Amended in Senate August 18, 2015

Amended in Senate July 9, 2015

Amended in Senate June 2, 2015

Amended in Assembly May 11, 2015

Amended in Assembly May 7, 2015

Amended in Assembly May 4, 2015

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: Senators Gaines, Galgiani, Hill, Runner, and Wieckowski)

February 24, 2015


An act to amend Sections 76300, 94923, 94924, 94925, and 94926 of, to amend the heading of Article 15 (commencing with Section 94926) of Chapter 8 of Part 59 of Division 10 of Title 3 of, and to add Sections 69433.61,begin insert 69999.19,end insert 94051, and 94926.5 to, the Education Code, relating to higher education, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 573, as amended, Medina. Higher education: campus closures: Corinthian Colleges.

(1) Existing law establishes the California Community Colleges under the administration of the Board of Governors of the California Community Colleges, and establishes community college districts throughout the state that operate community colleges and provide instruction to students. Existing law requires community college districts to charge each student a fee of $46 per unit per semester. Existing law requires the waiver of this fee for students meeting prescribed requirements.

This bill would, until July 1, 2018, require the board of governors to waive the fee for students who meet prescribed requirements, were enrolled at a California campus of a Corinthian Colleges, Inc., institution, and were either unable to complete an educational program offered by the campus due to the campus’s closure on April 27, 2015, or withdrew from an educational program offered by a Corinthian Colleges campus within 120 days of thatbegin delete date.end deletebegin insert date, and have demonstrated need, as determined by the enrolling campus.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 2009 provides for the regulation of private postsecondary educational institutions by the Bureau for Private Postsecondary Education in the Department of Consumer Affairs. The act requires an institution subject to its provisions to follow certain requirements prior to closing.

This bill would provide that, until January 1, 2020, there shall be established a single point of contact to respond to the closure of institutions that do not comply with these requirements prior to closing. The bill would require the single point of contact to assist the students who were enrolled at, or in an online program offered by, an institution that closes in, among other things, obtaining refunds, loan discharges, and tuition recovery. The bill would, upon the unlawful closure of an institution, require the Attorney General, or a qualified entity under contract with the Attorney General, to provide timely grant funds to eligible local nonprofit community service organizations to assist students of that institution with loan discharge and other student loan-related 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 eligible local nonprofit community service 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.

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.

(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 ofbegin delete a Corinthian Colleges, Inc., institution,end deletebegin insert Heald College,end insert and who was unable to complete an educational program offered by the campus due to its closure.

begin insert

(6) The California National Guard Education Assistance Award Program authorizes the renewal of California National Guard Education Assistance Awards, for a maximum of the greater of either four years of full-time equivalent enrollment or the duration for which the qualifying member would otherwise be eligible pursuant to the Cal Grant Program, if specified conditions are met.

end insert
begin insert

This bill would partially exempt from this limitation on California National Guard Education Assistance Awards a student who was enrolled and received a California National Guard Education Assistance Award at a California campus of Heald College, and who was unable to complete an educational program offered by the campus due to its closure.

end insert
begin delete

(6)

end delete

begin insert(7)end insert 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.

begin delete

(7)

end delete

begin insert(8)end insert 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.

begin delete

(8)

end delete

begin insert(9)end insert 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
P5    1by the closure of Corinthian Colleges, Inc., that took place on April
227, 2015.

3(b) (1) The sum of one hundred thousand dollars ($100,000)
4is hereby appropriated from the General Fund to the Chancellor
5of the California Community Colleges for allocation to a
6community college district to conduct a statewide media campaign
7to inform students affected by the closure of Corinthian Colleges,
8Inc., of education opportunities available at community colleges.

9(2) For purposes of making the computations required by Section
108 of Article XVI of the California Constitution, the funds
11appropriated pursuant to this section shall be deemed to be
12“General Fund revenues appropriated for community college
13districts,” as defined in subdivision (d) of Section 41202 of the
14Education Code, for the 2014-15 fiscal year, and included within
15the “total allocations to school districts and community college
16districts from General Fund proceeds of taxes appropriated pursuant
17to Article XIII B,” as defined in subdivision (e) of Section 41202
18of the Education Code, for the 2014-15 fiscal year.

19

SEC. 2.  

It is the intent of the Legislature that unencumbered
20restitution funds awarded to the state from a lawsuit involving
21Corinthian Colleges, Inc., and its affiliate institutions, including
22Heald College, shall be used to repay any funds provided to those
23students pursuant to this act.

24

SEC. 3.  

Section 69433.61 is added to the Education Code, to
25read:

26

69433.61.  

(a) Notwithstanding any other law, a student who
27was enrolled and received a Cal Grant award in the 2013-14 or
282014-15 academic year at a California campus ofbegin delete a Corinthian
29Colleges, Inc., institution, includingend delete
Heald College, and was unable
30to complete an educational program offered by the campus due to
31the campus’s closure on April 27, 2015, shall not have the award
32years used at abegin delete Corinthian Colleges, Inc.,end deletebegin insert Heald Collegeend insert campus
33considered for purposes of the limitation on the number of years
34of Cal Grant award eligibility. This restoration of award years for
35Cal Grant eligibility shall not exceed two years.

36 (b) A student shall be eligible for the restoration of award years
37if the student was enrolled at a campus ofbegin delete Corinthian Colleges,
38Inc.,end delete
begin insert Heald Collegeend insert on April 27, 2015, or had withdrawn from
39enrollment within 120 days of that date. The Bureau for Private
P6    1Postsecondary Education shall provide the commission with
2confirmation of student enrollment for purposes of this section.

3(c) An eligible student shall, before January 1, 2017, notify the
4commission of his or her intent to use the restoration of award
5years provided under this section and to enroll in an institution
6eligible for initial and renewal Cal Grant awards to be eligible for
7that restoration.

8begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 69999.19 is added to the end insertbegin insertEducation Codeend insertbegin insert, to
9read:end insert

begin insert
10

begin insert69999.19.end insert  

(a) Notwithstanding any other law, a student who
11was enrolled and received a California National Guard Education
12Assistance Award in the 2013-14 or 2014-15 academic year at a
13California campus of Heald College, and was unable to complete
14an educational program offered by the campus due to the campus’s
15closure on April 27, 2015, shall not have the award years used at
16a Heald College campus considered for purposes of the limitation
17on the number of years of California National Guard Education
18Assistance Award eligibility. This restoration of award years for
19California National Guard Education Assistance Award eligibility
20shall not exceed two years.

21(b) A student shall be eligible for the restoration of award years
22if the student was enrolled at a campus of Heald College on April
2327, 2015, or had withdrawn from enrollment within 120 days of
24that date. The Bureau for Private Postsecondary Education shall
25provide the commission with confirmation of student enrollment
26for purposes of this section.

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

end insert
32

begin deleteSEC. 4.end delete
33begin insertSEC. 5.end insert  

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.

P7    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
P8    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.,begin delete institution andend deletebegin insert institution,end insert was unable to complete
18an education program offered by the campus due to the campus’s
19closure on April 27,begin delete 2015.end deletebegin insert 2015, and has demonstrated need, as
20determined by the enrolling campus.end insert
This clause shall become
21inoperative on July 1, 2018.

22(v) Was enrolled at a California campus of a Corinthian
23Colleges, Inc.,begin delete institution andend deletebegin insert institution,end insert withdrew from an
24education program offered by the campus within 120 days, or a
25greater period determined by the Bureau for Private Postsecondary
26Education pursuant to Section 94923, of the campus’s closure on
27April 27,begin delete 2015.end deletebegin insert 2015, and has demonstrated need, as determined
28by the enrolling campus.end insert
This clause shall become inoperative on
29July 1, 2018.

30(2) (A) The board of governors, in consultation with students,
31faculty, and other key stakeholders, shall consider all of the
32following in the development and adoption of minimum academic
33and progress standards pursuant to subparagraph (A) of paragraph
34(1):

35(i) Minimum uniform academic and progress standards that do
36not unfairly disadvantage financially needy students in pursuing
37their education.

38(ii) Criteria for reviewing extenuating circumstances and
39granting appeals that, at a minimum, take into account and do not
40penalize a student for circumstances outside his or her control,
P9    1such as reductions in student support services or changes to the
2economic situation of the student.

3(iii) A process for reestablishing fee waiver eligibility that
4provides a student with a reasonable opportunity to continue or
5resume his or her enrollment at a community college.

6(B) To ensure that students are not unfairly impacted by the
7requirements of subparagraph (A) of paragraph (1), the board of
8governors shall establish a reasonable implementation period that
9commences no sooner than one year from adoption of the minimum
10academic and progress standards, or any subsequent changes to
11these standards, pursuant to subparagraph (A) of paragraph (1)
12and that is phased in to provide students adequate notification of
13this requirement and information about available support resources.

14(3) It is the intent of the Legislature that minimum academic
15and progress standards adopted pursuant to subparagraph (A) of
16paragraph (1) be implemented only as campuses develop and
17implement the student support services and interventions necessary
18to ensure no disproportionate impact to students based on ethnicity,
19gender, disability, or socioeconomic status. The board of governors
20shall consider the ability of community college districts to meet
21the requirements of this paragraph before adopting minimum
22 academic and progress standards, or any subsequent changes to
23these standards, pursuant to subparagraph (A) of paragraph (1).

24(4) It is the intent of the Legislature to ensure that a student shall
25not lose fee waiver eligibility without a community college campus
26first demonstrating a reasonable effort to provide a student with
27adequate notification and assistance in maintaining his or her fee
28waiver eligibility. The board of governors shall adopt regulations
29to implement this paragraph that ensure all of the following:

30(A) Students are provided information about the available
31student support services to assist them in maintaining fee waiver
32eligibility.

33(B) Community college district policies and course catalogs
34 reflect the minimum academic and progress standards adopted
35pursuant to subparagraph (A) of paragraph (1) and that appropriate
36notice is provided to students before the policies are put into effect.

37(C) A student does not lose fee waiver eligibility unless he or
38she has not met minimum academic and progress standards adopted
39pursuant to subparagraph (A) of paragraph (1) for a period of no
40less than two consecutive academic terms.

P10   1(5) The board of governors shall provide notification of a
2proposed action to adopt regulations pursuant to this subdivision
3to the appropriate policy and fiscal committees of the Legislature
4in accordance with the requirements of paragraph (1) of subdivision
5(a) of Section 70901.5. This notification shall include, but not be
6limited to, all of the following:

7(A) The proposed minimum academic and progress standards
8and information detailing how the requirements of paragraphs (1)
9to (4), inclusive, have been or will be satisfied.

10(B) How many students may lose fee waiver eligibility by
11ethnicity, gender, disability, and, to the extent relevant data is
12available, by socioeconomic status.

13(C) The criteria for reviewing extenuating circumstances,
14granting appeals, and reestablishing fee waiver eligibility pursuant
15to paragraph (2).

16(h) The fee requirements of this section shall be waived for any
17student who, at the time of enrollment, is a dependent or surviving
18spouse who has not remarried, of any member of the California
19National Guard who, in the line of duty and while in the active
20service of the state, was killed, died of a disability resulting from
21an event that occurred while in the active service of the state, or
22is permanently disabled as a result of an event that occurred while
23in the active service of the state. “Active service of the state,” for
24the purposes of this subdivision, refers to a member of the
25California National Guard activated pursuant to Section 146 of
26the Military and Veterans Code.

27(i) The fee requirements of this section shall be waived for any
28student who is the surviving spouse or the child, natural or adopted,
29of a deceased person who met all of the requirements of Section
3068120.

31(j) The fee requirements of this section shall be waived for any
32student in an undergraduate program, including a student who has
33previously graduated from another undergraduate or graduate
34program, who is the dependent of any individual killed in the
35September 11, 2001, terrorist attacks on the World Trade Center
36and the Pentagon or the crash of United Airlines Flight 93 in
37southwestern Pennsylvania, if that dependent meets the financial
38need requirements set forth in Section 69432.7 for the Cal Grant
39A Program and either of the following applies:

P11   1(1) The dependent was a resident of California on September
211, 2001.

3(2) The individual killed in the attacks was a resident of
4California on September 11, 2001.

5(k) A determination of whether a person is a resident of
6California on September 11, 2001, for purposes of subdivision (j)
7shall be based on the criteria set forth in Chapter 1 (commencing
8with Section 68000) of Part 41 of Division 5 for determining
9nonresident and resident tuition.

10(l) (1) “Dependent,” for purposes of subdivision (j), is a person
11who, because of his or her relationship to an individual killed as
12a result of injuries sustained during the terrorist attacks of
13September 11, 2001, qualifies for compensation under the federal
14September 11th Victim Compensation Fund of 2001 (Title IV
15(commencing with Section 401) of Public Law 107-42).

16(2) A dependent who is the surviving spouse of an individual
17killed in the terrorist attacks of September 11, 2001, is entitled to
18the waivers provided in this section until January 1, 2013.

19(3) A dependent who is the surviving child, natural or adopted,
20of an individual killed in the terrorist attacks of September 11,
212001, is entitled to the waivers under subdivision (j) until that
22person attains 30 years of age.

23(4) A dependent of an individual killed in the terrorist attacks
24of September 11, 2001, who is determined to be eligible by the
25 California Victim Compensation and Government Claims Board,
26is also entitled to the waivers provided in this section until January
271, 2013.

28(m) (1) It is the intent of the Legislature that sufficient funds
29be provided to support the provision of a fee waiver for every
30student who demonstrates eligibility pursuant to subdivisions (g)
31to (j), inclusive.

32(2) From funds provided in the annual Budget Act, the board
33of governors shall allocate to community college districts, pursuant
34to this subdivision, an amount equal to 2 percent of the fees waived
35pursuant to subdivisions (g) to (j), inclusive. From funds provided
36in the annual Budget Act, the board of governors shall allocate to
37community college districts, pursuant to this subdivision, an
38amount equal to ninety-one cents ($0.91) per credit unit waived
39pursuant to subdivisions (g) to (j), inclusive. It is the intent of the
40Legislature that funds provided pursuant to this subdivision be
P12   1used to support the determination of financial need and delivery
2of student financial aid services, on the basis of the number of
3students for whom fees are waived. It also is the intent of the
4Legislature that the funds provided pursuant to this subdivision
5directly offset mandated costs claimed by community college
6districts pursuant to Commission on State Mandates consolidated
7Test Claims 99-TC-13 (Enrollment Fee Collection) and 00-TC-15
8(Enrollment Fee Waivers). Funds allocated to a community college
9district for determination of financial need and delivery of student
10financial aid services shall supplement, and shall not supplant, the
11level of funds allocated for the administration of student financial
12aid programs during the 1992-93 fiscal year.

13(n) The board of governors shall adopt regulations implementing
14this section.

15(o) This section shall become operative on May 1, 2012, only
16if subdivision (b) of Section 3.94 of the Budget Act of 2011 is
17operative.

18

begin deleteSEC. 5.end delete
19begin insertSEC. 6.end insert  

Section 94051 is added to the Education Code, to read:

20

94051.  

Notwithstanding any provision of law, for a period not
21to exceed two years from the date of the closure of Corinthian
22Colleges, Inc., a state agency that provides certification,
23registration, or licensure necessary to promote the safety and
24protection of the public may, on a case-by-case basis, consider for
25certification, registration, or licensure students who were enrolled
26in a program of Corinthian Colleges, Inc., that provided education
27or training aimed towards these students receiving certification,
28registration, or licensure from the state agency, and who did not
29receive that certification, registration, or licensure due to the closure
30of Corinthian Colleges, Inc. This consideration shall be provided
31at the discretion of the state agency in accordance with its public
32protection mandate and applicable criteria established by the
33agency for consumer safety.

34

begin deleteSEC. 6.end delete
35begin insertSEC. 7.end insert  

Section 94923 of the Education Code is amended to
36read:

37

94923.  

(a) The Student Tuition Recovery Fund relieves or
38mitigates economic loss suffered by a student while enrolled in an
39educational program, as defined in Section 94837, at a campus or
40through a distance education program offered by an institution
P13   1with a physical presence in this state, including any affiliates of
2that institution, except at an independent institution of higher
3education, as defined in Section 66010, that is exempt from this
4chapter pursuant to subdivision (i) of Section 94874, who, at the
5time of his or her enrollment, was a California resident or was
6enrolled in a California residency program, prepaid tuition, and
7suffered economic loss.

8(b) The bureau shall adopt by regulation procedures governing
9the administration and maintenance of the Student Tuition
10Recovery Fund, including requirements relating to assessments
11on students and student claims against the Student Tuition
12Recovery Fund. The regulations shall provide for awards to
13students who suffer economic loss.

14The regulations shall ensure that the following students, and any
15other students deemed appropriate, are eligible for payment from
16the Student Tuition Recovery Fund:

17(1) Any student who was enrolled at an institution, at a location
18of the institution, or in an educational program offered by the
19institution, at the time that institution, location, or program was
20closed or discontinued, as applicable, who did not choose to
21participate in a teach-out plan approved by the bureau or did not
22complete a chosen teach-out plan approved by the bureau.

23(2) Any student who was enrolled at an institution or a location
24of the institution within the 120-day period before the closure of
25the institution or location of the institution, or who was enrolled
26in an educational program within the 120-day period before the
27program was discontinued, if the bureau determines there was a
28significant decline in the quality or value of that educational
29program during that time period.

30(3) Any student who was enrolled at an institution or a location
31of the institution more than 120 days before the closure of the
32institution or location of the institution, in an educational program
33offered by the institution as to which the bureau determines there
34was a significant decline in the quality or value of the program
35more than 120 days before closure.

36(4) A student to whom an institution has been ordered to pay a
37refund by the bureau but has failed to do so.

38(5) A student to whom an institution has failed to pay or
39reimburse loan proceeds under a federal student loan program as
P14   1required by law, or has failed to pay or reimburse proceeds received
2by the institution in excess of tuition and other costs.

3(6) A student who has been awarded restitution, a refund, or
4other monetary award by an arbitrator or court, based on a violation
5of this chapter by an institution or representative of an institution,
6but who has been unable to collect the award from the institution.
7The bureau shall review the award or judgment and shall ensure
8the amount to be paid from the fund does not exceed the student’s
9economic loss.

10(7) Notwithstanding the requirement of subdivision (a) that the
11institution not be exempt from this article, a student who was
12enrolled at a California campus of a Corinthian Colleges, Inc.,
13institution or was a California student enrolled in an online program
14offered by an out-of-state campus of a Corinthian Colleges, Inc.,
15institution, who also meets all of the other eligibility requirements,
16if the student was enrolled as of April 27, 2015, or withdrew within
17120 days of that date or any greater period determined by the
18bureau pursuant to this section.

19(c) Any student who is required to pay a Student Tuition
20Recovery Fund assessment who pays tuition equal to or greater
21than the required assessment shall be deemed to have paid the
22required assessment, whether or not his or her enrollment
23agreement specifies collection of the required assessment, and
24whether or not the institution identifies any money collected from
25the student as a Student Tuition Recovery Fund assessment.

26(d) The bureau shall establish regulations ensuring, as
27permissible under California law, that a student who suffers
28educational opportunity losses, whose charges are paid by a
29third-party payer, is eligible for educational credits under the fund.

30(e) The bureau may seek repayment to the Student Tuition
31Recovery Fund from an institution found in violation of the law
32for which a student claim was paid. An institution shall not be
33eligible to renew its approval to operate with the bureau if the
34 repayment is not made to the bureau as requested.

35(f) The bureau shall, by regulation, define “economic loss.” The
36regulation shall ensure that the definition of “economic loss”
37includes, but is not necessarily limited to, pecuniary loss, which
38is the sum of the student’s tuition, all other institutional charges
39as defined in Section 94844, the cost of equipment and materials
40required for the educational program as defined in Section 94837,
P15   1interest on any student loan used to pay for such charges, collection
2costs, penalties, and any license or examination fees the student
3paid to the institution but is unable to recover. Economic loss shall
4also include the amount the institution collected and failed to pay
5to third parties on behalf of the student for license fees or any other
6purpose. Economic loss does not include Student Tuition Recovery
7Fund assessments, unless the student is entitled to a full refund
8under Section 94919 or 94920, room and board, supplies,
9transportation, application fees, or nonpecuniary damages such as
10inconvenience, aggravation, emotional distress, or punitive
11damages. Economic loss does not include legal fees, attorney fees,
12court costs, or arbitration fees. Nothing in this subdivision shall
13prevent the bureau from further defining economic loss to include
14loss of educational opportunity.

15(g) A representation or agreement made by a person not to
16collect on a student loan shall not lessen a student’s eligibility to
17recover from the Student Tuition Recovery Fund or reduce the
18amount of the student’s economic loss unless the loan has been
19forgiven, discharged, or canceled in accordance with this section.

20

begin deleteSEC. 7.end delete
21begin insertSEC. 8.end insert  

Section 94924 of the Education Code is amended to
22read:

23

94924.  

(a) The bureau shall determine the amount of Student
24Tuition Recovery Fund assessments to be collected for each
25student.

26(b) An institution may submit Student Tuition Recovery Fund
27assessments to the bureau for its students who are enrolled at the
28institution, but shall not advertise or market this as a benefit it
29provides for its students.

30(c) All assessments collected pursuant to this article shall be
31credited to the Student Tuition Recovery Fund, along with any
32accrued interest, for the purpose of this article. Notwithstanding
33Section 13340 of the Government Code, the moneys in the Student
34Tuition Recovery Fund are continuously appropriated to the bureau,
35without regard to fiscal year, for the purposes of this article.

36(d) Except when an institution provides a full refund pursuant
37to Section 94919 or Section 94920, the Student Tuition Recovery
38Fund assessment is nonrefundable.

P16   1(e) The bureau shall collect Student Tuition Recovery Fund
2assessments from an institution for all of the institution’s enrolled
3students as follows:

4(1) For an institution that is not approved to operate as of the
5date this subdivision becomes operative, the bureau shall collect
6assessments from the institution upon issuance of the institution’s
7approval to operate.

8(2) For an institution that is approved to operate as of the date
9this subdivision becomes operative, the bureau shall collect
10assessments from the institution for its enrolled students for whom
11an assessment has not been collected, including assessments for
12students enrolled in distance education programs.

13

begin deleteSEC. 8.end delete
14begin insertSEC. 9.end insert  

Section 94925 of the Education Code is amended to
15read:

16

94925.  

(a) The amount in the Student Tuition Recovery Fund
17shall not exceed fifty million dollars ($50,000,000) at any time.

18(b) If the bureau has temporarily stopped collecting the Student
19Tuition Recovery Fund assessments because the fund has
20approached the fifty million dollar ($50,000,000) limit in
21subdivision (a), the bureau shall resume collecting Student Tuition
22Recovery Fund assessments when the fund falls below forty-five
23million dollars ($45,000,000).

24(c) An otherwise eligible student who enrolled during a period
25when institutions were not required to collect Student Tuition
26 Recovery Fund assessments is eligible for Student Tuition
27Recovery Fund payments despite not having paid any Student
28Tuition Recovery Fund assessment.

29(d) A student who is eligible for recovery from the Student
30Tuition Recovery Fund pursuant to paragraph (7) of subdivision
31(b) of Section 94923 shall be eligible for payments despite not
32having paid any Student Tuition Recovery Fund assessment.

33

begin deleteSEC. 9.end delete
34begin insertSEC. 10.end insert  

The heading of Article 15 (commencing with Section
3594926) of Chapter 8 of Part 59 of Division 10 of Title 3 of the 36Education Code is amended to read:

37 

38Article 15.  Institutional Closure and Teach-outs
39

 

P17   1

begin deleteSEC. 10.end delete
2begin insertSEC. 11.end insert  

Section 94926 of the Education Code is amended to
3read:

4

94926.  

(a) At least 30 days prior to closing, the institution
5shall notify the bureau in writing of its intention to close. The
6notice shall be accompanied by a closure plan, which shall include,
7but not necessarily be limited to, all of the following:

8(1) A plan for providing teach-outs of educational programs,
9including any agreements with any other postsecondary educational
10institutions to provide teach-outs.

11(2) If no teach-out plan is contemplated, or for students who do
12not wish to participate in a teach-out, arrangements for making
13refunds within 45 days from the date of closure, or for institutions
14that participate in federal student financial aid programs
15arrangements for making refunds and returning federal student
16financial aid program funds.

17(3) If the institution is a participant in federal student financial
18aid programs, it shall provide students information concerning
19these programs and institutional closures.

20(4) A plan for the disposition of student records.

21(b) Until January 1, 2020, there shall be established a single
22point of contact to respond to the closure of institutions that do
23not comply with requirements established under state and federal
24law. The goal of the point of contact shall be to ensure that students
25who were enrolled at, or in an online program offered by, an
26institution that has closed receive accurate and timely information
27regarding the school closure process and the students’ rights and
28responsibilities under federal and state law. The point of contact’s
29duties shall include, but not be limited to, all of the following:

30(1) Coordinating and working in consultation with state and
31federal agencies, including, but not limited to, the Bureau for
32Private Postsecondary Education, the Student Aid Commission,
33the Office of the Chancellor of the California Community Colleges,
34the Department of Veterans Affairs, the federal Consumer Financial
35Protection Bureau, and the United States Department of Education
36to determine both of the following:

37(A) Options and resources available to students.

38(B) Criteria which indicate additional steps are necessary for
39state agencies to take to ensure the protection of the public from
40school closures.

P18   1(2) Establishing and maintaining an Internet Web site to provide
2information to students about options available in the event of a
3school closure, including information necessary to help a student
4make an informed decision about whether to seek a loan discharge
5or to transfer credits. The Internet Web site shall list the names of
6institutions that are on the United States Department of Education’s
7list for heightened cash monitoring.

8(3) Assisting students in obtaining important documentation
9from a closed institution, including, but not limited to, their
10enrollment agreements, records, transcripts, and loan information.

11(c) (1) Consideration should be given to establishing the single
12point of contact within the Attorney General’s office.

13(2) The Legislature finds that the Attorney General’s office has
14expertise in complex legal situations such as those facing students
15impacted by the sudden and abrupt closure of their educational
16institutions and has established an online tool for students to receive
17a personalized resource sheet regarding the types of relief available
18to them.

19(3) The Legislature finds that, among the involved agencies,
20the Attorney General’s office is the best situated to continue
21playing a central, coordinating role in the effort to assist students
22of an institution that has closed.

23(4) This subdivision shall not be construed to authorize the
24Attorney General’s office to breach any of its responsibilities or
25to provide individual legal assistance or representation to students
26of an institution that has closed. If the single point of contact is
27established within the Attorney General’s office, the responsibilities
28of the single point of contact shall be separate and distinct from
29the office’s efforts to uphold state law, represent state agencies,
30and undertake related actions.

31

begin deleteSEC. 11.end delete
32begin insertSEC. 12.end insert  

Section 94926.5 is added to the Education Code, to
33read:

34

94926.5.  

(a) Upon the unlawful closure of an institution, grant
35funds shall be timely provided in accordance with this section to
36eligible local nonprofit community service organizations, including,
37but not limited to, legal aid organizations, organizations offering
38free services for counseling on student loan debt problems, and
39organizations assisting with the arrangement of debt management
40and settlement plans, to assist the students of that closed institution,
P19   1including veterans, for no less than one year following the closure
2of the institution, with loan discharge and other student loan-related
3requests and tuition recovery-related claims. Assistance shall
4include, but is not limited to, outreach and education, screening
5 requests for assistance, referring students for additional legal
6assistance through pro bono referral programs, and legal services.
7For purposes of this section, an “eligible local nonprofit community
8service organization” is an organization that satisfies both of the
9following conditions:

10(1) The organization is a 501(c)(3) tax-exempt organization in
11good standing with the Internal Revenue Service and in compliance
12with all applicable laws and requirements.

13(2) The organization demonstrates expertise in assisting students
14with, and currently provides direct legal services to students for,
15student loan matters.

16(b) The amount of grant funds shall be calculated by multiplying
17the number of students affected by the institution’s closure by one
18hundred dollars ($100).

19(c) (1) The bureau shall notify the Attorney General of all
20unlawful school closures within 15 days of the closure.

21(2) The notification shall include the name and location of the
22school, the programs, and the number of students affected at each
23site of the school, as appropriate. The bureau shall provide the
24Attorney General with all additional information that the Attorney
25General may request.

26(3) The Attorney General shall, within 90 days of receipt of the
27notification, solicit grant applications from eligible local nonprofit
28community service organizations as described in subdivision (a),
29select one or more of these organizations from among the
30applicants who are deemed to be qualified by the Attorney General,
31and notify the bureau and the recipient organization or
32organizations of the selection. The Attorney General may enter
33into a contract with another qualified entity to perform the Attorney
34General’s duties under this subdivision.

35(d) An eligible local nonprofit community service organization
36that receives funds pursuant to this section shall enter into a grant
37agreement with the Attorney General, or a qualified entity entrusted
38with this authority pursuant to paragraph (3) of subdivision (c), as
39applicable, and shall use grant funds exclusively for the purposes
40set forth in this section in accordance with the agreement. Any
P20   1unused funds shall be returned to the Attorney General unless the
2parties of the agreement enter into a new agreement authorizing
3the organization to expend the unused funds. The Attorney General,
4or a qualified entity, may terminate the agreement for material
5breach. However, the Attorney General, or a qualified entity, shall
6provide the grantee with written notice of the breach and a
7reasonable opportunity of not less than 30 days to resolve the
8breach.

9(e) An eligible local nonprofit community service organization
10that receives a grant may give priority to low-income students if
11demand exceeds available grant funds. Otherwise, the organization
12may provide assistance regardless of student income level.

13(f) An eligible local nonprofit community service organization
14that receives a grant shall report to the Attorney General, or a
15qualified entity pursuant to paragraph (3) of subdivision (c), as
16applicable, quarterly through the grant period on the number of
17students served from the date funds are distributed.

18(g) Funds shall be distributed by the Attorney General, or a
19qualified entity pursuant to paragraph (3) of subdivision (c), as
20applicable, to preapproved local nonprofit community service
21organizations as follows:

22(1) For a school closure involving fewer than 250 students, 100
23 percent of the grant funds shall be distributed within 30 days of
24the selection of one or more recipient organizations.

25(2) For a school closure involving 250 or more students:

26(A) Fifty percent shall be distributed within 30 days of the date
27of the institution’s unlawful closure.

28(B) Twenty-five percent shall be distributed upon the submission
29of the eligible local nonprofit community service organization’s
30second quarterly report.

31(C) Twenty-five percent shall be distributed upon the submission
32of the eligible local nonprofit community service organization’s
33third quarterly report.

34(h) This section shall become inoperative on July 1, 2020, and,
35as of January 1, 2021, is repealed, unless a later enacted statute,
36that becomes operative on or before January 1, 2021, deletes or
37extends the date on which it becomes inoperative and is repealed.

38

begin deleteSEC. 12.end delete
39begin insertSEC. 13.end insert  

(a) The sum of one million three hundred thousand
40dollars ($1,300,000) is hereby appropriated from the Private
P21   1Postsecondary Education Administration Fund to the Bureau of
2Private Postsecondary Education for the purposes of providing
3financial grants pursuant to Section 94926.5 of the Education Code
4to eligible local nonprofit community service organizations for
5students affected by the closure of Corinthian Colleges, Inc.
6Eligible local nonprofit community service organizations may use
7grant funds received pursuant to Section 94926.5 of the Education
8Code for affected students served from the date of closure.
9Notwithstanding subdivision (g) of Section 94926.5, the Bureau
10of Private Postsecondary Education shall ensure that these grant
11funds are made available within 30 days of the enactment of this
12section. The adoption of any regulation pursuant to this subdivision
13shall be deemed to be an emergency and necessary for the
14immediate preservation of the public, health, and safety, or general
15welfare.

16(b) The amount appropriated in subdivision (a) may include
17revenues derived from the assessment of fines and penalties
18imposed, and expenditures of these funds is specifically authorized
19for purposes of Section 13332.18 of the Government Code.

20(c) The Private Postsecondary Education Administration Fund
21reserve limit of six months of operating expenses pursuant to
22subdivision (b) of Section 94930 of the Education Code shall be
23suspended until July 1, 2016.

24

begin deleteSEC. 13.end delete
25begin insertSEC. 14.end insert  

If the Commission on State Mandates determines that
26this act contains costs mandated by the state, reimbursement to
27local agencies and school districts for those costs shall be made
28pursuant to Part 7 (commencing with Section 17500) of Division
294 of Title 2 of the Government Code.

30

begin deleteSEC. 14.end delete
31begin insertSEC. 15.end insert  

This act is an urgency statute necessary for the
32immediate preservation of the public peace, health, or safety within
33the meaning of Article IV of the Constitution and shall go into
34immediate effect. The facts constituting the necessity are:

35In order to provide immediate educational and economic relief
36to the thousands of students harmed by the closure of Corinthian
37Colleges, Inc., it is necessary for this act to take effect immediately.



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