Amended in Senate May 7, 2014

Amended in Senate April 3, 2014

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 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 thesebegin insert modelend insert contractsbegin insert, and all binding contracts of this nature,end insert 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 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:

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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
8contracts for use at their respective systems for the disbursement
9of a financial aid award, scholarship, campus-based aid award, or
10school refund onto a debit card, prepaid card, or other preloaded
11card issued by a financial institution. Each model contract shall
12be developed in consultation with stakeholders including statewide
13 student associations, individual campuses, and financial institutions
14that issue debit cards, prepaid cards, and preloaded cardsbegin insert and shall
15not be finalized before public comment is sought and consideredend insert
.

16(b) The board of governors and the trustees shall, and the regents
17and each governing body of an accredited private postsecondary
18educational institution are requested to, make every model contract
19developed under subdivision (a)begin insert, and every binding contract
20negotiated by an educational institution under the jurisdiction of
21one of these governing bodies with a financial institution for the
22disbursement of a financial aid award, scholarship, campus-based
23aid award, or school refund onto a debit card, prepaid card, or
24preloaded card,end insert
publicly available on its Internet Web site.

25(c) Every model contract developed under subdivision (a) shall
26consider the best interests of students and shall, at a minimum,
27contain provisions that reflect conditions required for compliance
P3    1with federal regulations governing the disbursement of federal
2financial aid.

3(d) When developing each model contract, the board of
4governors and the trustees shall, and the regents and each governing
5body of an accredited private postsecondary educational institution
6are requested to, consider all of the following:

7(1) The number of on-campus locations and proximity of
8off-campus locations where a fee-free withdrawal could be made
9by a student using a debit card, prepaid card, or preloaded card.

10(2) The type and size of fees a student would incur from debit,
11prepaid, or preloaded card use and whether provisions of the model
12contract ensure that the educational institution is provided
13information by the card-issuing financial institution to evaluate
14the costs of these fees to students.

15(3) The impact, if any, that offering a card displaying the name
16or mascot of a campus or educational system would have on
17students, that campus, or that educational system.

18(4) Whether provisions of the model contract ensure that the
19educational institution monitors compliance by the financial
20institution with federal Title IV requirements governing the
21disbursement of financial aid.

22(5) Whether provisions of the model contract ensure a process
23for the tracking and resolution of student complaints about the
24card-issuing financialbegin delete servicesend delete institution’s credit delivery,
25customer service, and debit, prepaid, or preloaded cards.

26(6) The impact, if any, of the content of a dispute resolution
27clause on students, their campus, and their educational system, if
28a conflict were to arise between a student and the card-issuing
29financial institution.

30(7) Whether provisions of the model contract ensure that the
31educational institution does not disclose student information to
32the card-issuing financial institution beyond what is necessary to
33perform the contracted financial aidbegin insert award, scholarship,
34campus-based aid award, or school refundend insert
disbursement function.

35(8) Whether provisions of the model contract ensure that the
36card-issuing financial institution does not solicit or collect
37information from a student that is not necessary to perform the
38contracted financial aidbegin insert award, scholarship, campus-based aid
39award, or school refundend insert
disbursement function as a condition of
40begin insert allowingend insert the studentbegin delete accessingend deletebegin insert to access aend insert financial aidbegin delete fundsend delete
P4    1begin insert award, scholarship, campus-based aid award, or school refundend insert
2 through a debit card, prepaid card, or preloaded card.



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