California’s oversight of for-profit colleges expired on Monday as a state law expired while state legislators battled over how to regulate the industry, which enrolls 400,000 students a year there.

Without state oversight, the students lack recourse if the proprietary colleges go out of business. The Bureau for Private Postsecondary and Vocational Education also went out of business last year, when lawmakers failed to reach agreement over renewing regulations that established it. A new law in 2007 subsequently re-established it.

Republicans in the Legislature rejected a bill on Monday that would have replaced the oversight law, which expired at midnight, the Los Angeles Times reported. The new bill would have offered protections for the students, including a state-run reimbursement fund. In exchange, the bill would have relaxed rules for the colleges, including dropping a requirement that 70 percent of their graduates must be placed in jobs.

Critics said the bill would have preserved too much red tape. “Certainly we need to protect students, but we also have to be mindful of the viability of the institutions,” an assemblyman, Roger Niello, told the Times.

The debate over regulating for-profit colleges has a long history in California, with consumer advocates arguing for stronger protection for students and better reporting of job-placement data. The colleges, meanwhile, have argued that bureaucracy and overregulation have hampered their efforts to expand in the state. —Kate Moser