colleges, Inc.,
11institution or was a California student enrolled in an online program
12offered by an out-of-state campus of a Corinthian Colleges, Inc.,
13institution, who also meets all of the other eligibility requirements,
14if the student was enrolled as of Aprilbegin delete 26,end deletebegin insert 27,end insert 2015, or withdrew
15within 120 days of that date or any greater period determined by
16the bureau pursuant to this section.

17(c) Any student who is required to pay a Student Tuition
18Recovery Fund assessment who pays tuition equal to or greater
19than the required assessment shall be deemed to have paid the
20required assessment, whether or not his or her enrollment
21agreement specifies collection of the required assessment, and
22whether or not the institution identifies any money collected from
23the student as a Student Tuition Recovery Fund assessment.

24(d) The bureau shall establish regulations ensuring, as
25permissible under California law, that a student who suffers
26educational opportunity losses, whose charges are paid by a
27third-party payer, is eligible for educational credits under the fund.

28(e) The bureau may seek repayment to the Student Tuition
29Recovery Fund from an institution found in violation of the law
30for which a student claim was paid. An institution shall not be
31eligible to renew its approval to operate with the bureau if the
32repayment is not made to the bureau as requested.

33(f) The bureau shall, by regulation, define “economic loss.” The
34regulation shall ensure that the definition of “economic loss”
35includes, but is not necessarily limited to, pecuniary loss, which
36is the sum of the student’s tuition, all other institutional charges
37as defined in Section 94844, the cost of equipment and materials
38required for the educational program as defined in Section 94837,
39interest on any student loan used to pay for such charges, collection
40costs, penalties, and any license or examination fees the student
P14   1paid to the institution but is unable to recover. Economic loss shall
2also include the amount the institution collected and failed to pay
3to third parties on behalf of the student for license fees or any other
4purpose. Economic loss does not include Student Tuition Recovery
5Fund assessments, unless the student is entitled to a full refund
6under Section 94919 or 94920, room and board, supplies,
7transportation, application fees, or nonpecuniary damages such as
8inconvenience, aggravation, emotional distress, or punitive
9damages. Economic loss does not include legal fees, attorney fees,
10court costs, or arbitration fees. Nothing in this subdivision shall
11prevent the bureau from further defining economic loss to include
12loss of educational opportunity.

begin insert

13(g) A representation or agreement made by a person not to
14collect on a student loan shall not lessen a student’s eligibility to
15recover from the Student Tuition Recovery Fund or reduce the
16amount of the student’s economic loss unless the loan has been
17forgiven, discharged, or canceled in accordance with this section.

end insert
18begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 94924 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
19read:end insert

20

94924.  

(a) The bureau shall determine the amount of Student
21Tuition Recovery Fund assessments to be collected for each
22student.

begin insert

23(b) An institution may submit Student Tuition Recovery Fund
24assessments to the bureau for its students who are enrolled at the
25institution, but shall not advertise or market this as a benefit it
26provides for its students.

end insert
begin delete

27(b)

end delete

28begin insert(c)end insert All assessments collected pursuant to this article shall be
29credited to the Student Tuition Recovery Fund, along with any
30accrued interest, for the purpose of this article. Notwithstanding
31Section 13340 of the Government Code, the moneys in the Student
32Tuition Recovery Fund are continuously appropriated to the bureau,
33without regard to fiscal year, for the purposes of this article.

begin delete

34(c)

end delete

35begin insert(d)end insert Except when an institution provides a full refund pursuant
36to Section 94919 or Section 94920, the Student Tuition Recovery
37Fund assessment is nonrefundable.

begin insert

38(e) The bureau shall collect Student Tuition Recovery Fund
39assessments from an institution for all of the institution’s enrolled
40students as follows:

end insert
begin insert

P15   1(1) For an institution that is not approved to operate as of the
2date this subdivision becomes operative, the bureau shall collect
3assessments from the institution upon issuance of the institution’s
4approval to operate.

end insert
begin insert

5(2) For an institution that is approved to operate as of the date
6this subdivision becomes operative, the bureau shall collect
7assessments from the institution for its enrolled students for whom
8an assessment has not been collected, including assessments for
9students enrolled in distance education programs.

end insert
10

begin deleteSEC. 6.end delete
11begin insertSEC. 8.end insert  

Section 94925 of the Education Code is amended to
12read:

13

94925.  

(a) The amount in the Student Tuition Recovery Fund
14shall not exceed fifty million dollars ($50,000,000) at any time.

15(b) If the bureau has temporarily stopped collecting the Student
16Tuition Recovery Fund assessments because the fund has
17approached the fifty million dollar ($50,000,000) limit in
18subdivision (a), the bureau shall resume collecting Student Tuition
19Recovery Fund assessments when the fund falls below forty-five
20million dollars ($45,000,000).

21(c) An otherwise eligible student who enrolled during a period
22when institutions were not required to collect Student Tuition
23Recovery Fund assessments is eligible for Student Tuition
24Recovery Fund payments despite not having paid any Student
25Tuition Recovery Fund assessment.

26(d) A student who is eligible for recovery from the Student
27Tuition Recovery Fund pursuant to paragraph (7) of subdivision
28(b) of Section 94923 shall be eligible for payments despite not
29having paid any Student Tuition Recovery Fund assessment.

begin delete
30

SEC. 7.  

Section 94926.5 is added to the Education Code, to
31read:

32

94926.5.  

(a) (1) The bureau shall establish and coordinate a
33standing closed school task force to respond to the closure of
34institutions that do not comply with the requirements, as applicable,
35of this article. The task force shall ensure that students who were
36enrolled at, or in an online program offered by, the institution
37receive accurate and timely information regarding the school
38closure process and the students’ rights and responsibilities under
39federal and state law. The task force shall ensure that these students
40are provided assistance in all of the following:

P16   1(A) Obtaining refunds, loan discharges, and tuition recovery
2for which the student is eligible.

3(B) Obtaining information regarding the option to transfer credits
4that the student earned while attending the institution, including
5information necessary to help the student make an informed
6decision about whether to seek a loan discharge or to transfer
7credits.

8(C) Providing other support deemed necessary by the task force
9in accordance with the bureau's consumer protection mission.

10(2) The members of the task force should include, but not
11necessarily be limited to, representatives on behalf of the Student
12Aid Commission, the Department of Justice, the Office of the
13Chancellor of the California Community Colleges, the Department
14of Veterans Affairs, one or more legal aid organizations, and two
15 financial experts, one representing community colleges and one
16representing a bureau-approved institution that meets the
17performance requirements of the Cal Grant program.

18(b) (1) Upon the unlawful closure of an institution, the bureau
19shall provide timely grant funds to local legal aid organizations to
20assist the students of that institution, including veterans, for no
21less than one year following the closure of the institution, with
22loan discharge and other student loan-related requests and tuition
23recovery related claims. Assistance shall include, but is not limited
24to, outreach and education, screening requests for assistance,
25referring students for additional legal assistance through pro bono
26referral programs, and legal services.

27 (2) The amount of grant funds shall be calculated by multiplying
28the number of students affected by the institution’s closure by one
29hundred dollars ($100).

30(3) The bureau shall establish an approval process to ensure
31each legal aid organization that receives a grant pursuant to this
32section meets both of the following requirements:

33(A) The legal aid organization is a 501(c)(3) tax-exempt
34organization in good standing with the Internal Revenue Service
35and in compliance with all applicable laws and requirements,
36including, if required, registration with the Attorney General’s
37Registry of Charitable Trusts.

38(B) The legal aid organization demonstrates expertise in assisting
39students with, and currently provides direct legal services to
40students for, student loan matters.

P17   1(4) A legal aid organization that receives funds pursuant to this
2section shall enter into a grant agreement with the bureau and shall
3use grant funds exclusively for the purposes set forth in this section
4in accordance with the agreement. Any unused funds shall be
5returned to the bureau unless the parties enter into a new agreement
6authorizing the legal aid organization to expend the unused funds.
7The bureau may terminate the agreement for material breach.
8However, the bureau shall provide the grantee with written notice
9of the breach and a reasonable opportunity of less than 30 days to
10resolve the breach.

11(5) A legal aid organization that receives a grant may give
12priority to low-income students if demand exceeds available grant
13funds. Otherwise, the legal aid organization may provide assistance
14regardless of student income level.

15(6) A legal aid organization that receives a grant shall report to
16the bureau quarterly through the grant period on the number of
17students served from the date funds are distributed.

18(7) Funds shall be distributed by the bureau to preapproved legal
19aid organizations as follows:

20(A) Fifty percent shall be distributed within 30 days of the date
21of the institution’s unlawful closure.

22(B) Twenty-five percent shall be distributed upon the submission
23of the legal aid organization’s second quarterly report.

24(C) Twenty-five percent shall be distributed upon the submission
25of the legal aid organization’s third quarterly report.

end delete
26begin insert

begin insertSEC. 9.end insert  

end insert

begin insertThe heading of Article 15 (commencing with Section
2794926) of Chapter 8 of Part 59 of Division 10 of Title 3 of the end insert
begin insert28Education Codeend insertbegin insert is amended to read:end insert

29 

30Article 15.  begin deleteOrderly end deleteInstitutional Closure and Teach-outs
31

 

32begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 94926 of the end insertbegin insertEducation Codeend insertbegin insert is amended to
33read:end insert

34

94926.  

begin insert(a)end insertbegin insertend insertAt least 30 days prior to closing, the institution
35shall notify the bureau in writing of its intention to close. The
36notice shall be accompanied by a closure plan, which shall include,
37but not necessarily be limited to, all of the following:

begin delete

38(a)

end delete

P18   1begin insert(1)end insert A plan for providing teach-outs of educational programs,
2including any agreements with any other postsecondary educational
3institutions to provide teach-outs.

begin delete

4(b)

end delete

5begin insert(2)end insert If no teach-out plan is contemplated, or for students who do
6not wish to participate in a teach-out, arrangements for making
7refunds within 45 days from the date of closure, or for institutions
8that participate in federal student financial aid programs
9arrangements for making refunds and returning federal student
10financial aid program funds.

begin delete

11(c)

end delete

12begin insert(3)end insert If the institution is a participant in federal student financial
13aid programs, it shall provide students information concerning
14these programs and institutional closures.

begin delete

15(d)

end delete

16begin insert(4)end insert A plan for the disposition of student records.

begin insert

17(b) Until January 1, 2020, there shall be established a single
18point of contact to respond to the closure of institutions that do
19not comply with requirements established under state and federal
20law. The goal of the point of contact shall be to ensure that students
21who were enrolled at, or in an online program offered by, an
22institution that has closed receive accurate and timely information
23regarding the school closure process and the students’ rights and
24responsibilities under federal and state law. The point of contact’s
25duties shall include, but not be limited to, all of the following:

end insert
begin insert

26(1) Coordinating and working in consultation with state and
27federal agencies, including, but not limited to, the Bureau for
28Private Postsecondary Education, the Student Aid Commission,
29the Office of the Chancellor of the California Community Colleges,
30the Department of Veterans Affairs, the federal Consumer
31Financial Protection Bureau, and the United States Department
32of Education to determine both of the following:

end insert
begin insert

33(A) Options and resources available to students.

end insert
begin insert

34(B) Criteria which indicate additional steps are necessary for
35state agencies to take to ensure the protection of the public from
36school closures.

end insert
begin insert

37(2) Establishing and maintaining an Internet Web site to provide
38information to students about options available in the event of a
39school closure, including information necessary to help a student
40make an informed decision about whether to seek a loan discharge
P19   1or to transfer credits. The Internet Web site shall list the names of
2institutions that are on the United States Department of
3Education’s list for heightened cash monitoring.

end insert
begin insert

4(3) Assisting students in obtaining important documentation
5from a closed institution, including, but not limited to, their
6enrollment agreements, records, transcripts, and loan information.

end insert
begin insert

7(c) (1) Consideration should be given to establishing the single
8point of contact within the Attorney General’s office.

end insert
begin insert

9(2) The Legislature finds that the Attorney General’s office has
10expertise in complex legal situations such as those facing students
11impacted by the sudden and abrupt closure of their educational
12institutions and has established an online tool for students to
13receive a personalized resource sheet regarding the types of relief
14available to them.

end insert
begin insert

15(3) The Legislature finds that, among the involved agencies, the
16Attorney General’s office is the best situated to continue playing
17a central, coordinating role in the effort to assist students of an
18institution that has closed.

end insert
begin insert

19(4) This subdivision shall not be construed to authorize the
20Attorney General’s office to breach any of its responsibilities or
21to provide individual legal assistance or representation to students
22of an institution that has closed. If the single point of contact is
23established within the Attorney General’s office, the responsibilities
24of the single point of contact shall be separate and distinct from
25the office’s efforts to uphold state law, represent state agencies,
26and undertake related actions.

end insert
27begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 94926.5 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
28read:end insert

begin insert
29

begin insert94926.5.end insert  

(a) Upon the unlawful closure of an institution, grant
30funds shall be timely provided in accordance with this section to
31eligible local nonprofit community service organizations, including,
32but not limited to, legal aid organizations, organizations offering
33free services for counseling on student loan debt problems, and
34organizations assisting with the arrangement of debt management
35and settlement plans, to assist the students of that closed institution,
36including veterans, for no less than one year following the closure
37of the institution, with loan discharge and other student
38loan-related requests and tuition recovery-related claims.
39Assistance shall include, but is not limited to, outreach and
40education, screening requests for assistance, referring students
P20   1for additional legal assistance through pro bono referral programs,
2and legal services. For purposes of this section, an “eligible local
3nonprofit community service organization” is an organization that
4satisfies both of the following conditions:

5(1) The organization is a 501(c)(3) tax-exempt organization in
6good standing with the Internal Revenue Service and in compliance
7with all applicable laws and requirements.

8(2) The organization demonstrates expertise in assisting students
9with, and currently provides direct legal services to students for,
10student loan matters.

11(b) The amount of grant funds shall be calculated by multiplying
12the number of students affected by the institution’s closure by one
13hundred dollars ($100).

14(c) (1) The bureau shall notify the Attorney General of all
15unlawful school closures within 15 days of the closure.

16(2) The notification shall include the name and location of the
17school, the programs, and the number of students affected at each
18site of the school, as appropriate. The bureau shall provide the
19Attorney General with all additional information that the Attorney
20General may request.

21(3) The Attorney General shall, within 90 days of receipt of the
22notification, solicit grant applications from eligible local nonprofit
23community service organizations as described in subdivision (a),
24select one or more of these organizations from among the
25applicants who are deemed to be qualified by the Attorney General,
26and notify the bureau and the recipient organization or
27organizations of the selection. The Attorney General may enter
28into a contract with another qualified entity to perform the Attorney
29General’s duties under this subdivision.

30(d) An eligible local nonprofit community service organization
31that receives funds pursuant to this section shall enter into a grant
32agreement with the Attorney General, or a qualified entity entrusted
33with this authority pursuant to paragraph (3) of subdivision (c),
34as applicable, and shall use grant funds exclusively for the
35purposes set forth in this section in accordance with the agreement.
36Any unused funds shall be returned to the Attorney General unless
37the parties of the agreement enter into a new agreement authorizing
38the organization to expend the unused funds. The Attorney General,
39or a qualified entity, may terminate the agreement for material
40breach. However, the Attorney General, or a qualified entity, shall
P21   1provide the grantee with written notice of the breach and a
2reasonable opportunity of not less than 30 days to resolve the
3breach.

4(e) An eligible local nonprofit community service organization
5that receives a grant may give priority to low-income students if
6demand exceeds available grant funds. Otherwise, the organization
7may provide assistance regardless of student income level.

8(f) An eligible local nonprofit community service organization
9that receives a grant shall report to the Attorney General, or a
10qualified entity pursuant to paragraph (3) of subdivision (c), as
11applicable, quarterly through the grant period on the number of
12students served from the date funds are distributed.

13(g) Funds shall be distributed by the Attorney General, or a
14qualified entity pursuant to paragraph (3) of subdivision (c), as
15applicable, to preapproved local nonprofit community service
16organizations as follows:

17(1) For a school closure involving fewer than 250 students, 100
18 percent of the grant funds shall be distributed within 30 days of
19the selection of one or more recipient organizations.

20(2) For a school closure involving 250 or more students:

21(A) Fifty percent shall be distributed within 30 days of the date
22of the institution’s unlawful closure.

23(B) Twenty-five percent shall be distributed upon the submission
24of the eligible local nonprofit community service organization’s
25second quarterly report.

26(C) Twenty-five percent shall be distributed upon the submission
27of the eligible local nonprofit community service organization’s
28third quarterly report.

29(h) This section shall become inoperative on July 1, 2020, and,
30as of January 1, 2021, is repealed, unless a later enacted statute,
31that becomes operative on or before January 1, 2021, deletes or
32extends the date on which it becomes inoperative and is repealed.

end insert
33

begin deleteSEC. 8.end delete
34begin insertSEC. 12.end insert  

(a) The sum of one million three hundred thousand
35dollars ($1,300,000) is hereby appropriated from the Private
36Postsecondary Education Administration Fund to the Bureau of
37Private Postsecondary Education for the purposes of providing
38financial grants pursuant tobegin delete subdivision (b) ofend delete Section 94926.5 of
39the Education Code tobegin delete legal aid organizationsend deletebegin insert eligible local
40nonprofit community service organizationsend insert
for students affected
P22   1by the closure of Corinthian Colleges, Inc.begin delete Legal aidend deletebegin insert Eligible local
2nonprofit community serviceend insert
organizations may use grant funds
3received pursuant tobegin delete subdivision (b) ofend delete Section 94926.5 of the
4Education Code for affected students served from the date of
5closure. Notwithstandingbegin delete paragraph (7) ofend delete subdivisionbegin delete (b)end deletebegin insert (g)end insert of
6Section 94926.5, the Bureau of Private Postsecondary Education
7shall ensure that these grant funds are made available within 30
8days of the enactment of this section. The adoption of any
9regulation pursuant to this subdivision shall be deemed to be an
10emergency and necessary for the immediate preservation of the
11public, health, and safety, or general welfare.

12(b) The amount appropriated in subdivision (a) may include
13revenues derived from the assessment of fines and penalties
14imposed, and expenditures of these funds is specifically authorized
15for purposes of Section 13332.18 of the Government Code.

16(c) The Private Postsecondary Education Administration Fund
17reserve limit of six months of operating expenses pursuant to
18subdivision (b) of Section 94930 of the Education Code shall be
19suspended until July 1, 2016.

20

begin deleteSEC. 9.end delete
21begin insertSEC. 13.end insert  

If the Commission on State Mandates determines that
22this act contains costs mandated by the state, reimbursement to
23local agencies and school districts for those costs shall be made
24pursuant to Part 7 (commencing with Section 17500) of Division
254 of Title 2 of the Government Code.

26

begin deleteSEC. 10.end delete
27begin insertSEC. 14.end insert  

This act is an urgency statute necessary for the
28immediate preservation of the public peace, health, or safety within
29the meaning of Article IV of the Constitution and shall go into
30immediate effect. The facts constituting the necessity are:

31In order to provide immediate educational and economic relief
32to the thousands of students harmed by the closure of Corinthian
33Colleges, Inc., it is necessary for this act to take effect immediately.



O

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