Article 18. Compliance, Enforcement, Process, And Penalties of California Education Code >> Division 10. >> Title 3. >> Part 59. >> Chapter 8. >> Article 18.

The bureau shall determine an institution's compliance with the requirements of this chapter. The bureau shall have the power to require reports that institutions shall file with the bureau in addition to the annual report, to send staff to an institution's sites, and to require documents and responses from an institution to monitor compliance. When the bureau has reason to believe that an institution may be out of compliance, it shall conduct an investigation of the institution. If the bureau determines, after completing an investigation, that an institution has violated any applicable law or regulation, the bureau shall take appropriate action pursuant to this article.

(a) As part of its compliance program, the bureau shall perform announced and unannounced inspections of institutions at least every five years.
  (b) On or before January 1, 2017, the bureau shall adopt regulations setting forth policies and practices to ensure that student protections are the highest priority of inspections and that inspections are conducted based on risk and potential harm to students. The regulations shall also set forth policies and practices for providing notice to students enrolled at an institution of the results of each inspection of the institution.

The bureau shall provide an institution with the opportunity to remedy noncompliance, impose fines, place the institution on probation, or suspend or revoke the institution's approval to operate, in accordance with this article, as it deems appropriate based on the severity of an institution's violations of this chapter, and the harm caused to students.

As much as is practicable, the bureau shall seek to resolve instances of noncompliance, including the use of alternative dispute resolution procedures in Article 5 (commencing with Section 11420.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code.

(a) As part of the compliance program, an institution shall submit an annual report to the bureau, under penalty of perjury, signed by a responsible corporate officer, by July 1 of each year, or another date designated by the bureau, and it shall include the following information for educational programs offered in the reporting period:
  (1) The total number of students enrolled by level of degree or for a diploma.
  (2) The number of degrees, by level, and diplomas awarded.
  (3) The degree levels and diplomas offered.
  (4) The Student Performance Fact Sheet, as required pursuant to Section 94910.
  (5) The school catalog, as required pursuant to Section 94909.
  (6) The total charges for each educational program by period of attendance.
  (7) A statement indicating whether the institution is, or is not, current in remitting Student Tuition Recovery Fund assessments.
  (8) A statement indicating whether an accrediting agency has taken any final disciplinary action against the institution.
  (9) Additional information deemed by the bureau to be reasonably required to ascertain compliance with this chapter.
  (b) The bureau, by January 1, 2011, shall prescribe the annual report's format and method of delivery.

(a) Bureau staff who, during an inspection of an institution, detect a violation of this chapter, or regulations adopted pursuant to this chapter, that is a minor violation as determined by the bureau, pursuant to regulations adopted by January 1, 2011, shall issue a notice to comply before leaving the institution. The bureau shall establish a voluntary informal appeal process, by regulation, within one year of the enactment of this chapter.
  (b) An institution that receives a notice to comply shall have no more than 30 days from the date of inspection to remedy the noncompliance.
  (c) Upon achieving compliance, the institution shall sign and return the notice to comply to the bureau.
  (d) A single notice to comply shall be issued listing separately all the minor violations cited during the inspection.
  (e) A notice to comply shall not be issued for any minor violation that is corrected immediately in the presence of the bureau staff. Immediate compliance may be noted in the inspection report, but the institution shall not be subject to any further action by the bureau.
  (f) A notice to comply shall be the only means the bureau shall use to cite a minor violation discovered during an inspection. The bureau shall not take any other enforcement action specified in this chapter against an institution that has received a notice to comply if the institution remedies the violation within 30 days from the date of the inspection.
  (g) If an institution that receives a notice to comply pursuant to subdivision (a) disagrees with one or more of the alleged minor violations listed in the notice to comply, an institution shall send the bureau a written notice of disagreement. The agency may take administrative enforcement action to seek compliance with the requirements of the notice to comply.
  (h) If an institution fails to comply with a notice to comply within the prescribed time, the bureau shall take appropriate administrative enforcement action.

(a) As a consequence of an investigation, and upon a finding that the institution has committed a violation of this chapter or that the institution has failed to comply with a notice to comply pursuant to Section 94935, the bureau shall issue a citation to an institution for violation of this chapter, or regulations adopted pursuant to this chapter.
  (b) The citation may contain either or both of the following:
  (1) An order of abatement that may require an institution to demonstrate how future compliance with this chapter or regulations adopted pursuant to this chapter will be accomplished.
  (2) Notwithstanding Section 125.9 of the Business and Professions Code, an administrative fine not to exceed five thousand dollars ($5,000) for each violation. The bureau shall base its assessment of the administrative fine on:
  (A) The nature and seriousness of the violation.
  (B) The persistence of the violation.
  (C) The good faith of the institution.
  (D) The history of previous violations.
  (E) The purposes of this chapter.
  (F) The potential harm to students.
  (c) (1) The citation shall be in writing and describe the nature of the violation and the specific provision of law or regulation that is alleged to have been violated.
  (2) The citation shall inform the institution of its right to request a hearing in writing within 30 days from service of the citation.
  (3) If a hearing is requested, the bureau shall select an informal hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code or a formal hearing pursuant to Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
  (4) If a hearing is not requested, payment of the administrative fine is due 30 days from the date of service, and shall not constitute an admission of the violation charged.
  (5) If a hearing is conducted and payment of an administrative fine is ordered, the administrative fine is due 30 days from when the final order is entered.
  (6) The bureau may enforce the administrative fine as if it were a money judgment pursuant to Title 9 (commencing with Section 680.010) of Part 2 of the Code of Civil Procedure.
  (d) All administrative fines shall be deposited in the Private Postsecondary Education Administration Fund.

(a) As a consequence of an investigation, and upon a finding that an institution has committed a violation, the bureau may place an institution on probation or may suspend or revoke an institution's approval to operate for:
  (1) Obtaining an approval to operate by fraud.
  (2) A material violation or repeated violations of this chapter or regulations adopted pursuant to this chapter that have resulted in harm to students. For purposes of this paragraph, "material violation" includes, but is not limited to, misrepresentation, fraud in the inducement of a contract, and false or misleading claims or advertising, upon which a student reasonably relied in executing an enrollment agreement and that resulted in harm to the student.
  (b) The bureau shall adopt regulations, within one year of the enactment of this chapter, governing probation and suspension of an approval to operate.
  (c) The bureau may seek reimbursement pursuant to Section 125.3 of the Business and Professions Code.
  (d) An institution shall not be required to pay the cost of investigation to more than one agency.

(a) If the bureau determines that it needs to make an emergency decision to protect students, prevent misrepresentation to the public, or prevent the loss of public funds or moneys paid by students, it may do so pursuant to Article 13 (commencing with Section 11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code.
  (b) The bureau shall, by January 1, 2011, adopt regulations to give this section effect pursuant to Section 11460.20 of the Government Code.

(a) The bureau may bring an action for equitable relief for any violation of this chapter. The equitable relief may include restitution, a temporary restraining order, the appointment of a receiver, and a preliminary or permanent injunction. The action may be brought in the county in which the defendant resides or in which any violation has occurred or may occur.
  (b) The remedies provided in this section supplement, and do not supplant, the remedies and penalties under other provisions of law.

As consequence of an adverse administrative action against an institution, the institution may request a hearing pursuant to Article 10 (commencing with Section 11445.10) of Chapter 4.5 or Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(a) An individual who has cause to believe that an institution has violated this chapter, or regulations adopted pursuant to this chapter, may file a complaint with the bureau against the institution. The complaint shall set forth the alleged violation, and shall contain any other information as may be required by the bureau.
  (b) To ensure that the bureau's resources are maximized for the protection of the public, the bureau, in consultation with the advisory committee, shall establish priorities for its inspections and other investigative and enforcement resources to ensure that institutions representing the greatest threat of harm to the greatest number of students are identified and disciplined by the bureau or referred to the Attorney General.
  (c) In developing its priorities for inspection, investigation, and enforcement regarding institutions, the bureau shall consider as posing heightened risks the characteristics of the following institutions:
  (1) An institution that receives significant public resources, including an institution that receives more than 70 percent of its revenues from federal financial aid, state financial aid, financial aid for veterans, and other public student aid funds.
  (2) An institution with a large number of students defaulting on their federal loans, including an institution with a three-year cohort default rate above 15.5 percent.
  (3) An institution with reported placement rates, completion rates, or licensure rates in an educational program that are far higher or lower than comparable educational institutions or programs.
  (4) An institution that experiences a dramatic increase in enrollment, recently expanded educational programs or campuses, or recently consolidated campuses.
  (5) An institution that offers only nonremedial educational program courses in English, but enrolls students with limited or no English language proficiency.
  (6) An institution that has experienced a recent change of ownership or control, or a change in the business organization of the institution.
  (7) An institution with audited financial statements that do not satisfy the bureau's requirements for financial stability.
  (8) An institution that has recently been the subject of an investigation, judgment, or regulatory action by, or a settlement with, a governmental agency.
  (9) An institution that experiences institutional or programmatic accreditation restriction by an accreditor, government restriction of, or injunction against, its approval to operate, or placement on cash-reimbursement or heightened monitoring status by the United States Department of Education.
  (d) The bureau shall indicate in an annual report, to be made publicly available on its Internet Web site, the number of temporary restraining orders, interim suspension orders, and disciplinary actions taken by the bureau, disaggregated by each priority category established pursuant to subdivision (b).
  (e) The bureau shall, in consultation with the advisory committee, adopt regulations to establish categories of complaints or cases that are to be handled on a priority basis. The priority complaints or cases shall include, but not be limited to, those alleging unlawful, unfair or fraudulent business acts or practices, including unfair, deceptive, untrue, or misleading statements, including all statements made or required to be made pursuant to the requirements of this chapter, related to any of the following:
  (1) Degrees, educational programs, or internships offered, the appropriateness of available equipment for a program, or the qualifications or experience of instructors.
  (2) Job placement, graduation, time to complete an educational program, or educational program or graduation requirements.
  (3) Loan eligibility, terms, whether the loan is federal or private, or default or forbearance rates.
  (4) Passage rates on licensing or certification examinations or whether an institution's degrees or educational programs provide students with the necessary qualifications to take these exams and qualify for professional licenses or certifications.
  (5) Cost of an educational program, including fees and other nontuition charges.
  (6) Affiliation with or endorsement by any government agency, or by any organization or agency related to the Armed Forces, including, but not limited to, groups representing veterans.
  (7) Terms of withdrawal and refunds from an institution.
  (8) Payment of bonuses, commissions, or other incentives offered by an institution to its employees or contractors.

(a) The bureau shall establish a toll-free telephone number staffed by a bureau employee by which a student or a member of the public may file a complaint under this chapter.
  (b) The bureau shall make a complaint form available on its Internet Web site. The bureau shall permit students and members of the public to file a complaint under this chapter through the bureau' s Internet Web site.

The following violations of this chapter are public offenses:
  (a) Knowingly operating a private postsecondary institution without an approval to operate is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code.
  (b) Knowingly providing false information to the bureau on an application for an approval to operate is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code.
  (c) Knowingly submitting, to the bureau, false information that is required to be reported pursuant to Article 16 (commencing with Section 94928) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code.

An institution shall designate and maintain an agent for service of process within this state, and provide the name, address, and telephone number of the agent to the bureau. The bureau shall furnish the agent's name, address, and telephone number to a person upon request.

Notwithstanding any other provision of law, the bureau shall cite any person, and that person shall be subject to a fine not to exceed fifty thousand dollars ($50,000), for operating an institution without proper approval to operate issued by the bureau pursuant to this chapter.

Each institution subject to this chapter shall be deemed to have authorized its accrediting agency to provide the bureau, the Attorney General, any district attorney, city attorney, or the Student Aid Commission, within 30 days of written notice, copies of all documents and other material concerning the institution that are maintained by the accrediting agency.

Within 30 days of receiving a written notice from the bureau, the Attorney General, district attorney, city attorney, or the Student Aid Commission pursuant to Section 94944.5, an accrediting agency shall provide the requesting entity with all documents or other material concerning an institution accredited by that agency that are designated specifically or by category in the written notice.

(a) This chapter does not limit or preclude the enforcement of rights or remedies under any other applicable statute or law.
  (b) This chapter does not limit or preclude the Attorney General, a district attorney, or a city attorney from taking any action otherwise authorized under any other applicable statute or law.
  (c) If the bureau has reason to believe that an institution has engaged in a pattern or practice of violating the provisions of this chapter or any other applicable law that involves multiple students or other claimants, the bureau shall contract with the Attorney General for investigative and prosecutorial services, as necessary.