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AB-1346 Postsecondary education: California Private Postsecondary Education Act of 2009: Student Tuition Recovery Fund.(2019-2020)

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Date Published: 04/02/2019 04:00 AM
AB1346:v98#DOCUMENT

Revised  April 10, 2019
Amended  IN  Assembly  April 01, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 1346


Introduced by Assembly Members Medina, Bauer-Kahan, Berman, Chiu, Eggman, Low, and McCarty
(Coauthor: Assembly Member Gloria)

February 22, 2019


An act to amend Section 94923 of the Education Code, relating to postsecondary education, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 1346, as amended, Medina. Postsecondary education: California Private Postsecondary Education Act of 2009: Student Tuition Recovery Fund.
The California Private Postsecondary Education Act of 2009 provides for the regulation of private postsecondary educational institutions by the Bureau for Private Postsecondary Education in the Department of Consumer Affairs. The act also establishes the Student Tuition Recovery Fund and requires the bureau to adopt regulations governing the administration and maintenance of the fund, including requirements relating to assessments on students and student claims against the fund, and establishes that the moneys in this fund are continuously appropriated to the bureau for specified purposes. The act authorizes a California student of a Corinthian Colleges, Inc., institution who meets all of the other eligibility requirements, including that the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date, to receive payment from the fund. The act defines economic loss loss, for the purposes of a student’s loss that may be relieved or mitigated through the fund, to include but not necessarily be limited to, pecuniary loss, which is the sum of the student’s tuition, all other institutional charges, the cost of equipment and materials required for the educational program, and interest on any student loan used to pay for such charges.
This bill would instead allow a student of a Corinthian Colleges, Inc., institution who was residing in California and attending a campus on or after January 1, 2010, to receive payment from the fund. The bill would expand the definition of economic loss to include all amounts paid by the student to the institution, any amounts paid in connection with attending the institution, and all principal, interest, and charges of any kind for any loan incurred by the student to pay these amounts. To the extent that the bill expands the purposes of the fund, the bill would make an appropriation.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 94923 of the Education Code is amended to read:

94923.
 (a) The Student Tuition Recovery Fund relieves or mitigates economic loss suffered by a student while enrolled in an institution not exempt from this article pursuant to Article 4 (commencing with Section 94874), who, at the time of the student’s enrollment, was a California resident or was enrolled in a California residency program, prepaid tuition, and suffered economic loss.
(b) (1) The bureau shall adopt, by regulation, procedures governing the administration and maintenance of the Student Tuition Recovery Fund. The fund shall be used to provide awards to students who suffer economic loss.
(2) The following students, and any other students deemed appropriate, are eligible for payment from the Student Tuition Recovery Fund:
(A) Any student who was enrolled at an institution, at a location of the institution, or in an educational program offered by the institution, at the time that institution, location, or program was closed or discontinued, as applicable, who did not choose to participate in a teach-out plan approved by the bureau or did not complete a chosen teach-out plan approved by the bureau.
(B) Any student who was enrolled at an institution or a location of the institution within the 120-day period before the closure of the institution or location of the institution, or who was enrolled in an educational program within the 120-day period before the program was discontinued.
(C) Any student who was enrolled at an institution or a location of the institution more than 120 days before the closure of the institution or location of the institution, in an educational program offered by the institution as to which the bureau determines there was a significant decline in the quality or value of the program more than 120 days before closure.
(D) Notwithstanding the requirement that a student attend an institution that is not exempt from this article, pursuant to subdivision (a), a student who was enrolled at a California campus of a Corinthian Colleges, Inc., institution or was a California student enrolled in an online program offered by an out-of-state campus of a Corinthian Colleges, Inc., institution, who also meets all of the other eligibility requirements, if the student was enrolled as of June 20, 2014, or withdrew within 120 days of that date or any greater period determined by the bureau pursuant to this section. residing in California and attending a campus of a Corinthian Colleges, Inc., institution on or after January 1, 2010.
(E) A student to whom an institution has been ordered to pay a refund by the bureau but has failed to do so.
(F) A student to whom an institution has failed to pay or reimburse loan proceeds under a federal student loan program as required by law, or has failed to pay or reimburse proceeds received by the institution in excess of tuition and other costs.
(G) A student who has been awarded restitution, a refund, or other monetary award by an arbitrator or court, based on a violation of this chapter by an institution or representative of an institution, but who has been unable to collect the award from the institution. The bureau shall review the award or judgment and shall ensure the amount to be paid from the fund does not exceed the student’s economic loss.
(H) Notwithstanding the definition of economic loss in subdivision (f), for purposes of recovery from the Student Tuition Recovery Fund, a student who has sought legal counsel that resulted in the cancellation of one or more student loans in connection with the student’s Student Tuition Recovery Fund claim may seek reimbursement for legal services rendered in an amount up to five hundred dollars ($500). The bureau shall review the invoice of the legal services rendered and evidence of the cancellation of the student loan or loans, and upon verifying that cancellation, pay the claim directly to the student.
(c) Any student who is required to pay a Student Tuition Recovery Fund assessment who pays tuition equal to or greater than the required assessment shall be deemed to have paid the required assessment, whether or not the student’s enrollment agreement specifies collection of the required assessment, and whether or not the institution identifies any money collected from the student as a Student Tuition Recovery Fund assessment.
(d) A student who suffers educational opportunity losses, whose charges are paid by a third-party payer, is eligible for educational credits under the fund.
(e) The bureau may seek repayment to the Student Tuition Recovery Fund from an institution found in violation of the law for which a student claim was paid. An institution shall not be eligible to renew its approval to operate with the bureau if the repayment is not made to the bureau as requested.
(f) For purposes of this section, “economic loss” includes, but is not necessarily limited to, pecuniary loss, which is the sum of all amounts paid by the student to the institution, any amounts paid in connection with attending the institution, and all principal, interest, and charges of any kind for a loan incurred by a student to pay these amounts. Economic loss shall also include the amount the institution collected from and failed to refund to third parties on behalf of the student. Economic loss does not include Student Tuition Recovery Fund assessments, unless the student is entitled to a full refund under Section 94919 or 94920 or nonpecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages. Economic loss does not include legal fees, attorney fees, court costs, or arbitration fees unless awarded to the student pursuant to a court or arbitrator award and the student is eligible for payment from the Student Tuition Recovery Fund pursuant to subparagraph (G) of paragraph (2) of subsection subdivision (b). Nothing in this This subdivision shall not prevent the bureau from further defining economic loss to include loss of educational opportunity.
(g) As a condition of the bureau satisfying a student loan obligation on behalf of a Student Tuition Recovery Fund applicant, the loan servicer or debtholder shall submit a letter stating that the servicer or holder will no longer collect on the debt and shall report the debt as “paid in full” to all credit reporting agencies. The bureau shall retain a copy of that letter and provide the original to the applicant.
(h) Except as provided in subdivision (i), the bureau shall require a student seeking reimbursement from the Student Tuition Recovery Fund to file a written application that shall be received by the bureau no later than four years after the date of the action that made the student eligible for recovery from the Student Tuition Recovery Fund.
(i) Any student whose loan is revived by a loan holder loanholder or debt collector after a period of noncollection by the holder or collector may, at any time, file a written application for recovery from the Student Tuition Recovery Fund for the debt that would have been otherwise eligible for recovery under this section.

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REVISIONS:
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