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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-21</ns0:ActionDate>
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<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-03-12</ns0:ActionDate>
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<ns0:ActionDate>2026-01-05</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Schiavo</ns0:AuthorText>
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<ns0:Name>Schiavo</ns0:Name>
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<ns0:Title>An act to add and repeal Section 69505.3 of the Education Code, relating to student financial aid.</ns0:Title>
<ns0:RelatingClause>student financial aid</ns0:RelatingClause>
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<ns0:Subject>Student financial aid: Pay it Forward, Pay it Back Pilot Program: study.</ns0:Subject>
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<html:p>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, and independent institutions of higher education, as the 4 segments of
postsecondary education in the state. Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education.</html:p>
<html:p>This bill would require the commission, in consultation with the Legislative Analyst’s Office, to conduct a study of the effects of enacting, in future legislation, a Pay it Forward, Pay it Back Pilot Program
that
would allow students to enroll at a California State University or University of California campus without paying upfront tuition, fees, or room and board, and instead would require participating students to pay, upon graduation or disenrollment and employment, a percentage of their annual adjusted gross income to the state for a number of years, as
specified. The bill would require the commission to submit a report on the study of the pilot program to the Assembly Committee on Higher Education and the Senate Committee on Education on or before September 30, 2027. The bill would make these provisions inoperative on September 30, 2030, and would repeal them as of January 1, 2031.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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<html:p>
(a)
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The Legislature finds and declares all of the following:
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<html:p>
(1)
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The cost of attending the University of California and the California State University remains a barrier to accessing postsecondary education, with average annual tuition and campus fees of $16,634 and $8,508 at the University of California and the California State University, respectively.
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<html:p>
(2)
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Due to postsecondary education becoming increasingly unaffordable, many students are forced to borrow money to finance their postsecondary education.
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(3)
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On average, students graduating with a baccalaureate degree in California borrow $21,125 to finance their undergraduate education.
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<html:p>
(4)
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As of 2020, Californians collectively owed over $142,000,000,000 in student loan debt, with federal loans making up the majority of that debt.
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(b)
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It is the intent of the Legislature that revenue received
from a Pay it Forward, Pay it Back Pilot Program is managed by the state.
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<html:p>
(c)
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It is further the intent of the Legislature that a Pay it Forward, Pay it Back Pilot Program does not replace existing forms of financial aid, including grants, scholarships, and loans, but would instead serve as an additional option for students to finance their education.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 69505.3 is added to the
<ns0:DocName>Education Code</ns0:DocName>
, to read:
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<ns0:Num>69505.3.</ns0:Num>
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(a)
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For purposes of this section, the following definitions apply:
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(1)
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“Campus” means a University of California, California State University, or California Community College campus, or an independent institution of higher education.
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(2)
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“Social impact bond” means an agreement between a nongovernmental entity and a campus under which a student’s cost of attendance is paid for by the nongovernmental entity in exchange for a security interest in the payments made by the student, as specified in the contract described in subparagraph (C) of paragraph (2) of subdivision (b).
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(b)
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(1)
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The
commission, in consultation with the Legislative Analyst’s Office, shall conduct a study of the effects of enacting, in future legislation, a Pay it Forward, Pay it Back Pilot Program.
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(2)
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The study shall evaluate a pilot program described in paragraph (1) that does all of the following:
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(A)
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Is designed to provide an additional option for students to finance the costs of their education, including the costs of upfront tuition, fees, and room and board, for enrollment at a campus.
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(B)
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Allows a student who is admitted to a campus and is a California resident, as determined by the campus, to enroll at the campus without paying upfront tuition, fees, or room and board.
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<html:p>
(C)
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Requires, in lieu of paying upfront tuition, fees, or room and board, a student
described in subparagraph (B) to sign a contract to pay, upon graduation, 2 to 4 percent, inclusive, of the student’s annual adjusted gross income to the state for a specified number of years, as determined in paragraph (2) of subdivision (d).
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<html:p>
(c)
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The pilot program described in paragraph (1) of subdivision (b) may vary by campus in regard to each of the following:
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<html:p>
(1)
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The total cost of attendance at the campus to be reimbursed by a student.
</html:p>
<html:p>
(2)
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The portion of the total cost of attendance to be paid by the state.
</html:p>
<html:p>
(3)
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The number of years that a student would be required to make payments, as specified in the contract described in subparagraph (C) of paragraph (2) of subdivision (b).
</html:p>
<html:p>
(4)
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The
percentage of annual adjusted gross income that would be required to be paid by a student, as specified in the contract described in subparagraph (C) of paragraph (2) of subdivision (b).
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(d)
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The study of the pilot program shall do all of the following:
</html:p>
<html:p>
(1)
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Identify at least one campus of the University of California, one campus of the California State University, one campus of the California Community Colleges, and one independent institution of higher education, as defined in Section 66010, to participate in the pilot program. The campuses identified pursuant to this paragraph shall be regionally diverse.
</html:p>
<html:p>
(2)
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Based on current research, and projections of state subsidies, specify the number of years that a student would be required to make payments and the percentage of a student’s annual adjusted gross income to be
paid, upon graduation, under a contract described in subparagraph (C) of paragraph (2) of subdivision (b) at each participating campus.
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(3)
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Identify an immediate source of funding for the first 15 to 20 years, inclusive, of the pilot program, which would include establishment of a revolving fund for the deposit of payments made by students under the pilot program, and consider the possibility of using social impact bonds as an immediate funding source.
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(e)
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(1)
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The commission shall submit a report on the study of the pilot program to the Assembly Committee on Higher Education and the Senate Committee on Education on or before September 30, 2027.
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<html:p>
(2)
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A report submitted pursuant to paragraph (2) shall be submitted in compliance with Section 9795 of the Government Code.
</html:p>
<html:p>
(3)
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Pursuant to Section 10231.5 of the Government Code, this section shall become inoperative on September 30, 2030, and, as of January 1, 2031, is repealed.
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