BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 440


                                                                    Page  1





          SENATE THIRD READING


          SB  
          440 (Committee on Education)


          As Amended  April 13, 2015


          Majority vote


          SENATE VOTE:  36-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Higher          |12-0 |Medina, Baker, Bloom, |                    |
          |Education       |     |Chávez, Harper,       |                    |
          |                |     |Irwin, Jones-Sawyer,  |                    |
          |                |     |Levine, Linder, Low,  |                    |
          |                |     |Santiago, Williams    |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 


          SUMMARY:  Authorizes the withholding of registration privileges  
          from University of California (UC) and California State  
          University (CSU) students who are recipients of the DREAM Loan  
          Program if they have defaulted on their DREAM Loan.


          EXISTING LAW:    








                                                                     SB 440


                                                                    Page  2







          1)Provides that, beginning January 1, 2013, AB 540 (Firebaugh),  
            Chapter 814, Statues of 2001, students are eligible to apply  
            for, and participate in, any student financial aid program  
            administered by the State of California to the full extent  
            permitted by federal law; and, requires the California Student  
            Aid Commission to establish procedures and forms that enable  
            AB 540 students to apply for, and participate in, all student  
            financial aid programs administered by the State of California  
            to the full extent permitted by federal law (Education Code  
            (EC) Section 69508.5).
          2)Requires the CSU Trustees and the California Community  
            Colleges (CCC) Board of Governors, and requests the UC  
            Regents, to establish procedures and forms that enable AB 540  
            students to apply for, and participate in, all student aid  
            programs administered by these segments (CCC, CSU, and UC) to  
            the full extent permitted by federal law (EC Section 66021.6).


          3)Provides that a student attending the CCC, the CSU, or the UC  
            who is exempt from paying nonresident tuition under the  
            provisions of AB 540 is eligible to receive a scholarship  
            derived from nonstate funds received, for the purpose of  
            scholarships, by the segment at which he or she is a student  
            (EC Section 66021.7).


          4)Establishes the California DREAM Loan Program, which may also  
            be referred as the DREAM Program (EC Section 70031).


          5)Requires the CSU Trustees and UC Regents to 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; and, specifies that the services withheld, as  
            specified, shall not include the withholding of registration  








                                                                     SB 440


                                                                    Page  3





            privileges (EC Section 70037).


          FISCAL EFFECT:  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  Background.  Existing law (as described above),  
          establishes the DREAM Loan Program.  The DREAM Program specifies  
          that if a DREAM Loan recipient defaults on his or her loan, the  
          CSU or UC, as applicable, can withhold the following services  
          from the recipient:  1) the provision of grades; 2) the  
          provision of transcripts; and, 3) the provision of diplomas.   
          Existing law also states that even with the default of the DREAM  
          Loan, a recipient can still be allowed to register for classes.


          To note:  All other loan programs whereby a student defaults on  
          a loan, allows the respective campus of the CSU or UC to  
          withhold registration privilege from the student.


          Purpose of this measure.  According to the Senate Education  
          Committee, collective authors of this measure, this bill ensures  
          consistency with other financial aid programs whereby campuses  
          of the CSU and UC have the option to withhold registration  
          privileges should a student default on a loan regardless of the  
          loan program.




          Analysis Prepared by:                                             
                          Jeanice Warden / HIGHER ED. / (916) 319-3960   
          FN: 0001069












                                                                     SB 440


                                                                    Page  4