Landmark California reforms enacted nearly 20 years ago to protect unwary students from "diploma mills" making false promises about how their training will lead to good-paying jobs, expired at midnight Saturday.
A stopgap measure to extend the protections -- while debate continues on a long-range solution -- could be passed in several weeks by legislators grappling with how best to protect students and improve the operations of the state agency that oversees trade schools.
There is intense debate about what to do next. Consumer advocates think that legislation to create a new regulatory scheme is not strong enough, while the trade association representing the schools maintains that it is too draconian.
Last September, Gov. Arnold Schwarzenegger vetoed a bill that would have extended the reforms enacted in 1989, saying the statutes were "fundamentally flawed." He pledged to introduce his own proposal and work with the Legislature to get a new law passed early this year. That has not happened, and it is far from clear what can be worked out in Sacramento before the end of the year, when the stopgap law would expire.
Elena Ackel, an attorney with the Legal Aid Foundation of Los Angeles who has represented students victimized by trade schools for more than two decades, is concerned that if strong, long-term regulations are not enacted, students studying for a range of occupations, from computer programming to cosmetology, will not get the education they are seeking and wind up in debt.
The state Bureau for Private Postsecondary and Vocational Education, which had jurisdiction over more than 1,600 for-profit schools with more than 400,000 students, went at least temporarily out of business when the legislation governing the state's private postsecondary and vocational schools expired. The schools garner about $5 billion a year in tuition. Many of the students who attend the schools are low-income and are able to attend only with the help of federal loans and grants.
If action is not taken soon to replace the old regulations, the state could go back to the "Wild West" situation it experienced during the mid-1980s, when California had a reputation as one of the nation's worst "diploma mills," said Betsy Imholz, director of special projects at Consumers Union in San Francisco.
Robert Johnson, executive director of the California Assn. of Private Postsecondary Schools, the primary trade association representing school owners, acknowledged that there needs to be some law in place. "No rational person would argue you don't need an oversight body," Johnson said in an interview Sunday.
But, in the meantime, he said, "the sky is not going to fall."
The reforms enacted in 1989 were designed to help students and taxpayers, who face paying part of the bill when students default on loans. Thousands of students defaulted after dropping out of shabby programs.
Today, Rep. Maxine Waters (D-Los Angeles), who was author of several of the key reforms when she was in the state Legislature, is scheduled to speak at a news conference on the issue with Ackel and several vocational school students. Waters has not unveiled any new proposals yet.
"The risk for individual students is huge" in an unregulated environment, Imholz said. "Students are putting out thousands for education and we have no system in place to ensure that they are going to get what they pay for. Before these lives are ruined by debt that they incurred for a program they couldn't handle or a job that didn't exist, they need to have certain basic rights and opportunities for redress," said Imholz, who represented a number of students who were defrauded by a nationwide trade school chain in the 1980s while she was a legal aid lawyer in Brooklyn, N.Y.
No one thinks the situation is ideal.
A 2005 report by a special monitor, commissioned by the state, said the bureau overseeing trade schools had a record of "fundamental problems." The report said the bureau did not conduct unannounced school site visits mandated by law, failed to verify "placement rates" that show how many graduates obtain jobs in the fields they study, almost never assessed fines against poorly performing schools and had never placed a school on probation or revoked a school's license.
The report also emphasized that the bureau could not impose a fine greater than $2,500.
The report also said the old law contained conflicting regulations that made it difficult for bureau staff to administer and enforce them. It also said excessively bureaucratic demands were imposed on schools seeking to renew their certification.