BILL NUMBER: AB 1456 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 2, 2014
INTRODUCED BY Assembly Member Jones-Sawyer
( Coauthors: Assembly Members
Ammiano, Bocanegra, Levine,
Skinner, Ting, and Weber )
( Coauthor: Senator Cannella
)
JANUARY 9, 2014
An act relating to higher education.
LEGISLATIVE COUNSEL'S DIGEST
AB 1456, as amended, Jones-Sawyer. Higher education: tuition and
fees: pilot program. study.
Existing law provides for a public postsecondary education system
in this state. This system consists of the University of California,
the California State University, and the California Community
Colleges. Existing law authorizes these institutions to require that
mandatory systemwide fees and tuition, among other fees, be paid by
enrolled students at these institutions
.
Existing law establishes the Student Aid Commission as the primary
state agency for the administration of state-authorized student
financial aid programs available to students attending all segments
of postsecondary education.
This bill would require the Student Aid Commission , the
Trustees of the California State University, and the Board of
Governors of the California Community Colleges, and would request the
Regents of the University of California, to jointly
and the Legislative Analyst to conduct a study of the effects
of enacting, in future legislation, a Pay it Forward, Pay it Back
Pilot Program and would designate the Student Aid Commission as
the lead body in charge of preparing the study . The
bill would specify that the study would evaluate a
pilot program would be designed to
replace the current system of charging students upfront tuition and
fees, including for provide an additional option for
students to finance the costs of their education, by paying the costs
of upfront tuition, fees, and room and board, for enrollment
at public institutions of higher education,
and instead allow certain students to for
admitted resident students who sign a binding contract to, upon
graduation, pay a specified percentage 2 to
4%, inclusive, of their annual adjusted gross incomes to the
state or the institution for a specified number of years, as
provided. This The bill would further
specify that the pilot program could vary by institution ,
as specified .
This bill would require the study to, among other things, identify
at least one campus of one or more of the public segments
each segment of public higher
education and one campus of a nonprofit private postsecondary
educational institution to participate in the pilot program and
establish an immediate source of funding for the first 15 to 20
years, inclusive, of the pilot program, as provided. The bill would
require that the study be presented for consideration by the
Legislature, and would require the Student Aid Commission to submit a
report on the study to the Assembly Committee on Higher Education
and the Senate Committee on Education on or before September 30,
2015. The bill would also make legislative findings and
declarations related to these provisions.
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. (a) The Legislature finds and
declares all of the following:
(a)
(1) The Legislature recognizes that postsecondary
education has expanded opportunities for Californians to qualify for
high-quality jobs and entry into the middle class, providing clear
benefits to this state's economy.
(b)
(2) In response to decreased state support, costs at
the University of California (UC) and the California State University
(CSU) have grown significantly over the past decade. In 2000, the
total cost of a year of education at UC was $15,000. By 2013, this
figure had more than doubled to $32,400. Costs at CSU are lower, but
still increased by nearly 70 percent in this period. These increases
far outpace inflation.
(c)
(3) Tuition at California's public institutions of
higher education has been rising far more rapidly than family
incomes. In 2000, the cost of attendance for a UC student living on
campus was 25 percent of California
California's median family income. In 2009, this cost had grown
to 39 percent of median family income. Costs at CSU also grew
relative to incomes, going increasing
from 19 percent of median family income in 2000 to 29 percent of
median family income in 2009.
(d)
(4) The increasing unaffordability of a college
education has forced students to borrow more money to pay for higher
education, causing 51 percent of students graduating from four-year
institutions of higher education in California to borrow an average
of $18,879.
(e)
(5) In the 1970s, the General Fund provided $12 for
every dollar that students paid in fees; by 2009, this amount had
fallen to $1.40 for every dollar in student fees.
(f)
(6) High levels of student debt are damaging not only
to the an individual student's ability
to succeed financially but also will have grave consequences for the
future economy of this state.
(g)
(7) As of spring 2011, only 77.9
83 percent of UC students and 51.4 percent of CSU students
entering as freshmen had graduated within six years. For transfer
students, only 79.6 percent of UC students and 64.6 percent of CSU
students had graduated within four years.
(h)
(8) By 2025, California is projected to have a shortage
of 2.3 million college graduates in the state's workforce if the
number of young and older adults who go to college and complete a
higher education is not significantly increased.
(i)
(9) The Legislature finds that it must halt the
decrease in this the state's support
for public education and, over time, must increase its contribution
to the funding of higher education.
(j)
(10) The Legislature finds that it must immediately
seek another approach to financing the students'
a student's share of the cost of public
higher education in this the state
that will not result in students graduating from California
public colleges and universities burdened with debt.
(k)
(11) There is growing interest in a new financing
strategy.
(l)
(12) The Legislature recognizes that it is in this
state's interest to study and recommend a potential pilot program.
(b) It is the intent of the Legislature that revenue received from
a Pay it Forward, Pay it Back pilot program would be managed by the
state.
(c) It is further the intent of the Legislature that a Pay it
Forward, Pay it Back pilot program would not replace existing forms
of financial aid, including grants, scholarships, and loans, but
would instead serve as an additional option for students to finance
their education.
SEC. 2. (a) The Student Aid Commission , the Trustees of
the California State University, and the Board of Governors of the
California Community Colleges shall, and the Regents of the
University of California are requested to, jointly and
the Legislative Analyst shall conduct a study of the effects
of enacting, in future legislation, a Pay it Forward, Pay it Back
Pilot Program. The Student Aid Commission is designated as the
lead body in charge of preparing the study. The
study would evaluate a pilot program would be
designed to replace the current system of charging
students upfront tuition and fees, including for
provide an additional option for students to finance the costs of
their education, including the costs of upfront tuition, fees, and
room and board, for enrollment at public
institutions of higher education.
(b) The pilot program would do both of the following:
(1) Allow a student who is a state resident, as determined by the
respective institution, and who otherwise qualifies for admission to
that institution, to enroll at the institution without paying upfront
tuition or fees. tuition, fees, or room and
board.
(2) Provide that, in lieu of paying upfront tuition or
fees, tuition, fees, or room and board, a
student may sign a binding contract to, upon graduation, pay
a specified percentage 2 to 4 percent, inclusive,
of his or her annual adjusted gross income to the state or the
institution for a specified number of years.
(c) The pilot program could vary by institution, in regard to each
of the following:
(1) The total cost of attendance at the institution required to be
reimbursed.
(2) The portion of the total cost of attendance to be paid by the
state.
(3) The number of years that a student shall be required to make
payments, as specified in the contract.
(4) The percentage of annual adjusted gross income required to be
paid by a student, as specified in the contract.
(d) The study of the pilot program shall do all of the following:
(1) Identify at least one campus of one or more of the
public segments of higher education of the University
of California, one campus of the California State University, one
campus of the California Community Colleges, and one campus of a
nonprofit private postsecondary educational institution to
participate in the pilot program. The campuses identified
pursuant to this paragraph shall be regionally diverse.
(2) Based on current research, and projections of state subsidies,
specify the number of years and percentage of annual adjusted gross
income for a contract at each participating institution that would
reimburse the nonstate cost of a student's
attendance.
(3) (A) Establish an immediate source of funding for the first 15
to 20 years, inclusive, of the pilot program, which would include the
establishment of a revolving fund for the deposit of payments made
under the pilot program, and consider the possibility of using social
impact bonds as an immediate funding source.
(B) For the purposes of this paragraph, the term "social impact
bond" means an agreement between a nongovernmental entity and
a public an institution of higher
education under which a student's cost of attendance is paid for by
the nongovernmental entity in exchange for a security interest in the
payments made by the student pursuant to paragraph (2) of
subdivision (b).
(e) (1) The study of the pilot program shall be presented for
consideration by the Legislature.
(2) The Student Aid Commission shall submit a report on the study
of the pilot program to the Assembly Committee on Higher Education
and the Senate Committee on Education on or before September 30,
2015.
SEC. 3. Section 2 of this act shall become inoperative on June 30,
2016, and, as of January 1, 2017, is repealed, unless a later
enacted statute, that becomes operative on or before January 1, 2017,
deletes or extends the dates on which it becomes inoperative and is
repealed.