0989 Educational Facilities Authority
0945 - STUDENT LOAN PROGRAMS
Pursuant to Chapter 917, Statutes of 1995, effective January 1, 1996, the California Student Loan Authority (CSLA) was abolished, and the assets, obligations, and functions were transferred to CEFA. The purpose of the CSLA was to purchase federally reinsured educational loans from eligible lending institutions by issuing tax-exempt revenue bonds, thereby expanding student access to such low-cost federally reinsured loans. Pursuant to Chapter 917, the functions were expanded under CEFA to include direct student lending from proceeds of tax-exempt revenue bonds issued by CEFA. CEFA issued a total of $265.4 million in bonds, and as of June 30, 2014, there were no bonds outstanding. Bonds for this purpose are subject to the state's ''private activity'' bond ceiling, as specified in the Federal Tax Reform Act of 1986 and allocated by the California Debt Limit Allocation Committee (CDLAC).
Chapter 318, Statutes of 2005, added the requirement that not-for-profit corporations must seek approval from CEFA before applying for an allocation of a portion of the state's annual private activity volume cap from CDLAC for the purposes of issuing Qualified Scholarship Funding Bonds for Student Loan Programs. This requirement does not pertain to entities that applied to CDLAC prior to January 1, 2006. Bonds issued for student loans are not a debt, liability, or a pledge of the full faith and credit of the taxing power of the state or any of its political subdivisions. This is a trust activity and all operating expenses must be paid from revenues and other moneys available to CEFA.
Chapter 34, Statutes of 2014, provided that, for purposes of the California Educational Facilities Authority Act, "student loan" may also mean a loan assumption pursuant to the Assumption Program of Loans for Education (APLE) program administered by the California Student Aid Commission. The Budget Act of 2014 appropriated six million dollars from the CSLA fund for the purpose of supporting the APLE program.
Chapter 816, Statutes of 2014, established the California Student Loan Refinancing Program with the goal of helping eligible college graduates to refinance student loan debt at favorable rates by creating a revolving fund so that additional refinancing may occur to help more qualified borrowers, as defined, through the creation of a loss reserve account. The bill authorizes the authority to contract with any financial institution, as defined, for the purpose of allowing the financial institution to participate in the program and establishes eligibility requirements for qualified borrowers to participate in the program.