BILL ANALYSIS �
AB 330
Page 1
Date of Hearing: January 14, 2014
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 330 (Chau) - As Amended: January 9, 2014
SUBJECT : Student financial aid: disclosures.
SUMMARY : Requires postsecondary educational institutions to
provide their 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
average student loan debt information concerning its
graduates, as defined, to CSAC. Authorizes the University of
California and the California State University to comply with
this requirement by including student loan debt information,
as defined, in their annual financial aid reports and
providing a copy of the report to CSAC.
2)Requires CSAC to make all of the following information from
Cal Grant participating institutions available in the
searchable database on the CSAC Internet Website:
a) License examination passage rates;
b) Latest three-year cohort default rate;
c) Percentage of undergraduate student borrowers; and,
d) Average student loan debt information concerning
graduates.
3)Requires a for-profit institution that must provide its
students with a School Performance Fact Sheet (SPFS) pursuant
to the Private Postsecondary Education Act to include
information regarding the average student debt of its
graduates.
4)Requires the information regarding average student loan debt
to be calculated and reported as specified.
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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 (Bureau) 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
SPFS, 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 student average debt of graduates 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."
Average student debt data . According to data from The Institute
on College Access and Success's (TICAS) Project on Student Debt,
52% of students who graduated from reporting public and private
non-profit four-year universities in California in 2012 took out
student loans (ranking 42st in the nation) with an average debt
of $20,269 (ranking 48th in the nation). According to TICAS,
average student debt data is incomplete because most for-profit
institutions and some nonprofit colleges do not report their
student debt data. Limited institutional information regarding
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median borrowing through federal financial aid programs can be
found on the U.S. Department of Education's website. However,
the USDE figures do not take into account whether the student
graduated; sometimes resulting a misleading picture of
affordability at colleges with high drop-out rates. This bill
would require institutions to report average loan debt of
graduates in certificate, associate degree, and baccalaureate
degree programs. Further, this bill would require institutions
to include all known loan debt associated with the student's
cost of attendance, not just borrowing in federal loan programs.
CSAC reporting and web posting . Existing law requires CSAC to
establish a searchable database on the CSAC website containing
enrollment, persistence, graduation, job placement and wage and
salary data for undergraduate programs at Cal Grant
participating institutions. Existing law also requires CSAC to
obtain institutional information regarding license examination
passage rates, loan default rates, and percentage of borrowers
at Cal Grant participating institutions. This bill would
require institutions to calculate and report average student
loan debt information and would require CSAC to add license
examination passage rates and student loan and default
information to the searchable internet database.
Bureau reporting and SPFS disclosures . Institutions regulated
by the Bureau are required to report to the Bureau and provide
prospective students with a SPFS containing job placement rates,
license examination passage rates and salary and wage
information of graduates, as well as the institution's cohort
default rate and the percentage of enrolled students receiving
federal loans. This bill would add to these reporting
requirements and SPFS disclosure average student loan debt of
graduates. The Bureau and institutions are currently required
to post SPFS data on their websites.
Data calculations . This bill requires institutions to calculate
the average per-undergraduate cumulative debt in federal loan
programs (Perkins loans, Stafford loans, etc.) and in any
student loan programs (federal, institutional, private) and to
separately report averages for certificate, associate degree,
and baccalaureate degree graduates. Institutions are required
to include private loans "certified or known by the
institution". It is unclear under what circumstances an
institution is expected to have "known" of a private loan
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obtained by the student. Additionally, it is unclear how
closely the definitions and calculations contained in this bill
mirror those in other voluntary and mandatory student debt
reporting in which institutions participate. These areas
deserve further examination and clarification, should this bill
move forward.
Arguments in support . The California Federation of Teachers
argues that it is valuable to provide prospective students and
their families with information and tools to gauge college
affordability and that this bill will facilitate the ability of
California families to make informed financial and educational
decisions. The California State Student Association notes that,
while CSU is one of the most cost-effective public universities
in the country, it is important that students be able to easily
compare college tuition and have a better understanding of the
true cost of college before they start.
Arguments in opposition . American Career College/West Coast
University argues that the regulations implementing AB 2296
(Block, 2012), requiring additional SPFS disclosures, are only
now being drafted and that this bill will have the effect of
piling on new requirements while institutions are in the midst
of understanding how AB 2296 will be implemented.
Oppose unless amended. The University of Phoenix (UOPX) and the
California Coalition of Accredited Career Schools (CCACS) have
requested amendments to this bill to conform the disclosure
requirements to those required under federal law. Specifically,
UOPX and CCACS note that the information mandated in this bill
differs from existing mandates pursuant to the USDE "Gainful
Employment" rules and the Integrated Postsecondary Education
Data System (IPEDS), resulting in institutions being required to
provide one data set to comply with GE, a different data set to
comply with IPEDS and a different data set to comply with AB
330. These differing requirements create confusion for students
and duplicative and costly data gathering requirements for
institutions.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers
California State Student Association
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Opposition
American River College/West Coast University
California Association of Private Postsecondary Schools
California Coalition of Accredited Career Schools
University of Phoenix
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960