RECAP: AB 1343, The Bill That Would Have Taken Down For-Profit Universities In California

Despite making national news in April and May for it’s tough stance on for-profit university loans, AB 1343 quietly fizzled out in the Senate.

What was it?

Assembly Bill 1343. Part of a group of seven bills aimed at giving for-profit universities more regulation, AB 1343 would have stopped universities from enrolling students if more than 85 percent of the schools revenue came from federal or state sources. As for-profit universities primarily rely on these loans, AB 1343 would have closed down many, or would have forced them to find a new business model.

If signed into law, the new regulations would have began January 1, 2023.

Who Backed It? 

AB 1343 was introduced by Assembly members Susan Talamantes Eggman (D-Stockton), Rebecca Bauer-Kahan (D-Orinda), Marc Berman (D-Palo Alto), David Chiu (D-San Francisco), Evan Low (D-Silicon Valley), and Kevin McCarty (D-Sacramento). Until reaching the Senate, Democrats and some Republicans voted for the bill in the Assembly.

Education groups also backed the bill. Former Obama administration Deputy Undersecretary for Education Bob Shireman personally said “This is a historic day for for-profit college accountability, not just in California, but across the country. These seven bills represent a bold, precedent-setting effort to protect vulnerable students, enhance transparency and oversight of taxpayer funded-schools, and ensure that all colleges are operating on a level playing field.

“For too long, for-profit colleges in California and elsewhere have been allowed to act with impunity, bringing in billions of dollars in taxpayer money and trapping unsuspecting students in poor-quality programs with mountains of debt,” Shireman continued. “With these bills, lawmakers are saying ‘no more.’”

What happened?

The bill quickly rose through Assembly committees and was ultimately passed by the California Assembly in May, 66-5. It quickly received national attention as striking a blow against for-profit universities. 

Owners of for-profit universities panicked and rallied against AB 1343. Lobbyists against the bill descended on Sacramento shortly after it’s passing. Lobbyists were given more than $800,000 from for-profit education companies. One for-profit chain directly donated money to the reelection campaign funds to each member of the Senate Education and Business, Professions and Economic Development committee, most notably Senator Connie Leyva (D-Chico).

“The experience we’ve had moving this package forward highlights the role of money and what that buys as far as influence in the Capitol and in state capitols around the country,” said Assemblyman Chiu of the campaign contributions.

Soon one member of the Assembly withdrew sponsorship. Then constituents who had graduated from these universities began contacted committee members en masse. Some, such as Veterans’ groups, pointed out that for-profit schools took advantage of veterans straight out of the military through their federal loans. But most groups countered that for-profit universities provided classes with better class times, more study options, and the option to study from home.

By the time in reached the Senate committees in June support for the bill had dwindled. It’s last action was an amendment added in mid-June while in the Senate Business, Professions, and Economic Development.

Current Status:

AB 1343 wasn’t brought up for a Senate vote during the recent session in August and September and is effectively dead. A few similar for-profit education bills squeaked through both houses, namely AB 1344 which makes out-of-state for-profit schools disclose to California regulations what legal trouble they have been in. But the bill that made headlines mere months ago never managed to make it out of Senate committees.