Search for Consensus in California

Debate over regulating for-profit colleges seems as intractable as ever as two new proposals for overseeing the sector circulate.
August 28, 2007

The contentious debate surrounding the regulation of for-profit colleges continues churning in California, where Republican Gov. Arnold Schwarzenegger’s administration put forward a five-year legislative proposal Friday to counter a Democratic leader’s stopgap solution. With only three weeks remaining in the legislative session, the parties in the discussion -- the institutions, consumer advocates and their respective political backers -- are as diametrically opposed as ever. And time to regulate the 400,000-student sector – essentially left unregulated when an earlier law expired this summer – is quickly running out.

“Both parties, both sides, are so far apart, and trying to find a middle ground consensus place for this bill has been incredibly difficult. And it doesn’t seem likely that’s going to happen this year,” says Michael Miiller, a consultant representing the president pro tem of the Democratically controlled Senate, Don Perata, who has sponsored legislation to regulate the for-profit colleges (SB 823) that has been championed by student advocates but stymied by widespread criticism from industry supporters.

The polarization is apparent in the response to two new proposals released late last week. Perata’s SB 45 sidesteps the most controversial elements in his stalled SB 823 -- standards for approving institutions, provisions for enforcing said standards, and protections for students -- and provides minimal oversight through 2008 while legislators look for a long-term solution. (This would be the second piece of stopgap legislation, as lawmakers already approved a short-term bill this summer to provide the most basic levels of protection through January). In response to SB 45, the Schwarzenegger administration put forward a counterproposal calling for a five-year regulatory apparatus that is already proving contentious, too.

Says Robert Johnson, president of the California Association of Private Postsecondary Schools, of the administration’s proposal: “It’s absolutely balanced. It’s fair.”

Says Elena Ackel, a lawyer with the Legal Aid Foundation of Los Angeles, “This should be the ‘Rotten School Revitalization Act’ because they’re putting all the onus on those students and allowing the schools to get away with highway robbery.”

The administration’s proposal, which a Department of Consumer Affairs spokesman, Russ Heimerich, says has been presented to Senator Perata’s office in hopes that a consensus bill can emerge, relies heavily on regulations (to be determined later by the consumer affairs agency) to enforce a significantly streamlined statute. Where Perata’s original bill, SB 823, was criticized for being unintelligible and lengthy, the administration’s proposal is relatively short (23 pages) and to the point. “What’s actually interesting is that you’re able to read it and understand it,” jokes Johnson, whose association represents career-oriented institutions.

But while Betsy Imholz, director of special projects for Consumers Union, says she appreciates the need to streamline the statute, also stripped from the proposal are basic consumer protections in place under the now-expired law, including standards surrounding minimum program completion and job placement rates. “The assumption that the agency will in fact put good things in regulation and watch over the students … is not well-founded,” she says of the omissions, citing the Department of Consumer Affairs’ well-documented history as an ineffective entity (one of the few points people from both sides of this debate will readily agree upon).

“The bill proposed by the administration is a piece of crap,” adds Ackel, less diplomatically. “It leaves everything at the discretion of the DCA and the Department of Consumer Affairs is a misnomer because everything they do is for the benefit of schools.”

The administration’s proposal for regulating for-profit colleges also exempts more institutions than had previously been excluded, by not only continuing the exemption for colleges accredited by the Western Association of Schools and Colleges (an exemption that would have been subject to review under Perata’s earlier, much criticized bill), but also offering an exemption to nationally accredited colleges that meet certain criteria. That’s welcome news for Johnson, who says all institutions already accountable to accrediting agencies should be exempt. Johnson also welcomes a provision narrowing what was perceived by industry supporters as a broad right for students to sue colleges without necessarily demonstrating that they had been harmed.

“This week is huge. This next week and a half is huge,” Johnson says of the chances the administration’s bill could be adopted in part or wholesale by the Legislature.

“It’s been such a contentious and divisive legislative process this year; very little good will has leaked through on just about any level. We’re hopeful,” says Johnson, “there will be a compromise.”

“It could be that we just run out of time and that students are left high and dry and that, frankly, the good schools in the sector are left with questionable status because we may not get any bill, and that would be a shame," Imholz says. "Because policy makers have a chance and they still do, but I don’t hear the parties moving closer.”


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