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California for-profit colleges must come clean

New law strengthens colleges' obligations to disclose information to students

Prospective college students in California will have new protections to help them make informed decisions about where to spend their tuition dollars, thanks to a new law that goes into effect Jan. 1. Student advocates say the law is a model for the nation.

Assembly Bill 2296 governs the state's for-profit and vocational schools and colleges, and addresses problems in earlier student-protection laws. It closes loopholes that have allowed for-profit schools to provide misleading job placement and salary disclosures on the state-required School Performance Fact Sheet.

Under the law, schools and programs must disclose:

  • Salaries of their actual graduates. Formerly, the schools could report average salaries of anyone in the occupation for which students were preparing.
  • Specific job placement rates. Under the prior law, schools would report students as placed in jobs, even when the job they got was not the specific job they trained for.
  • Cohort default rate. Schools must report how many of their graduates were in default on loan repayments three years after graduating or leaving the program.
  • Accreditation status. Schools must disclose if the school or one of its programs is not accredited, and must also explain the limitations of going to an unaccredited school or program, such as being ineligible for licensing exams and certain jobs.

"Because many for-profit schools cost so much more than our public colleges, students can end up with crippling debt," says Jeffery Freitas, secretary-treasurer of the California Federation of Teachers. "When they can't find jobs because the education or training they signed up for was inadequate, they may never recover. This transparency provides an essential protection for unsuspecting students."

Reprinted from the November 2012 issue of On Campus.