Institutional Debt Transparency Act.

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.