VETO! California’s bill for regulating career colleges gets shot down, Governator-style

California’s bill for regulating career colleges gets shot down, Governator-style

Flexing muscle is nothing new for Arnold Schwarzenegger
– not in films and not in the halls of
state government. Last month, California’s Governor
squashed what he and career college proponents
throughout the state thought to be an ineffectual
bill for regulating private postsecondary schools.

Schwarzenegger let an earlier version of the bill die
last summer without his signature and has criticized
the latest version as a big mess that missed its mark.

“If a statute is not clearly drafted, reasonably enforceable,
or easily understandable to students, schools,
and regulators, no one is well served,” Schwarzenegger
wrote in his veto message. His decision effectively
leaves 1,600 career colleges to regulate themselves.

The California Private Postsecondary Education Act of
2008 would have created the Bureau for Private Postsecondary
Education within the Department of Consumer Affairs
to set standards and regulations for schools. It included
requirements for schools to publish graduation and
job placement rates on their web sites. State Senator Don
Perata (D-Oakland) sponsored the bill and reacted swiftly
to the veto.

“With this veto, the Governor has abandoned the 400,000
students attending one of these private trade schools,” Perata
said. “These are mostly young, low-income, minority
women. Many are trying to learn a skill to get out of poverty.
This veto leaves them with few protections in California
law and allows the schools to take their money, and dash
their dreams.”

Critics of the bill have called it punitive. Robert Johnson,
Executive Director of the California Association of Private
Postsecondary Schools, had urged the Governor to
veto the bill in part because he thought it was too tough
for smaller schools to comply. The CAPPS web site was
“happy to announce” the veto, and Johnson has stated
that he will be glad when Perata is gone as well.

In the September edition of Career College Central,
Johnson said, “Once Perata leaves … I believe that with
the existing leadership in the Assembly and the Governor’s
office, we will reach consensus quickly and have
new legislation in place in 2009.” The lawmaker’s term
is up this winter.

Lawmakers have been trying to come to terms on an
agreement to regulate private postsecondary schools
for more than two years. They know they need it. One
lawsuit filed by the State Attorney General against a forprofit
college resulted in a multimillion-dollar settlement
over the issue of misleading job placement and salary
figures used to recruit students.

Voluntary agreements that governed the schools expired
in June, and there is no longer a mandate for schools to
pay into a tuition recovery fund to protect students from
failed or unscrupulous institutions. The extended act of
oversight has consumer advocates concerned.

In an Oct. 1 article in the Contra Costa Times, Betsy Imholz,
an attorney with the Consumers Union, compared
the situation to the aftermath of a natural disaster when
victims are easy targets for predatory operations. Senator
Perata shares the sentiment.

“This veto will only serve to encourage the worst diploma
mills in the country to relocate to California,”
Perata said.

Schwarzenegger acknowledged the fear. In his veto message,
the Governor directed the Department of Consumer
Affairs to continue to work with schools to encourage
“meaningful disclosures” and “sound business practices”
and to use its authority to investigate complaints.

“I have repeatedly stated that a reform act […] should
treat schools as uniformly as possible,” wrote the Governor,
and “strike a balance between protecting the students,
while being firm, yet fair to schools.”

A bill with a past

By mid-September, a political standoff between Schwarzenegger
and legislators that had California operating
for several months without a 2008-09 budget made it
unclear when the Governor might consider SB 823 – or
if it would meet his approval.

“Right now the Governor’s top priority is getting a responsible
budget approved,” Rachel Cameron, Schwarzenegger’s
Deputy Press Secretary, said at the time.
“The Governor has said he will veto any bill that reaches
him that doesn’t have to do with the budget.”

Cameron’s comment came just a few days before the
Governor and legislators reached a budget compromise.
But clearing the budget logjam was no guarantee that
Schwarzenegger would sign off on the bill sponsored
by Perata.

The Governor vetoed previous legislation to revive the
Bureau for Private Postsecondary and Vocational Education,
which ceased operations in July 2007 when
the bill that created it expired. The legislature voted a
temporary extension of the enabling legislation through
June 2008.

“This legislation [SB 823] mandates that private postsecondary
schools are upfront with students about what
programs they offer and their cost and results,” Perata
said after the Senate voted 22-14 to pass the bill. “SB
823 would protect the thousands of Californians who are
trying to pull themselves up by their own bootstraps by
attending vocational schools, enhancing their skills and
getting better jobs.”

From the outset, Perata’s bill to reinstitute the bureau
attracted both supporters and critics.

Carrie Lopez, Director of the state’s Department of Consumer
Affairs, said her agency has encouraged California
career colleges to voluntarily abide by bureau standards until new legislation becomes law.

Lopez said her agency would create a new bureau “to
ensure effective student protections and effective regulation
of private postsecondary education” and that
legislation should set “clear expectations and direction
for schools and students so they [understand] their responsibilities
and their rights.”

Imholz served as a chief lobbyist for SB 823. She
noted on the Consumers Union web site that the
“tragic collapse of all consumer protections and
state oversight of for-profit career schools in California”
left students at “the mercy of the predatory trade
school marketplace.”

The California Association of Private Postsecondary
Schools posted a letter on its web site calling for opponents
of the bill to write Schwarzenegger opposing
SB 823.

In an Aug. 4 news story titled “Students wanted jobs,
but got debt instead,” Orange County Register Reporter
Marla Jo Fisher spoke to students who said career
college promises of lucrative employment hadn’t
panned out.

A number of students filed complaints with the
state’s Department of Consumer Affairs about what
they saw as the schools’ misleading or incomplete
promotional materials.

One student quoted in Fisher’s article said she wasn’t
told she’d need a certificate or diploma to find work as
a medical assistant. She also noted that some classmates
who were placed in medical offices tended to
be bilingual, another qualification she said the school
failed to disclose.

But Joanne Wenzel, an advocate for the state’s Department
of Consumer Affairs and a former Bureau for
Private Postsecondary and Vocational Education employee,
said that students should be responsible for
making educated decisions about career schools.

“Students need to step up, be responsible and make
sure they take a hard look at what they’re getting themselves
into,” Wenzel said in Fisher’s Register story.
National organizations also chimed in on SB 823. In a
letter to Schwarzenegger urging the veto, Career College
Association President Harris Miller described the bill
as “the most complex and convoluted regulatory scheme
in the country.”

Miller said the current bill is less acceptable than previous
attempts to regulate career colleges in the state.
Among other things, Miller said, it fails to recognize
“the federally recognized equivalence of regional and
national accreditation.”

That objection was also raised by Elise Scanlon, Executive
Director of the Accrediting Commission of Career Schools
and Colleges of Technology. “I think my biggest objection
and that of other executive directors is that SB 823 doesn’t
treat accredited schools equally,” Scanlon said.

Scanlon’s agency was among several represented in a letter
the Council of Recognized Accrediting Agencies sent
to Schwarzenegger. Scanlon said the letter provided information
on the processes used by accrediting agencies to
endorse a school.

Scanlon said that, as it is currently written, Perata’s bill
recognizes regional accreditation but excludes national
accrediting agencies.

“It seems unusual that SB 823 would exempt one set of
accredited institutions and not another,” she said.

Other observers believed that accrediting agencies – and
as a last resort, the courts – already serve as watchdogs
to protect career college students.

In an Aug. 20 editorial, the staff of the Appeal-Democrat
in Marysville, Calif., wrote, “These private organizations,
akin to those that oversee community and four-year colleges,
are more effective at clamping down on fraud than
bureaucratic government agencies. Schools whose students
don’t get jobs or often default on loans won’t get or
stay accredited.”

But observers were divided on the need for more regulation.

“These schools have been unregulated basically since
June of 2008,” said Alicia Trost, Perata’s Press Secretary,
on the eve of a vote to break California’s budget stalemate.
“I can’t speculate on what the Governor will do, but
these schools definitely need to be regulated.”

Now Trost and others know the Governor’s decision: A bill
without any teeth stands no chance to have any bite.

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