Institutional Debt Transparency Act.

Plain English Breakdown

The official source material does not provide specific details about the consequences if colleges do not follow the new rules, implementation costs, or exact future changes to reporting requirements.

Institutional Debt Transparency Act

This act stops colleges from charging higher fees or preventing students from enrolling if they owe money, and requires schools to report debt information.

What This Bill Does

• Forbids colleges from charging more tuition or fees because a student owes institutional debt.
• Does not allow colleges to stop current or former students from reenrolling unless the college follows certain rules, like giving an exemption and payment plan options.
• Requires colleges to create written policies for collecting debts and share these with affected students.
• Prohibits colleges from taking unfair actions when trying to collect institutional debt.
• Makes public institutions report details about their institutional debts every two years starting in 2027.

Who It Names or Affects

• Students who owe money to educational institutions.
• Colleges and universities that receive state funding or are part of the California system.

Terms To Know

Institutional debt

Money a student owes to an educational institution, like unpaid tuition or fees.

Biennial basis

Every two years.

Limits and Unknowns

• The bill does not specify what happens if colleges do not follow the new rules.
• It is unclear how much it will cost to implement these changes and who will pay for them.
• Details about reporting requirements may change based on further regulations or guidelines.

Official Summary Text

AB 850, as introduced, Pacheco.
Institutional Debt Transparency 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.
This bill would prohibit an institution of higher education, as defined, from charging a higher tuition or fee on the grounds that a student owes an institutional debt, as defined. The bill would also prohibit an institution of higher education from preventing a current or former student from reenrolling or registering at the institution on
those grounds unless the institution complies with specified conditions, including, among other conditions, that the institution grants a one-time exemption from the enrollment or registration hold and a specified opportunity for payment or entry into a payment plan, as provided. The bill would require an institution of higher education to establish a written policy defining standards and practices for the collection of institutional debt, as provided, and to provide the written policy to current or former students that owe an institutional debt. The bill would prohibit an institution of higher education from taking specified actions when collecting an institutional debt. The bill would require the Board of Governors of the California Community Colleges and the Trustees of the California State University, and request the office of the President of the University of California, to require each public institution to report, beginning on or before January 1, 2027, using a specified uniform format and on a
biennial basis, specified information regarding the number and dollar amount of institutional debts at each institution. The bill would require, beginning on or before July 1, 2029, that biennial report to include additional specified information. By imposing new duties on community college districts, the bill would constitute a state-mandated local program.
The bill would make its provisions severable.
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.

Current Bill Text

Download Bill PDF