SENATE BILL REPORT

SB 5100

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Summary of Bill

Directs each institution of higher education to take reasonable steps to ensure each student participates in a live financial literacy seminar.
Encourages institutions to present seminars as early as possible in the academic year.

Background: In 2012 the Legislature directed the Office of Student Financial Assistance, within the Washington Student Achievement Council (WSAC), to provide online financial aid counseling curriculum to all higher education institutions participating in the State Need Grant (SNG) program. The curriculum must include, but not be limited to:

an explanation of SNG program rules;
information on scholarships and work study options;
an overview of student loan options and consequences;
an overview of financial literacy;
average salaries for a range of jobs;
perspectives from students who are or were recipients of financial aid, including loans; and
contact information for local financial aid resources and the Federal Student Aid Ombudsman’s Office.

The higher education institutions are required to take reasonable steps to ensure that each SNG recipient receives information by directly referencing or linking to a website on the Conditions of Award statement provided to each recipient. Institutions may also require non-SNG students to participate in all or portions of the counseling. The curriculum is available on WSAC's Ready, Set, Grad website. Additionally, federal law requires a school to ensure that federal loan borrowers fulfill entrance and exit counseling requirements in person, by an audio-visual presentation, or electronically.

Summary of Bill: By the 2017-18 academic year, each institution of higher education must take reasonable steps to ensure each enrolled student participates in a live financial literacy seminar. The seminar must include information being provided to SNG recipients under current law.

The institutions are encouraged to present the seminars during student orientation or as early as possible in the academic year.

Staff Summary of Public Testimony: PRO: Broadly speaking, there is clearly a need for increasing the level of financial literacy amongst students who take out loans to pay for college. The bill is intended to give students an opportunity to see what lies ahead before they sign on the dotted line. A live financial seminar is a good first step in helping college students make smarter financial decisions and allows students to ask questions. In-person seminars are an important tool in making students more aware of the ramifications of the financial choices they make.

OTHER: As the legislation moves forward, a one time seminar for incoming students cannot be the "end all be all". This is something that needs to start in the K-12 system and with parents and families. Institutions would like to have maximum flexibility to implement, and be able to include pre-existing programs.