Consumer Federation of California

Emotions were heated last Thursday morning as the Assembly Committee on
Higher Education voted to approve a SB 823 to re-establish regulations
on private for-profit postsecondary schools including those that
provide vocational training.

The bill, called the California Private Postsecondary Education
Act of 2007, was introduced by Senate President pro Tem Don Perata
because a previous regulatory act had lapsed, leaving the California
Bureau for Private Postsecondary and Vocational Education (BPPVE)
inactive since July 1. Since 1989, the Bureau has regulated 1500
private colleges in California, including so-called ‘diploma mills,’
that serve an estimated 400,000 students.

In the meantime, with a defunct BPPVE, dozens of students, some of them
with tears in their eyes, stood in line to tell the committee horror
stories that they and fellow students had experienced at the mercy of
‘diploma mills.’

Sara Bachman-Williams, a former student at one of these schools, told
the committee, ‘I was told lie after lie about the school ‘ I was told
that the college had 100% job placement, and that I would graduate in
less than two years.’ In the end, she says, ‘I do not know of one
student that was placed for a job ‘ and not one student, including
myself, graduated within the promised time.’

Michelle Freeman told a similar story, saying that at her design school
‘we were lied to, and now we are terrified, jobless, and in a scary
amount of debt.’ Freeman told the committee that she was $70,000 in
debt as a result of her enrollment at a school.

Along with re-establishing the BPPVE, the bill creates an advisory
board to enforce the regulations, as well as establishes the position
of ombudsperson to act as an intermediary between students and schools.
The board and ombudsperson were added to the bill this year to correct
inefficiencies of the bureau.

The lapse occurred because lawmakers were not able come to an agreement
last year legislation before the previous law expired. A similar
attempt, sponsored by Governor Arnold Schwarzenegger, failed to make it
out of the Senate in 2006. The Governor subsequently vetoed a competing
bill, saying ‘simply extending the existing governing statute until
July 1, 2008 ‘ does nothing to enhance protections for students, allows
problems that have been well documented to continue to exist and merely
allows mediocrity for California’s students.’

At the time, Schwarzenegger said he would seek necessary reforms. This
year he also expressed a desire to work with the Legislature. However,
Schwarzenegger and lawmakers failed to address the problem in time to
prevent the existing law from expiring, and now these private
postsecondary schools remain unregulated. A spokesperson for the
Governor said that the administration currently is working with
Assemblyman Paul Cook (R-Yucca Valley) on a ‘stop-gap’ to temporarily
extend the BPPVE for seven months.

Legislators on the committee stressed the importance of quickly passing
a bill to regulate these schools, and Schwarzenegger’s office reports
daily negotiations between the governor and legislators to resolve
differences.

Consumer rights groups support the bill, arguing that it protects students. Richard Holober, director of the Consumer Federation of California, says
that diploma mills are an ‘industry with bad people and they just can’t
be unregulated’there have been some really, really egregious cases of
fraud.’

Opponents, however, are numerous, including the California Chamber of
Commerce, several community college districts, and hundreds of private
colleges. One of the most cited complaints is that Perata’s bill,
despite passing the committee Thursday, is still in the process of
being written. In an analysis by the committee, the author of the bill
is quoted as saying, ‘this bill is not a completed product. However,
[sic] nor is it a work in process.’

A number of amendments to the bill outlined in the committee analysis
were agreed to by Senator Perata before the bill passed out of the
committee.

The ambiguous status of the bill is not its only feature that
leaves people confused. The unclear language of the bill itself, some
opponents say, is one reason the BPPVE was ineffective in the past. Dr.
Jonathan Brown, president of the Association of Independent California
Colleges and Universities, testified that ‘somebody needs to stand up
and say this bill needs to make sense before we let it out.’

Opponents also argue that cases of fraud by diploma mills are no reason
to enact what they consider to be overzealous regulations on honest
private postsecondary schools. ‘This bill is about crime and
punishment,’ Brown said, arguing that wronged students have alternative
methods of seeking retribution.

The committee voted along party lines, with five Democrats in favor and two Republicans opposed.

Governor Schwarzenegger’s office did not comment on whether he plans to
sign the bill should it reach his desk. Indications are, however, that
Schwarzenegger will sign Cook’s temporary bill ‘as quickly as
possible.’