Amended in Senate February 25, 2014

Senate BillNo. 845


Introduced by Senator Correa

January 8, 2014


An act to add Section 69505.8 to the Education Code, relating to postsecondary education.

LEGISLATIVE COUNSEL’S DIGEST

SB 845, as amended, Correa. Postsecondary education: electronic disbursement of student financial aid.

Existing law provides for the missions and functions of the private and public segments of postsecondary education in the state. Existing law establishes various student financial aid programs for students attending segments of postsecondary education.

This bill would require the Board of Governors of the California Community Colleges and the Trustees of the California State University, and would request the Regents of the University of California and each governing body of an accredited private postsecondary educational institution, to develop, in consultation with stakeholders, one or more model contractsbegin delete that would govern at each campus within their respective systemsend deletebegin insert for use at their respective systems forend insert the disbursement of a financial aid award, scholarship, campus-based aid award, or school refund on a debit, prepaid, or preloaded card.

The bill would also require that each model contract consider the best interests of students and contain certain provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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SECTION 1.  

Section 69505.8 is added to the Education Code,
2to read:

3

69505.8.  

(a) The Board of Governors of the California
4Community Colleges and the Trustees of the California State
5University shall, and the Regents of the University of California
6and each governing body of an accredited private postsecondary
7educational institution are requested to, develop one or more model
8contractsbegin delete that would govern, at each campus within their respective
9systems,end delete
begin insert for use at their respective systems forend insert the disbursement
10of a financial aid award, scholarship, campus-based aid award, or
11school refund onto a debit card, prepaid card, or other preloaded
12card issued by a financial institution. Each model contract shall
13be developed in consultation with stakeholders includingbegin insert statewideend insert
14 studentbegin delete organizationsend deletebegin insert associationsend insert, individual campuses, and
15financial institutions that issue debit cards, prepaid cards, and
16preloaded cards.

17(b) The board of governors and the trustees shall, and the regents
18and each governing body of an accredited private postsecondary
19educational institution are requested to, makebegin delete aend deletebegin insert everyend insert model
20contract developed under subdivision (a) publicly available on its
21Internet Web site.

22(c) Every model contract developed under subdivision (a) shall
23consider the best interests of students and shall, at a minimum,
24contain all of the following provisions:

25(1) The campus, educational system, or card-issuing financial
26institution shall not represent a debit card, prepaid card, or
27preloaded card as the only disbursement option available for a
28student to receive a financial aid award, scholarship, campus-based
29aid award, or school refund.

30(2) A card-issuing financial institution shall provide a list of all
31debit card, prepaid card, or preloaded card fees to a student before
32that student may elect to receive a financial aid award, scholarship,
33campus-based aid award, or school refund on a debit card, prepaid
34card, or preloaded card. A card-issuing financial institution shall
35also provide a readily accessible link to a printable version of this
36fee list from the homepage on its Internet Web site.

37(3) A student who receives a financial aid award, scholarship,
38campus-based aid award, or school refund on a debit card, prepaid
P3    1card, or preloaded card shall not be charged for any of the
2following:

3(A) Opening a debit card, prepaid card, or preloaded card
4account.

5(B) Receiving an initial debit card, prepaid card, or preloaded
6card.

7(C) Having a financial aid award, scholarship, campus-based
8aid award, or school refund deposited on a debit card, prepaid card,
9or preloaded card.

10(4) A card-issuing financial institution shall locate at least one
11branch office or automated teller machine on or immediately
12adjacent to the contracting campus, at which fee-free withdrawals
13may be made using the card.

14(5) A card-issuing financial institution, campus, or educational
15system shall not market a debit card, prepaid card, preloaded card,
16or card account as a credit card or credit instrument or convert the
17card or account into a credit card or credit instrument.

18(6) A card-issuing financial institution, campus, or educational
19system shall not represent placement of the name or mascot of a
20campus or educational system on a debit card, prepaid card, or
21preloaded card as an endorsement of that card by the campus or
22educational system.

23(d) When developing each model contract, the board of
24governors and the trustees shall, and the regents and each governing
25body of an accredited private postsecondary educational institution
26are requested to, consider all of the following:

27(1) The number of on-campus locations and proximity of
28off-campus locations where a fee-free withdrawal could be made
29by a student using a debit card, prepaid card, or preloaded card.

30(2) The type and size of fees a student would incur from debit,
31prepaid, or preloaded card use.

32(3) The impact, if any, that offering a card displaying the name
33or mascot of a campus or educational system would have on
34students, that campus, or that educational system.

35(4) The impact, if any, of the content of a dispute resolution
36clause on students, their campus, and their educational system, if
37a conflict were to arise between a student and the card-issuing
38financial institution.



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