Amended in Senate April 13, 2015

Senate Bill No. 440

Introduced by Committee on Education (Senators Liu (Chair), Block, Hancock, Huff, Leyva, Mendoza, Pan, and Vidak)

February 25, 2015

An act to amend Section begin delete 66010 end delete begin insert 70037 end insert of the Education Code, relating to postsecondary education.

LEGISLATIVE COUNSEL’S DIGEST

SB 440, as amended, Committee on Education. Postsecondary education: institutions.

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Existing law establishes the California DREAM Loan Program, which provides a student attending a participating campus of the University of California or California State University with a loan, referred to as a DREAM loan, if the student satisfies specified requirements. The program requires the trustees and requests the regents to adopt regulations providing for the withholding of institutional services from current and former students who have been notified in writing that they are in default on DREAM loans. The program specifies that registration privileges may not be withheld from students who are in default on DREAM loans.

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This bill would authorize the withholding of registration privileges from these students.

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Existing law, the Donahoe Higher Education Act, sets forth the missions and functions of the segments of the public postsecondary education system in the state, including the University of California, administered by the Regents of the University of California, the California State University, administered by the Trustees of the California State University, and the California Community Colleges, administered by the Board of Governors of the California Community Colleges. The act specifies that it is not intended to regulate, subsidize, or intrude upon private education.

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This bill would make nonsubstantive changes to this provision.

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

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

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begin insert SECTION 1. end insert   

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begin insert Section 70037 of the end insert begin insert Education Code end insert begin insert is amended
to read: end insert

70037.  

(a) The Trustees of the California State University and
the Regents of the University of California shall adopt regulations
providing for the withholding of institutional services from students
or former students who have been notified in writing at the
student’s or former student’s last known address that he or she is
in default on a loan or loans under the DREAM Program.

(b)  begin delete (1) end delete begin delete   end delete The regulations adopted pursuant to subdivision (a) shall
provide that the services withheld may be provided during a period
when the facts are in dispute or when the student or former student
demonstrates to either the Trustees of the California State
University or the Regents of the University of California, as
applicable, that reasonable progress has been made to repay the
loan or that there exists a reasonable justification for the delay as
determined by the institution. The regulations shall specify the
services to be withheld from the student, which may include, but
are not limited to, the following:

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(A)

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begin insert (1) end insert  The provision of grades.

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(B)

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begin insert (2) end insert  The provision of transcripts.

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(C)

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begin insert (3) end insert  The provision of diplomas.

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(2) The services withheld pursuant to paragraph (1) shall not
include the withholding of registration privileges.

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(c) “Default,” for purposes of this section, means the failure of
a borrower to make an installment payment when due, or to meet
other terms of the promissory note under circumstances where the
institution holding the loan finds it reasonable to conclude that the
borrower no longer intends to honor the obligation to repay,
provided that this failure persists for 180 days for a loan repayable
in monthly installments, or 240 days for a loan repayable in less
frequent installments.

(d) This section shall not impose any requirement upon the
University of California unless the Regents of the University of
California, by resolution, makes this section applicable.

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SECTION 1.  

Section 66010 of the Education Code is amended
to read:

66010.  

(a) Public higher education consists of (1) the
California Community Colleges, (2) the California State University,
and each campus, branch, and function thereof, and (3) each
campus, branch, and function of the University of California.

(b) As used in this part, “independent institutions of higher
education” are nonpublic higher education institutions that grant
undergraduate degrees, graduate degrees, or both, and that are
formed as nonprofit corporations in this state and are accredited
by an agency recognized by the United States Department of
Education.

(c) This part is not intended to regulate, subsidize, or intrude
upon private education, including, but not limited to, independent
educational institutions and religious schools, or to vary existing
state law or state constitutional provisions relating to private
education.

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