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AB-1020 Student loans: financial education for students regarding loans.(2017-2018)

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Date Published: 02/16/2017 09:00 PM
AB1020:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 1020


Introduced by Assembly Member Holden

February 16, 2017


An act to add Chapter 1.5 (commencing with Section 99050) to Part 65 of Division 14 of Title 3 of the Education Code, relating to student loans.


LEGISLATIVE COUNSEL'S DIGEST


AB 1020, as introduced, Holden. Student loans: financial education for students regarding loans.
Existing law establishes the University of California, under the administration of the Regents of the University of California, the California State University, under the administration of the Trustees of the California State University, the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in this state.
The California Finance Lenders Law generally provides for the licensure and regulation of persons who are engaged in the business of making consumer or commercial loans by the Commissioner of Business Oversight, as specified, and makes a willful violation of its provisions a crime.
This bill would express findings and declarations of the Legislature relating to student loans. The bill would require, in addition to any information required to be provided under the California Finance Lenders Law, that a lender, before entering into a loan agreement for purposes of financing the costs of a student’s postsecondary education, disclose the student’s options for financing his or her postsecondary education, the student’s repayment options, and any other information relevant to the proposed loan agreement that is reasonably requested by the student.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 (a) The Legislature finds and declares both of the following:
(1) College students graduate owing an average of $26,600 in student loans. Federal and private student loans cannot be discharged in bankruptcy proceedings.
(2) Students receive widely varying amounts of information before committing themselves to student loans.
(b) It is the intent of the Legislature in enacting this act to give students access to detailed information about different loan and repayment options before they enter into a student loan agreement.

SEC. 2.

 Chapter 1.5 (commencing with Section 99050) is added to Part 65 of Division 14 of Title 3 of the Education Code, to read:
CHAPTER  1.5. Financial Education Regarding Student Loans

99050.
 In addition to any information required to be provided under the California Finance Lenders Law (Division 9 (commencing with Section 22000) of the Financial Code), a lender, before entering into a loan agreement for purposes of financing the costs of a student’s postsecondary education, shall disclose all of the following to the student:
(a) The student’s options, including, but not necessarily limited to, loans, for financing the costs of the student’s postsecondary education.
(b) The student’s options for repayment if he or she decides to enter into a loan agreement.
(c) Any other information relevant to the proposed loan agreement that is reasonably requested by the student.