BILL NUMBER: AB 573 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 2, 2015
AMENDED IN ASSEMBLY MAY 11, 2015
AMENDED IN ASSEMBLY MAY 7, 2015
AMENDED IN ASSEMBLY MAY 4, 2015
INTRODUCED BY Assembly Members Medina and McCarty
(Principal coauthor: Senator Block)
(Coauthors: Assembly Members Alejo, Atkins, Baker, Bonilla, Brown,
Calderon, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Eggman,
Frazier, Gipson, Hadley, Kim, O'Donnell, Olsen, Quirk,
Ridley-Thomas, Rodriguez, Santiago, and Thurmond
Thurmond, and Ting )
( Coauthors: Senators Gaines
and Galgiani )
FEBRUARY 24, 2015
An act to amend Sections 76300, 94923, and 94925 of, and to add
Sections 69433.61 and 94926.5 to, the Education Code, relating to
higher education, making an appropriation therefor, and declaring the
urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 573, as amended, Medina. Higher education: campus closures:
Corinthian Colleges.
(1) Existing law establishes the California Community Colleges
under the administration of the Board of Governors of the California
Community Colleges, and establishes community college districts
throughout the state that operate community colleges and provide
instruction to students. Existing law requires community college
districts to charge each student a fee of $46 per unit per semester.
Existing law requires the waiver of this fee for students meeting
prescribed requirements.
This bill would, until July 1, 2018, require the board of
governors to waive the fee for students who meet prescribed
requirements, were enrolled at a California campus of a Corinthian
Colleges, Inc., institution, and were either unable to complete an
educational program offered by the campus due to the campus's closure
on April 27, 2015, or withdrew from an educational program offered
by a Corinthian Colleges campus within 120 days,
or a greater period determined by the Bureau for Private
Postsecondary Education, of the campus's closure on April 27, 2015.
days of that date. To the extent this provision
would impose additional duties on community college districts, it
would constitute a state-mandated local program.
(2) The California Private Postsecondary Education Act of
2009, 2009 provides for the regulation of
private postsecondary educational institutions by the Bureau for
Private Postsecondary Education in the Department of Consumer
Affairs. The act requires an institution subject to its provisions to
follow certain requirements prior to closing.
This bill would require the bureau to establish a standing task
force to respond to the closure of institutions that do not comply
with these requirements prior to closing. The bill would require the
task force to assist the students who were enrolled at, or in an
online program offered by, an institution that closes in, among other
things, obtaining refunds, loan discharges, and tuition recovery.
The bill would, upon the unlawful closure of an institution, require
the bureau to provide timely grant funds to local legal aid
organizations to assist students of that institution with loan
discharge and other student loan- related
requests and tuition recovery related claims, as specified.
(3) This bill would appropriate the sum of $1,300,000 from the
Private Postsecondary Education Administration Fund to the Bureau of
Private Postsecondary Education for the purposes of providing
financial grants to legal aid organizations, as described above, for
students affected by the closure of Corinthians
Corinthian Colleges, Inc., as specified, thereby making an
appropriation.
(4) The act also establishes the Student Tuition Recovery Fund and
requires the bureau to adopt regulations governing the
administration and maintenance of the fund, including requirements
relating to assessments on students and student claims against the
fund, and establishes that the moneys in this fund are continuously
appropriated to the bureau for specified purposes. The act caps the
amount that may be in the fund at any time at $25,000,000.
This bill would deem a student who was enrolled at a California
campus of a Corinthian Colleges, Inc., institution, or a California
student who was enrolled in an online program offered by an
out-of-state campus of a Corinthian Colleges, Inc., institution, to
be eligible for recovery from the fund under specified circumstances.
By expanding the purpose for which moneys in the Student Tuition
Recovery Fund may be used, this bill would make an appropriation. The
bill would raise the cap for the fund to $50,000,000.
(5) The Cal Grant Program prohibits an applicant from receiving
Cal Grant awards totaling in excess of the amount equivalent to the
award level for a total of four years of full-time attendance in an
undergraduate program, except as provided.
This bill would partially exempt from this limitation
on Cal Grant awards a student who was enrolled and received a Cal
Grant award at a California campus of a Corinthian Colleges, Inc.,
institution, and who was unable to complete an educational program
offered by the campus due to its closure.
(6) This bill would appropriate $100,000 from the General Fund to
the Chancellor of the California Community Colleges for allocation to
a community college district for the purpose of conducting a
statewide media campaign to inform students affected by the closure
of Corinthian Colleges, Inc., of the education opportunities
available at community colleges, thereby making an appropriation.
Funds appropriated by this bill to a community college district
would be applied toward the minimum funding requirements for school
districts and community college districts imposed by Section 8 of
Article XVI of the California Constitution.
(7) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
(8) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) It is the intent of the Legislature that the
California Community Colleges shall utilize available resources to
provide matriculation services, including, but not limited to,
assessments, counseling, and academic planning to a student
planning, to students who was
were enrolled at a California campus of a Corinthian
Colleges, Inc., institution, including Heald College, or was
a and California student
students enrolled in one or more online programs offered
by an out-of-state campus of a Corinthian Colleges, Inc., institution
and was who were harmed by the closure
of Corinthian Colleges, Inc., that took place on April 27, 2015.
(b) (1) The sum of one hundred thousand dollars ($100,000) is
hereby appropriated from the General Fund to the Chancellor of the
California Community Colleges for allocation to a community college
district to conduct a statewide media campaign to inform students
affected by the closure of Corinthian Colleges, Inc., of education
opportunities available at community colleges.
(2) For purposes of making the computations required by Section 8
of Article XVI of the California Constitution, the funds appropriated
pursuant to this section shall be deemed to be "General Fund
revenues appropriated for community college districts," as defined in
subdivision (d) of Section 41202 of the Education Code, for the
2014-15 fiscal year, and included within the "total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated pursuant to Article XIII B," as
defined in subdivision (e) of Section 41202 of the Education Code,
for the 2014-15 fiscal year.
SEC. 2. It is the intent of the Legislature that unencumbered
restitution funds awarded to the students of the state, who
received funds pursuant to Section 5 of this act,
state from a lawsuit involving Corinthian Colleges,
Inc. Inc., and its affiliate institutions,
including Heald College, shall be used to repay any funds provided to
those students pursuant to Section 5 of this act.
SEC. 3. Section 69433.61 is added to the Education Code, to read:
69433.61. (a) Notwithstanding any other
law, a student who was enrolled and received a Cal Grant award
in the 2013-14 or 2014-15 academic year at a California campus
of a Corinthian Colleges, Inc., institution, including Heald College,
and was unable to complete an educational program offered by the
campus due to the campus's closure on April 27, 2015, shall not have
the award years used at a Corinthian Colleges, Inc., campus
considered for purposes of the limitation on the number of years of
Cal Grant award eligibility. This restoration of award years for
Cal Grant eligibility shall not exceed two years.
(b) A student shall be eligible for the restoration of award years
if the student was enrolled at a campus of Corinthian Colleges Inc.,
on April 27, 2015, or had withdrawn from enrollment within 120 days
of that date. The Bureau for Private Postsecondary Education shall
provide the commission with confirmation of student enrollment for
purposes of this section.
(c) An eligible student shall, before January 1, 2017, notify the
commission of his or her intent to use the restoration of award years
provided under this section and to enroll in an institution eligible
for initial and renewal Cal Grant awards to be eligible for that
restoration.
SEC. 4. Section 76300 of the Education Code is amended to read:
76300. (a) The governing board of each community college district
shall charge each student a fee pursuant to this section.
(b) (1) The fee prescribed by this section shall be forty-six
dollars ($46) per unit per semester, effective with the summer term
of the 2012 calendar year.
(2) The board of governors shall proportionately adjust the amount
of the fee for term lengths based upon a quarter system, and also
shall proportionately adjust the amount of the fee for summer
sessions, intersessions, and other short-term courses. In making
these adjustments, the board of governors may round the per unit fee
and the per term or per session fee to the nearest dollar.
(c) For the purposes of computing apportionments to community
college districts pursuant to Section 84750.5, the board of governors
shall subtract, from the total revenue owed to each district, 98
percent of the revenues received by districts from charging a fee
pursuant to this section.
(d) The board of governors shall reduce apportionments by up to 10
percent to any district that does not collect the fees prescribed by
this section.
(e) The fee requirement does not apply to any of the following:
(1) Students enrolled in the noncredit courses designated by
Section 84757.
(2) California State University or University of California
students enrolled in remedial classes provided by a community college
district on a campus of the University of California or a campus of
the California State University, for whom the district claims an
attendance apportionment pursuant to an agreement between the
district and the California State University or the University of
California.
(3) Students enrolled in credit contract education courses
pursuant to Section 78021, if the entire cost of the course,
including administrative costs, is paid by the public or private
agency, corporation, or association with which the district is
contracting and if these students are not included in the calculation
of the full-time equivalent students (FTES) of that district.
(f) The governing board of a community college district may exempt
special part-time students admitted pursuant to Section 76001 from
the fee requirement.
(g) (1) The fee requirements of this section shall be waived for
any student who meets all of the following requirements:
(A) Meets minimum academic and progress standards adopted by the
board of governors, which fulfill the requirements outlined in this
paragraph and paragraphs (2) to (5), inclusive. Any minimum academic
and progress standards adopted pursuant to this section shall be
uniform across all community college districts and campuses. These
standards shall not include a maximum unit cap, and community college
districts and colleges shall not impose requirements for fee waiver
eligibility other than the minimum academic and progress standards
adopted by the board of governors and the requirements of
subparagraph (B).
(B) Meets at least one of the following criteria:
(i) At the time of enrollment, is a recipient of benefits under
the Temporary Assistance for Needy Families program, the Supplemental
Security Income/State Supplementary Payment Program, or a general
assistance program.
(ii) Demonstrates eligibility according to income standards
established by regulations of the board of governors.
(iii) Demonstrates financial need in accordance with the
methodology set forth in federal law or regulation for determining
the expected family contribution of students seeking financial aid.
(iv) Was enrolled at a California campus of a Corinthian Colleges,
Inc. Inc., institution and was unable
to complete an education program offered by the campus due to the
campus's closure on April 27, 2015. This clause shall become
inoperative on July 1, 2018.
(v) Was enrolled at a California campus of a Corinthian Colleges,
Inc. Inc., institution and withdrew
from an education program offered by the campus within 120 days, or a
greater period determined by the Bureau for Private Postsecondary
Education pursuant to Section 94923, of the campus's closure on April
27, 2015. This clause shall become inoperative on July 1, 2018.
(2) (A) The board of governors, in consultation with students,
faculty, and other key stakeholders, shall consider all of the
following in the development and adoption of minimum academic and
progress standards pursuant to subparagraph (A) of paragraph (1):
(i) Minimum uniform academic and progress standards that do not
unfairly disadvantage financially needy students in pursuing their
education.
(ii) Criteria for reviewing extenuating circumstances and granting
appeals that, at a minimum, take into account and do not penalize a
student for circumstances outside his or her control, such as
reductions in student support services or changes to the economic
situation of the student.
(iii) A process for reestablishing fee waiver eligibility that
provides a student with a reasonable opportunity to continue or
resume his or her enrollment at a community college.
(B) To ensure that students are not unfairly impacted by the
requirements of subparagraph (A) of paragraph (1), the board of
governors shall establish a reasonable implementation period that
commences no sooner than one year from adoption of the minimum
academic and progress standards, or any subsequent changes to these
standards, pursuant to subparagraph (A) of paragraph (1) and that is
phased in to provide students adequate notification of this
requirement and information about available support resources.
(3) It is the intent of the Legislature that minimum academic and
progress standards adopted pursuant to subparagraph (A) of paragraph
(1) be implemented only as campuses develop and implement the student
support services and interventions necessary to ensure no
disproportionate impact to students based on ethnicity, gender,
disability, or socioeconomic status. The board of governors shall
consider the ability of community college districts to meet the
requirements of this paragraph before adopting minimum academic and
progress standards, or any subsequent changes to these standards,
pursuant to subparagraph (A) of paragraph (1).
(4) It is the intent of the Legislature to ensure that a student
shall not lose fee waiver eligibility without a community college
campus first demonstrating a reasonable effort to provide a student
with adequate notification and assistance in maintaining his or her
fee waiver eligibility. The board of governors shall adopt
regulations to implement this paragraph that ensure all of the
following:
(A) Students are provided information about the available student
support services to assist them in maintaining fee waiver
eligibility.
(B) Community college district policies and course catalogs
reflect the minimum academic and progress standards adopted pursuant
to subparagraph (A) of paragraph (1) and that appropriate notice is
provided to students before the policies are put into effect.
(C) A student does not lose fee waiver eligibility unless he or
she has not met minimum academic and progress standards adopted
pursuant to subparagraph (A) of paragraph (1) for a period of no less
than two consecutive academic terms.
(5) The board of governors shall provide notification of a
proposed action to adopt regulations pursuant to this subdivision to
the appropriate policy and fiscal committees of the Legislature in
accordance with the requirements of paragraph (1) of subdivision (a)
of Section 70901.5. This notification shall include, but not be
limited to, all of the following:
(A) The proposed minimum academic and progress standards and
information detailing how the requirements of paragraphs (1) to (4),
inclusive, have been or will be satisfied.
(B) How many students may lose fee waiver eligibility by
ethnicity, gender, disability, and, to the extent relevant data is
available, by socioeconomic status.
(C) The criteria for reviewing extenuating circumstances, granting
appeals, and reestablishing fee waiver eligibility pursuant to
paragraph (2).
(h) The fee requirements of this section shall be waived for any
student who, at the time of enrollment, is a dependent or surviving
spouse who has not remarried, of any member of the California
National Guard who, in the line of duty and while in the active
service of the state, was killed, died of a disability resulting from
an event that occurred while in the active service of the state, or
is permanently disabled as a result of an event that occurred while
in the active service of the state. "Active service of the state,"
for the purposes of this subdivision, refers to a member of the
California National Guard activated pursuant to Section 146 of the
Military and Veterans Code.
(i) The fee requirements of this section shall be waived for any
student who is the surviving spouse or the child, natural or adopted,
of a deceased person who met all of the requirements of Section
68120.
(j) The fee requirements of this section shall be waived for any
student in an undergraduate program, including a student who has
previously graduated from another undergraduate or graduate program,
who is the dependent of any individual killed in the September 11,
2001, terrorist attacks on the World Trade Center and the Pentagon or
the crash of United Airlines Flight 93 in southwestern Pennsylvania,
if that dependent meets the financial need requirements set forth in
Section 69432.7 for the Cal Grant A Program and either of the
following applies:
(1) The dependent was a resident of California on September 11,
2001.
(2) The individual killed in the attacks was a resident of
California on September 11, 2001.
(k) A determination of whether a person is a resident of
California on September 11, 2001, for purposes of subdivision (j)
shall be based on the criteria set forth in Chapter 1 (commencing
with Section 68000) of Part 41 of Division 5 for determining
nonresident and resident tuition.
(l) (1) "Dependent," for purposes of subdivision (j), is a person
who, because of his or her relationship to an individual killed as a
result of injuries sustained during the terrorist attacks of
September 11, 2001, qualifies for compensation under the federal
September 11th Victim Compensation Fund of 2001 (Title IV (commencing
with Section 401) of Public Law 107-42).
(2) A dependent who is the surviving spouse of an individual
killed in the terrorist attacks of September 11, 2001, is entitled to
the waivers provided in this section until January 1, 2013.
(3) A dependent who is the surviving child, natural or adopted, of
an individual killed in the terrorist attacks of September 11, 2001,
is entitled to the waivers under subdivision (j) until that person
attains 30 years of age.
(4) A dependent of an individual killed in the terrorist attacks
of September 11, 2001, who is determined to be eligible by the
California Victim Compensation and Government Claims Board, is also
entitled to the waivers provided in this section until January 1,
2013.
(m) (1) It is the intent of the Legislature that sufficient funds
be provided to support the provision of a fee waiver for every
student who demonstrates eligibility pursuant to subdivisions (g) to
(j), inclusive.
(2) From funds provided in the annual Budget Act, the board of
governors shall allocate to community college districts, pursuant to
this subdivision, an amount equal to 2 percent of the fees waived
pursuant to subdivisions (g) to (j), inclusive. From funds provided
in the annual Budget Act, the board of governors shall allocate to
community college districts, pursuant to this subdivision, an amount
equal to ninety-one cents ($0.91) per credit unit waived pursuant to
subdivisions (g) to (j), inclusive. It is the intent of the
Legislature that funds provided pursuant to this subdivision be used
to support the determination of financial need and delivery of
student financial aid services, on the basis of the number of
students for whom fees are waived. It also is the intent of the
Legislature that the funds provided pursuant to this subdivision
directly offset mandated costs claimed by community college districts
pursuant to Commission on State Mandates consolidated Test Claims
99-TC-13 (Enrollment Fee Collection) and 00-TC-15 (Enrollment Fee
Waivers). Funds allocated to a community college district for
determination of financial need and delivery of student financial aid
services shall supplement, and shall not supplant, the level of
funds allocated for the administration of student financial aid
programs during the 1992-93 fiscal year.
(n) The board of governors shall adopt regulations implementing
this section.
(o) This section shall become operative on May 1, 2012, only if
subdivision (b) of Section 3.94 of the Budget Act of 2011 is
operative.
SEC. 5. Section 94923 of the Education Code is amended to read:
94923. (a) The Student Tuition Recovery Fund relieves or
mitigates economic loss suffered by a student while enrolled in an
educational program, as defined in Section 94837, at an institution
not exempt from this article pursuant to Article 4 (commencing with
Section 94874), who, at the time of his or her enrollment, was a
California resident or was enrolled in a California residency
program, prepaid tuition, and suffered economic loss.
(b) The bureau shall adopt by regulation procedures governing the
administration and maintenance of the Student Tuition Recovery Fund,
including requirements relating to assessments on students and
student claims against the Student Tuition Recovery Fund. The
regulations shall provide for awards to students who suffer economic
loss.
The regulations shall ensure that the following students, and any
other students deemed appropriate, are eligible for payment from the
Student Tuition Recovery Fund:
(1) Any student who was enrolled at an institution, at a location
of the institution, or in an educational program offered by the
institution, at the time that institution, location, or program was
closed or discontinued, as applicable, who did not choose to
participate in a teach-out plan approved by the bureau or did not
complete a chosen teach-out plan approved by the bureau.
(2) Any student who was enrolled at an institution or a location
of the institution within the 120-day period before the closure of
the institution or location of the institution, or who was enrolled
in an educational program within the 120-day period before the
program was discontinued, if the bureau determines there was a
significant decline in the quality or value of that educational
program during that time period.
(3) Any student who was enrolled at an institution or a location
of the institution more than 120 days before the closure of the
institution or location of the institution, in an educational program
offered by the institution as to which the bureau determines there
was a significant decline in the quality or value of the program more
than 120 days before closure.
(4) A student to whom an institution has been ordered to pay a
refund by the bureau but has failed to do so.
(5) A student to whom an institution has failed to pay or
reimburse loan proceeds under a federal student loan program as
required by law, or has failed to pay or reimburse proceeds received
by the institution in excess of tuition and other costs.
(6) A student who has been awarded restitution, a refund, or other
monetary award by an arbitrator or court, based on a violation of
this chapter by an institution or representative of an institution,
but who has been unable to collect the award from the institution.
The bureau shall review the award or judgment and shall ensure the
amount to be paid from the fund does not exceed the student's
economic loss.
(7) Notwithstanding the requirement of subdivision (a) that the
institution not be exempt from this article, a student who was
enrolled at a California campus of a Corinthian Colleges, Inc.,
institution or was a California student enrolled in an online program
offered by an out-of-state campus of a Corinthian Colleges, Inc.,
institution, who also meets all of the other eligibility
requirements, if the student was enrolled as of April 26, 2015, or
withdrew within 120 days of that date or any greater period
determined by the bureau pursuant to this section.
(c) Any student who is required to pay a Student Tuition Recovery
Fund assessment who pays tuition equal to or greater than the
required assessment shall be deemed to have paid the required
assessment, whether or not his or her enrollment agreement specifies
collection of the required assessment, and whether or not the
institution identifies any money collected from the student as a
Student Tuition Recovery Fund assessment.
(d) The bureau shall establish regulations ensuring, as
permissible under California law, that a student who suffers
educational opportunity losses, whose charges are paid by a
third-party payer, is eligible for educational credits under the
fund.
(e) The bureau may seek repayment to the Student Tuition Recovery
Fund from an institution found in violation of the law for which a
student claim was paid. An institution shall not be eligible to renew
its approval to operate with the bureau if the repayment is not made
to the bureau as requested.
(f) The bureau shall, by regulation, define "economic loss." The
regulation shall ensure that the definition of "economic loss"
includes, but is not necessarily limited to, pecuniary loss, which is
the sum of the student's tuition, all other institutional charges as
defined in Section 94844, the cost of equipment and materials
required for the educational program as defined in Section 94837,
interest on any student loan used to pay for such charges, collection
costs, penalties, and any license or examination fees the student
paid to the institution but is unable to recover. Economic loss shall
also include the amount the institution collected and failed to pay
to third parties on behalf of the student for license fees or any
other purpose. Economic loss does not include Student Tuition
Recovery Fund assessments, unless the student is entitled to a full
refund under Section 94919 or 94920, room and board, supplies,
transportation, application fees, or nonpecuniary damages such as
inconvenience, aggravation, emotional distress, or punitive damages.
Economic loss does not include legal fees, attorney fees, court
costs, or arbitration fees. Nothing in this subdivision shall prevent
the bureau from further defining economic loss to include loss of
educational opportunity.
SEC. 6. Section 94925 of the Education Code is amended to read:
94925. (a) The amount in the Student Tuition Recovery Fund shall
not exceed fifty million dollars ($50,000,000) at any time.
(b) If the bureau has temporarily stopped collecting the Student
Tuition Recovery Fund assessments because the fund has approached the
fifty million dollar ($50,000,000) limit in subdivision
(a), the bureau shall resume collecting Student Tuition Recovery Fund
assessments when the fund falls below forty-five million dollars
($45,000,000).
(c) An otherwise eligible student who enrolled during a period
when institutions were not required to collect Student Tuition
Recovery Fund assessments is eligible for Student Tuition Recovery
Fund payments despite not having paid any Student Tuition Recovery
Fund assessment.
(d) A student who is eligible for recovery from the Student
Tuition Recovery Fund pursuant to paragraph (7) of subdivision (b) of
Section 94923 shall be eligible for payments despite not having paid
any Student Tuition Recovery Fund assessment.
SEC. 7. Section 94926.5 is added to the Education Code, to read:
94926.5. (a) (1) The bureau shall establish and coordinate a
standing closed school task force to respond to the closure of
institutions that do not comply with the requirements, as applicable,
of this article. The task force shall ensure that students who were
enrolled at, or in an online program offered by, the institution
receive accurate and timely information regarding the school closure
process and the students' rights and responsibilities under federal
and state law. The task force shall ensure that these students are
provided assistance in all of the following:
(A) Obtaining refunds, loan discharges, and tuition recovery for
which the student is eligible.
(B) Obtaining information regarding the option to transfer credits
that the student earned while attending the institution, including
information necessary to help the student make an informed decision
about whether to seek a loan discharge or to transfer credits.
(C) Providing other support deemed necessary by the task force in
accordance with the bureau's consumer protection mission.
(2) The members of the task force should include, but not
necessarily be limited to, representatives on behalf of the Student
Aid Commission, the Department of Justice, the Office of the
Chancellor of the California Community Colleges, the Department of
Veterans Affairs, and one or more legal aid
organizations. organizations, and two
financial experts, one representing community colleges and one
representing a bureau-approved institution that meets the performance
requirements of the Cal Grant program.
(b) (1) Upon the unlawful closure of an
institution, the bureau shall provide timely grant funds to local
legal aid organizations, which may include local legal aid
organizations designed specifically to assist veteran students,
organizations to assist the students of that
institution, including veterans, for no less than one year
following the closure of the institution, with loan discharge
and other student loan- related requests and tuition
recovery related claims. The Assistance
shall include, but is not limited to, outreach and education,
screening requests for assistance, referring students for additional
legal assistance through pro bono referral programs, and legal
services.
(2) The amount of grant funds
shall be calculated by multiplying the number of students affected by
the institution's closure by one hundred dollars ($100).
Legal aid organizations that receive grants should be located in the
areas of the state affected by the institutional closure. Legal aid
organizations that receive grants may give priority to low income
students if demand exceeds available grant funds. Legal aid
organizations that receive grants shall report to the bureau after
completing their obligations under the grant on the number of
students served from the date of the institution's closure.
(3) The bureau shall establish an approval process to ensure each
legal aid organization that receives a grant pursuant to this section
meets both of the following requirements:
(A) The legal aid
organization is a 501(c)(3) tax-exempt organization in good standing
with the Internal Revenue Service and in compliance with all
applicable laws and requirements, including, if required,
registration with the Attorney General's Registry of Charitable
Trusts.
(B) The legal aid organization demonstrates expertise in assisting
students with, and currently provides direct legal services to
students for, student loan matters.
(4) A legal aid organization that receives funds pursuant to this
section shall enter into a grant agreement with the bureau and shall
use grant funds exclusively for the purposes set forth in this
section in accordance with the agreement. Any unused funds shall be
returned to the bureau unless the parties enter into a new agreement
authorizing the legal aid organization to expend the unused funds.
The bureau may terminate the agreement for material breach. However,
the bureau shall provide the grantee with written notice of the
breach and a reasonable opportunity of less than 30 days to resolve
the breach.
(5) A legal aid organization that receives a grant may give
priority to low-income students if demand exceeds available grant
funds. Otherwise, the legal aid organization may provide assistance
regardless of student income level.
(6) A legal aid organization that receives a grant shall report to
the bureau quarterly through the grant period on the number of
students served from the date funds are distributed.
(7) Funds shall be distributed by the bureau to preapproved legal
aid organizations as follows:
(A) Fifty percent shall be distributed within 30 days of the date
of the institution's unlawful closure.
(B) Twenty-five percent shall be distributed upon the submission
of the legal aid organization's second quarterly report.
(C) Twenty-five percent shall be distributed upon the submission
of the legal aid organization's third quarterly report.
SEC. 8. (a) The sum of one million three hundred thousand dollars
($1,300,000) is hereby appropriated from the Private Postsecondary
Education Administration Fund to the Bureau of Private Postsecondary
Education for the purposes of providing financial grants pursuant to
subdivision (b) of Section 94926.5 of the Education Code to legal aid
organizations for students affected by the closure of
Corinthians Corinthian Colleges, Inc.,
Inc. Legal aid organizations may use grant funds
received pursuant to subdivision (b) of Section 94926.5 of the
Education Code for affected students served from the date of closure.
The Notwithstanding paragraph (7) of
subdivision (b) of Section 94926.5, the Bureau of Private
Postsecondary Education shall ensure that these grant funds are made
available within 30 days of the enactment of this section. The
adoption of any regulation pursuant to this subdivision shall be
deemed to be an emergency and necessary for the immediate
preservation of the public, health, and safety, or general welfare.
(b) The amount appropriated in subdivision (a) may include
revenues derived from the assessment of fines and penalties imposed,
and expenditures of these funds is specifically authorized for
purposes of Section 13332.18 of the Government Code.
(c) The Private Postsecondary Education Administration Fund
reserve limit of six months of operating expenses pursuant to
subdivision (b) of Section 94930 of the Education Code shall be
suspended until July 1, 2016.
SEC. 9. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
SEC. 10. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to provide immediate educational and economic relief to
the thousands of students harmed by the closure of Corinthian
Colleges, Inc., it is necessary for this act to take effect
immediately.