The Tragic Collapse of State Oversight of For-Profit Career Schools in California With Assembly Defeat of SB 823

Ms. Imholz should know of what she speaks because she was one of the social engineers behind SB 823 (Perata, D-Oakland). However, there are several reasons why this measure has, so far, failed to garner sufficient votes for its passage. Here are a few:
1. It is built on the FALSE premise that all "trade" schools are crooked, greedy, and unscrupulous. This couldn't be further from the truth. The private postsecondary institutions in California provide skills and knowledge (especially in technical fields like healthcare, and automotive maintenance) that the public schools simply cannot match. Many students leave California's public colleges and universities only to attend private schools where they actually gain marketable qualifications that they could not obtain at the public schools.
2. The measure includes what will likely be found to be provisions violate the U.S. Constitution by unfairly treating one group of private schools (those accredited by the Western Association of Schools and Colleges - go here for the complete list http://www.wascsenior.org/institutions/) differently from other regionally accredited schools like Harvard, Yale, the University of Chicago, DeVry University, and Corinthian College, Inc.
3. SB 823 includes provisions whereby ANY violation of the complicated law, no matter how minor or technical, has the potential of becoming the basis for disciplinary action without any requirement that the sanctions bear some proportionality to the seriousness of the offense. Many of those same violations could also become grounds for private lawsuits for "unfair business practices" or "false advertising."
4. While the apples-to-apples comparisons of the non-exempt schools would help students decide from among those schools which to attend, none of the exempt schools (and certainly none of the public schools, including the University of California and the California State University) are required to make the same disclosures. This hardly seems fair to the student trying to decide where to go to college.
5. The sponsors of SB 823 prevailed upon the chairman and a majority of the members on the Assembly Appropriations Committee to kill the Governor's proposal, AB 2746 (Niello, R-Sacramento). AB 2746 was supported by the regulated industry and, according to the Sacramento Bee, "[It] had a good structure and many good provisions. (It also had some flaws that easily could have been fixed.) The Bee went on to describe SB 823, "Even with the latest fixes, presented finally last Thursday, it's ugly – 112 pages long, overly prescriptive, unwieldy and unworkable."

As a former faculty member who taught for nearly 3 years at the Art Institute of California-SF, owned by Goldman Sachs, I know from first hand experience how desparately these diploma mills need to be regulated. Every week I heard stories from my students about how they were misled about costs to attend the school, repayment, job placement rates and even what kinds of career placement assistance they would get.

One student even told me how they were recruiting and cashing checks from students for a graduate program that their neither had approval for from their acceditiation agency (also industry self managed) or faculty with graduate level degrees.

Thanks to the disasterous de-regulation of the student loan industry which allows students at these diploma mills to receive federally subsidized student loans, the student are caught in the lock hold of the possibility of both now borrowing money from the same company they are paying their tuition to.

Is it any wonder that my students were upset that the career counselors were paid bonuses based on their placement of students? When I learned that Ai was talking students out of starting their own businesses or going freelance in order to push them into low waged temporary jobs so they could secure their bonsueses and game the placement rates it all became crystal clear. These schools are out of control and desparately need to be regulated.

Robert Ovetz, Ph.D.

Mr. Blanchard's comment above is both insightful and correct. Ms. Imholtz' views in this area, and of those who sponsored SB 823, are entirely disconnected from the facts underlying this critical sector of education.

The underlying view of the proponents of this awful legislation is that for-profit education is illegitimate. Their elitist assumption is that the primarily adult students who seek career education are idiots. They think that unless 'protected' by highly prescriptive legislation, for-profit schools will lie cheat and steal to obtain enrollments, and that the gullible enrollees will be left in the lurch.

The reality is entirely otherwise. Those of us who own and operate career schools are dedicated educators, who treasure their students and are justifiably proud of the incredible results that our students obtain from the learning opportunities we provide.

Unlike the community colleges who dabble in career training, our institutions obtain real outcomes. Those of us who are accredited have graduation rates that are more than triple those of the community colleges. Our records of job placement of graduates is almost always over 70%, almost quadruple those of the community colleges (who by the way do not publicly disclose their statistics, which are nothing to be proud of).

Our accrediting bodies, which are sanctioned by the United States Department of Education, require these sorts of fantastic results. And be assured that they don't just take our word for it. Accredited career schools are subject to consistent and searching scrutiny by the accrediting bodies. In short, it's not prescriptive and penal legislation that gets our students such wonderful outcomes. It's the quality of the education and the educators, the diligence and desire of the students, and the close supervision of the accrediting agencies and the US Department of Education.

Ms. Imholtz refers to the usual litany of alleged misdeeds by schools. This is the sort of false rhetoric that has been repeated for 20 years by the advocates of maintaining the awful and ineffective law that finally expired. Where is the evidence that there is such widespread fraud and bad actors? Just repeating the charges do not give them substance.

Also completely false is the claim that SB 823 is some sort of 'hard fought compromise.' This bill was an attempt to jam a lousy bill down the throats of the affected institutions without any significant compromise. The sole structural change in this bill since its introduction was a complete exemption of the regionally accredited schools. This was done to attempt to buy support from some of those institutions for a bill from which they would be exempted. And no surprise, most folks would be in favor of a piano falling on someone's head besides theirs.

It is also laughably false that SB 823 makes schools do less than the prior law. The now-expired Reform Act was incredibly lengthy, incomprehensible, internally inconsistent and horribly prescriptive. I speak from personal knowledge not only as a school owner, but also as a lawyer who has been counseling schools for the last 16 years. One of the plaintiff's lawyers who made a living suing schools told me once that under that Act, every school could be successfully sued because no one could possibly understand and comply with it. SB 823 is exponentially worse. It requires reams of new 'disclosures', right down to the 'vintage of equipment' (I'm not making this up), instructor start dates of employment, etc. If a school made any error in this byzantine regime, SB 823 requires a COMPLETE REFUND of tuition. So the penalty for inevitiable and minor errors, even inconsequential ones, is institutional destruction. SB 823 is a plaintiffs lawyer full employment act, and that's not an accident.

Ms. Imholtz implies that schools do not want to be regulated, and that it was their recalcitrance that led to the current state of affairs. This is the classic 'big lie.'

Everyone agrees that the prior law was a mess. The legislature itself commissioned an Independent Monitor to assess that broken system and suggest changes. The Monitor's scathing report called for simplification and a complete re-write of the law. That resulted in a compromise bill carried by Sen. Figueroa, a democrat. She got the input from all stakeholders, including schools, and came up with a decent bill.

What happened? Senator Perata killed it at the last second, and scratched a year of good faith efforts. They then tried to sneak in an truly atrocious bill, AB 2810, which was so rotten that even the democrats wouldn't consider it. When that failed, they tried to extend the old law, and that was justifiably vetoed by Governor Schwarzenegger.

SB 823 is no more than AB 2810 with a few minor changes. It is worse in every way than the prior law. And it is less excusable because by now we all know that the approach of vindictive, prescriptive and destructive legislation is a failure.

The more rational approach was advanced in the Governor's bill, AB 2746 (Niello, R- Sac). But like the Figueroa bill, it was killed by Senator Perata. This was yet another demonstration that those who support the failed approach of the prior law, and which is embodied in SB 823, have no interest in creating a rational compromise that is good for California's students, good for California schools, and good public policy. For those folks, it is enough to keep repeating the old, false shibboleths of 'predatory trade schools,'and'dashed dreams.'

I would hope that after the experience of 20 years of failure of this approach, some rationality and fairness would emerge. We in the sector do want reasonable and fair legislation. We don't want, and have never wanted an unregulated sector. But until we rise above a dialog tries to base legislation on the same old lies and ignorance, we are not likely to get good public policy.

(A good example of this sort of view appears directly above, in the comment by Mr. Ovetz. Readers will find that Mr. Ovetz was embroiled in a dispute with his former employer over alleged censorship of a student magazine. Apparently he was happy to continue working there until he did not get his way. See http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2007/01/04/BAG31NCF5E1.DTL&o=0)

Finally, I would note that in the spirit of Chicken Little, Ms. Imholz' editorial speaks to 'tragic collapse of state oversight...' But note that the law actually expired a year ago. And guess what: The sky never fell. No accredited school has failed. No scandals have emerged. No claim on the tuition recovery fund went unpaid.

But that fact is not addressed above, is it?

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