United States: California Jumps In With Sweeping Statutory Proposals – Part II (Registered Online Institutions And STRF)

Last Updated: March 15 2019
Article by Katherine Lee Carey and Caitlyn Shelby

As noted in our blog post last week, a group of six California Assembly members have coordinated in authoring a legislative package of seven bills impacting higher education in (and out of) that state. This is part two in our discussion of these legislative proposals, which may reshape parts of higher education regulation in California and create ripple effects for other institutions around the country and the students they serve.

These bills (AB1340 through 1346) focus on institutions offering education to residents of California under the approval of, or through registration with, the Bureau for Private Postsecondary Education (BPPE). Framing the bills to capture institutions with BPPE authorization or registration potentially could have a huge impact on the latter category. Specifically, the reference to registration captures many out-of-state institutions that serve students in California or enroll California residents in their online programs.

The amendment relating to the registration process would subject those out-of-state institutions to the entirety of the California Private Postsecondary Education Act (CPPEA), in contrast to the current system in which those out-of-state institutions are subject to the California Student Tuition Recovery Fund (STRF) requirements but not the other provisions of the CPPEA. While the impact on out-of-state institutions would be significant, California students seeking to enroll in online programs offered by those institutions would see the greatest impact. When faced with the burdensome prospect of complying with both home-state and BPPE requirements, institutions may be forced to make a tough decision: dedicate the time and financial resources to needed to comply with all BPPE requirements, or forgo enrolling California students altogether. In addition, this decision would increase pressure from registered institutions that choose to "opt in" to the BPPE requirements to ensure all colleges subject to the registration requirement complete this step.

AB1344

This bill would affect out-of-state institutions that offer online programs to California residents and are required to be registered in the state (i.e., all private institutions that do not have a physical presence in California but enroll California students in online programs that are not degree-granting public or non-profit accredited institutions).

Currently these institutions can be registered simply by submitting information about their home state authorization and accreditation and agreeing to comply with the BPPE's STRF regulations. Under the proposed law, they would need to comply with the entirety of the CPPEA and regulations for each California student they enroll.

It is unclear how any out-of-state institution could bifurcate its compliance model to comply with California's laws and regulations only for certain students, or how the BPPE would appropriately oversee institutions across the country. For example, how could the BPPE meet the CPPEA requirement to conduct regular compliance inspections of an approved school in Florida or Texas? Moreover, how would these institutions manage their compliance with their home-state laws and regulations, which are not congruent with the California requirements?

On a closely watched related matter, this also sends a strong message that California legislators (at least Democratic legislators) will not be receptive to a bill to allow California to enter the State Authorization Reciprocity Agreement (SARA). California has long indicated that it does not trust any other state to provide sufficient protections for its residents and AB1344 reinforces that message.

AB1346

This bill would expand the definition of "economic loss" for purposes of students' eligibility for relief from the STRF. The proposed language includes "any amounts paid in connection with attending the institution, and all principal, interest and charges of any kind for a loan incurred by a student to pay these amounts." This language is extremely broad and it is unclear how the Assembly would define "amounts paid in connection with" attendance. Further, it is not evident how this expanded form of relief under state law would work in cases of school closures (a prerequisite for STRF eligibility) where the students are eligible for or actually receive a discharge of their federal loans, including all fees and charges.

*****

At this time, these bills are legislative proposals that are just beginning to wind their way through the legislative review process. They have not yet been assigned to a committee and there is no evident parallel action in the California Senate. Nevertheless, the concerted effort of a powerful bloc within a large Democratic majority to introduce seven coordinated bills, all targeting the same sector of education, is a rarity. Particularly because so many out-of-state institutions are authorized or registered in California, the impact could go well beyond this single state and affect institutions all over the country.

Cooley will continue to provide summaries of the individual proposals, track these bills and provide updates as the sausage is made (er, as the legislative process unfolds).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions