Out-of-State Institution Registration

Last updated: 6/2/17

The California Education Code provides that all private postsecondary educational institutions with a physical presence in the state of California must apply for approval to operate with the Bureau for Private Postsecondary Education (Bureau).

Effective July 1, 2017, certain out-of-state private postsecondary educational institutions must register with the Bureau, pay a $1,500 registration fee and submit required documentation. Out-of-state institutions that register with the Bureau will also be required to collect Student Tuition Recovery Fund (STRF) assessments from students who are California residents or enrolled in a residency program, and to otherwise comply with STRF regulations.

Inquiries regarding out-of-state institution registration should be directed to bppe.licensing@dca.ca.gov. Inquiries regarding STRF assessments and/or reporting should be directed to strf@dca.ca.gov.

Out-of-State Institution Registration Form – NEW!

STRF Frequently Asked Questions

• What Does it Mean to be Compliant with the New Law?

  To be compliant with the new law, out-of-state institutions must:

  ✓ Submit the following to the Bureau:

  Registration application

  Evidence of accreditation

  Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location

  Name of a California agent for service of process

  Copy of its catalog

  Sample enrollment agreement

  Check or money order for $1,500 fee

  ✓ Receive written registration confirmation from the Bureau

  ✓ Comply with Student Tuition Recovery Fund (STRF) requirements

• What Institutions Does This New Law Apply to?

  The new law applies to private institutions that do not have a physical presence in California but enroll California students in distance education, except for non-profit accredited institutions.

• How Long Will an Institution’s Registration With the Bureau be Valid?

  An institution’s registration is valid for two years.

• What is the STRF and its Purpose?

  The STRF is a fund administered by the Bureau that primarily reimburses eligible students’ tuition under specific circumstances. The purpose of the STRF is to relieve or mitigate economic loss suffered by a student in an educational program at a qualifying institution.

• Who is Eligible for Reimbursement from the STRF?

  Students who, at the time of enrollment, were California residents or enrolled in a California residency program may be eligible for reimbursement from the STRF if they were enrolled in a qualifying institution, prepaid tuition, and suffered an economic loss.

• What is a STRF Assessment?

  A STRF assessment is a fee that Bureau-approved and registered institutions are required to collect from California residents or students enrolled in a California residency program upon collection of the first payment at or after enrollment. On a quarterly basis, institutions are required to complete and submit a STRF Assessment Reporting Form and (when applicable) remit payment to the Bureau for the total STRF assessments collected from students.

• What is the Current STRF Assessment Rate?

  Effective January 1, 2015, the current STRF assessment rate is zero dollars ($0). Although Bureau-approved and registered institutions are not currently required to collect STRF assessments from students, institutions are still required to complete and submit the STRF Assessment Reporting Forms issued by the Bureau. Institutions are also required to maintain all back-up documentation supporting the information reported on their STRF Assessment Reporting Forms.

REFERENCE

Section 94801.5, California Education Code

(a) Effective July 1, 2017, an out-of-state private postsecondary educational institution shall register with the bureau, pay a fee pursuant to Section 94930.5, and comply with all of the following:

(1) The institution shall provide the bureau with all of the following information:

(A) Evidence of accreditation.

(B) Evidence that the institution is approved to operate in the state where the institution maintains its main administrative location.

(C) The agent for service of process consistent with Section 94943.5.

(D) A copy of the institution's catalog and sample enrollment agreement.

(2) The institution shall comply with the requirements of the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.

(3) The institution shall provide disclosures pursuant to the requirements for the Student Tuition Recovery Fund, established in Article 14 (commencing with Section 94923), and regulations adopted by the bureau related to the fund, for its students residing in California.

(b) This section does not apply to nonpublic higher education institutions that grant undergraduate degrees, graduate degrees, or both, and that are formed as nonprofit corporations and are accredited by an agency recognized by the United States Department of Education.

(c) An institution described in subdivision (a) that fails to comply with this section is not authorized to operate in this state.

(d) A registration with the bureau pursuant to this section shall be valid for two years.

(e) The bureau shall develop, through emergency regulations, a registration form. The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. These emergency regulations shall become law through the regular rulemaking process by January 1, 2018.

Section 94850.5, California Education Code

"Out-of-state private postsecondary educational institution" means a private entity without a physical presence in this state that offers distance education to California students for an institutional charge, regardless of whether the institution has affiliated institutions or institutional locations in California.

Section 94886, California Education Code

Except as exempted in Article 4 (commencing with Section 94874) or in compliance with the transition provisions in Article 2 (commencing with Section 94802), a person shall not open, conduct, or do business as a private postsecondary educational institution in this state without obtaining an approval to operate under this chapter.

Section 94909(a)(14), California Education Code

(a) Except as provided in subdivision (d), prior to enrollment, an institution shall provide a prospective student, either in writing or electronically, with a school catalog containing, at a minimum, all of the following:

(14) A description of the student's rights and responsibilities with respect to the Student Tuition Recovery Fund. This statement shall specify that it is a state requirement that a student who pays his or her tuition is required to pay a state-imposed assessment for the Student Tuition Recovery Fund. This statement shall also describe the purpose and operation of the Student Tuition Recovery Fund and the requirements for filing a claim against the Student Tuition Recovery Fund.

Section 94911(b), California Education Code

An enrollment agreement shall include, at a minimum, all of the following:

(b) A schedule of total charges, including a list of any charges that are nonrefundable and the student's obligations to the Student Tuition Recovery Fund, clearly identified as nonrefundable charges.

Section 94923, California Education Code

(a)The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of his or her enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.

(b) (1) The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.

(2) The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:

(A) Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.

(B) Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.

(C) Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.

(D) Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section.

(E) A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.

(F) A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.

(G) A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the student's economic loss.

(H) Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with his or her Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.

(c) Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not his or her enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.

(d) A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.

(e) The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.

(f) For purposes of this section, "economic loss" includes, but is not necessarily limited to, pecuniary loss, which is the sum of the student's tuition, all other institutional charges as defined in Section 94844, the cost of equipment and materials required for the educational program as defined in Section 94837, interest on any student loan used to pay for such charges, collection costs, penalties, and any license or examination fees the student paid to the institution but is unable to recover. Economic loss shall also include the amount the institution collected and failed to pay to third parties on behalf of the student for license fees or any other purpose. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920, room and board, supplies, transportation, application fees, or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees. Nothing in this subdivision shall prevent the bureau from further defining economic loss to include loss of educational opportunity.

(g) As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as "paid in full" to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.

(h) Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund. 

(i) Any student whose loan is revived by a loan holder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.

Section 94924, California Education Code

(a) The bureau shall determine the amount of Student Tuition Recovery Fund assessments to be collected for each student.

(b) All assessments collected pursuant to this article shall be credited to the Student Tuition Recovery Fund, along with any accrued interest, for the purpose of this article. Notwithstanding Section 13340 of the Government Code, the moneys in the Student Tuition Recovery Fund are continuously appropriated to the bureau, without regard to fiscal year, for the purposes of this article.

(c) Except when an institution provides a full refund pursuant to Section 94919 or Section 94920, the Student Tuition Recovery Fund assessment is nonrefundable.

Section 94925, California Education Code

(a) The amount in the Student Tuition Recovery Fund shall not exceed twenty-five million dollars ($25,000,000) at any time.

(b) If the bureau has temporarily stopped collecting the Student Tuition Recovery Fund assessments because the fund has approached the twenty-five million dollar limit in subdivision (a), the bureau shall resume collecting Student Tuition Recovery Fund assessments when the fund falls below twenty million dollars ($20,000,000).

(c) An otherwise eligible student who enrolled during a period when institutions were not required to collect Student Tuition Recovery Fund assessments is eligible for Student Tuition Recovery Fund payments despite not having paid any Student Tuition Recovery Fund assessment.

Section 94930.5, California Education Code

Subject to Section 94930, an institution shall remit to the bureau for deposit in the Private Postsecondary Education Administration Fund the following fees, in accordance with the following schedule:

(a) The following fees shall be remitted by an institution submitting an application for an approval to operate, if applicable:

(1) Application fee for an approval to operate: five thousand dollars ($5,000).

(2) Application fee for the approval to operate a new branch of the institution: three thousand dollars ($3,000).

(3) Application fee for an approval to operate by means of accreditation: seven hundred fifty dollars ($750).

(b) The following fees shall be remitted by an institution seeking a renewal of its approval to operate, if applicable:

(1) Renewal fee for the main campus of the institution: three thousand five hundred dollars ($3,500).

(2) Renewal fee for a branch of the institution: three thousand dollars ($3,000).

(3) Renewal fee for an institution that is approved to operate by means of accreditation: five hundred dollars ($500).

(c) The following fees shall apply to an institution seeking authorization of a substantive change to its approval to operate, if applicable:

(1) Processing fee for authorization of a substantive change to an approval to operate: five hundred dollars ($500).

(2) Processing fee in connection with a substantive change to an approval to operate by means of accreditation: two hundred fifty dollars ($250).

(d) (1) In addition to any fees paid to the bureau pursuant to subdivisions (a) to (c), inclusive, each institution that is approved to operate pursuant to this chapter shall remit both of the following:

(A) An annual fee for each campus designated by the institution as a main campus location in California, in an amount equal to 0.45 percent of the campus' total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).

(B) An annual campus fee for each branch of the institution in an amount equal to 0.45 percent of the branch's total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000).

(2) The amount of the annual fees pursuant to paragraph (1) shall be proportional to the bureau's cost of regulating institutions under this chapter, but shall not exceed seven hundred fifty thousand dollars ($750,000) for any institution.

(e) The bureau may assess both of the following fees, if applicable:

(1) An out-of-state institution registration fee in an amount of one thousand five hundred dollars ($1,500).

(2) A request for inactive status fee in an amount of five hundred dollars ($500).

(f) It is the intent of the Legislature that the fees established pursuant to this section be evaluated during the 2017–18 state budget process and, if necessary, adjusted by subsequent legislation based upon information provided to the Legislature by the department and the bureau.

(g) Notwithstanding subdivision (d), effective July 1, 2018, the annual fee for each campus described in subparagraphs (A) and (B) of paragraph (1) of subdivision (d) shall be in an amount equal to 0.55 percent of that campus' total gross revenue derived from students in California, but not to be less than two thousand five hundred dollars ($2,500) and not to exceed sixty thousand dollars ($60,000) for each campus.

Section 71800(e)(11), California Code of Regulations

In addition to the requirements of section 94911 of the Code, an institution shall provide to each student an enrollment agreement that contains at the least the following information:

 (e) Itemization of all institutional charges and fees including, as applicable:

 (11) Student Tuition Recovery Fund fee (non-refundable)

Section 76020, California Code of Regulations

(a) The fund exists to relieve or mitigate economic losses suffered by a student in an educational program as defined in section 94837 of the Code at a qualifying institution, who is or was a California resident or was enrolled in a residency program, if the student enrolled in the institution, prepaid tuition, paid the assessment, and suffered loss as a result of any of the following:

(1) The closure of the institution;

(2) The institution's failure to pay refunds or charges on behalf of a student to a third party for license fees or any other purposes, or to provide equipment or materials for which a charge was collected within 180 days before the closure of the institution;

(3) The institution's failure to pay or reimburse loan proceeds under a federally guaranteed student loan program as required by law or to pay or reimburse proceeds received by the institution prior to closure in excess of tuition and other costs;

(4) A significant decline in the quality or value of the educational program within the 30-day period before the closure of the institution or, if the decline began before that period, the period of decline determined by the Bureau, to a degree that results in the institution's failure to meet minimum operating or academic standards; and

(5) The student's inability to collect a judgment entered against a qualifying institution for a violation of the Act, subject to all of the following:

(A) The student has reasonably tried, and failed, to collect on the judgment. The Bureau will determine the reasonableness of the effort on a case-by-case basis;

(B) The Bureau receives the student's application within 4 years from the school's closure;

(C) The student has not received reimbursement or forgiveness from any other source.

(b) A student whose total charges were paid by a third-party payer is not eligible to make a claim.

Section 76120, California Code of Regulations

(a) Each qualifying institution shall collect an assessment of zero dollars ($0) per one thousand dollars ($1,000) of institutional charges, rounded to the nearest thousand dollars, from each student in an educational program who is a California resident or is enrolled in a residency program. For institutional charges of one thousand dollars ($1,000) or less, the assessment is zero dollars ($0).

(b) Unless a student has a separate agreement to repay the third party, a student whose costs are paid to the institution by third-party payer shall not pay the STRF assessment to the qualifying institution.

(c) Except when an institution provides a 100% refund pursuant to section 94919(d) or section 94920(b) of the Code, the assessment is non-refundable.

Section 76130, California Code of Regulations

A qualifying institution shall collect the assessment from each student in an educational program at the time it collects the first payment from or on behalf of the student at or after enrollment. The assessment shall be collected for the entire period of enrollment, regardless of whether the student pays the institutional charges in increments.

A qualifying institution shall complete the STRF Assessment Reporting Form (Rev. 2/10) and remit it with the STRF assessments collected from students to be received by the Bureau no later than the last day of the month following the close of the quarter as follows:

April 30 for the first quarter,

July 31 for the second quarter,

October 31 for the third quarter, and

January 31 for the fourth quarter. If the due date falls on a Saturday, Sunday or State or federal holiday, the due date shall be extended to the next regular business day for the Bureau.

If the due date falls on a Saturday, Sunday, or State or federal holiday, the due date shall be extended to the next regular business day for the Bureau.

The STRF Assessment Reporting Form shall contain the following information:

Total number of students who signed enrollment agreements for educational programs during the reporting period; and

Total number of students eligible for STRF who signed enrollment agreements for educational programs during the reporting period; and

The total number of students who signed their enrollment agreement during the reporting period, were eligible for STRF, and who made their first payment during the reporting period; and

The total number of students who signed their enrollment agreement in a previous reporting period, were eligible for STRF, and who made their first payment during the current reporting period; and

Total amount of institutional charges after rounding each student's institutional charges to the nearest $1,000, for all eligible STRF students whose STRF assessment was collected in the reporting period; and

Current contact telephone number of the person preparing the form; and

A declaration dated and signed under penalty of perjury by the person preparing the form that the form and any attachments are true and correct.

In the event of a school closure, any collected assessments shall be remitted to the Bureau within seven days following the cessation of instruction.

Submission of all prior reports and assessments required by this section is a condition of renewal.

Section 76140, California Code of Regulations

(a) A qualifying institution shall collect and maintain records of student information to substantiate the data reported on the STRF Assessment Reporting Form and records of the students' eligibility under the Fund. Such records shall include the following for each student:

(1) Student identification number,

(2) First and last names,

(3) Email address,

(4) Local or mailing address,

(5) Address at the time of enrollment,

(6) Home address,

(7) Date enrollment agreement signed,

(8) Courses and course costs,

(9) Amount of STRF assessment collected,

(10) Quarter in which the STRF assessment was remitted to the Bureau,

(11) Third-party payer identifying information,

(12) Total institutional charges charged, and

(13) Total institutional charges paid.

(b) The qualifying institution shall maintain the data required under this section in an electronic format that is readily available and open to inspection by the Bureau upon request. The institution shall make the records immediately available to a Bureau representative conducting a site inspection or, upon written request, shall provide a copy within 14 calendar days of the request. All records shall be provided to the Bureau in an intelligible and orderly manner and in an electronic format.

Section 76215, California Code of Regulations

(a) A qualifying institution shall include the following statement on both its enrollment agreement and school catalog:

“The State of California established the Student Tuition Recovery Fund (STRF) to relieve or mitigate economic loss suffered by a student in an educational program at a qualifying institution, who is or was a California resident while enrolled, or was enrolled in a residency program, if the student enrolled in the institution, prepaid tuition, and suffered an economic loss. Unless relieved of the obligation to do so, you must pay the state-imposed assessment for the STRF, or it must be paid on your behalf, if you are a student in an educational program, who is a California resident, or are enrolled in a residency program, and prepay all or part of your tuition.

You are not eligible for protection from the STRF and you are not required to pay the STRF assessment, if you are not a California resident, or are not enrolled in a residency program.”

(b) In addition to the statement required under subdivision (a) of this section, a qualifying institution shall include the following statement in its school catalog:

“It is important that you keep copies of your enrollment agreement, financial aid documents, receipts, or any other information that documents the amount paid to the school. Questions regarding the STRF may be directed to the Bureau for Private Postsecondary Education, 2535 Capitol Oaks Drive, Suite 400, Sacramento, CA 95833, (916) 431-6959 or (888) 370-7589.

To be eligible for STRF, you must be a California resident or are enrolled in a residency program, prepaid tuition, paid or deemed to have paid the STRF assessment, and suffered an economic loss as a result of any of the following:

1. The institution, a location of the institution, or an educational program offered by the institution was closed or discontinued, and you did not choose to participate in a teach-out plan approved by the Bureau or did not complete a chosen teach-out plan approved by the Bureau.

2. You were enrolled at an institution or a location of the institution within the 120 day period before the closure of the institution or location of the institution, or were enrolled in an educational program within the 120 day period before the program was discontinued.

3. You were enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the Bureau determined there was a significant decline in the quality or value of the program more than 120 days before closure.

4. The institution has been ordered to pay a refund by the Bureau but has failed to do so.

5. The institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.

6. You have been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but have been unable to collect the award from the institution.

7. You sought legal counsel that resulted in the cancellation of one or more of your student loans and have an invoice for services rendered and evidence of the cancellation of the student loan or loans.

To qualify for STRF reimbursement, the application must be received within four (4) years from the date of the action or event that made the student eligible for recovery from STRF.

A student whose loan is revived by a loan holder or debt collector after a period of noncollection may, at any time, file a written application for recovery from STRF for the debt that would have otherwise been eligible for recovery. If it has been more than four (4) years since the action or event that made the student eligible, the student must have filed a written application for recovery within the original four (4) year period, unless the period has been extended by another act of law.

However, no claim can be paid to any student without a social security number or a taxpayer identification number.”