‘Diploma mill’ curbs to expire
A class assignment gave Robert Thornton an early clue that the computer training program he was enrolled in might have higher priorities than his education.
“They had had us all put together computers for their school because they were expanding into another building,” Thornton said. His fellow students at the Computer Education Institute’s San Diego campus grumbled “that they were getting free labor out of us and calling it teaching.”
The school had advertised that its seven-month training program and the “direct job referrals” it provided led graduates to well-paying jobs with top companies, according to a lawsuit against the school’s former owners.
But Thornton, one of the plaintiffs in the unresolved suit, said the school arranged no job interviews for him. The prospective employers he found on his own, he said, “were expecting a lot more experience and a lot more skill” than what the school had prepared him for.
After paying more than $10,000 in tuition, Thornton never landed a computer-related job; he is a sheriff’s deputy.
Nearly two decades after California began regulating for-profit colleges and vocational schools to weed out “diploma mills,” the state is not free of institutions that dangle exaggerated promises of better careers before students who end up jobless and deeply in debt. Yet state oversight of the schools, which enroll more than 400,000 students a year, could soon end.
The law that establishes the rules for 1,800 schools -- including hundreds in Los Angeles County -- will expire July 1. In anticipation of that, many of the state employees who administer the law have left their jobs or have been transferred to other parts of the Department of Consumer Protection.
Gov. Arnold Schwarzenegger and the Democratic-led Legislature are trying to reach an agreement on how to refashion the law, but none is on the horizon.
The issues in dispute include how aggressive a regulatory role the state should have and what to do between July and January, the earliest that a new law could be enacted.
The Assembly’s higher education panel plans to hold a hearing Tuesday on draft legislation to help bridge the six-month gap.
In 2005, an independent monitor appointed by the Legislature concluded that state regulation of the schools “has been plagued by problems for the past 20 years” and that shortcomings identified repeatedly in audits still persist.
Those include portions of the law that conflict with one another; fees too low to pay for the state’s inspection and licensing costs; fines too small to deter misconduct; and excessive bureaucratic demands on schools seeking re-approval.
“It’s very difficult for anybody to know what the rules are. That includes the schools, students and the regulators themselves,” said Russ Heimerich, a spokesman for the state Department of Consumer Affairs.
The state’s tuition recovery program, for instance, has been mostly depleted, in part because the state may not have collected all the fees schools are required to provide. Currently, 577 students are awaiting reimbursement after their schools went out of business before they could graduate.
The state’s efforts to discipline schools have also been troubled. In 2005, regulators tried to put Brooks Institute of Photography, which has campuses in Santa Barbara and Ventura, on probation. The state charged that the school had inflated its placement rates and salary projections to prospective students.
One state inspector who posed as a potential student was told “the sky’s the limit” and that she could earn more than $50,000 after graduation, according to state records. But when regulators surveyed graduates from the class of 2003, they found the average income was about $26,000.
But an effort to discipline the school was invalidated by an administrative judge, who said the state had failed to heed its own requirement that an independent panel of peers, not state employees, evaluate schools.
“It’s hard to defend the [state], because no one seems to think it’s doing a great job, but it seems to me it ought to be strengthened rather than weakened,” said Stephen Burd, a senior fellow at the New America Foundation, a nonpartisan public policy institute based in Washington, D.C.
In the fiscal year ending in June 2004, only 32% of students enrolled in degree-granting for-profit schools in California completed their course work, according to the most recent statistics the schools reported to the state. California requires that at least 60% do so if the schools, which offer degrees in various fields, including business administration, education and nursing,are to stay in business.
Vocational schools that don’t offer degrees met that threshold, but barely, with 61% of their students completing their programs.
Only 23% of graduates of degree-granting schools and 51% from vocational schools landed jobs in their fields, though the state requires schools to place at least 70% of students.
The industry blames the poor completion and placement rates on the collapse of California’s dot-com industry -- in which many of the schools’ students aspired to work -- at the start of the decade.
Robert W. Johnson, executive director of the California Assn. of Private Postsecondary Schools, said for-profit schools favor continued state regulation, but not the current type. He said the law was written by people ideologically opposed to the idea of for-profit schools and gives plaintiff’s lawyers too much leverage.
“The first three pages of the law makes clear the only good school is a dead school,” Johnson said. Consumer advocates who want extensive state regulation “dislike our sector and make no bones about it,” he said.
Keith Zakarin, a San Diego lawyer who represents the former owners of Computer Education Institute, called the students’ lawsuit against them meritless and said it was “typical of the laundry list of complaints that this code has spawned.” Sam Afrookhteh and Matthew Amir Baniassad, once owners of the school, sold it after the suit was filed in 2002.
Plaintiffs’ lawyers are not the only ones faulting the schools. The California attorney general’s office, relying on the same state law, has been investigating Corinthian Colleges, which is based in Santa Ana and owns Bryman College campuses throughout Southern California and in Washington state.
State investigators have told Corinthian officials that some of their schools have not met minimum placement requirements and have reported inaccurate placement rates to regulators, according to a company filing last month with the Securities and Exchange Commission.
Lawrence Salisbury, a San Diego attorney who has sued many of the schools and represents Thornton, the former computer student, said that in addition to other exaggerated claims, some schools have oversold the possibility that students can transfer their credits to community colleges or other more established institutions. In fact, he said, many other colleges and universities won’t accept them.
“These are devastating things to find after students spend a year and are out $10,000 or $15,000 or more,” Salisbury said.
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California’s for-profit colleges and vocational schools often fall short of state requirements for graduation rates and for the percentage of graduates who find jobs in their fields within six months.
For fiscal year ending in June 2004
Percent of students who graduate
Degree granting schools: 32%
Non-degree granting schools: 61%
State requirement: 60%
Percent of graduates who find a job
Degree granting schools: 23%
Non-degree granting schools: 51%
State requirement: 70%
Sources: State Education Code, Bureau for Private Postsecondary and
Vocational Education (2004-05 annual report)