SECTIONS 69503-69509.5 - California Statutes

EDUCATION CODE

SECTION 69503-69509.5

69503. In enacting this article, the Legislature finds and
declares:
(a) The awarding of financial assistance to needy students by
state-funded student aid programs appropriately considers family
income in determining an applicant's financial need.
(b) Claiming of financial independence by students whose parents
are in fact able to provide financial assistance unfairly redirects
limited student aid dollars from students with legitimate financial
need.
(c) Definitions and procedures by which a student may declare
financial independence from the student's parents differ among
state-funded student aid programs and among institutions. A statutory
definition of when a student's eligibility for need-based,
state-funded grants is to be determined without regard to his or her
parents' financial circumstances will reduce confusion and ensure
that such grants are allocated to students on the basis of a more
equitable evaluation of their financial need.

69504. The provisions of this article apply to all need-based
student grants that are funded by the state or a public postsecondary
educational institution. Nothing in this article shall be construed
as attempting to regulate the selection or awarding of scholarships
to applicants by the state or a public postsecondary educational
institution where the scholarships are funded and awarded pursuant to
the terms of a private endowment, trust, or similar instrument.

69505. (a) To the extent that federal financial analysis
methodology incorporates this exemption, income received as
reparation payments paid pursuant to federal law on or after October
1, 1990, for the purpose of redressing the injustice done to United
States citizens and resident aliens of Japanese ancestry who were
interned during World War II shall not be considered in determining
an applicant's financial need.
(b) To the extent that federal financial analysis methodology
incorporates this exemption, income received as reparation payments
paid by the Canadian government for the purpose of redressing the
injustice done to persons of Japanese ancestry who were interned in
Canada during World War II shall not be considered in determining an
applicant's financial need.

69506. (a) The methodology set forth in federal law or regulation
shall serve as the formula for determining the expected family
contribution of students seeking any state-funded financial
assistance.
(b) For the purposes of determining the dependent and independent
status of students, the definition set forth in the federal law or
regulation shall serve as the definition for students seeking any
state-funded financial assistance.

69506.3. It is the intent of the Legislature that the commission,
commencing with the 1991-92 academic year, shall implement the income
verification process authorized in Section 19286.9 of the Revenue
and Taxation Code, and develop procedures which allow postsecondary
educational institutions to use information obtained through that
process.

69506.5. Notwithstanding Section 69506, the Student Aid Commission
may, whenever it is determined to be in the best interest of the
state, develop and adopt regulations that modify the methodology set
forth in federal law or regulation for determining the expected
family contribution of students seeking any state-funded financial
assistance or the federal definition for establishing the dependent
and independent status of students seeking any state-funded financial
assistance. It is the Legislature's intent that these regulations
promote consistency between federal and state standards, encourage
the maximum contribution from parents while being sensitive to
individual student financial and personal circumstances, and
encourage a simple financial aid application process.
(a) The regulations developed pursuant to this section shall be
adopted as Student Aid Commission regulations in accordance with the
provisions of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.
(b) Prior to adopting or amending regulations pursuant to this
section, the commission shall conduct, and make public, a full
analysis which includes at least an examination and explanation of
the cost of the change, the effect on student applicant and recipient
eligibility and award levels, and the effects of implementing the
criteria on those programs administered by the commission.
(c) Not later than July 1 of the year following any modifications
to the methodology for determining expected family contribution or
the federal definition of student dependence or independence made
pursuant to this section, the commission shall report to the Governor
and the Legislature the impact of the changes on those programs
administered by the commission.

69507. In instances where an applicant does not meet the criteria
specified in Section 69506, and the parents refuse to provide
financial information, the student may not be considered for a grant.
In those instances, however, the student may be considered for a
loan or employment aid to the extent that such are available on the
basis of the resources of the student and the student's spouse, if
any.

69507.5. (a) Except as provided in subdivision (b), no student
shall receive a grant or fellowship administered by the Student Aid
Commission if he or she has previously defaulted on any student loan,
or has failed to repay a federal or state student grant where
required to do so.
(b) If a student has made satisfactory arrangements to repay a
default on a previous student loan, or to repay grant funds where
required to do so, the student may be eligible to receive a grant or
fellowship administered by the Student Aid Commission.

69508. When federal regulations defining the financial independence
of students are altered, the Student Aid Commission shall as soon as
possible report to the Legislature on what changes are necessary to
conform this article to federal standards.

69509. (a) Upon the commencement of any cause of action, including
an emergency action, by the commission against an educational
institution in connection with the Federal Family Education Loan
Program or other state student financial aid program, the director of
the commission may order that all or any part of state financial aid
funds scheduled to be delivered to that institution by the
commission, whether payable to that institution or its students, be
withheld from the institution and deposited in a separate state
account. However, in order to alleviate the financial hardships
imposed upon students by withholding the delivery of state financial
aid funds to an educational institution, the director of the
commission, at any time after the initial withholding, may release
state financial aid funds to these students, giving first priority to
the release of funds for subsistence payments.
(b) The director shall give notice to the institution and affected
students of any action taken pursuant to subdivision (a).
(c) The director, upon the termination of any action taken
pursuant to subdivision (a), shall order the disposition of the
withheld funds in a manner consistent with the outcome of the cause
of action and in the best interest of the affected students. The
director may order that the funds be withheld from an institution
permanently, in which case those funds shall be returned to the state
fund or account from which it originated, for subsequent use by the
commission.
(d) "Cause of action" and "emergency action," for the purposes of
this section, mean those actions described in Sections 30302 and
30304 of Title 5 of the California Code of Regulations, and as those
sections may subsequently be amended, concerning the limitation,
suspension, and termination of eligibility under the Federal Family
Education Loan Program.

69509.5. (a) Within five days of the commencement of any cause of
action, including an emergency action, by the commission against a
private postsecondary educational institution in connection with the
Federal Family Education Loan Program, the director of the commission
shall give notice, in writing, of the commencement of the action to
the Council for Private Postsecondary and Vocational Education.
(b) "Cause of action" and "emergency action" for the purposes of
this section, mean those actions described in Sections 30302 and
30304 of Title 5 of the California Code of Regulations, and as those
sections may subsequently be amended, concerning the limitation,
suspension, and termination of eligibility under the Federal Family
Education Loan Program.
(c) The director of the commission, or his or her designee, shall
give written notice to the Council for Private Postsecondary and
Vocational Education when, in the administration of a program review
concerning any private postsecondary educational institution's
participation in the Cal Grant Program or the Federal Family
Education Loan Program, evidence indicates that a private
postsecondary educational institution is in violation of the
standards adopted by its responsible accrediting agency or when it is
in violation of Section 94800, Sections 94811 to 94825, inclusive,
or Section 94930.
(d) The director of the commission may develop selection criteria
for the scheduled review of any private postsecondary or vocational
educational institution.
(e) This section shall become operative on January 1, 1997.