AMENDED IN SENATE MARCH 26, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

98

Introduced by Senator Arreguín

February 20, 2026

An act to amend Section 94874 of, and to add Sections 94874.3 and 94926.3 to, the Education Code, relating to private postsecondary education.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

The California Private Postsecondary Education Act of 2009 provides, among other things, for student protections and regulatory oversight of private postsecondary institutions in the state. The act is enforced by the Bureau for Private Postsecondary Education within the Department of Consumer Affairs. The act defines a “private postsecondary educational institution” as a private entity with a physical presence in the state that offers postsecondary education to the public for an institutional charge. The act requires an out-of-state private postsecondary educational institution, as defined, to register with the bureau, pay a fee, and comply with delineated requirements unless the institution is exempt from complying with these requirements. Existing law repeals the act on January 1, 2027.

This bill would require the bureau to exempt from the act a nonprofit private postsecondary educational institution that meets specified conditions, including that the institution is headquartered outside of this state and assumes ownership or operational control of an existing private postsecondary educational institution campus located in the County of Alameda that is imminently facing closure, as provided. provided, has merged with another institution, or has closed.

The bill would also authorize the bureau to adopt regulations that require a private postsecondary educational institution operating in the County of Alameda to provide not less than 24 months’ advance written notice to the bureau before ceasing operations, except as specified.

This bill would make legislative findings and declarations as to the necessity of a special statute for private postsecondary educational institutions operating in the County of Alameda.

The people of the State of California do enact as follows:

SECTION 1.

(a) The Legislature finds and declares all of the following:

(1) California is experiencing the imminent closure of several private postsecondary educational institutions, particularly in high-cost urban regions where university campuses are uniquely difficult to repurpose or find other tenants for those campuses.

(2) Vacant or abandoned university campuses contribute to commercial vacancy, neighborhood disinvestment, and the loss of educational infrastructure that serves students, faculty, and surrounding communities.

(3) Certain nonprofit, regionally accredited universities located outside of California possess the financial capacity, institutional stability, and academic resources necessary to assume operations of an existing campus that is imminently facing closure, without posing risks to students or the public.

(4) The Bureau for Private Postsecondary Education was established to protect students from institutional instability, including abrupt closures. Institutions with substantial financial resources, including large endowments, present a materially lower risk of such closures.

(5) The Bureau for Private Postsecondary Education has noted that certain categories of institutions, such as those with clear and credible claims to exemption, particularly regionally accredited, nonprofit universities, pose relatively low risks to California consumers. Allowing narrowly tailored exemptions for regionally accredited, nonprofit universities supports regulatory efficiency and enables the bureau to focus its resources on higher risk entities, thereby advancing its core mission of consumer protection.

(b) (1) Therefore, it is in the public interest to authorize the bureau to grant a limited, narrowly tailored exemption to qualifying out-of-state nonprofit universities that assume operations of an existing campus that is imminently facing closure, has merged with another institution, or has closed, in order to preserve educational continuity and avoid long-term vacancy.

(2) It is the intent of the Legislature that this exemption be limited in scope, nontransferable, and not serve as precedent or justification for the development of new campuses or expansion by private postsecondary educational institutions in this state.

SEC. 2.

Section 94874 of the Education Code is amended to read:

94874.

Except as provided in Sections 94874.2, 94874.7, and 94927.5, the following are exempt from this chapter:

(a) An institution that offers solely avocational or recreational educational programs.

(b) (1) An institution only offering educational programs to members of a bona fide trade, business, professional, or fraternal organization that is separate and distinct from the institution and that sponsors the educational programs. An institution that sponsors an educational program directly or through an affiliated division or corporate entity of the institution and that requires student membership for purposes of those educational programs does not qualify under this exemption.

(2) (A) Except as provided in subparagraph (B), a bona fide organization, association, or council that offers preapprenticeship training programs, on behalf of one or more Division of Apprenticeship Standards-approved labor-management apprenticeship programs that satisfies one of the following conditions:

(i) It is not on the Eligible Training Provider List established and maintained by the California Workforce Development Board but has met the requirements for placement on the list.

(ii) It is on the Eligible Training Provider List established and maintained by the California Workforce Development Board and meets the requirements for continued listing.

(B) If an organization, association, or council has been removed from the Eligible Training Provider List established and maintained by the California Workforce Development Board for failure to meet performance standards, it is not exempt until it meets all applicable performance standards.

(c) A postsecondary educational institution established, operated, and governed by the federal government or by this state or its political subdivisions.

(d) An institution offering either of the following:

(1) Test preparation for examinations required for admission to a postsecondary educational institution.

(2) Continuing education or license examination preparation, if the institution or the program is approved, certified, or sponsored by any of the following:

(A) A government agency, other than the bureau, that licenses persons in a particular profession, occupation, trade, or career field.

(B) A state-recognized professional licensing body, such as the State Bar of California, that licenses persons in a particular profession, occupation, trade, or career field.

(C) A bona fide trade, business, or professional organization.

(e) (1) An institution owned, controlled, and operated and maintained by a religious organization lawfully operating as a nonprofit religious corporation pursuant to Part 4 (commencing with Section 9110) of Division 2 of Title 1 of the Corporations Code, that meets all of the following requirements:

(A) The instruction is limited to the principles of that religious organization, or to courses offered pursuant to Section 2789 of the Business and Professions Code.

(B) The diploma or degree is limited to evidence of completion of that education.

(2) An institution operating under this subdivision shall offer degrees and diplomas only in the beliefs and practices of the church, religious denomination, or religious organization.

(3) An institution operating under this subdivision shall not award degrees in any area of physical science.

(4) Any degree or diploma granted under this subdivision shall contain on its face, in the written description of the title of the degree being conferred, a reference to the theological or religious aspect of the degree’s subject area.

(5) A degree awarded under this subdivision shall reflect the nature of the degree title, such as “associate of religious studies,” “bachelor of religious studies,” “master of divinity,” or “doctor of divinity.”

(f) An institution that does not award degrees and that solely provides educational programs for total charges of two thousand five hundred dollars ($2,500) or less when no part of the total charges is paid from state or federal student financial aid programs. The bureau may adjust this cost threshold based upon the California Consumer Price Index and post notification of the adjusted cost threshold on its internet website as the bureau determines, through the promulgation of regulations, that the adjustment is consistent with the intent of this chapter.

(g) A law school that is accredited by the Council of the Section of Legal Education and Admissions to the Bar of the American Bar Association or a law school or law study program that is subject to the approval, regulation, and oversight of the Committee of Bar Examiners, pursuant to Sections 6046.7 and 6060.7 of the Business and Professions Code.

(h) A nonprofit public benefit corporation that satisfies all of the following criteria:

(1) Is qualified under Section 501(c)(3) of the United States Internal Revenue Code.

(2) Is organized specifically to provide workforce development or rehabilitation services.

(3) Is accredited by an accrediting organization for workforce development or rehabilitation services recognized by the Department of Rehabilitation.

(i) An institution that is accredited by the Accrediting Commission for Senior Colleges and Universities, Western Association of Schools and Colleges, or the Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges.

(j) Flight instruction providers or programs that provide flight instruction pursuant to Federal Aviation Administration regulations and meet both of the following criteria:

(1) The flight instruction provider or program does not require students to enter into written or oral contracts of indebtedness.

(2) The flight instruction provider or program does not require or accept prepayment of instruction-related costs in excess of two thousand five hundred dollars ($2,500).

(k) (1) An institution owned, controlled, operated, and maintained by a community-based organization, as defined in Section 7801 of Title 20 of the United States Code, as that section exists on March 1, 2017, that satisfies all of the following criteria:

(A) The institution has programs on or is applying for some or all of their programs to be on the Eligible Training Provider List established and maintained by the California Workforce Development Board.

(B) The institution is registered as a nonprofit entity qualified under Section 501(c)(3) of the federal Internal Revenue Code.

(C) The institution does not offer degrees, as defined in Section 94830.

(D) The institution does not offer educational programs designed to lead directly or specifically to positions in a profession, occupation, trade, or career field requiring licensure, if bureau approval is required for the student to be eligible to sit for licensure.

(E) The institution would not otherwise be subject to oversight of the bureau under this chapter if it did not receive funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.). For purposes of this requirement, funds received through the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) do not count towards the total referenced in subdivision (f) or any other fee charge limitation condition for an exemption from this chapter.

(F) The institution can provide a letter from the local workforce development board that demonstrates the institution has met the initial criteria of that board.

(2) An institution granted an exemption pursuant to paragraph (1) shall comply with all of the following requirements:

(A) The institution shall provide to the Employment Development Department all required tracking information and data necessary to comply with performance reporting requirements under the federal Workforce Innovation and Opportunity Act, codified in Chapter 32 (commencing with Section 3101) of Title 29 of the United States Code, for programs on the Eligible Training Provider List.

(B) The institution shall comply with the Eligible Training Provider List policy developed by the California Workforce Development Board.

(C) The institution shall not charge a student who is a recipient of funding under the federal Workforce Innovation and Opportunity Act (29 U.S.C. Sec. 3101 et seq.) any institutional charges, as defined in Section 94844, for attending and participating in the program.

(l) A nonprofit private postsecondary educational institution that meets the conditions described in Section 94874.3.

SEC. 3.

Section 94874.3 is added to the Education Code, to read:

94874.3.

(a) Notwithstanding any other law, the bureau shall grant an exemption from this chapter to a nonprofit private postsecondary educational institution that satisfies all of the following conditions:

(1) The institution is accredited by a regional accrediting agency recognized by the United States Department of Education.

(2) The institution is headquartered outside this state.

(3) The institution merges with or assumes ownership or operational control of an existing campus of a postsecondary educational institution located in the County of Alameda.

(4) The campus assumed by the institution is has been operated by a private postsecondary educational institution that has provided written notice to the bureau of its intent to cease operations and is has been determined by the bureau to be imminently facing closure. closure, has merged with another institution, or has closed. For purposes of this paragraph, “imminently facing closure” means that the existing institution operating the campus has provided written notice to the bureau of its intent to cease operations within 24 months, or has otherwise demonstrated financial distress sufficient for the bureau to reasonably conclude that continued operation is unlikely.

(5) The institution has an endowment with a market value of not less than one billion dollars ($1,000,000,000), as demonstrated by audited financial statements.

(6) The institution agrees to continue operation of the campus as a private postsecondary educational institution without a material interruption in instruction.

(b) (1) The bureau shall not grant more than three exemptions per calendar year pursuant to this section, and shall not grant more than six total exemptions pursuant to this section.

(2) If an exemption granted pursuant to this section is revoked, surrendered, or otherwise terminated, the bureau may grant one additional exemption, if the numerical limits set forth in paragraph (1) are not exceeded.

(c) Each of the following apply to an exemption granted pursuant to this section:

(1) It shall apply only to the specific campus identified in the application. and other related campus facilities in the region.

(2) It shall not be transferred, assigned, or used as the basis for an exemption of any other campus or institution.

(3) It shall not be cited as precedent or relied upon by any other institution seeking to establish, operate, or expand a private postsecondary educational institution in the state.

(4) It shall not authorize the development of new real property or a new campus that was not previously operated as a private postsecondary educational institution.

(d) A nonprofit private postsecondary educational institution exempted pursuant to this section shall be exempt from the requirements of the Student Tuition Recovery Fund if the institution meets the endowment requirement set forth in paragraph (5) of subdivision (a).

(f) The bureau may adopt regulations to implement and enforce this section. section or otherwise impose a fee for cost recovery purposes.

SEC. 4.

Section 94926.3 is added to the Education Code, to read:

94926.3.

The bureau may adopt regulations requiring a private postsecondary educational institution operating in the County of Alameda to provide not less than 24 months’ advance written notice to the bureau before ceasing operations, unless an earlier closure is unavoidable due to extraordinary circumstances.

SEC. 5.

The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances of university campuses in the County of Alameda.