SB 1289 Summary

• Requires public, private, and independent postsecondary institutions (except California Community Colleges) to disclose in financial aid materials that federal loans offer flexible repayment options and income-based forgiveness benefits that private loans are not required to provide.

• Mandates institutions distinguish private loans from federal loans in financial aid award packages by stating whether interest rates are fixed or variable and explaining that private loan rates depend on credit rating and can fluctuate with market conditions.

• Requires institutions providing private loan lender lists to include general information about available loans, disclose the basis for each lender's inclusion, and inform students they can choose any lender.

• Applies to University of California only if the Regents adopt a resolution making it applicable; California Community Colleges are authorized and requested to comply voluntarily.

• Effective January 1, 2013 for newly printed financial aid materials, with allowance for using pre-2013 printed materials if accompanied by required disclosure inserts.