Amended IN Assembly March 16, 2023 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 1160Introduced by Assembly Member PachecoFebruary 16, 2023An act relating to student debts. An act to amend Sections 1788.92 and 1788.93 of, and to add Section 1788.94 to, the Civil Code, to amend Section 66022 of, and to add Article 4.3 (commencing with Section 66035) to Chapter 2 of Part 40 of Division 5 of Title 3 to, the Education Code, and to amend Section 12419.5 of the Government Code, relating to student debts.LEGISLATIVE COUNSEL'S DIGESTAB 1160, as amended, Pacheco. Student loan debts. Protecting Students from Creditor Colleges Act.Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.The Donahoe Higher Education Act requires public higher education entities to adopt regulations to withhold institutional services, including withholding grades and diplomas, upon notice to a student that they are in default on a loan made pursuant to specified federal law.Notwithstanding any other law, the Educational Debt Collection Practices Act prohibits a school, as defined, from refusing to provide a transcript for a current or former student on the grounds that the student owes a debt, conditioning the provision of a transcript on the payment of a debt, charging a higher fee for obtaining a transcript or providing less favorable treatment of a transcript request because a student owes a debt, or using a transcript issuance as a tool for debt collection, as specified.This bill would expand the provisions described above to also prohibit a school from refusing to provide a diploma or certificate, as defined, for a current or former student on the grounds that the student owes a debt, conditioning the provision of a diploma or certificate on the payment of a debt, charging a higher fee for obtaining a diploma or certificate or providing less favorable treatment of a diploma or certificate request because a student owes a debt, or using a diploma or certificate issuance as a tool for debt collection. The bill would prohibit a school from engaging a third-party debt collection agency to collect an existing or future student debt or selling an existing or future student debt to a third party. The bill would make other conforming changes.This bill would prohibit an institution of higher education, as defined, from taking specified actions, including, among other things, placing an enrollment or registration hold on a current or former students account, on the grounds that the student owes an institutional debt, as defined. The bill would require the governing boards of institutions of higher education, and request the office of the President of the University of California, to require each institution to report, on an annual basis, specified information regarding the number and dollar amount of institutional debts at each institution. By imposing new duties on community college districts, the bill would constitute a state-mandated local program.Existing law authorizes the Controller, in their discretion, to offset any amount due to a state agency from a person or entity, against any amount owing to that person or entity, including any tax refund, by any state agency, except as specified.This bill would prohibit the Controller, for taxable years beginning on and after January 1, 2024, from offsetting any amount due to a public or private postsecondary educational institution, as defined, from a current or former student against any amount owing to that current or former student by a state agency.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.Existing law establishes the University of California, the California State University, the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of public and private postsecondary education in this state. Existing law requires public postsecondary educational institutions to adopt regulations to withhold institutional services, including the provision of grades and diplomas, upon notice to students that they are in default of their loans under certain loan programs. This bill would state the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Over the last decade, state and national attention has focused on the harmful impacts of the $1.7 trillion dollar student loan debt crisis. Across California, more than 3,900,000 borrowers owe nearly $148 million in student loan debt. Although state and federal governments have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed: institutional debt, which are debts owed by current or former students directly to an institution of higher education. Available research indicates that institutional debt rates in the state have increased.(b) Over the course of the COVID-19 pandemic, as the economic and public health emergency forced record numbers of students to withdraw from their courses, the growing segment of institutional debts has ballooned, resulting in more than 750,000 low-income students owing more than $350 million in debt to California public colleges.(c) In 2019, California became the first state in the nation to pass limited protections for students who owe institutional debts to California colleges, prohibiting schools from holding college transcripts hostage as a tactic to collect on institutional debts from former students.(d) Despite these reforms, current or former students with outstanding institutional debts still face disastrous consequences. Institutions of higher education have been found to place holds on a students account barring them from reenrolling in coursework and placing harmful barriers to degree completion, withholding degrees and certificates, harming a students employment prospects, and even placing students in private collections or subjecting them to benefits and tax return offsets through the Interagency Intercept Collection Program operated by the Franchise Tax Board.(e) Unlike federal student loans and other privately held debts, students with institutional debt lack many basic consumer protections. Furthermore, California policymakers and taxpayers lack transparent data on the prevalence and long-term harms of institutional debt.SEC. 2. Section 1788.92 of the Civil Code is amended to read:1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.SEC. 3. Section 1788.93 of the Civil Code is amended to read:1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.SEC. 4. Section 1788.94 is added to the Civil Code, immediately following Section 1788.93, to read:1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.SEC. 5. Section 66022 of the Education Code is amended to read:66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.SEC. 6. Article 4.3 (commencing with Section 66035) is added to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, to read: Article 4.3. Protecting Students from Creditor Colleges Act66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.SEC. 7. Section 12419.5 of the Government Code is amended to read:12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.SEC. 8. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.SECTION 1.It is the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.
Amended IN Assembly March 16, 2023 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 1160Introduced by Assembly Member PachecoFebruary 16, 2023An act relating to student debts. An act to amend Sections 1788.92 and 1788.93 of, and to add Section 1788.94 to, the Civil Code, to amend Section 66022 of, and to add Article 4.3 (commencing with Section 66035) to Chapter 2 of Part 40 of Division 5 of Title 3 to, the Education Code, and to amend Section 12419.5 of the Government Code, relating to student debts.LEGISLATIVE COUNSEL'S DIGESTAB 1160, as amended, Pacheco. Student loan debts. Protecting Students from Creditor Colleges Act.Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.The Donahoe Higher Education Act requires public higher education entities to adopt regulations to withhold institutional services, including withholding grades and diplomas, upon notice to a student that they are in default on a loan made pursuant to specified federal law.Notwithstanding any other law, the Educational Debt Collection Practices Act prohibits a school, as defined, from refusing to provide a transcript for a current or former student on the grounds that the student owes a debt, conditioning the provision of a transcript on the payment of a debt, charging a higher fee for obtaining a transcript or providing less favorable treatment of a transcript request because a student owes a debt, or using a transcript issuance as a tool for debt collection, as specified.This bill would expand the provisions described above to also prohibit a school from refusing to provide a diploma or certificate, as defined, for a current or former student on the grounds that the student owes a debt, conditioning the provision of a diploma or certificate on the payment of a debt, charging a higher fee for obtaining a diploma or certificate or providing less favorable treatment of a diploma or certificate request because a student owes a debt, or using a diploma or certificate issuance as a tool for debt collection. The bill would prohibit a school from engaging a third-party debt collection agency to collect an existing or future student debt or selling an existing or future student debt to a third party. The bill would make other conforming changes.This bill would prohibit an institution of higher education, as defined, from taking specified actions, including, among other things, placing an enrollment or registration hold on a current or former students account, on the grounds that the student owes an institutional debt, as defined. The bill would require the governing boards of institutions of higher education, and request the office of the President of the University of California, to require each institution to report, on an annual basis, specified information regarding the number and dollar amount of institutional debts at each institution. By imposing new duties on community college districts, the bill would constitute a state-mandated local program.Existing law authorizes the Controller, in their discretion, to offset any amount due to a state agency from a person or entity, against any amount owing to that person or entity, including any tax refund, by any state agency, except as specified.This bill would prohibit the Controller, for taxable years beginning on and after January 1, 2024, from offsetting any amount due to a public or private postsecondary educational institution, as defined, from a current or former student against any amount owing to that current or former student by a state agency.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.Existing law establishes the University of California, the California State University, the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of public and private postsecondary education in this state. Existing law requires public postsecondary educational institutions to adopt regulations to withhold institutional services, including the provision of grades and diplomas, upon notice to students that they are in default of their loans under certain loan programs. This bill would state the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES
Amended IN Assembly March 16, 2023
Amended IN Assembly March 16, 2023
CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION
Assembly Bill
No. 1160
Introduced by Assembly Member PachecoFebruary 16, 2023
Introduced by Assembly Member Pacheco
February 16, 2023
An act relating to student debts. An act to amend Sections 1788.92 and 1788.93 of, and to add Section 1788.94 to, the Civil Code, to amend Section 66022 of, and to add Article 4.3 (commencing with Section 66035) to Chapter 2 of Part 40 of Division 5 of Title 3 to, the Education Code, and to amend Section 12419.5 of the Government Code, relating to student debts.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 1160, as amended, Pacheco. Student loan debts. Protecting Students from Creditor Colleges Act.
Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.The Donahoe Higher Education Act requires public higher education entities to adopt regulations to withhold institutional services, including withholding grades and diplomas, upon notice to a student that they are in default on a loan made pursuant to specified federal law.Notwithstanding any other law, the Educational Debt Collection Practices Act prohibits a school, as defined, from refusing to provide a transcript for a current or former student on the grounds that the student owes a debt, conditioning the provision of a transcript on the payment of a debt, charging a higher fee for obtaining a transcript or providing less favorable treatment of a transcript request because a student owes a debt, or using a transcript issuance as a tool for debt collection, as specified.This bill would expand the provisions described above to also prohibit a school from refusing to provide a diploma or certificate, as defined, for a current or former student on the grounds that the student owes a debt, conditioning the provision of a diploma or certificate on the payment of a debt, charging a higher fee for obtaining a diploma or certificate or providing less favorable treatment of a diploma or certificate request because a student owes a debt, or using a diploma or certificate issuance as a tool for debt collection. The bill would prohibit a school from engaging a third-party debt collection agency to collect an existing or future student debt or selling an existing or future student debt to a third party. The bill would make other conforming changes.This bill would prohibit an institution of higher education, as defined, from taking specified actions, including, among other things, placing an enrollment or registration hold on a current or former students account, on the grounds that the student owes an institutional debt, as defined. The bill would require the governing boards of institutions of higher education, and request the office of the President of the University of California, to require each institution to report, on an annual basis, specified information regarding the number and dollar amount of institutional debts at each institution. By imposing new duties on community college districts, the bill would constitute a state-mandated local program.Existing law authorizes the Controller, in their discretion, to offset any amount due to a state agency from a person or entity, against any amount owing to that person or entity, including any tax refund, by any state agency, except as specified.This bill would prohibit the Controller, for taxable years beginning on and after January 1, 2024, from offsetting any amount due to a public or private postsecondary educational institution, as defined, from a current or former student against any amount owing to that current or former student by a state agency.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.Existing law establishes the University of California, the California State University, the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of public and private postsecondary education in this state. Existing law requires public postsecondary educational institutions to adopt regulations to withhold institutional services, including the provision of grades and diplomas, upon notice to students that they are in default of their loans under certain loan programs. This bill would state the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.
Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.
The Donahoe Higher Education Act requires public higher education entities to adopt regulations to withhold institutional services, including withholding grades and diplomas, upon notice to a student that they are in default on a loan made pursuant to specified federal law.
Notwithstanding any other law, the Educational Debt Collection Practices Act prohibits a school, as defined, from refusing to provide a transcript for a current or former student on the grounds that the student owes a debt, conditioning the provision of a transcript on the payment of a debt, charging a higher fee for obtaining a transcript or providing less favorable treatment of a transcript request because a student owes a debt, or using a transcript issuance as a tool for debt collection, as specified.
This bill would expand the provisions described above to also prohibit a school from refusing to provide a diploma or certificate, as defined, for a current or former student on the grounds that the student owes a debt, conditioning the provision of a diploma or certificate on the payment of a debt, charging a higher fee for obtaining a diploma or certificate or providing less favorable treatment of a diploma or certificate request because a student owes a debt, or using a diploma or certificate issuance as a tool for debt collection. The bill would prohibit a school from engaging a third-party debt collection agency to collect an existing or future student debt or selling an existing or future student debt to a third party. The bill would make other conforming changes.
This bill would prohibit an institution of higher education, as defined, from taking specified actions, including, among other things, placing an enrollment or registration hold on a current or former students account, on the grounds that the student owes an institutional debt, as defined. The bill would require the governing boards of institutions of higher education, and request the office of the President of the University of California, to require each institution to report, on an annual basis, specified information regarding the number and dollar amount of institutional debts at each institution. By imposing new duties on community college districts, the bill would constitute a state-mandated local program.
Existing law authorizes the Controller, in their discretion, to offset any amount due to a state agency from a person or entity, against any amount owing to that person or entity, including any tax refund, by any state agency, except as specified.
This bill would prohibit the Controller, for taxable years beginning on and after January 1, 2024, from offsetting any amount due to a public or private postsecondary educational institution, as defined, from a current or former student against any amount owing to that current or former student by a state agency.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Existing law establishes the University of California, the California State University, the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of public and private postsecondary education in this state. Existing law requires public postsecondary educational institutions to adopt regulations to withhold institutional services, including the provision of grades and diplomas, upon notice to students that they are in default of their loans under certain loan programs.
This bill would state the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Over the last decade, state and national attention has focused on the harmful impacts of the $1.7 trillion dollar student loan debt crisis. Across California, more than 3,900,000 borrowers owe nearly $148 million in student loan debt. Although state and federal governments have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed: institutional debt, which are debts owed by current or former students directly to an institution of higher education. Available research indicates that institutional debt rates in the state have increased.(b) Over the course of the COVID-19 pandemic, as the economic and public health emergency forced record numbers of students to withdraw from their courses, the growing segment of institutional debts has ballooned, resulting in more than 750,000 low-income students owing more than $350 million in debt to California public colleges.(c) In 2019, California became the first state in the nation to pass limited protections for students who owe institutional debts to California colleges, prohibiting schools from holding college transcripts hostage as a tactic to collect on institutional debts from former students.(d) Despite these reforms, current or former students with outstanding institutional debts still face disastrous consequences. Institutions of higher education have been found to place holds on a students account barring them from reenrolling in coursework and placing harmful barriers to degree completion, withholding degrees and certificates, harming a students employment prospects, and even placing students in private collections or subjecting them to benefits and tax return offsets through the Interagency Intercept Collection Program operated by the Franchise Tax Board.(e) Unlike federal student loans and other privately held debts, students with institutional debt lack many basic consumer protections. Furthermore, California policymakers and taxpayers lack transparent data on the prevalence and long-term harms of institutional debt.SEC. 2. Section 1788.92 of the Civil Code is amended to read:1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.SEC. 3. Section 1788.93 of the Civil Code is amended to read:1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.SEC. 4. Section 1788.94 is added to the Civil Code, immediately following Section 1788.93, to read:1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.SEC. 5. Section 66022 of the Education Code is amended to read:66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.SEC. 6. Article 4.3 (commencing with Section 66035) is added to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, to read: Article 4.3. Protecting Students from Creditor Colleges Act66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.SEC. 7. Section 12419.5 of the Government Code is amended to read:12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.SEC. 8. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.SECTION 1.It is the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following:(a) Over the last decade, state and national attention has focused on the harmful impacts of the $1.7 trillion dollar student loan debt crisis. Across California, more than 3,900,000 borrowers owe nearly $148 million in student loan debt. Although state and federal governments have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed: institutional debt, which are debts owed by current or former students directly to an institution of higher education. Available research indicates that institutional debt rates in the state have increased.(b) Over the course of the COVID-19 pandemic, as the economic and public health emergency forced record numbers of students to withdraw from their courses, the growing segment of institutional debts has ballooned, resulting in more than 750,000 low-income students owing more than $350 million in debt to California public colleges.(c) In 2019, California became the first state in the nation to pass limited protections for students who owe institutional debts to California colleges, prohibiting schools from holding college transcripts hostage as a tactic to collect on institutional debts from former students.(d) Despite these reforms, current or former students with outstanding institutional debts still face disastrous consequences. Institutions of higher education have been found to place holds on a students account barring them from reenrolling in coursework and placing harmful barriers to degree completion, withholding degrees and certificates, harming a students employment prospects, and even placing students in private collections or subjecting them to benefits and tax return offsets through the Interagency Intercept Collection Program operated by the Franchise Tax Board.(e) Unlike federal student loans and other privately held debts, students with institutional debt lack many basic consumer protections. Furthermore, California policymakers and taxpayers lack transparent data on the prevalence and long-term harms of institutional debt.
SECTION 1. The Legislature finds and declares all of the following:(a) Over the last decade, state and national attention has focused on the harmful impacts of the $1.7 trillion dollar student loan debt crisis. Across California, more than 3,900,000 borrowers owe nearly $148 million in student loan debt. Although state and federal governments have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed: institutional debt, which are debts owed by current or former students directly to an institution of higher education. Available research indicates that institutional debt rates in the state have increased.(b) Over the course of the COVID-19 pandemic, as the economic and public health emergency forced record numbers of students to withdraw from their courses, the growing segment of institutional debts has ballooned, resulting in more than 750,000 low-income students owing more than $350 million in debt to California public colleges.(c) In 2019, California became the first state in the nation to pass limited protections for students who owe institutional debts to California colleges, prohibiting schools from holding college transcripts hostage as a tactic to collect on institutional debts from former students.(d) Despite these reforms, current or former students with outstanding institutional debts still face disastrous consequences. Institutions of higher education have been found to place holds on a students account barring them from reenrolling in coursework and placing harmful barriers to degree completion, withholding degrees and certificates, harming a students employment prospects, and even placing students in private collections or subjecting them to benefits and tax return offsets through the Interagency Intercept Collection Program operated by the Franchise Tax Board.(e) Unlike federal student loans and other privately held debts, students with institutional debt lack many basic consumer protections. Furthermore, California policymakers and taxpayers lack transparent data on the prevalence and long-term harms of institutional debt.
SECTION 1. The Legislature finds and declares all of the following:
### SECTION 1.
(a) Over the last decade, state and national attention has focused on the harmful impacts of the $1.7 trillion dollar student loan debt crisis. Across California, more than 3,900,000 borrowers owe nearly $148 million in student loan debt. Although state and federal governments have taken action to support student loan borrowers, another type of student debt has gone mostly unaddressed: institutional debt, which are debts owed by current or former students directly to an institution of higher education. Available research indicates that institutional debt rates in the state have increased.
(b) Over the course of the COVID-19 pandemic, as the economic and public health emergency forced record numbers of students to withdraw from their courses, the growing segment of institutional debts has ballooned, resulting in more than 750,000 low-income students owing more than $350 million in debt to California public colleges.
(c) In 2019, California became the first state in the nation to pass limited protections for students who owe institutional debts to California colleges, prohibiting schools from holding college transcripts hostage as a tactic to collect on institutional debts from former students.
(d) Despite these reforms, current or former students with outstanding institutional debts still face disastrous consequences. Institutions of higher education have been found to place holds on a students account barring them from reenrolling in coursework and placing harmful barriers to degree completion, withholding degrees and certificates, harming a students employment prospects, and even placing students in private collections or subjecting them to benefits and tax return offsets through the Interagency Intercept Collection Program operated by the Franchise Tax Board.
(e) Unlike federal student loans and other privately held debts, students with institutional debt lack many basic consumer protections. Furthermore, California policymakers and taxpayers lack transparent data on the prevalence and long-term harms of institutional debt.
SEC. 2. Section 1788.92 of the Civil Code is amended to read:1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
SEC. 2. Section 1788.92 of the Civil Code is amended to read:
### SEC. 2.
1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
1788.92. For purposes of this title, the following terms shall have the following meanings:(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study. (b)(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
1788.92. For purposes of this title, the following terms shall have the following meanings:
(a) School means any public or private postsecondary school, or any public or private entity, responsible for providing transcripts transcripts, diplomas, or certificates to current or former students of a school.
(b) Certificate means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
(b)
(c) Debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, from a student, but does not include the fee, if any, charged to all students for the actual costs of providing the transcripts.
(d) Diploma means a recognized educational credential awarded by an institution that signifies satisfactory completion of the requirements of a postsecondary educational program or course of study.
SEC. 3. Section 1788.93 of the Civil Code is amended to read:1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.
SEC. 3. Section 1788.93 of the Civil Code is amended to read:
### SEC. 3.
1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.
1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.
1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.
1788.93. Notwithstanding any provision of other law, a school shall not do any of the following:
(a) Refuse to provide a transcript transcript, diploma, or certificate for a current or former student on the grounds that the student owes a debt.
(b) Condition the provision of a transcript transcript, diploma, or certificate on the payment of a debt, other than a fee charged to provide the transcript. transcript, diploma, or certificate.
(c) Charge a higher fee for obtaining a transcript, diploma, or certificate, or provide less favorable treatment of a transcript transcript, diploma, or certificate request because a student owes a debt.
(d) Use transcript transcript, diploma, or certificate issuance as a tool for debt collection.
SEC. 4. Section 1788.94 is added to the Civil Code, immediately following Section 1788.93, to read:1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.
SEC. 4. Section 1788.94 is added to the Civil Code, immediately following Section 1788.93, to read:
### SEC. 4.
1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.
1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.
1788.94. Notwithstanding any other law, a school shall not do either of the following:(a) Engage a third-party debt collection agency to collect an existing or future student debt.(b) Sell an existing or future student debt to a third party.
1788.94. Notwithstanding any other law, a school shall not do either of the following:
(a) Engage a third-party debt collection agency to collect an existing or future student debt.
(b) Sell an existing or future student debt to a third party.
SEC. 5. Section 66022 of the Education Code is amended to read:66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.
SEC. 5. Section 66022 of the Education Code is amended to read:
### SEC. 5.
66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.
66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.
66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.(A)The provision of grades.(B)The provision of diplomas.(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.
66022. (a) The governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco shall adopt regulations providing for the withholding of institutional services from students or former students who have been notified in writing at the students or former students last known address that they are in default on a loan or loans under the Federal Family Education Loan Program.
Default, for purposes of this section, means the failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay, provided that this failure persists for 180 days for a loan repayable in monthly installments, or 240 days for a loan repayable in less frequent installments.
(b) (1) The regulations adopted pursuant to subdivision (a) shall provide that the services withheld may be provided during a period when the facts are in dispute or when the student or former student demonstrates to either the governing board of the community college district, the Trustees of the California State University, the Regents of the University of California, or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, as appropriate, or to the Student Aid Commission, or both the Student Aid Commission and the appropriate entity or its designee, that reasonable progress has been made to repay the loan or that there exists a reasonable justification for the delay as determined by the institution. The regulations shall specify the services to be withheld from the student and may include, but are not limited to, the following: provision of grades.
(A)The provision of grades.
(B)The provision of diplomas.
(2) The adopted regulations shall not include the withholding of registration privileges or transcripts. privileges, transcripts, or diplomas.
(c) When it has been determined that an individual is in default on a loan or loans specified in subdivision (a), the Student Aid Commission shall give notice of the default to all institutions through which that individual acquired the loan or loans.
(d) This section shall not impose any requirement upon the University of California or the college named in Section 92200 College of the Law, San Francisco unless the Regents of the University of California or the Board of Directors of the college named in Section 92200, College of the Law, San Francisco, respectively, by resolution, make this section applicable.
(e) Guarantors, or those who act as their agents or act under their control, who provide information to postsecondary educational institutions pursuant to this section, shall defend, indemnify, and hold harmless the governing board of every community college district, the Trustees of the California State University, the Regents of the University of California, and the Board of Directors of the college named in Section 92200 College of the Law, San Francisco from action resulting from compliance with this section when the action arises as a result of incorrect, misleading, or untimely information provided to the postsecondary educational institution by the guarantors, their agents, or those acting under the control of the guarantors.
SEC. 6. Article 4.3 (commencing with Section 66035) is added to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, to read: Article 4.3. Protecting Students from Creditor Colleges Act66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.
SEC. 6. Article 4.3 (commencing with Section 66035) is added to Chapter 2 of Part 40 of Division 5 of Title 3 of the Education Code, to read:
### SEC. 6.
Article 4.3. Protecting Students from Creditor Colleges Act66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.
Article 4.3. Protecting Students from Creditor Colleges Act66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.
Article 4.3. Protecting Students from Creditor Colleges Act
Article 4.3. Protecting Students from Creditor Colleges Act
66035. For purposes of this article, the following definitions apply:(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.
66035. For purposes of this article, the following definitions apply:
(a) Institution of higher education or institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations or distance education, and each institution of public higher education as defined in subdivision (a) of Section 66010, any independent institutions of higher education as defined in subdivision (b) of Section 66010, and any private postsecondary educational institutions as defined Section 94843.
(b) Institutional debt means any money, obligation, claim, or sum, due or owing, or alleged to be due or owing, whether or not reduced to court judgment, from a student to an institution of higher education.
66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.
66036. Notwithstanding any other law, an institution of higher education shall not place an enrollment or registration hold on a current or former students account, charge a higher tuition or fee, provide less favorable treatment related to reenrollment or registration for courses, or otherwise prevent a current or former student from reenrolling or registering at the institution of higher education on the grounds that the student owes an institutional debt.
66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:(1) The total number and dollar amount of institutional debts at each institution.(2) The total number and dollar amount of institutional debts at each institution that are past due.(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:(A) Dollar amount in increments of five hundred dollars ($500).(B) The age of the institutional debt in increments of one year.(C) The gender and racial demographic of the students.(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.(9) The number of students and accounts subject to an administrative hold at each institution.(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.
66037. (a) In order to increase transparency on the growth and prevalence of institutional debt, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, require each institution to report, on an annual basis not later than three months after the end of each institutions fiscal year, all of the following information, as of the final day of the institutions previous fiscal year:
(1) The total number and dollar amount of institutional debts at each institution.
(2) The total number and dollar amount of institutional debts at each institution that are past due.
(3) A breakdown of the total number and total dollar amount of institutional debts by each of the following categories:
(A) Dollar amount in increments of five hundred dollars ($500).
(B) The age of the institutional debt in increments of one year.
(C) The gender and racial demographic of the students.
(4) The total number and dollar amount of institutional debts owed by Pell Grant-eligible current or former students.
(5) A breakdown of the total number and dollar amount of institutional debts by declared major and degree type being sought.
(6) A breakdown of the source of institutional debts by underlying expense type, including tuition, room and board, fines, and campus fees.
(7) The total number and dollar amount of institutional debts owed, in whole or in part, as the result of a current or former students federal financial aid being returned to the federal government.
(8) A description of any policies related to administrative actions or account holds imposed on current or former students with an outstanding account due to an institutional debt.
(9) The number of students and accounts subject to an administrative hold at each institution.
(10) The total number and dollar amount of institutional debts assigned to third-party collection agencies during the prior fiscal year.
(11) The total number and dollar amount collected on institutional debts through third-party collection agencies during the prior fiscal year.
(12) The number of institutional debts subject to collection through the Franchise Tax Board and the total dollar amount collected through the Franchise Tax Board during the prior fiscal year.
(b) In coordination with the Commissioner of Financial Protection and Innovation, the governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, develop a uniform format for data collection and ensure data reporting is done in a timely manner.
(c) The governing boards of institutions of higher education shall, and the office of the President of the University of California is requested to, report in a publicly accessible manner on their internet websites the data compiled pursuant to this section across each campus on an annual basis.
SEC. 7. Section 12419.5 of the Government Code is amended to read:12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.
SEC. 7. Section 12419.5 of the Government Code is amended to read:
### SEC. 7.
12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.
12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.
12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.For(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.This section(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.
12419.5. (a) (1) The Controller may, in the Controllers discretion, offset any amount due a state agency from a person or entity, against any amount owing that person or entity by any state agency. The Controller may deduct from the claim, and draw the Controllers warrants for the amounts offset in favor of the respective state agencies to which due, and, for any balance, in favor of the claimant. Whenever insufficient to offset all amounts due state agencies, the amount available shall be applied in the manner as the Controller, in the Controllers discretion, shall determine. If, in the discretion of the Controller, the person or entity refuses or neglects to file a claim within a reasonable time, the head of the state agency owing the amount shall file the claim on behalf of that person or entity. If approved by the Controller, the claim shall have the same force and effect as though filed by that person or entity. The amount due any person or entity from the state or any agency thereof is the net amount otherwise owing that person or entity after any offset as provided in this section.
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(2) For purposes of this section, subdivision, an amount owing to a person or entity by any state agency shall include any tax refund.
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(3) This subdivision shall not apply to payment of online game prizes of ninety-nine dollars ($99) or lower by California State Lottery Retailers pursuant to subdivision (a) of Section 8880.32. 8880.321.
(b) (1) Notwithstanding any other law, for taxable years beginning on or after January 1, 2024, the Controller shall not offset any amount due to a postsecondary institution from a current or former student against any amount owing to that current or former student by a state agency.
(2) For purpose of this subdivision, postsecondary institution means any public or private postsecondary educational institution operating in the state, including its branch campuses and satellite locations, or distance education, and includes each California Community College District, the California State University, and, upon agreement by the Regents, the University of California.
SEC. 8. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 8. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 8. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
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It is the intent of the Legislature to enact subsequent legislation to protect Californias postsecondary students from the myriad of harms posed by the growth and prevalence of institutional loan debt, shed light and track the growth and impact of institutional loan debt across California, and monitor the methods that postsecondary educational institutions use to collect on institutional loan debt.