BILL NUMBER: SB 1289	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 13, 2012
	AMENDED IN ASSEMBLY  JUNE 26, 2012
	AMENDED IN SENATE  MAY 3, 2012
	AMENDED IN SENATE  APRIL 24, 2012

INTRODUCED BY   Senator Corbett

                        FEBRUARY 23, 2012

   An act to add Article 14.5 (commencing with Section 69800) to
Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code,
relating to student financial aid.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1289, as amended, Corbett. Postsecondary education: private
student loans.
   Existing law establishes the University of California, California
State University, the California Community Colleges, and independent
colleges and universities as the 4 segments of postsecondary
education in this state. Existing law establishes various student
financial aid programs for students attending all segments of
postsecondary education.
   This bill would require a public, private, or independent
postsecondary educational institution, except the California
Community Colleges, to make specified disclosures related to private
student loans in financial aid material and private loan applications
provided or made available by the institution, to distinguish
private loans from federal loans in individual financial aid awards,
and, if the institution provides a private loan lender list, to
provide general information about the loans available through the
lender and disclose the basis for each lender's inclusion on the
list. The bill would authorize and request the California Community
Colleges to comply with these provisions, and would apply to the
University of California only to the extent that the Regents of the
University of California act, by resolution, to make it applicable.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Article 14.5 (commencing with Section 69800) is added
to Chapter 2 of Part 42 of Division 5 of Title 3 of the Education
Code, to read:

      Article 14.5.  Private Student Loans


   69800.  A public, private, or independent postsecondary
educational institution, except the California Community Colleges,
shall do all of the following:
   (a) (1) State  all   both  of the
following in all printed and online financial aid materials issued or
distributed by the institution to applicants for admission or
matriculated students and with private loan applications provided or
made available by the institution:
   (A) Federal student loans are required by law to provide a range
of flexible repayment options, including, but not limited to,
income-based repayment and income-contingent repayment plans, and
loan forgiveness benefits, which  private  
other  student loans are not required to provide. 
   (B) Private student loans may or may not cost more than federal
loans.  
   (C) 
    (B)  Federal direct loans are available to students
regardless of income.
   (2) The institution may continue to use financial aid materials
that are printed before January 1, 2013, if the institution includes
an insert with the printed material that provides the information
required in paragraph (1). All financial aid materials printed on or
after January 1, 2013, shall include the information required in
paragraph (1).
   (b) Clearly distinguish private loans from federal loans in
individual financial aid awards by stating, for any private loans
included by the institution as part of the institution's award
package, all of the following:
   (1) Whether the rate is fixed or variable.
   (2) An explanation that private student loan lenders can offer
variable interest rates that can increase or decrease over time,
depending on market conditions.
   (3) An explanation that private student loans have a  wide
 range of interest rates  and fees  and students
should determine the interest rate of  , and any fees associated
with,  the private student loan included in their financial aid
award package before accepting the loan.
   (4) An explanation that students should contact the lender of the
private student loan or their postsecondary educational institution's
financial aid office if they have any questions about a private
student loan. 
   (5) Any and all fees associated with the assumption of the loan.
 
   (6) 
    (5)  An explanation that the interest rate on a private
loan may depend on the borrower's credit rating.
   (c) If the institution provides a private loan lender list, it
also shall provide general information about the loans available
through the lender and disclose the basis for each lender's inclusion
on the list. The institution shall also disclose with the list that
the student has the ability to choose any lender.
   69800.5.  The California Community Colleges may, and are requested
to, comply with the provisions of this article.
   69801.  This article shall apply to the University of California
only to the extent that the Regents of the University of California
act, by resolution, to make it applicable.