BILL NUMBER: SB 845	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 3, 2014
	AMENDED IN SENATE  FEBRUARY 25, 2014

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 contracts for use at their
respective systems for the disbursement of a financial aid award,
scholarship, campus-based aid award, or school refund on a debit,
prepaid, or preloaded card  ,   and to make these
contracts publicly available on their respective Internet Web sites
 .
   The bill would also require that each model contract consider the
best interests of students and contain  certain 
provisions    that reflect conditions required for
compliance with federal regulations governing the disbursement of
federal financial aid  . 
   The bill would also require the board of governors and the
trustees, and would additionally request the regents and each
governing body of an accredited private postsecondary educational
institution, when developing each of their respective model
contracts, to consider specified information. 
   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.  Section 69505.8 is added to the Education Code, to
read:
   69505.8.  (a) The Board of Governors of the California Community
Colleges and the Trustees of the California State University shall,
and the Regents of the University of California and each governing
body of an accredited private postsecondary educational institution
are requested to, develop one or more model contracts for use at
their respective systems for the disbursement of a financial aid
award, scholarship, campus-based aid award, or school refund onto a
debit card, prepaid card, or other preloaded card issued by a
financial institution. Each model contract shall be developed in
consultation with stakeholders including statewide student
associations, individual campuses, and financial institutions that
issue debit cards, prepaid cards, and preloaded cards.
   (b) The board of governors and the trustees shall, and the regents
and each governing body of an accredited private postsecondary
educational institution are requested to, make every model contract
developed under subdivision (a) publicly available on its Internet
Web site.
   (c) Every model contract developed under subdivision (a) shall
consider the best interests of students and shall, at a minimum,
contain  all of the following provisions:  
provisions that reflect conditions required for   compliance
with federal regulations governing the disbursement of federal
financial aid.  
   (1) The campus, educational system, or card-issuing financial
institution shall not represent a debit card, prepaid card, or
preloaded card as the only disbursement option available for a
student to receive a financial aid award, scholarship, campus-based
aid award, or school refund.  
   (2) A card-issuing financial institution shall provide a list of
all debit card, prepaid card, or preloaded card fees to a student
before that student may elect to receive a financial aid award,
scholarship, campus-based aid award, or school refund on a debit
card, prepaid card, or preloaded card. A card-issuing financial
institution shall also provide a readily accessible link to a
printable version of this fee list from the homepage on its Internet
Web site.  
   (3) A student who receives a financial aid award, scholarship,
campus-based aid award, or school refund on a debit card, prepaid
card, or preloaded card shall not be charged for any of the
following:  
   (A) Opening a debit card, prepaid card, or preloaded card account.
 
   (B) Receiving an initial debit card, prepaid card, or preloaded
card.  
   (C) Having a financial aid award, scholarship, campus-based aid
award, or school refund deposited on a debit card, prepaid card, or
preloaded card.  
   (4) A card-issuing financial institution shall locate at least one
branch office or automated teller machine on or immediately adjacent
to the contracting campus, at which fee-free withdrawals may be made
using the card. 
   (5) A card-issuing financial institution, campus, or educational
system shall not market a debit card, prepaid card, preloaded card,
or card account as a credit card or credit instrument or convert the
card or account into a credit card or credit instrument. 

   (6) A card-issuing financial institution, campus, or educational
system shall not represent placement of the name or mascot of a
campus or educational system on a debit card, prepaid card, or
preloaded card as an endorsement of that card by the campus or
educational system. 
   (d) When developing each model contract, the board of governors
and the trustees shall, and the regents and each governing body of an
accredited private postsecondary educational institution are
requested to, consider all of the following:
   (1) The number of on-campus locations and proximity of off-campus
locations where a fee-free withdrawal could be made by a student
using a debit card, prepaid card, or preloaded card.
   (2) The type and size of fees a student would incur from debit,
prepaid, or preloaded card use  and whether provisions of the
  model contract   ensure that the educational
institution is provided information by the card-issuing financial
institution to evaluate the costs of these fees to students  .
   (3) The impact, if any, that offering a card displaying the name
or mascot of a campus or educational system would have on students,
that campus, or that educational system. 
   (4) Whether provisions of the model contract ensure that the
educational institution monitors compliance by the financial
institution with federal Title IV requirements governing the
disbursement of financial aid.  
   (5) Whether provisions of the model contract ensure a process for
the tracking and resolution of student complaints about the
card-issuing financial services institution's credit delivery,
customer service, and debit, prepaid, or preloaded cards. 

   (4) 
    (6)  The impact, if any, of the content of a dispute
resolution clause on students, their campus, and their educational
system, if a conflict were to arise between a student and the
card-issuing financial institution. 
   (7) Whether provisions of the model contract ensure that the
educational institution does not disclose student information to the
card-issuing financial institution beyond what is necessary to
perform the contracted financial aid disbursement function. 

   (8) Whether provisions of the model contract ensure that the
card-issuing financial institution does not solicit or collect
information from a student that is not necessary to perform the
contracted financial aid disbursement function as a condition of the
student accessing financial aid funds through a debit card, prepaid
card, or preloaded card.