AB 534, as introduced, Wieckowski. Postsecondary education: institutional and financial assistance information for students.
Under existing law, there are 4 segments of postsecondary education in this state: the University of California, the California State University, the California Community Colleges, and independent institutions of higher education. Existing law, the California Private Postsecondary Education Act of 2009, regulates the operations of private postsecondary educational institutions, as defined, some of which are not accredited. Existing federal law, the Higher Education Opportunity Act, requires postsecondary institutions whose students receive certain federally funded, or federally insured or guaranteed, student loans to provide, among other services, entrance and exit counseling to students with specified information about these loans.
This bill would require each campus of the 4 segments listed above, and private postsecondary educational institutions subject to the California Private Postsecondary Education Act of 2009, to provide entrance and exit counseling, as specified, with respect to any institutional or state-funded loans offered or recommended to the student by the institution or segment. The bill would not apply to federally funded, federally insured, or federally guaranteed loans for which counseling is required by the federal Higher Education Opportunity Act.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Chapter 1.5 (commencing with Section 99050)
2is added to Part 65 of Division 14 of Title 3 of the Education Code,
3to read:
4
The Regents of the University of California, the
9Trustees of the California State University, the governing board
10of each community college district, the governing body of each
11accredited independent institution of higher education in this state,
12and the governing body of each private postsecondary educational
13institution as defined in Section 94858 that is subject to Chapter
148 (commencing with Section 94800) of Part 59 of Division 10,
15shall each provide entrance and exit counseling services for
16students at all campuses within their respective jurisdictions with
17respect to any institutional or state-funded loans offered or
18recommended to a student by the institution or segment, except as
19provided in Section 99051.
This chapter shall not apply to a federally funded,
21federally insured, or federally guaranteed loan for which counseling
22is required by Section 1092 of Title 20 of the United States Code.
As used in this chapter:
24(a) “Entrance counseling” includes all of the following:
25(1) Providing the student with comprehensive information on
26the terms and conditions of the loan and of the responsibilities the
27student has with respect to the loan. This information shall be
28provided before the student enters into the loan agreement, and
29shall be expressed in a simple and understandable manner. The
30information may be provided during an entrance counseling session
31conducted in person, on a written form provided to the student that
32the student signs and returns to the institution, or online, with the
33student acknowledging receipt of the information.
P3 1(2) The comprehensive information provided under this
2subdivision shall include all of the following:
3(A) To the extent practicable, the effect of accepting the loan
4to be disbursed on the eligibility of the borrower for other forms
5of student financial assistance.
6(B) Information on how interest accrues and is capitalized during
7periods when the interest is not paid by the borrower.
8(C) The definitions of full-time and half-time enrollment at the
9institution, during regular terms and intersession terms, if
10applicable, and the consequences of not maintaining full-time or
11half-time enrollment.
12(D) An explanation of the importance of contacting the
13appropriate offices at the institution if the borrower withdraws
14before completing his or her
program of study so that the institution
15can provide exit counseling.
16(E) Sample monthly repayment amounts, based on a range of
17levels of indebtedness.
18(F) The obligation of the borrower to repay the full amount of
19the loan, irrespective of whether the borrower completes his or her
20program of study at the institution.
21(G) The likely consequences of default on the loan, including
22adverse credit reports, delinquent debt collection procedures, and
23litigation.
24(H) Information on the National Student Loan Data System and
25how the borrower can access his or her records.
26(I) The name of, and contact information for, an individual the
27borrower may contact if he or she has any questions about the
28
borrower’s rights and responsibilities or the terms and conditions
29of the loan.
30(b) (1) “Exit counseling” shall be provided as close as
31practicable to the date that a student graduates from, transfers from,
32withdraws from, or otherwise completes his or her program of
33study at, the institution. “Exit counseling” includes information
34relating to all of the following:
35(A) Repayment plans that are available, including a description
36of the different features of each plan and sample information
37showing the average anticipated monthly payments, and the
38difference in interest paid and total payments, under each plan.
39(B) Debt management strategies that are designed to facilitate
40the repayment of indebtedness.
P4 1(C) An explanation that the
borrower has the options to prepay
2each loan, pay each loan on a shorter schedule, or change
3repayment plans.
4(D) The likely consequences of default on the loan, including
5adverse credit reports, delinquent debt collection procedures, and
6litigation.
7(E) Information on the effects of consolidation on a borrower’s
8underlying loan benefits.
9(F) Information on grace periods, loan forgiveness, cancellation,
10and deferment opportunities.
11(G) The borrower benefit programs of different lenders.
12(H) A general description of the tax benefits that may be
13available to borrowers.
14(2) With respect to a student who leaves an institution without
15the knowledge of the
institution, the institution shall attempt to
16 provide the information described in paragraph (1) to the student
17in writing.
18(c) For purposes of this section, “institution” means a campus
19of the University of California, the California State University, or
20the California Community Colleges, an accredited private and
21independent college or university, or a private postsecondary
22educational institution as defined in Section 94858 that is subject
23to Chapter 8 (commencing with Section 94800) of Part 59 of
24Division 10.
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