Bureau for Private Postsecondary Education Undergoes Sunset Review

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By Madison Beck

On December 1, 2019, the Bureau of Private Postsecondary Education (BPPE) published its Sunset Review Report in preparation for its Sunset Review Oversight hearing before the Assembly Business and Professions Committee and the Senate Business, Professions and Economic Development Committee. Initially, the Bureaus’ enabling act, section 94800, et seq. of the Education Code, was scheduled to “sunset” (be repealed) on January 1, 2021, pursuant to section 94950 of the Education Code if not extended as part of the sunset review process.  [25:2 CRLR 117–119] Due to the COVID-19 pandemic, the original Sunset Review hearing set for March 30, 2020, was postponed to March 16, 2021, and BPPE was provided a one-year sunset extension to January 1, 2022, in SB 1474 (Committee on Business, Professions, and Economic Development) (Chapter 312, Statutes of 2020). [26:1 CRLR 146] The sunset process provides an opportunity for the Department of Consumer Affairs (DCA), the legislature, the bureaus, and interested parties to discuss BPPE’s performance, and make recommendations for improvements, and requires BPPE to justify its existence and effectiveness as a regulatory body under DCA in order for the sunset date to be extended another four years.

BPPE’s Sunset Report includes performance measures on licensing and enforcement programs, as well as responses to issues raised by the legislature during the Bureau’s last sunset review in 2016, and raises sixteen new issues that the Bureau seeks to discuss with the legislature as part of the sunset review process. For a complete list of new issues the Bureau is raising, see section eleven of the Report.

Of note, BPPE seeks a legislative change to section 94937 of the Education Code, which currently requires actual student harm before the Bureau can take disciplinary action for an institution’s violation of the law (Issue #1). Citing the legislative intent set forth in section 94801(d)(6), which is to ensure prevention of student and public harm as a result of fraudulent or substandard educational programs, the Bureau recommends amending section 94937 to authorize BPPE to take disciplinary action if there is potential harm to students. Additionally, BPPE seeks a statutory amendment to require institutions applying for an Approval to Operate with the Bureau to post a surety bond as part of the application process (Issue # 4). According to the Bureau, this practice would bring it in line with eleven other states[1] requiring the same, and with other DCA entities[2] which have authority to require a bond as part of the licensing process. When a school precipitously closes, the high extrinsic costs and unique student needs can be provided for by the surety bond. BPPE reports that sudden closure causes significant economic harm to students who have invested time and money for an incomplete program of study. The STRF helps mitigate some of these losses after the school closes but it is statutorily prohibited from funding the storage, maintenance and availability of student records, faculty compensation to complete instruction through the end of a term, or keeping temporary school staff to assist students in transferring to other institutions—all of which may be in the best interest of the students. The Bureau reported that it also incurs unforeseen travel and lodging costs for personnel to assist students across the state when the larger institutions close, which can cause personnel to be pulled from their normal duties, resulting in temporary backlogs.

In preparation for BPPE’s Joint Sunset Review Oversight hearing, committee staff issued a background paper for members of the respective Business and Professions committees, which provides background about the Bureau, updates the committees on the changes and improvements BPPE made regarding ten issues from the previous sunset review, and identifies  new issues to raise with the Bureau during the sunset review process.

Among its main concerns, the legislature asks whether the recent fee increases are necessary for the Bureau to remain solvent (Issue #2). Fees have increased at rates up to 1309% and the legislature raises the concern that ultimately students will bear the brunt of the heightened costs. Additionally, the legislature asks whether the current exemptions from oversight, such as the religious exemption, are sensible, or if changes are necessary (Issue #4).  Also of note, the legislature asks how BPPE ensures protection of students attending distance education provided by out-of-state institutions that lack physical presence that triggers oversight (Issue #7). The Background Paper points out that Section 94858 of the Education Code defines a Private Postsecondary Educational Institution as “a private entity with a physical presence in this state that offers postsecondary education to the public for an institutional charge,” yet fails to define physical presence, leading to confusion.

At the Joint Sunset Review Oversight hearing on March 16, 2021, the Director of the Department of Consumer Affairs, Kimberly Kirchmeyer, the Deputy Bureau Chief, Leeza Rifredi, and Office of Student Assistance and Relief (OSAR) Chief, Scott Valverde, appeared on behalf of the Bureau. After the initial presentation, the Bureau representatives addressed questions from members of the committees as to the fee increases, religious exemption, and oversight of out-of-state institutions as well as the accuracy of rates of job placement upon receipt of a certificate or license, the importance of surety bonds to private postsecondary institutions, and the need to amend the Bureau’s minimum operating standards to increase student protection and BPPE oversight.

The committees also heard comments from several public members as to the Bureau’s performance. Four former students of institutions licensed by the Bureau testified to various harms such as the failure of the Bureau to investigate a claim, the inability to find a job upon graduation, and the fact that hundreds of past students collectively owe over seventy million dollars in student loan debt. Representatives from the Professional Beauty Federation of California and the California Aesthetic Alliance urged the legislature to shift sole oversight from BPPE to the California State Board of Cosmetology due to their expertise and prominence among current cosmetology and esthetics students. A coalition of student, veteran, consumer, civil rights, and higher education advocates provided written testimony highlighting numerous concerns and recommendations to the legislature including requiring schools to obtain surety bonds and authorizing the Bureau to create stronger minimum operating standards. In addition to signing this written testimony, the Center for Public Interest Law also provided public comment at the hearing expressing support for reforms proposed by the governor and the committees in the background paper.

At this writing, a sunset extension bill to extend the Bureau’s sunset date has yet to be introduced. The Bureau’s written responses to the legislature are due on April 16, 2021.

[1] Arizona, Alaska, Florida, Georgia, Maryland, Nebraska, New Mexico, South Carolina, Tennessee, Texas, Utah.

[2] The Board of Pharmacy, Contractors State Licensing Board, Bureau of Cannabis Control, Cemetery and Funeral Bureau.

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