Vocational schools face loss of state oversight
Sacramento Bee 1/22/07
The Department of Consumer Affairs' Bureau for Private Postsecondary and Vocational Education is the branch responsible for making sure that private colleges and universities don't defraud their students -- many of whom are aspiring to change careers or improve their paychecks. The bureau, which consumer advocates say has a history of being understaffed and underfunded, approves educational and training programs, as well as a tuition reimbursement fund.
"It's a great concern because you have 400,000 students at 1,500 for-profit schools pulling in $5 billion in annual tuition transactions," Senate President Pro Tem Don Perata, D-Oakland, said last week at a confirmation hearing for Rosario Marin, secretary of the State and Consumer Services Agency.
Marin, who will be up for confirmation in the Senate this week, pledged to work with the Legislature on a solution to regulate the schools that teach a wide range of skills, from computer programming to cosmetology.
The Governor's Office on Friday affirmed that sentiment, saying Gov. Arnold Schwarzenegger wants to "pass a measure that will provide comprehensive reform and address the fundamental flaws that currently exist."
Department of Consumer Affairs spokesman Russ Heimerich said the department will sponsor legislation soon.
Consumer advocates warn that without the regulatory bureau, thousands of students could face losing federal financial aid and others might not be able to earn professional certificates -- such as acupuncturists, cosmetologists, and marriage and family therapists.
Betsy Imholz, special projects director at Consumers Union, the nonprofit publisher of Consumer Reports, said the state could fall back to a time when so-called diploma mills offered unnecessary degrees or overstated job placement rates and earning potential.
"It would once again be the Wild West," Imholz said.
Industry representatives call that a scare tactic, saying the U.S. Department of Education doesn't require state approval for student loans. They say that even without the bureau, most schools would remain in good standing with their national and regional accrediting agencies.
Robert Johnson, executive director of the California Association of Private Postsecondary Schools, said the state may actually discourage new schools from starting up.
California began regulating for-profit colleges in 1989. Over the years, the state passed the job around, from the Department of Education to an independent board and finally to the Department of Consumer Affairs.
Consumer advocates say the bureau chronically suffers from a backlog of complaints and the student tuition recovery fund can't cover all students. Currently, the bureau reports having 350 claims for refunds and nearly 500 complaints against schools, many more than six months old.
Imholz said there's no political will to vigorously regulate the industry because the director of consumer affairs is a political appointee.
And consumers aren't the only ones who are unhappy with the bureau.
At TechSkills, a vocational school in Sacramento, President David Vice said the bureau imposes too much red tape on the industry. For example, community colleges aren't required to report graduation and placement rates. His school, however, does.
"We want a good law," Vice said. "Good schools want consumer protection because it's how we run a good business."
Last year, Schwarzenegger vetoed a bill that would have extended the bureau's lifeline before it expires July 1. The governor wrote in his veto message that he wanted to clean up fundamental flaws in the program.
Though the administration has yet to introduce a plan, Schwarzenegger's new budget assumes a $3 million increase for the bureau, which currently operates on an $8 million budget generated by fees. The extra money might have to come from fee changes and increases imposed on schools.
"We're hopeful that the governor will get a bill on the table so we can negotiate regulations," Johnson said. "Our position is, if you fix the law, good governance will come."
For now, the bureau is preparing for the worst. A hiring freeze has been imposed. And marriage and family therapist programs are being warned that some of their graduates won't be eligible to take licensing exams.
In a Dec. 12 letter sent by Board of Behavioral Sciences Executive Director Paul Riches, he warned that schools should be planning for the worst-case scenario if the bureau ceased to exist. He recommended notifying students about the possibility of not getting their licenses.