BILL ANALYSIS �
AB 330
Page 1
Date of Hearing: April 23, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 330 (Chau) - As Introduced: February 13, 2013
SUBJECT : Student financial aid: disclosures.
SUMMARY : Requires postsecondary educational institutions to
provide their net price calculators and average student debt per
graduate to the California Student Aid Commission (CSAC) as a
condition of eligibility for the Cal Grant Program, requires
CSAC to provide this information on its website in a searchable
database, and requires a for-profit institution to include this
information in its School Performance Fact Sheet. Specifically,
this bill :
1)Requires postsecondary educational institutions to provide
their net price calculators, as required pursuant to federal
law, and the average student loan debt of its graduates to
CSAC as a condition of eligibility for the Cal Grant Program,
and requires CSAC to make this information available in a
searchable database on its Internet Website.
2)Requires CSAC to provide a glossary on its Internet Website
explaining the meanings of various financial aid terms,
including but not limited to all of the following:
a) Private student loan;
b) Federal direct loan;
c) Grant; and,
d) Scholarship.
3)Requires a for-profit institution that must provide its
students with a School Performance Fact Sheet pursuant to the
Private Postsecondary Education Act to include the following
on that Fact Sheet:
a) Its net price calculator, if required to provide one on
its website under federal law and,
b) The average student debt of its graduates, if it
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receives federal financial aid funding.
EXISTING LAW :
1)Establishes the Cal Grant Program under the administration of
CSAC, and establishes eligibility requirements for awards
under the program for participating students attending
qualifying institutions. As a condition for participation in
the program, existing law requires each Cal Grant
participating institution to annually report specified
information to CSAC, which CSAC is required to provide on its
Internet Website in a searchable database. (Education Code �
69433.2)
2)Provides, among other things, for student protections and
regulatory oversight of private postsecondary schools in the
state pursuant to the California Private Postsecondary
Education Act of 2009. The Act is enforced by the Bureau for
Private Postsecondary Education within the Department of
Consumer Affairs, exempts specified institutions from all, or
a portion of, its provisions, and requires an institution to
provide a prospective student prior to enrollment with a
School Performance Fact Sheet, which is required to contain
specified information relating to the educational program.
(EC � 94800 et seq.)
FISCAL EFFECT : Unknown
COMMENTS : Need for the bill . According to the author, "AB 330
aims to centralize the net price calculator and the student
average debt of each Title IV institution on a webpage where
students and their families can easily use, compare, and
understand the net price calculators for all California
post-secondary education institutions and receive more
comprehensive and meaningful information, so they can make the
best financial and educational decision about which
postsecondary education institution to attend."
Net price calculator . Federal law requires higher education
institutions to post net price calculators on their websites to
allow students and their families to receive early and
individualized estimates of the cost of attending the
institution they are considering. After entering information
about finances, academics, or other factors, students are able
to view the full cost of attendance, the amount of grants and
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scholarships they are likely to receive, and the "net price"-the
remaining amount that they would be expected to cover with
savings, work, and loans.
A centralized net price calculator is currently available for
institutions participating in federal financial aid programs
(Title IV) via the College Navigator on the U.S. Department of
Education's website ( https://nces.ed.gov/collegenavigator ) and
includes numerous features allowing students to create
side-by-side comparisons of institutions based a variety of
factors. The Department noted in March that about 2.5 million
students visited the site, and it is stepping up its promotion
of this and other on-line tools offered by the Department.
Average student debt . According to data from the Project on
Student Debt, 51% of students who graduated from public and
private non-profit four-year universities in California in 2011
took out student loans (ranking 41st in the nation) with an
average debt of $18,879 (ranking 46th in the nation).
However, this data is limited because it doesn't include most
for-profit institutions and some nonprofit colleges did not
report their student debt data. Nationally, 66% of college
seniors who graduated in 2011 had student loan debt, with an
average of $26,600 per student.
The federal government does not require institutions to report
the average student debt of their graduates. Title IV-eligible
institutions are required to report their three-year cohort
default rate (CDR), which measures the number of students who
default within three years of leaving the institution. CDRs are
important indicators of college quality because they indicate
the ability of students to put their education to work and repay
their loans. The federal government requires institutions
maintain a CDR of 30% or less to maintain eligibility for
federal financial aid, and institutions with a CDR greater than
15.5% are ineligible for the Cal Grant Program. An
institution's CDR is available on the College Navigator, along
with the percentage of students at that institution who take out
loans.
Issues to consider .
1)Value of a California-specific net price calculator. As noted
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previously, the federal government's College Navigator
provides a searchable net price calculator for every Title
IV-eligible institution in the country. This bill would
create a search engine for a subset of those institutions.
While the net price calculator in this bill would include the
average student debt per graduate, it is unclear if this
information is of enough value to justify a separate database.
2)Definition of average student debt per graduate. Staff
recommends this term be defined to ensure consist reporting by
institutions. Should this data take into account the
students who enroll, take out loans, and then fail to
complete?
Related legislation . AB 534 (Wieckowski), to be heard in this
Committee on April 23, would require public and private
postsecondary educational institutions to provide entrance and
exit counseling, as specified, for students enrolled at their
institutions regarding student loans offered by the institution
or a private lender, and would prohibit a lender from accepting
an application for a private student loan without first
receiving certification that the counseling was conducted by the
appropriate postsecondary institution, which may charge a fee to
the lender for this service.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers
California State Student Association
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960