Bill Text: CA SB791 | 2017-2018 | Regular Session | Amended

California Senate Bill 791 (Prior Session Legislation)

Bill Title: Student loan disclosure: cohort default and other rates.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2018-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB791 Detail]

Download: California-2017-SB791-Amended.html

Amended IN Senate April 17, 2017

Amended IN Senate March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 791

Introduced by Senator Glazer

February 17, 2017

An act to add Section 69509.1 to the Education Code, relating to student financial aid.

LEGISLATIVE COUNSEL'S DIGEST

SB 791, as amended, Glazer. Student loan disclosure: cohort default and other rates.

Existing law establishes the University of California, under the administration of the Regents of the University of California, the California State University, under the administration of the Trustees of the California State University, the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in this state. Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education.

Commencing with the 2018–19 academic year, this bill would require a postsecondary educational institution with current or former students receiving certain federal loans to collect specified information available from the United States Department of Education regarding its current and former student borrowers and to publish and make available annually the forbearance, deferment, delinquency, and official cohort default rate percentages, and specified definitions, for each campus on the page of its Internet Web site regarding student financial aid, and if applicable, as part of the School Performance Fact Sheet. The bill would ~~require the failure of an institution to comply with the posting requirement to be punishable by warning or fine, as provided, and would~~ require enforcement of ~~that provision~~ these provisions by the ~~commission and~~ commission, in conjunction with the Bureau for Private Postsecondary Education, as appropriate.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 69509.1 is added to the Education Code, to read:

69509.1.

(a) Commencing with the 2018–19 academic year, a postsecondary educational institution with current or former students receiving Federal Stafford Loans from the Federal Family Education Loan Program or Direct Stafford/Ford Loans from the William D. Ford Direct Loan Program shall do all of the following:

(1) Collect the forbearance, deferment, and official cohort default rate percentages from the electronic Cohort Default Rate packet provided by the United States Department of Education for its current and former student borrowers in the most recent cohort year.

(2) Collect the delinquency rate percentage from the Delinquent Borrower Report accessible through the United States Department of Education’s National Student Loan Data System for its current and former student borrowers in the most recent cohort year.

(3) Publish and make available annually the forbearance, deferment, delinquency, and official cohort default rate percentages, and the definitions in subdivision (c), for each campus on the page of its Internet Web site regarding student financial aid, and if applicable, as part of the School Performance Fact Sheet required pursuant to Section 94910.

(b)(1)Failure to publish and make available annually the forbearance, deferment, delinquency, and official cohort default rate percentages as required by paragraph (3) of subdivision (a) shall be punishable in accordance with the following:
~~(A)For the first violation, the offending institution shall receive a written warning.~~
~~(B)For the second violation, the offending institution shall receive a fine of two hundred fifty dollars ($250).~~
~~(C)For the third and subsequent violations, the offending institution shall receive a fine of five hundred dollars ($500).~~
~~(2)~~

(b) This ~~subdivision~~ section shall be enforced by the ~~commission and~~ commission, in conjunction with the Bureau of Private Postsecondary Education, as appropriate.

(1) “Default” means the failure to make a student loan installment payment when due or to meet other terms of the promissory note when either failure persists for 240 days if the loan is repayable in monthly installments, 270 days if repayable in quarterly installments, or 330 days if repayable in less frequent installments.

(2) “Deferment” means the condition of a loan as to which an eligible borrower has entered into a period during which repayment of the principal and interest amount of the loan is temporarily delayed. Deferment eligibility is determined in accordance with the standards set forth in the William D. Ford Federal Direct Loan Program under Section 685.204 of Title 34 of the Code of Federal Regulations.

(3) “Delinquency” means the condition of a loan payment as to which the borrower is past due on a the loan payment by a minimum of 31 days and a maximum of 239 days, 269 days, or 329 days, as applicable.

(4) “Direct Stafford/Ford Loans” means any Federal Direct Subsidized Stafford/Ford Loans and Federal Direct Unsubsidized Stafford/Direct loans.

(5) “Federal Stafford Loan” means any subsidized or unsubsidized Federal Stafford Loan.

(6) “Forbearance” means permitting the temporary suspension of payments, allowing an extension of time for making payments, or temporarily accepting smaller payments than previously scheduled. Forbearance eligibility is determined in accordance with the standards set forth in the William D. Ford Federal Direct Loan Program under Section 685.205 of Title 34 of the Code of Federal Regulations.