Relating to: student financial protection at certain private postsecondary schools. (FE)

AB 638 requires private postsecondary schools seeking state approval (or renewal) to maintain a reserve fund equal to 25% of their highest annual revenue over the past five years (or projected first-year revenue for new schools). This fund protects students if schools commit fraud, fail to deliver promised education services, or close unexpectedly. Schools must also pay a $3 student protection fee for every $1,000 of their annual revenue, with fee collection stopping once the fund exceeds $5 million. The bill directly affects private colleges operating in the state, creating a financial safety net for students through mandatory reserves and a fee-based fund.