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Rough Start for New Regulator

February 10, 2010

In mid-January, officials at American Graduate University got a pleasant surprise: A letter from California's new Bureau for Private Postsecondary Education informing the university that the bureau had approved two academic programs that had been in limbo since the agency's predecessor, the Bureau for Private Postsecondary and Vocational Education, was shut down in July 2007.

Paul R. McDonald, president of American Graduate University, said that its administrators were surprised that the new agency, which had sprung to life on Jan.1 thanks to passage of a new law, "had moved that fast" in approving the institution's degree and certificate programs in supply management. "Oh, they’re clearing up the back applications quickly," McDonald remembers saying to a colleague.

The only problem: They actually aren't.

Officials of the Department of Consumer Affairs, which oversees the new regulatory agency, acknowledged Tuesday that because of a "clerical error," the new agency had erroneously listed as "approved" programs for which about 50 colleges had sought approval in the weeks before legislature let the old bureau "sunset" in mid-2007. The state was unable to authorize the establishment of new academic programs at private for-profit institutions between the time the former agency left the scene and Jan. 1, when the new bureau took effect.

A spokesman for the consumer affairs agency, Russ Heimerich, said that dozens of programs at 250 institutions that had submitted applications for approval prior to July 2007 were "erroneously merged into a larger database of programs that were already approved." When the Bureau for Private Postsecondary Education sent letters to about 2,000 institutions in mid-January informing them which of their programs were in good standing with the new agency, about 50 were told that they had approval for programs that had not, in fact, earned such approval.

The letters also went out under the signature of Sheila Hawkins, who was the degree administrator at the now-sunsetted Bureau for Private Postsecondary and Vocational Education. Hawkins learned of the mess when American Graduate University contacted colleagues at her current job, as head of the agency that approves education programs for military veterans in California, to say that the certificate program in supply management had been approved by the new state postsecondary bureau. Hawkins wrote officials at the Department of Consumer Affairs, concerned that the new postsecondary agency had been approving programs at a time when it should not have been.

No such approvals were granted, Heimerich insists -- only the erroneous impression that they had been.

Heimerich said that while "potential for consumer harm was there" in the consumer protection agency's screw-up, the chance that any students would be affected was "extremely small." First, all of the programs that have yet to be approved by the agency are operating legally, because their institutions are approved. Second, Heimerich said he doubted that "anybody was going out marketing those [programs] as being approved" in the two or three weeks between mid-January, when the bureau erroneously told the 50 postsecondary institutions that their programs had been approved, and this week, when the agency followed up by telling the institutions about the error.

And third, "these programs may ultimately wind up being approved, after they submit the proper paperwork," Heimerich said, so no harm will have been done to any students in the off chance that they may have entered the programs thinking they had been approved.

But given the intense disagreement that arose over the closure of the old agency and the creation of the new one -- to oversimplify, pitting consumer advocates and state education regulators against for-profit colleges and critics of excessive state regulation -- the bureau's early glitch is unlikely to build confidence in it.

 

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