BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 330
AUTHOR: Chau
AMENDED: May 23, 2014
FISCAL COMM: Yes HEARING DATE: June 4, 2014
URGENCY: No CONSULTANT:Kathleen Chavira
NOTE : This bill has been referred to the Committees on
Education and Business, Professions, and Economic
Development. A "do pass" motion should include referral to
the Committee on Business, Professions, and Economic
Development.
SUBJECT : Student Financial Aid Disclosures.
SUMMARY
This bill expands institutional reporting requirements
which currently exist as a condition of voluntary
participation in the Cal Grant Program, expands the
information which an institution regulated under the
California Private Postsecondary Education Act is required
to provide a prospective student in its School Performance
Fact Sheet and in its annual report to the Bureau, and
expands the information which must be made available by the
California Student Aid Commission (CSAC) on a searchable
database.
BACKGROUND
Current law 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.
Current law also requires the CSAC to provide other
information and links useful to students and parents who
are in the process of selecting a college or university.
(Education Code � 69433.2)
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Current law also requires, as a condition of participation
in the Cal Grant Program, that a "qualifying institution"
provide information (on an enrollment or centralized
admission website, or on enrollment applications or other
information distributed to students) on where to access
California license exam passage rates for the most recent
available year for undergraduate programs that lead to
employment in a field that requires licensing. (Education
Code � 69433.7)
Current law, until January 1, 2015, establishes the
California Private Postsecondary Education Act (Act) of
2009, which provides for the approval, regulation, and
enforcement of private postsecondary educational
institutions by the Bureau for Private Postsecondary
Education (BPPE) within the Department of Consumer Affairs
(DCA). (Education Code � 94800-94950)
Among other things, the Act requires a regulated
institution to provide a prospective student with a School
Performance Fact Sheet containing information on completion
rates, placement rates, license examination passage rates,
salary or wage information, the most recent three-year
cohort default rate and the percentage of enrolled students
receiving federal student loans (if the institution
participates in federal financial programs) and other
specified information. (EC � 94910)
ANALYSIS
This bill :
1) Expands institutional reporting requirements which
currently exist as a condition of voluntary
participation in the Cal Grant Program to additionally
include information on license examination passage
rates, the institution's latest 3-year cohort default
rate, its percentage of undergraduate student
borrowers, and student loan debt information for
first-time degree or certificate seeking
undergraduates.
2) Expands the responsibility of the CSAC to post
information on a searchable database to include the
new reporting requirements established by the bill.
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3) Establishes specific provisions related to the new
student loan debt reporting requirements.
Specifically it:
a) Authorizes the UC and CSU to
comply with these requirements by:
i) Including student loan
debt information in their respective final
annual financial aid reports.
ii) Providing a copy of their reports
to the CSAC.
b) Exempts California Community
Colleges from complying with the student loan
debt information reporting requirements.
c) Expands the information which an
institution regulated under the California
Private Postsecondary Education Act is required
to provide a prospective student in its School
Performance Fact Sheet and in its annual report
to the Bureau to include the average student loan
debt of its graduates, calculated as specified.
4) Specifies the method of calculation for purposes of
reporting student loan debt information for both the
Cal Grant Program and as part of the annual report and
School Performance Fact Sheet reporting requirements
under the California Private Postsecondary Education
Act.
5) Provides that the changes to the School Performance
Fact Sheet and to the annual report requirements only
become effective if the repeal of California Private
Postsecondary Education Act of 2009 is delayed or
eliminated.
6) Makes other technical changes.
STAFF COMMENTS
1) Need for the bill . According to the author,
comprehensive and meaningful consumer information for
students and their families is not readily available
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to make the best financial and educational decisions
about which post-secondary education institution to
attend. This bill attempts to centralize information
about student debt within the CSAC and/or the BPPE to
provide families with information that is easy to use,
compare, and understand, as a way to decide between
educational institutions.
2) Current status of CSAC searchable database . Current
law requires that the CSAC provide enrollment,
graduation, persistence, job placement rate and salary
and wage information data for Cal Grant participating
institutions in a searchable database. The CSAC has
established the searchable data base on its website.
Currently, the database only contains enrollment data
for the 2011-12 academic year. The CSAC reports that
additional data will be added as it, and sufficient
funding, become available for expansion. According to
the CSAC, full compliance with existing requirements
to post institutional information on a searchable
database would require approximately $100,000 in
ongoing funds annually. It is unclear whether the CSAC
has the capacity to create the more comprehensive
information resource envisioned by the bill's
provisions.
3) Duplicative information ? Several federal online tools
exist to assist prospective college students in making
informed decisions about their postsecondary education
options. These include the following:
The College Scorecards: In February 2013, the U.S.
Department of Education's (USDOE) College
Affordability and Transparency Center released an
interactive college scorecard, intended to provide
information on a college's affordability and value to
enable parents and prospective students to make
informed decisions about which college to attend.
According to the USDOE, the Scorecard highlights key
indicators about the cost and value of institutions
across the country to help students choose a school
that is well-suited to meet their needs, priced
affordably, and is consistent with their educational
and career goals. Each Scorecard includes five key
pieces of data about a college: costs, graduation
rate, loan default rate, average amount borrowed, and
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employment. USDOE reports that these data will be
updated periodically, and that they plan to publish
information on average earnings in the coming year.
Net Price Calculators: Federal law requires any
college that participates in Title IV financial aid
programs to post on-line "net price calculators" to
help parents and students determine the potential cost
of different colleges before they apply. This
calculator allows students to calculate an estimated
net price of attendance at an institution (defined as
cost of attendance minus grant and scholarship aid)
based on what similar students paid in a previous
year. The net price calculator is required for all
Title IV institutions that enroll full-time,
first-time degree- or certificate-seeking
undergraduate students. The USDOE College
Affordability and Transparency Center provides a link
to the net-price calculator for individual colleges
nationally.
Financial Aid Shopping Sheet. In 2012, the USDOE
partnered with the Consumer Financial Protection
Bureau to develop the Financial Aid Shopping Sheet to
promote transparency in student financial disclosures.
The Shopping Sheet is designed to help students better
understand the amount of grants and scholarships they
would receive from a given institution, and the amount
of loans an institution recommends a student take out
to cover out-of-pocket costs. The Shopping Sheet is
not mandatory, but the federal government did ask
institutions to voluntarily adopt the Shopping Sheet
beginning with the 2013-14 academic year. About 1800
institutions nationally have agreed to use the
Shopping Sheet template, and the CSU reports that all
its campuses began using it in 2013-14 for all newly
admitted prospective undergraduate and graduate
students.
The College Navigator: The National Center for Higher
Education Management Statistics (located within the
U.S. Department of Education and the Institute of
Education Sciences) is the primary federal entity for
collecting and analyzing data related to education in
the U.S. and other nations. College Navigator provides
comprehensive information to compare colleges on
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criteria that includes costs, majors offered, size of
school, campus safety, and graduation rates.
http://nces.ed.gov/collegenavigator/
This bill would create yet another tool at the state
level, specifically for Cal Grant participants, for
accessing similar information.
4) Additional responsibilities for the BPPE ? This bill
directs the BPPE to collect and post information on
student loan debt for the schools it regulates. On
April 21, 2014, the Business, Professions, and
Economic Development Committee convened a joint
hearing that included the relevant committees in both
houses (Senate Education, Assembly Committees on
Higher Education and Business, Professions and
Consumer Protection) as a part of its sunset review of
the BPPE. The background paper for the hearing
identified 26 different issues for consideration at
the hearing, including administrative, budget,
licensing and exemption, enforcement, and
accountability issues.
Additionally, a related Bureau of State Audits report
found that the BPPE has consistently failed to meet
its responsibility to protect the public's interests
as it had a significant backlog of licensing
applications, failed to proactively identify and
sanction effectively unlicensed institutions,
conducted only a fraction of the inspections of
institutions required by law and failed to identify
violations during these inspections, failed to respond
appropriately to complaints against institutions, and
did not ensure that institutions provided students
with accurate disclosures about their operations.
Is this the time to expand the BPPE responsibilities
to include activities related to additional reporting
requirements? Would these new responsibilities
further dilute its ability to focus on enforcement
activities?
5) Related TICAS study . According to a recent report,
Student Debt and the Class of 2012, issued by the
Institute for College Access and Success (TICAS),
nationally, 71 percent of college seniors who
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graduated last year had student loan debt, with an
average debt of $29,400 per borrower. The report
highlighted high debt and low debt states, and
California was noted as being among the low debt
states. Among its recommendations, TICAS advised that
students and their families need clear, timely, and
comparable information on costs, financial aid and
typical outcomes and for that reason supported the
improvement and promotion of federal tools and
processes that provide more and better consumer
information throughout the college process. The report
specifically noted tools such as the College
Scorecard, the Net Price Calculator, and the Shopping
Sheet.
6) Another alternative ? This bill proposes the creation
of a state level searchable database within the CSAC
to provide information to students and their families
about their real costs to attend specific colleges
they are considering. In light of the extensive work
being done at the federal level, it may be more
helpful, less confusing, and less costly to ensure
that Cal Grant participants are able to access the
federal tools through the CSAC website, and for the
BPPE to provide similar access for students
considering a regulated school, rather than create yet
another tool with different definitions and
information than that currently available.
Staff recommends the bill be amended to delete the
additional reporting requirements, and to instead,
require that the CSAC and the BPPE provide links to
federal and state websites that provide information
such as net cost, financial aid, and student loan
debt, that can be used by students and families to
evaluate their college choices.
7) Alternate legislation ? Some of the provisions of this
bill are contingent upon legislation that delays or
eliminates the repeal of the California Private
Postsecondary Education Act of 2009. The Business,
Professions and Economic Development Committee is
currently undertaking a sunset review of the BPPE and
will consider a number of changes to the Act, to be
contained in SB 1247 (Lieu). SB 1247 was heard and
passed by this committee on April 30, 2014, by a vote
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of 8-0, and is currently awaiting action in the
Assembly.
Should the relevant provisions of this bill be
incorporated into the more comprehensive reform of the
Act anticipated in SB 1247?
SUPPORT
California Federation of Teachers
University of California Student Association
OPPOSITION
American Career College/West Coast University
California Association of Private Postsecondary Schools
Corinthian Colleges
University of Phoenix