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CR applauds California Assembly for passing bills to hold for-profit schools accountable

Bills address long-standing abuses that have harmed students at for-profit schools

SACRAMENTO, CA — Consumer Reports praised California Assemblymembers today for passing legislation to strengthen oversight of for-profit schools operating in the state.  The bills were proposed in the wake of ongoing closures and misconduct at for-profit schools, and as the U.S. Department of Education is considering proposals that could drastically weaken school oversight at the national level.

“At a time when the federal government is actively working to roll back measures to hold for-profit schools accountable, it is critical for California and other states to stand up for students to ensure that they are being treated fairly,” said Suzanne Martindale, senior policy counsel.  “Tens of thousands of students have been defrauded and left in debt by for-profit schools that promised a quality education but failed to provide the training needed for success in the job market.  We’re pleased that the California Assembly has approved this comprehensive package of bills to address these well-documented abuses at many for-profit schools and urge the Senate to do the same.  As California leads the charge, we hope that other states will be inspired to follow.”

A slew of state and federal investigations have uncovered abusive practices at recently closed for-profit schools like Corinthian Colleges and ITT Tech that engaged in aggressive marketing to prospective students and used inflated graduation and job-placement rates to induce them into paying top dollar for their education.  The California higher education package is intended to help improve school quality and compliance with the law, as well as ensure students receive the education and training they were promised.  The package of bills include:

AB 1340 (Chiu):  establishes “gainful employment” standards for career education programs requiring schools to demonstrate that they are effectively preparing students for the job market;

AB 1341 (Berman) / AB 1342 (Low):  sets standards for schools trying to change their tax status by converting from for-profit to non-profit, and vice versa;

AB 1343 (Eggman):  prohibits for-profit schools from receiving more than 80-85% of their revenue from state and federal taxpayer dollars (depending on school size);

AB 1344 (Bauer-Kahan):  requires out-of-state online programs to comply with California law when enrolling CA residents;

AB 1345 (McCarty):  strengthens restrictions on incentive compensation for school recruiters; and

AB 1346 (Medina):  expands access to student debt relief through the state’s Student Tuition Relief Fund.

Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext. 7606