The state agency under the microscope pretty much agreed with everything in the harsh report (pdf) from the state auditor, except its title: “Bureau for Private Postsecondary Education—It Has Consistently Failed to Meet Its Responsibility to Protect the Public’s Interests.”
It was created in 2010 after the Legislature sunset its ineffective predecessor and was overwhelmed from the start. California has more than 1,000 for-profit colleges, including the University of Phoenix, ITT Technical Institute, Academy of Art University and Citrus Heights Beauty College.
They are a motley crew. The industry is plagued by deceptive recruiting practices, high costs, fraud and lousy student performance that have gone on for decades and continue to get worse.
“Unfortunately, during our current audit of the bureau, we found that many of the problems of the past persist today, four years after the Legislature reestablished the bureau to fill the regulatory void left by the sunset of its predecessor,” the report said.
Pronouncing the public “at risk,” the auditor noted that the bureau inspected only a fraction of the required number of institutions and then took way too long to finish the ones they did.
The auditor found 1,100 license applications that were awaiting a bureau decision, some for as long as three years. On average, the bureau took three times as long as the statutory 60-day limit to process the 3,200 applications it did look at during a three-year period ending in 2012-13.
The bureau still does not have a “program to identify unlicensed institutions proactively,” as required by the law that established it. And it does a crummy job of resolving the problems that are brought to it. It had not resolved around 160 of 438 complaints made about unlicensed institutions that it received as of October 2013.
When the bureau does act, it’s not very good at following up. “It had issued 14 citations to unlicensed institutions with administrative fines totaling $700,000, yet at the time of this audit, it had only collected $5,000 from one of the institutions,” the auditor reported.
The state’s independent Office of the Legislative Analyst (LAO) told much the same story in a clinically critical report last December that recommended the bureau change its mission. The Analyst suggested it stop worrying about educational quality at already-accredited schools and focus on the bad schools that are using suspect marketing and illegal business practices to rip students off.
Some critics didn’t think it a good idea for the state to cede critical oversight functions to the peer review of accreditors.
The auditor’s report was no less skeptical of the bureau’s ability to reform itself. It noted that the agency will sunset on January 1, 2015, and gave the governor and Legislature three recommendations to choose from: Either give the bureau “significantly more assistance,” transfer some of its duties to other agencies within the Consumer Affairs department or jerk it all away from the department and ship the duties elsewhere.