With the passing of the Education Debt Collection Practices Act in October, Santa Monica College (SMC) administrators are left with fewer options for collecting debt from students. According to SMC Vice President of Business and Administration Chris Bonvenuto, student bad debt has doubled over the last four years.

“Student bad debt happens when a student signs up for classes and hits the postpone button,” said Benvenuto at the Sept. 3 SMC Board of Trustees Meeting. The data below shows the trend:

The most recent increase, from 2017-2018 to 2018-2019, is $382,362. “The important thing to remember is that for this entire period the District budgeted for approximately $800,000 in student bad debt,” said Bonvenuto in an email to the Corsair. “In 2018-2019 the amount budgeted was increased by [approximately] 1.3 million to match the new reality of the student bad debt amount.”

This “new reality” may be a harsher one for schools collecting debt. The Educational Debt Collection Practices Act, formerly AB1313, makes it illegal to withhold a transcript from a student in order to collect fees, mistreat a transcript request due to outstanding fees, or use a transcript as a means of debt collection from a student.

Prior to this law, signed by Governor Newsom on Oct. 4, holding transcripts to collect fees was one of the primary means of collection.

As the new law will make it more difficult to collect bad debt from students, Benvenuto plans to carve out more of the yearly budget specifically to cover the debt. “Normally we budget 700,000 dollars for bad debt in that area. Two years ago, that number spiked to about 1.7 million,” continued Benvenuto at the Board meeting. “This year, I'm proposing to increase the budget to 2 million dollars. No longer can I assume that number will drop to 700,000 again.” That 2 million dollar figure represents about 1.1 percent of the school district’s budget.

On the future collection of debt, Benvenuto said, “That’s currently under discussion. We’re trying to keep in mind the needs of the students, while being fiscally responsible.” Benvenuto also added that to his knowledge, SMC is the only school in the area that allows students the option to postpone payment. On the plans to mitigate future debt increases, Benvenuto said “that, too, is currently under discussion.”

The Educational Debt Collection Practices Act applies to students at community colleges and universities throughout California. The next SMC Board of Trustees meeting is Jan. 21, 2020 at 7 p.m. in the Board Room in Business 117.

SMC Administrators Stymied by Student Debt Law