BILL ANALYSIS �
AB 330
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Date of Hearing: January 23, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 330 (Chau) - As Amended: January 9, 2014
Policy Committee: Higher
EducationVote:9-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires postsecondary education institutions to
report to the state specified information regarding student
debt. Specifically, this bill:
1)Requires every postsecondary educational institution, as a
condition for participation in the Cal Grant program, to
provide information regarding average student loan debt of its
graduates, as specified, to the California Student Aid
Commission (CSAC). (The University of California (UC) and the
California State University (CSU) may comply with this
requirement by including the student loan debt information in
their respective annual financial aid reports and providing
this report to the commission.)
2)Requires the commission to incorporate the following
information into its existing searchable database requirements
pertaining to institutional performance.
a) License examination passage rates.
b) Latest three-year cohort default rate.
c) Percentage of undergraduate student borrowers.
d) Average student loan debt, as specified, of the
institution's graduates.
3)Requires a for-profit institution that must provide its
students with a School Performance Fact Sheet (SPFS) to
include in the SPFS, and to report to the Bureau for Private
AB 330
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Postsecondary Education, information regarding graduates'
average student debt, as specified.
FISCAL EFFECT
1)CSU estimates one-time GF costs of $110,000 and ongoing costs
of $25,000 to implement data gathering not currently performed
for non-state supported, continuing education programs.
2)The California Community Colleges will incur significant GF/98
costs statewide for the 72 districts (112 campuses) to begin
tracking information regarding private student loans. Assuming
an average of $5,000 per college, including for modification
of campus information systems, one-time statewide costs would
be $560,000.
3)Any costs to UC, CSAC and to the bureau would be minor and
absorbable.
COMMENTS
1)Purpose . According to the author, AB 330 is intended to
centralize information regarding the average student debt of
graduates on a webpage where students can easily compare
comprehensive and meaningful information in order to help make
the best financial and educational decision about which
postsecondary education institution to attend.
According to The Institute on College Access and Success
(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 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 in a misleading picture of affordability at colleges
with high drop-out rates. AB 330 requires institutions to
report average loan debt of graduates in certificate,
associate degree, and baccalaureate degree programs, and to
include all known loan debt associated with the student's cost
of attendance, not just borrowing in federal loan programs.
2)Current law requires CSAC to establish a searchable database
on the CSAC website containing enrollment, persistence,
graduation, job placement and wage and salary data for
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undergraduate programs at Cal Grant participating
institutions. Current law also requires the commission to
obtain institutional information regarding license examination
passage rates, loan default rates, and percentage of borrowers
at Cal Grant participating institutions. This bill requires
institutions to calculate and report average student loan debt
information and requires CSAC to add this information, plus
license examination passage rates and student loan and default
information, to its searchable database.
Current law also requires institutions regulated by the bureau
to report to the bureau, and provide prospective students,
with an 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. The bureau and institutions are currently required to
post SPFS data on their websites.
3)Opposition . The University of Phoenix (UOPX), the California
Coalition of Accredited Career Schools (CCACS), and the
California Association of Private Postsecondary Schools
(CAPPS) are concerned that the bill has different reporting
requirements from those required under federal law, and that
this will lead to confusion for students and additional costs
for schools. American Career College/West Coast University and
CAPPS additionally argue that the regulations implementing AB
2296 (Block)/Chapter 585 of 2012, requiring additional SPFS
disclosures, are being drafted and that this bill will add new
requirements while institutions are in the midst of
understanding how AB 2296 will be implemented.
4)Cost-Benefit of Including Community Colleges is Questionable .
The proposed data requirements seem excessive for a segment
that has very few students taking out loans. According to the
Chancellor's Office, in 2012-13, only about 60,000 (2.6%) of
the system's 2.3 million students had federal student loans.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081