Amended in Senate September 4, 2015

Amended in Senate August 31, 2015

Amended in Senate August 18, 2015

Amended in Senate July 9, 2015

Amended in Senate June 2, 2015

Amended in Assembly May 11, 2015

Amended in Assembly May 7, 2015

Amended in Assembly May 4, 2015

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 amendbegin delete Sections 76300, 94925, and 94926end deletebegin insert Section 94925end insert of,begin delete 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 delete and to add Sections 69433.61, 69999.19, 94051, and 94926.5 to, the Education Code, relating to higher education, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

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

begin delete

(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.

end delete
begin delete

This bill would, until July 1, 2018, require the board of governors to waive the fee for students who meet prescribed requirements, were enrolled at a California campus of a Corinthian Colleges, Inc., institution, and were either unable to complete an educational program offered by the campus due to the campus’s closure on April 27, 2015, or withdrew from an educational program offered by a Corinthian Colleges campus after the earlier of either (A) 120 days before the closure, or an earlier date as may determined by the Bureau for Private Postsecondary Education, or (B) the date set by the United States Department of Education for closed school loan discharge eligibility, and have demonstrated financial need, as determined by the enrolling campus. To the extent this provision would impose additional duties on community college districts, it would constitute a state-mandated local program.

end delete
begin delete

(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.

end delete
begin delete

This bill would provide that, until January 1, 2020, the Governor shall establish a single point of contact to respond to each closure of an institution that does not comply with these closure and related requirements prior to closing. The bill would require the single point of contact to assist the students who were enrolled at, or in an online program offered by, an institution that closes in, among other things, receiving information on obtaining refunds, loan discharges, and tuition recovery.

end delete
begin delete

(3)

end delete

begin insert(1)end insertbegin insertThe 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. end insertThe act also establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes. The act caps the amount that may be in the fund at any time at $25,000,000.

This bill would raise the cap for the fund tobegin delete $50,000,000. The bill would, upon the unlawful closure of an institution, require the Attorney General, or a qualified entity under contract with the Attorney General, to provide timely grant funds to eligible nonprofit community service organizations, as defined, to assist students of that institution with loan discharge and other student loan-related requests and tuition recovery-related claims, as specified. The bill would provide that the aggregate amount of these grants and the reasonable administrative costs to the Attorney General’s office related to the grants would be made available from the Student Tuition Recovery Fund, thereby making an appropriation.end deletebegin insert $30,000,000.end insert

begin delete

(4)

end delete

begin insert(2)end insert This bill would appropriate the sum of $1,300,000 from the Student Tuition Recovery Fund to thebegin delete Bureau of Private Postsecondary Educationend deletebegin insert Attorney Generalend insert for the purposes of providing grants to eligible nonprofit community service organizations to assistbegin insert eligibleend insert students affected by the closure of Corinthian Colleges, Inc., as defined, with loan discharge and other student loan-related requests and tuition recovery-related claims, and to paybegin insert an amount not to exceed $150,000end insert for the reasonable administrative costs of the Attorney General’s office related to these grants, as specified, thereby making an appropriation.begin delete The bill would require the bureau to ensure that these grant funds are made available within 30 days of its enactment.end deletebegin insert The bill would require the bureau to notify the Attorney General of all unlawful Corinthian Colleges, Inc., closures within 15 days of the effective date of these provisions. The bill would require the Attorney General to, among other things, within 90 days of the notification, solicit grant applications from eligible nonprofit community service organizations, select one or more of these organizations deemed to be qualified, and set additional terms and conditions of the grants as necessary. The bill would set a schedule for how grant funds are to be distributed. The bill would require the grantee to submit specified information to the Attorney General on a quarterly basis, and require the Attorney General to make these reports available to the Legislature and the bureau upon request. The bill would require the Attorney General to provide the Legislature and the bureau a final report summarizing all the information submitted to it by grantees, promptly following the time when all funds are expended by the grantees, or by August, 1, 2018, whichever is earlier. The bill would authorize the Attorney General to contract with another qualified entity to perform the Attorney General’s duties under these provisions.end insert

begin insert

(3) This bill would, for a period not to exceed 2 years from April 27, 2015, authorize state agencies that provide certification, registration, or licensure necessary to promote the safety and protection of the public to, on a case-by-case basis, consider for certification, registration, or licensure students who were enrolled in a program of Corinthian Colleges, Inc., that provided education or training aimed towards these students receiving certification, registration, or licensure from the state agency, and who did not receive that certification, registration, or licensure due to the closure of that institution.

end insert
begin delete

(5)

end delete

begin insert(4)end insert The Cal Grant Program prohibits an applicant from receiving Cal Grant awards totaling in excess of the amount equivalent to the award level for a total of four years of full-time attendance in an undergraduate program, except as provided.

This bill would partially exempt from this limitation on Cal Grant awards a student who was enrolled and received a Cal Grant award at a California campus of Heald College, and who was unable to complete an educational program offered by the campus due to its closure.

begin delete

(6)

end delete

begin insert(5)end insert The California National Guard Education Assistance Award Program authorizes the renewal of California National Guard Education Assistance Awards, for a maximum of the greater of either four years of full-time equivalent enrollment or the duration for which the qualifying member would otherwise be eligible pursuant to the Cal Grant Program, if specified conditions are met.

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

begin delete

(7) This bill would appropriate $100,000 from the General Fund to the Chancellor of the California Community Colleges for allocation to a community college district for the purpose of conducting a statewide media campaign to inform students affected by the closure of Corinthian Colleges, Inc., of the education opportunities available at community colleges, thereby making an appropriation.

end delete
begin delete

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.

end delete
begin delete

(8) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end delete
begin delete

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.

end delete
begin delete

(9)

end delete

begin insert(6)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: begin deleteyes end deletebegin insertnoend insert.

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

begin delete
P5    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
P6    1community college district to conduct a statewide media campaign
2to inform students affected by the closure of Corinthian Colleges,
3Inc., of education opportunities available at community colleges.

4(2) For purposes of making the computations required by Section
58 of Article XVI of the California Constitution, the funds
6appropriated pursuant to this section shall be deemed to be
7“General Fund revenues appropriated for community college
8districts,” as defined in subdivision (d) of Section 41202 of the
9Education Code, for the 2014-15 fiscal year, and included within
10the “total allocations to school districts and community college
11districts from General Fund proceeds of taxes appropriated pursuant
12to Article XIII B,” as defined in subdivision (e) of Section 41202
13of the Education Code, for the 2014-15 fiscal year.

end delete
14

begin deleteSEC. 2.end delete
15begin insertSECTION 1.end insert  

It is the intent of the Legislature that
16unencumbered restitution funds awarded to the state from a lawsuit
17involving Corinthian Colleges, Inc., and its affiliate institutions,
18including Heald College, shall be used to repay any funds provided
19tobegin delete thoseend delete students pursuant to this act.

20

begin deleteSEC. 3.end delete
21begin insertSEC. 2.end insert  

Section 69433.61 is added to the Education Code, to
22read:

23

69433.61.  

(a) Notwithstanding any other law, a student who
24was enrolled and received a Cal Grant award in the 2013-14 or
252014-15 academic year at a California campus of Heald College,
26and was unable to complete an educational program offered by
27the campus due to thebegin delete campus’send deletebegin insert campusend insertbegin insertend insert closure on April 27,
282015, shall not have the award years used at a Heald College
29campus considered for purposes of the limitation on the number
30of years of Cal Grant award eligibility. This restoration of award
31years for Cal Grant eligibility shall not exceed two years.

32 (b) A student shall be eligible for the restoration of award years
33if the student was enrolled at a campus of Heald College on April
3427, 2015, or withdrew from enrollment between July 1, 2014, and
35April 27, 2015. The Bureau for Private Postsecondary Education
36shall provide the commission withbegin delete confirmation ofend deletebegin insert information,
37if available, to confirmend insert
student enrollment for purposes of this
38section.

39(c) An eligible student shall, before January 1, 2017, notify the
40commission of his or her intent to use the restoration of award
P7    1years provided under this section and to enroll in an institution
2eligible for initial and renewal Cal Grant awards to be eligible for
3that restoration.

4

begin deleteSEC. 4.end delete
5begin insertSEC. 3.end insert  

Section 69999.19 is added to the Education Code, to
6read:

7

69999.19.  

(a) Notwithstanding any other law, a student who
8was enrolled and received a California National Guard Education
9Assistance Award in the 2013-14 or 2014-15 academic year at a
10California campus of Heald College, and was unable to complete
11an educational program offered by the campus due to thebegin delete campus’send delete
12begin insert campusend insertbegin insertend insert closure on April 27, 2015, shall not have the award years
13used at a Heald College campus considered for purposes of the
14limitation on the number of years of California National Guard
15Education Assistance Award eligibility. This restoration of award
16years for California National Guard Education Assistance Award
17eligibility shall not exceed two years.

18(b) A student shall be eligible for the restoration of award years
19if the student was enrolled at a campus of Heald College on April
2027, 2015, or withdrew from enrollment between July 1, 2014, and
21April 27, 2015. The Bureau for Private Postsecondary Education
22shall provide the commission withbegin delete confirmation ofend deletebegin insert information,
23if available, to confirmend insert
student enrollment for purposes of this
24section.

25(c) An eligible student shall, before January 1, 2017, notify the
26commission of his or her intent to use the restoration of award
27years provided under this section and to enroll in an institution
28eligible for initial and renewal California National Guard Education
29 Assistance Awards to be eligible for that restoration.

begin delete
30

SEC. 5.  

Section 76300 of the Education Code is amended to
31read:

32

76300.  

(a) The governing board of each community college
33district shall charge each student a fee pursuant to this section.

34(b) (1) The fee prescribed by this section shall be forty-six
35dollars ($46) per unit per semester, effective with the summer term
36of the 2012 calendar year.

37(2) The board of governors shall proportionately adjust the
38amount of the fee for term lengths based upon a quarter system,
39and also shall proportionately adjust the amount of the fee for
40summer sessions, intersessions, and other short-term courses. In
P8    1making these adjustments, the board of governors may round the
2per unit fee and the per term or per session fee to the nearest dollar.

3(c) For the purposes of computing apportionments to community
4college districts pursuant to Section 84750.5, the board of
5governors shall subtract, from the total revenue owed to each
6district, 98 percent of the revenues received by districts from
7charging a fee pursuant to this section.

8(d) The board of governors shall reduce apportionments by up
9to 10 percent to any district that does not collect the fees prescribed
10by this section.

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

12(1) Students enrolled in the noncredit courses designated by
13Section 84757.

14(2) California State University or University of California
15students enrolled in remedial classes provided by a community
16 college district on a campus of the University of California or a
17campus of the California State University, for whom the district
18claims an attendance apportionment pursuant to an agreement
19between the district and the California State University or the
20University of California.

21(3) Students enrolled in credit contract education courses
22pursuant to Section 78021, if the entire cost of the course, including
23administrative costs, is paid by the public or private agency,
24corporation, or association with which the district is contracting
25and if these students are not included in the calculation of the
26full-time equivalent students (FTES) of that district.

27(f) The governing board of a community college district may
28exempt special part-time students admitted pursuant to Section
2976001 from the fee requirement.

30(g) (1) The fee requirements of this section shall be waived for
31any student who meets all of the following requirements:

32(A) Meets minimum academic and progress standards adopted
33by the board of governors, which fulfill the requirements outlined
34in this paragraph and paragraphs (2) to (5), inclusive. Any
35minimum academic and progress standards adopted pursuant to
36this section shall be uniform across all community college districts
37and campuses. These standards shall not include a maximum unit
38cap, and community college districts and colleges shall not impose
39requirements for fee waiver eligibility other than the minimum
P9    1academic and progress standards adopted by the board of governors
2and the requirements of subparagraph (B).

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

4(i) At the time of enrollment, is a recipient of benefits under the
5Temporary Assistance for Needy Families program, the
6Supplemental Security Income/State Supplementary Payment
7Program, or a general assistance program.

8(ii) Demonstrates eligibility according to income standards
9established by regulations of the board of governors.

10(iii) Demonstrates financial need in accordance with the
11methodology set forth in federal law or regulation for determining
12the expected family contribution of students seeking financial aid.

13(iv) Was enrolled at a California campus of a Corinthian
14Colleges, Inc., institution, was unable to complete an education
15program offered by the campus due to the campus’s closure on
16April 27, 2015, and has demonstrated financial need, as determined
17by the enrolling campus. This clause shall become inoperative on
18July 1, 2018.

19(v) Was enrolled at a California campus of a Corinthian
20Colleges, Inc., institution, withdrew from an education program
21offered by the campus after the earlier of either (1) 120 days before
22the April 27, 2015, closure, or an earlier date as may be determined
23by the Bureau for Private Postsecondary Education pursuant to
24Section 94923, or (2) the date set by the United States Department
25of Education for closed school loan discharge eligibility, and has
26demonstrated financial need, as determined by the enrolling
27campus. This clause shall become inoperative on July 1, 2018.

28(2) (A) The board of governors, in consultation with students,
29faculty, and other key stakeholders, shall consider all of the
30following in the development and adoption of minimum academic
31and progress standards pursuant to subparagraph (A) of paragraph
32(1):

33(i) Minimum uniform academic and progress standards that do
34not unfairly disadvantage financially needy students in pursuing
35their education.

36(ii) Criteria for reviewing extenuating circumstances and
37granting appeals that, at a minimum, take into account and do not
38penalize a student for circumstances outside his or her control,
39such as reductions in student support services or changes to the
40economic situation of the student.

P10   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
20academic 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
32reflect 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
P11   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.

P12   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
16 the 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
P13   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.

end delete
16

begin deleteSEC. 6.end delete
17begin insertSEC. 4.end insert  

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

18

94051.  

Notwithstanding any provision of law, for a period not
19to exceed two years from the date of the closure of Corinthian
20Colleges, Inc., a state agency that provides certification,
21registration, or licensure necessary to promote the safety and
22protection of the public may, on a case-by-case basis, consider for
23certification, registration, or licensure students who were enrolled
24in a program of Corinthian Colleges, Inc., that provided education
25or training aimed towards these students receiving certification,
26registration, or licensure from the state agency, and who did not
27receive that certification, registration, or licensure due to the closure
28of Corinthian Colleges, Inc. This consideration shall be provided
29at the discretion of the state agency in accordance with its public
30protection mandate and applicable criteria established by the
31agency for consumer safety.

32

begin deleteSEC. 7.end delete
33begin insertSEC. 5.end insert  

Section 94925 of the Education Code is amended to
34read:

35

94925.  

(a) The amount in the Student Tuition Recovery Fund
36shall not exceedbegin delete fiftyend deletebegin insert thirtyend insert million dollarsbegin delete ($50,000,000)end delete
37begin insert ($30,000,000)end insert at any time.

38(b) If the bureau has temporarily stopped collecting the Student
39Tuition Recovery Fund assessments because the fund has
40approached thebegin delete fiftyend deletebegin insert thirtyend insert million dollarbegin delete ($50,000,000)end delete
P14   1begin insert (30,000,000)end insert limit in subdivision (a), the bureau shall resume
2collecting Student Tuition Recovery Fund assessments when the
3fund falls belowbegin delete fortyend deletebegin insert twentyend insert million dollarsbegin delete ($40,000,000).end delete
4begin insert ($20,000,000).end insert

5(c) An otherwise eligible student who enrolled during a period
6when institutions were not required to collect Student Tuition
7Recovery Fund assessments is eligible for Student Tuition
8Recovery Fund payments despite not having paid any Student
9Tuition Recovery Fund assessment.

begin delete
10

SEC. 8.  

The heading of Article 15 (commencing with Section
1194926) of Chapter 8 of Part 59 of Division 10 of Title 3 of the 12Education Code is amended to read:

13 

14Article 15.  Institutional Closure and Teach-outs
15

 

16

SEC. 9.  

Section 94926 of the Education Code is amended to
17read:

18

94926.  

(a) At least 30 days prior to closing, the institution
19shall notify the bureau in writing of its intention to close. The
20notice shall be accompanied by a closure plan, which shall include,
21but not necessarily be limited to, all of the following:

22(1) A plan for providing teach-outs of educational programs,
23including any agreements with any other postsecondary educational
24institutions to provide teach-outs.

25(2) If no teach-out plan is contemplated, or for students who do
26not wish to participate in a teach-out, arrangements for making
27refunds within 45 days from the date of closure, or for institutions
28that participate in federal student financial aid programs
29arrangements for making refunds and returning federal student
30financial aid program funds.

31(3) If the institution is a participant in federal student financial
32aid programs, it shall provide students information concerning
33these programs and institutional closures.

34(4) A plan for the disposition of student records.

35(b) Until January 1, 2020, the Governor shall establish a single
36point of contact to respond to each closure of an institution that
37does not comply with closure and related requirements established
38under state and federal law. The goal of the point of contact shall
39be to ensure that students who were enrolled at, or in an online
40program offered by, an institution that has closed receive accurate
P15   1and timely information regarding the school closure process and
2the students’ rights and responsibilities under federal and state
3law. The point of contact’s primary duty shall be to advocate on
4behalf of and represent the interest of California students who
5attended the closed institutions; other duties shall include, but not
6 necessarily be limited to, all of the following:

7(1) Coordinating and working in consultation with state and
8federal agencies, including, but not limited to, the Bureau for
9Private Postsecondary Education, the Student Aid Commission,
10the Attorney General’s Office, the Office of the Chancellor of the
11California Community Colleges, the Department of Veterans
12Affairs, the federal Consumer Financial Protection Bureau, and
13the United States Department of Education to determine both of
14the following:

15(A) Options and resources available to students.

16(B) Criteria which indicate additional steps are necessary for
17state agencies to take to ensure the protection of the public from
18school closures.

19(2) Establishing and maintaining an Internet Web site to provide
20information to students about options available in the event of a
21school closure, including information necessary to help a student
22make an informed decision about whether to seek a loan discharge
23or to transfer credits. The Internet Web site shall list the names of
24institutions that are on the United States Department of Education’s
25list for heightened cash monitoring.

26(3) Assisting students in obtaining important documentation
27from a closed institution, including, but not limited to, their
28enrollment agreements, records, transcripts, and loan information.

29(c) (1) For unlawful closures of large institutions regarding
30which the Attorney General has a pending investigation or ongoing
31litigation, consideration should be given to establishing the single
32point of contact within the Attorney General’s office.

33(2) The Legislature finds that the Attorney General’s office has
34expertise in complex legal situations such as those facing students
35impacted by the sudden and abrupt closure of their educational
36institutions and has established an online tool for students to receive
37a personalized resource sheet regarding the types of relief available
38to them.

P16   1(3) The Legislature finds that the Attorney General’s office is
2situated to continue playing a central role in the effort to assist
3students of an institution that has unlawfully closed.

4(4) This subdivision shall not be construed to authorize the
5Attorney General’s office to breach any of its responsibilities or
6to provide individual legal assistance or representation to students
7of an institution that has closed. If the single point of contact is
8established within the Attorney General’s office, the responsibilities
9of the single point of contact shall be separate and distinct from
10the office’s efforts to uphold state law, represent state agencies,
11and undertake related actions.

end delete
12

begin deleteSEC. 10.end delete
13begin insertSEC. 6.end insert  

Section 94926.5 is added to the Education Code, to
14read:

15

94926.5.  

(a) begin insertThe Legislature finds and declares all of the
16following:end insert

begin insert

17(1) Corinthian Colleges, Inc., has been the target of consumer
18and taxpayer protection enforcement efforts by the federal
19government, the Attorney General, and other state and federal
20authorities.

end insert
begin insert

21(2) Based on findings of harm to students enrolled at Corinthian
22Colleges, Inc., campuses, the United States Department of
23Education has announced debt relief programs to assist students,
24including all of the following:

end insert
begin insert

25(A) A student who attended a Corinthian Colleges, Inc., campus
26that closed on April 27, 2015, and withdrew any time after June
2720, 2014, is eligible to apply for a closed school loan discharge,
28so long as the student does not transfer earned credit and
29subsequently complete a comparable program at another
30institution.

end insert
begin insert

31(B) A student who believes he or she was a victim of fraud or
32other violations of state law by Corinthian Colleges, Inc., can
33apply for debt relief under borrower defense to repayment. The
34United States Department of Education has determined that
35Corinthian Colleges, Inc., misrepresented job placement rates for
36a majority of programs at its Heald College campuses between
372010 and 2014 and is in the process of establishing a specific
38process for federal loan discharge for these Heald students.

end insert
begin insert

P17   1(C) A Corinthian student who intends to submit a borrower
2defense claim may request loan forbearance while a claims review
3process is established and his or her claim is reviewed.

end insert
begin insert

4(3) Pursuant to Section 94923, the Student Tuition Recovery
5Fund exists to relieve or mitigate a student’s economic loss caused
6by a documented violation of certain laws or by institutional
7closure, as specified.

end insert
begin insert

8(4) On October 10, 2013, the Attorney General filed a lawsuit
9against Corinthian Colleges, Inc., for false and predatory
10advertising, intentional misrepresentations to students, securities
11fraud, and unlawful use of military seals in advertisements, in
12violation of the 2007 final judgment of the Los Angeles Superior
13Court in the People of the State of California v. Corinthian Schools,
14Inc.

end insert
begin insert

15(5) On April 16, 2015, the bureau issued an emergency decision
16ordering Corinthian Colleges, Inc., to cease enrollment of any
17new students in all programs at Everest College and WyoTech
18locations in California effective upon close of business April 23,
192015.

end insert
begin insert

20(6) It is consistent with the purpose of the Student Tuition
21Recovery Fund to provide assistance to Corinthian Colleges, Inc.,
22students to obtain federal and private loan discharge and other
23financial aid relief.

end insert

24begin insert(b)end insertbegin insertend insertUponbegin insert appropriation by the Legislature, in response toend insert thebegin insert end insert
25begin insertstudent harm caused by the practices andend insert unlawful closure ofbegin delete an
26institution,end delete
begin insert Corinthian Colleges, Inc.,end insert grant funds shall be timely
27provided in accordance with this section to eligible nonprofit
28community servicebegin delete organizations, including, but not limited to,
29legal aid organizations and organizations offering free services for
30counseling on student financial aid and loan debt problems,end delete

31begin insert organizations,end insert to assist thebegin insert eligibleend insert students of that closed
32institution, including veterans,begin delete for no less than one year following
33the closure of the institution,end delete
by relieving or mitigating the
34economic and educational opportunity lossbegin delete associated with the
35closure of theend delete
begin insert incurred by eligible students of thatend insert institution.
36begin delete Servicesend delete

37begin insert(c)end insertbegin insertend insertbegin insertServicesend insert provided by eligible nonprofit community services
38organizations shall include assistance with loan discharge and
39other student financial aid, veterans education benefits, loan-related
40relief, and tuition recovery-related claims. Assistance may include,
P18   1but is not limited to, outreach and education, screening requests
2for assistance, referring students for additional legal assistance
3through pro bono referral programs, and legal services.begin delete Theend delete

4begin insert(d)end insertbegin insertend insertbegin insertTheend insert terms and conditions of the grantbegin delete funds may permit
5recipients to use excess grant funds to provide assistance to other
6clients related to school closure or student debt.Forend delete
begin insert agreements
7shall ensure that grant funds are used for the exclusive purpose
8of assisting eligible students with federal and private loan
9discharge and other financial aid relief, and that students eligible
10to claim recovery through the Student Tuition Recovery Fund are
11referred to the bureau for assistance with claim processing.end insert

12begin insert(e)end insertbegin insertend insertbegin insertForend insert purposes of this section, an “eligible nonprofit
13community service organization” is an organization that satisfies
14all of the following conditions:

15(1) The organization is a 501(c)(3) tax-exempt organization in
16good standing with the Internal Revenue Service and in compliance
17with all applicable laws and requirements.

18(2) The organization demonstrates expertise in assisting students
19with, and currently provides free direct legal services to students
20for, or will work in partnership with or under the supervision of
21an attorney or a nonprofit legal services organization that has
22demonstrated expertise in assisting students with, student loan and
23tuition recovery-related matters.

24(3) The organization does not charge students for services,
25including services provided pursuant to this section.

begin delete

26(b) (1) The aggregate amount of these grant funds, which shall
27be made available from the Student Tuition Recovery Fund, shall
28be calculated by multiplying the number of students affected by
29the institution’s closure by one hundred dollars ($100).

30(2) The reasonable administrative costs of the Attorney
31General’s office pursuant to this section shall be made available
32from the Student Tuition Recovery Fund.

end delete
begin insert

33(f) For purposes of this section, an “eligible student” is a student
34who was enrolled at a California campus of, or a California student
35who was enrolled in an online campus of, a Corinthian Colleges,
36Inc., institution, and who is eligible to apply for debt relief from
37 the United States Department of Education or other student
38financial aid relief.

end insert
begin delete

39(c)

end delete

P19   1begin insert(g)end insert (1) The bureau shall notify the Attorney General of all
2unlawfulbegin delete schoolend deletebegin insert Corinthian Colleges, Inc.,end insert closures within 15 days
3of thebegin delete closure.end deletebegin insert effective date of this section.end insert

4(2) The notification shall include the name and location of the
5school, the programs, and the number of students affected at each
6site of the school, as appropriate. The bureau shall provide the
7Attorney General with all additional information that the Attorney
8General maybegin delete request.end deletebegin insert request, provided that the bureau has access
9to the requested information.end insert

10(3) The Attorney General shall, within 90 days of receipt of the
11notification, solicit grant applications from eligible nonprofit
12community service organizations as described in subdivisionbegin delete (a),end delete
13begin insert (e),end insert select one or more of these organizations from among the
14applicants who are deemed to be qualified by the Attorney General,
15set additional terms and conditions of the grants as necessary, and
16notify the bureau and the recipient organization or organizations
17of thebegin delete selection.end deletebegin insert selection and the share of grant funds available
18that the organization shall receive.end insert
The Attorney General may
19enter into a contract with another qualified entity to perform the
20Attorney General’s duties under this subdivision.

begin delete

21(d)

end delete

22begin insert(h)end insert An eligible nonprofit community service organization that
23receives funds pursuant to this section shall enter into a grant
24agreement with the Attorney General, or a qualified entity entrusted
25with this authority pursuant to paragraph (3) of subdivisionbegin delete (c),end delete
26begin insert (g),end insert as applicable, and shall use grant funds exclusively for the
27purposes set forth in this section in accordance with the agreement.
28Any unused funds shall be returned to the Attorneybegin delete General unless
29the parties of the agreement enter into a new agreement authorizing
30the organization to expend the unused funds.end delete
begin insert General, for return
31to the Student Tuition Recovery Fund.end insert
The Attorney General, or
32abegin insert contractedend insert qualified entity, may terminate thebegin insert grantend insert agreement
33for materialbegin delete breach.end deletebegin insert breach, and may require repayment of funds
34provided to the nonprofit community service organization during
35the time that the agreement was being materially breached.end insert

36 However, the Attorney General, or a qualified entity, shall provide
37the grantee with written notice of the breach and a reasonable
38opportunity of not less than 30 days to resolve the breach.

begin delete

39(e)

end delete

P20   1begin insert(i)end insert An eligible nonprofit community service organization that
2receives a grant may give priority to low-income students if
3demand exceeds available grant funds. Otherwise, the organization
4may provide assistance regardless of student income level.

begin delete

5(f)

end delete

6begin insert(j)end insertbegin insert(1)end insertbegin insertend insert An eligible nonprofit community service organization
7that receives a grant shall report to the Attorney General, or a
8qualified entity pursuant to paragraph (3) of subdivisionbegin delete (c),end deletebegin insert (g),end insert
9 as applicable, quarterly through the grant period onbegin delete the number of
10students served from the date funds are distributed.end delete
begin insert all of the
11following:end insert

begin insert

12(A) The number of eligible students served pursuant to the grant
13agreement.

end insert
begin insert

14(B) A detailed summary of services provided to those students.

end insert
begin insert

15(C) The number of Student Tuition Recovery Fund claims
16referred to the bureau.

end insert
begin insert

17(D) The number of federal loan forgiveness claims filed and the
18number of those claims approved, denied, and pending.

end insert
begin insert

19(E) Any other information that is deemed appropriate by the
20Attorney General or qualified entity, as applicable.

end insert
begin insert

21(2) The Attorney General or qualified entity, as applicable, shall
22make the reports submitted pursuant to paragraph (1) available
23to the Legislature and the bureau upon request.

end insert
begin insert

24(3) The Attorney General or qualified entity, as applicable, shall
25provide the Legislature and the bureau a final report summarizing
26the information submitted pursuant to paragraph (1) promptly
27following the time when all funds are expended by the grantees or
28by August 1, 2018, whichever is earlier.

end insert
begin delete

29(g)

end delete

30begin insert(k)end insert Funds shall be distributed to preapproved nonprofit
31community service organizations as follows:

begin delete

32(1) For a school closure involving fewer than 250 students, 100
33percent of the grant funds shall be distributed within 30 days of
34the grantee entering into a grant agreement.

35(2) For a school closure involving 250 or more students:

36(A)

end delete

37begin insert(1)end insert Fifty percent shall be distributedbegin insert to the granteeend insert within 30
38days of the grantee entering into a grant agreement.

begin delete

39(B)

end delete

P21   1begin insert(2)end insert Twenty-five percent shall be distributedbegin insert to the granteeend insert upon
2the submission of the grantee’s second quarterly report.

begin delete

3(C)

end delete

4begin insert(3)end insert Twenty-five percent shall be distributedbegin insert to the granteeend insert upon
5the submission of the grantee’s third quarterly report.

begin insert

6(l) Eligible nonprofit community service organizations may use
7grant funds received pursuant to this section to pay the costs of
8assisting eligible students who have been served after the date of
9closure until June 30, 2018, or until any later date as may be
10determined necessary by the Attorney General.

end insert
begin insert

11(m) The adoption of any regulation pursuant to this section
12shall be deemed to be an emergency and necessary for the
13immediate preservation of the public health and safety, or general
14welfare.

end insert
15

begin deleteSEC. 11.end delete
16begin insertSEC. 7.end insert  

(a) The sum of one million three hundred thousand
17dollars ($1,300,000) is hereby appropriated from the Student
18Tuition Recovery Fund to thebegin delete Bureau of Private Postsecondary
19Educationend delete
begin insert Attorney Generalend insert for the purposes of providing grants
20begin delete to eligible nonprofit community service organizations to assist
21eligible students affected by the closure of Corinthian Colleges,
22Inc.,end delete
begin insert pursuant to Section 94926.5 of the Education Code,end insert and to
23paybegin insert an amount not to exceed one hundred fifty thousand dollars
24($150,000)end insert
for the reasonable administrative costs of the Attorney
25General’s office related to these begin delete grants, as provided in subdivision
26(b). Eligible nonprofit community service organizations may use
27grant funds received pursuant to this section for affected students
28who have been served from the date of closure.end delete
begin insert grants.end insert

begin delete

29(b) Grants shall be issued consistent with the procedures
30specified in Section 94926.5 of the Education Code, except that
31the Bureau of Private Postsecondary Education shall ensure that
32these grant funds are made available within 30 days of the
33enactment of this section.

34(c) The adoption of any regulation pursuant to this section shall
35be deemed to be an emergency and necessary for the immediate
36preservation of the public, health, and safety, or general welfare.

37(d) For purposes of this section the following definitions shall
38apply:

P22   1(1) “Eligible nonprofit community service organization” shall
2have the same meaning as specified in subdivision (a) of Section
394926.5 of the Education Code.

4(2) “Eligible students affected by the closure of Corinthian
5Colleges, Inc.” means either of the following:

6(A) A student who was enrolled at a California campus of a
7Corinthian Colleges, Inc., institution and was unable to complete
8an education program offered by the campus due to the campus’s
9closure on April 27, 2015.

10(B) A student who was enrolled at a California campus of a
11Corinthian Colleges, Inc., institution and withdrew from an
12education program offered by the campus after the earlier of either
13(i) 120 days before the April 27, 2015, closure, or an earlier date
14as may be determined by the Bureau for Private Postsecondary
15Education pursuant to Section 94923, or (ii) the date set by the
16United States Department of Education for closed school loan
17discharge eligibility.

end delete
begin delete
18

SEC. 12.  

If the Commission on State Mandates determines
19that this act contains costs mandated by the state, reimbursement
20to local agencies and school districts for those costs shall be made
21pursuant to Part 7 (commencing with Section 17500) of Division
224 of Title 2 of the Government Code.

end delete
23

begin deleteSEC. 13.end delete
24begin insertSEC. 8.end insert  

This act is an urgency statute necessary for the
25immediate preservation of the public peace, health, or safety within
26the meaning of Article IV of the Constitution and shall go into
27immediate effect. The facts constituting the necessity are:

28In order to provide immediate educational and economic relief
29to the thousands of students harmed by the closure of Corinthian
30Colleges, Inc., it is necessary for this act to take effect immediately.



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