BILL NUMBER: AB 534 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Wieckowski
FEBRUARY 20, 2013
An act to add Chapter 1.5 (commencing with Section 99050) to Part
65 of Division 14 of Title 3 of the Education Code, relating to
postsecondary education.
LEGISLATIVE COUNSEL'S DIGEST
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:
SECTION 1. Chapter 1.5 (commencing with Section 99050) is added to
Part 65 of Division 14 of Title 3 of the Education Code, to read:
CHAPTER 1.5. INSTITUTIONAL AND FINANCIAL ASSISTANCE
INFORMATION FOR STUDENTS
99050. The Regents of the University of California, the Trustees
of the California State University, the governing board of each
community college district, the governing body of each accredited
independent institution of higher education in this state, and the
governing body of each private postsecondary educational institution
as defined in Section 94858 that is subject to Chapter 8 (commencing
with Section 94800) of Part 59 of Division 10, shall each provide
entrance and exit counseling services for students at all campuses
within their respective jurisdictions with respect to any
institutional or state-funded loans offered or recommended to a
student by the institution or segment, except as provided in Section
99051.
99051. This chapter shall not apply to a federally funded,
federally insured, or federally guaranteed loan for which counseling
is required by Section 1092 of Title 20 of the United States Code.
99052. As used in this chapter:
(a) "Entrance counseling" includes all of the following:
(1) Providing the student with comprehensive information on the
terms and conditions of the loan and of the responsibilities the
student has with respect to the loan. This information shall be
provided before the student enters into the loan agreement, and shall
be expressed in a simple and understandable manner. The information
may be provided during an entrance counseling session conducted in
person, on a written form provided to the student that the student
signs and returns to the institution, or online, with the student
acknowledging receipt of the information.
(2) The comprehensive information provided under this subdivision
shall include all of the following:
(A) To the extent practicable, the effect of accepting the loan to
be disbursed on the eligibility of the borrower for other forms of
student financial assistance.
(B) Information on how interest accrues and is capitalized during
periods when the interest is not paid by the borrower.
(C) The definitions of full-time and half-time enrollment at the
institution, during regular terms and intersession terms, if
applicable, and the consequences of not maintaining full-time or
half-time enrollment.
(D) An explanation of the importance of contacting the appropriate
offices at the institution if the borrower withdraws before
completing his or her program of study so that the institution can
provide exit counseling.
(E) Sample monthly repayment amounts, based on a range of levels
of indebtedness.
(F) The obligation of the borrower to repay the full amount of the
loan, irrespective of whether the borrower completes his or her
program of study at the institution.
(G) The likely consequences of default on the loan, including
adverse credit reports, delinquent debt collection procedures, and
litigation.
(H) Information on the National Student Loan Data System and how
the borrower can access his or her records.
(I) The name of, and contact information for, an individual the
borrower may contact if he or she has any questions about the
borrower's rights and responsibilities or the terms and conditions of
the loan.
(b) (1) "Exit counseling" shall be provided as close as
practicable to the date that a student graduates from, transfers
from, withdraws from, or otherwise completes his or her program of
study at, the institution. "Exit counseling" includes information
relating to all of the following:
(A) Repayment plans that are available, including a description of
the different features of each plan and sample information showing
the average anticipated monthly payments, and the difference in
interest paid and total payments, under each plan.
(B) Debt management strategies that are designed to facilitate the
repayment of indebtedness.
(C) An explanation that the borrower has the options to prepay
each loan, pay each loan on a shorter schedule, or change repayment
plans.
(D) The likely consequences of default on the loan, including
adverse credit reports, delinquent debt collection procedures, and
litigation.
(E) Information on the effects of consolidation on a borrower's
underlying loan benefits.
(F) Information on grace periods, loan forgiveness, cancellation,
and deferment opportunities.
(G) The borrower benefit programs of different lenders.
(H) A general description of the tax benefits that may be
available to borrowers.
(2) With respect to a student who leaves an institution without
the knowledge of the institution, the institution shall attempt to
provide the information described in paragraph (1) to the student in
writing.
(c) For purposes of this section, "institution" means a campus of
the University of California, the California State University, or the
California Community Colleges, an accredited private and independent
college or university, or a private postsecondary educational
institution as defined in Section 94858 that is subject to Chapter 8
(commencing with Section 94800) of Part 59 of Division 10.