Consumer Federation of California

SACRAMENTO – Hundreds of private trade schools left without state oversight for more than two years soon will be supervised again.

On Jan. 1, a revamped California Bureau for Private Post-Secondary Education will begin regulating some of the for-profit schools, which blanket daytime and late-night TV with advertisements for coursework in everything from hair styling to truck driving.

Dozens of the schools operate in Riverside and San Bernardino counties. After a previous state agency shut down July 1, 2007, when lawmakers failed to pass legislation extending it, the industry has essentially operated on the honor system even as the economic downturn and overcrowded community colleges triggered more student interest.

Lawmakers approved a bill in September to restore the state’s oversight of the schools, reviving the agency.

Some skeptics question whether the bill does enough. The legislation exempts certain types of schools from bureau review, including campuses of industry giant University of Phoenix.

Attorney Ignacio Hernandez estimated that about 70 percent of students attend schools that would be exempt from state regulation.

"It seems to promise protection that really isn’t there," said Hernandez, a lobbyist for the Consumer Federation of California. "The bill is not without some positive elements, but there are just too many schools that are exempt."

The measure’s author called the legislation a compromise and good first step.

The bill includes a review of the exemptions in 2013, as well as an audit of the entire bureau. Changes would be made if those identify problems, said Assemblyman Anthony Portantino, D-Pasadena.

"You can’t look into everybody on the first day," said Portantino, the chairman of the Assembly Higher Education Committee. "As the bureau evolves, as the industry as a whole demonstrates its ability to follow the rules or not follow the rules, (the bill) provides for a re-evaluation of the exemptions."

LACK OF SCRUTINY

As of 2007, about 1,200 vocational training schools and 300 satellites, along with another 300 or so degree-granting institutions, were operating in California. About 400,000 people attended them.

Widespread complaints about diploma mills and jilted, debt-laden students had prompted lawmakers to create a Bureau for Private Postsecondary and Vocational Education in the late 1980s.

The agency increasingly came under attack. In 2005, an independent monitor hired by the state found large backlogs of school licensing applications, a failure to pursue student complaints and bureau mismanagement.

As the bureau neared its expiration, the Democrat-dominated Legislature and the administration of Gov. Arnold Schwarzenegger, a Republican, feuded about what to do, as did private school operators, attorneys representing students and even the union representing bureau workers.

The agency shut down amid the talks.

"It was really like on June 30, 2007, everything was stuck in deep freeze," said Robert W. Johnson of the California Association of Private Postsecondary Schools.

Since then, he said, there have been signs of fly-by-night school operators taking advantage of the situation as well as reports of students stiffing some schools on tuition by citing the lack of state regulation.

Last year, the governor vetoed a bill backed by Democrats that would have restored the agency, saying the measure was not "clearly drafted, reasonably enforceable or easily understandable."

The latest bill starts by giving the agency a new name: the Bureau for Private Postsecondary Education.

The legislation calls for the bureau to maintain a searchable Web site of school data. Schools will have to report job-placement rates as well as the number of students and the types of classes offered.

In addition, schools will have to pay into a tuition recovery fund, which will refund students if their schools suddenly shut down.

Exempted from the law are schools that are accredited by various bodies. The University of Phoenix is accredited by the Higher Learning Commission. Also exempted are schools that offer just recreational or vocational programs, those sponsored by trade organizations or the government.

The Department of Consumer Affairs, which contains the revamped bureau, did not respond to questions.

Kim Esquerre, executive director and owner of the Riverside-based Universal Schools and Colleges of Health and Human Services, said she welcomes the new rules after 2