Bill
AB 700
Establishes a California Public Service Education Loan Forgiveness Fund offering up to $10,000 per eligible public service employee with 10+ years, funded by donations and state ap
Status: In committee (Hearing postponed). Introduced February 14, 2025. Referred to the Committee on Higher Education; hearing initially scheduled, later postponed as of April 22, 2025.
What the bill would do
- Establish a California public service educational loan forgiveness program as an alternative pathway if the federal Public Service Loan Forgiveness (PSLF) program is repealed or becomes obsolete.
- Create the Public Service Education Loan Forgiveness Fund and authorize the California Student Aid Commission (CSAC) to administer the program and accept donations to fund it.
- Authorize awards of up to $10,000 per eligible applicant, subject to available funds and guidelines.
Key provisions and mechanics
- Eligibility and entitlement
- Applicants must be active employees of a state agency, local government agency, or a qualifying nonprofit organization.
- Must have served at least 10 years in these roles and must have made continuous loan payments.
- Applicants must submit proof of full-time employment and obtain an attestation (under penalty of perjury) from a supervisor, manager, or nonprofit board member that the applicant is in good standing.
- The program awards a grant not to exceed $10,000, limited to amounts that are deemed reasonable for the applicant’s educational loans.
- Administration and guidelines
- CSAC must develop guidelines and implementation materials, all of which must be posted on CSAC’s website.
- The commission may monitor for fraud, deny applications, pursue recovery of funds if fraud or error is discovered, and deposit recovered funds back into the fund.
- Funding and administration
- Establishes the Public Service Education Loan Forgiveness Fund.
- Donations to the fund are allowed; funds are available upon appropriation by the Legislature.
- CSAC may use no more than 5% of funds for administrative purposes.
- Reporting and accountability
- The CSAC must annually report to the Legislature (by January 1 each year) on: the number of awardees, the fund balance, and estimated needs to sustain and grow the program; recommendations to improve the program are allowed if aligned with its intent.
- Contingencies and definitions
- The program’s operation is contingent on an appropriation (Budget Act or other statute).
- Defines “local government agency” and “nonprofit organization” (as a 501(c)(3) public benefit nonprofit) and adopts the same definitions for “state agency.”
- Mandates and reimbursement
- The bill states that no reimbursement is required for certain costs for local agencies or school districts because it creates a new crime/changes penalties in a way that qualifies for a no-reimbursement provision; any other mandated costs would be reimbursed if determined by the Commission on State Mandates.
Potential impact
- Creates a state-funded, donor-supported loan forgiveness option for public-service workers with 10+ years of service, potentially complementing or replacing PSLF if federal changes occur.
- Could influence recruitment and retention of state, local government, and nonprofit staff with student loan debt.
- Imposes additional administration and verification duties on local governments and nonprofit organizations (noted as a potential state-mandated local program due to penalties under penalty of perjury).
Note: The bill is currently in committee with a hearing postponed; its provisions would take effect only upon appropriation and subsequent regulatory implementation.
Compiled from official sources — confirm details with the bill’s official record.
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