Student loans: public service educational loan forgiveness program.

Plain English Breakdown

The exact details of how the fund will be managed and utilized for supporting the program are not specified in the official source.

Student Loan Forgiveness Program

This law establishes a program that forgives up to $10,000 of student loans for people who work in public service jobs for at least ten years and have made continuous payments on their debt.

What This Bill Does

• Creates a loan forgiveness program where eligible workers can have up to $10,000 of their student debt forgiven.
• Requires applicants to be full-time employees of state agencies, local government offices, or nonprofits for at least ten years and to provide proof of continuous payments on their debt.
• Needs proof from the applicant's supervisor that they are in good standing with their employer under penalty of perjury.
• Establishes a fund where donations can go to support this loan forgiveness program.
• Requires annual reports on the program’s progress and any issues like fraud.

Who It Names or Affects

• People who work for state agencies, local government offices, or nonprofits after graduating from college.
• The Student Aid Commission which will run the program.
• Local governments that might have to follow new rules about loan forgiveness.

Terms To Know

Public Service

Work for a government agency, local office, or nonprofit organization.

Perjury

Lying under oath when giving testimony in court or signing documents like the one needed to apply for loan forgiveness.

Limits and Unknowns

• The program will only work if the state gives money to pay for it each year.
• Local governments might have to follow new rules but won't get extra money from the state to do so.
• Not everyone who works in public service will qualify for loan forgiveness.

Official Summary Text

AB 700, as introduced, Caloza.
Student loans: public service educational loan forgiveness program.
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.
The federal Public Service Loan Forgiveness Program was created in 2007 by the federal College Cost Reduction and Access Act and requires certain student loans to be forgiven after 10 years of public service, as provided.
This bill would require the commission to establish a public service educational loan forgiveness program of up to $10,000 per applicant, as specified. The bill would require applicants for the program to have made continuous payments on their debt and be active employees of a state agency, local government agency, or nonprofit organization, as defined, who have
served for a minimum of 10 years. The bill would require an applicant to provide proof of full-time employment and for the applicant’s supervisor, manager, or a nonprofit organization board member to attest, under penalty of perjury, that the applicant is in good standing with the respective agency or nonprofit organization for which they serve. By expanding the crime of perjury, and to the extent that the bill would otherwise impose additional duties on local government officials, the bill would impose a state-mandated local program. The bill would create the Public Service Education Loan Forgiveness Fund and authorize the commission to accept donations for purposes of the program and deposit them in the fund. The bill would require the commission to monitor the program for fraud and to annually report to the Legislature on the program, as specified. The bill would make the operation of the program contingent upon an appropriation in the annual Budget Act or another statute.
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 with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Current Bill Text

Download Bill PDF