Recap of 2019 Private Career Schools Bills
This week’s focus is state bills to impose additional regulations on private career schools. The bills listed below constitute the fourth section of AACS’ compilation of 2019 state bills of interest to member schools.
The bills in this report are color coded. Measure in green have been enacted into law and those listed in red are dead for 2019. Bills in blue have been enacted into law without the apprenticeship provisions detailed in this report.
The text of the bills listed in this report can be found in AACS’ Bill Tracking Portal at:
https://www.billtrack50.com/Public/Stakeholder/Jt1rI23hjU2jC1MOSr6KVA/Embedded
Please do not hesitate to contact me at bnewman@abingdonstrategies.com or by phone at 202-491-5254 with comments or questions.
2019 State Career School Bills
State Bills to Establish an 85/15 or 80/20 Rule
New York A2006/S1506 (Education Budget Bills)
Governor Cuomo’s education budget originally contained the “For-Profit College Accountability Act.” This measure would: establish a 80-20 rule for New York State schools; require schools spend at least 50 percent of their revenues “on instruction and learning resources as opposed to recruiting, marketing, and advertising;” require that schools report the salaries of the college presidents and senior leadership, and “prohibit any school leadership from serving on an accreditation board of an organization responsible for oversight of the for-profit college to avert potential conflicts of interest.”
The “For-Profit College Accountability Act” was removed from the state’s budget.
Maryland SB 399/HB464
The originally drafted bill would have established an 85-15 rule for private career schools with an annual income greater than $10 million.
While the 85-15 rule provision was removed prior to passage, the enacted measure requires private career schools – including cosmetology schools – to make the following new disclosures:
California AB 1343
AB 1343 would have established an 85-15 Rule, beginning January 1, 2021, for institutions with revenues greater than $2.5 million or require not less than 50 percent of the institution’s revenue dedicated to student instruction. The bill was pulled by its sponsor and is no longer eligible for consideration this year.
Oregon HB 2976
The bill would establish an 80-20 rule for career schools that collect $1 million or more in annual gross tuition revenue. Career schools below the $1 million threshold would be subject to a 90-10 Rule that includes veterans’ federal tuition assistance.
State Gainful Employment Bills
California AB 1340
The Introduced bill would have established Gainful Employment based on the debt-to-earnings rates established during the Obama administration.
The current version which is pending in the Senate Appropriation Committee is a data collection and reporting bill. It requires institutions regulated by the Bureau for Private Postsecondary Education (BPPE) to report “individual identifying information, the program the graduate was enrolled in, and specified student loan debt information. The Bureau would then be required to match the data reported by institutions with wage data from the Employment Development Department, as specified. The bill would also require the bureau to make available certain program-level and institution-level statistics regarding the earnings levels of students and student debt burdens.”
Washington HB 1124
The measure would establish a Gainful Employment metric in Washington State for private career schools, including cosmetology schools, based on debt-to-earnings, and; direct state officials to determine what is considered a passing rate. Accordingly, the measure will subject schools to new student-level data reporting requirements, including data on financial aid awards – which is defined as the amount of federal, state, and institutional loans, grants, or scholarships the student received of which the school is aware. If meaningful debt-to-earnings rates cannot be established for a particular program or school, the workforce training and education coordinating board would be required to make an alternative calculation assessing “earnings in relation to cost of attendance, taking into consideration the length of the particular program.”
State Spending Limitation Bills
Maine LD 103
The Act requires for-profit colleges to report a significant amount of new information, including the amount of funds spend on “educational instruction,” “advertising” and “executive salaries.”
More significantly, it states that for-profit colleges must spend at least 50% of their total spending on “instruction” and no more than 15% of total spending on advertising.
The Act expands the definition of a "for-profit college or university" to include “a postsecondary institution that is regulated by the Department of Education or the State Board of Education, is eligible to participate in federal student aid programs and is operated by a private, for-profit business.” While schools of cosmetology and barbering subject to approval by the Director of the Office of Professional and Occupational Regulation under Title 32, chapter 126 are exempt from Maine Department of Education oversight, the provisions of this bill may be impactful to AACS members who have programs outside of the scope of the Barbering and Cosmetology Licensing Program. (Please note that this information should not be construed as legal advice or as an official interpretation of the Act. It is strongly recommended that Maine school officials contact their state regulator(s) and/or an attorney to determine the applicability of LD 103’s provisions.)
New York A2006/S1506 (Education Budget Bills)
See above for additional information. “Student instruction" means expenditures for salaries, fringe benefits, professional development expenses, and other payments made to instructors related to classroom instruction.
State Incentive Compensation Bill
California AB 1345
The bill pending in the Senate Appropriations Committee would establish and revise existing restrictions on career schools – including cosmetology schools – from providing specified financial incentives, compensation, commission, bonus, or payment contingent upon quotas based on securing student enrollments, admissions, financial aid awards, or sales of educational materials.