California Enacts Law Preventing Collectors From Reporting School-Related Debts To Credit Bureaus

California Gov. Jerry Brown has signed a bill into law that will prevent schools from withholding diplomas from students who have unpaid school debts and will prohibit schools and school boards from penalizing the parents of students for failing to pay their school debts.

The bill — the Primary Education Fair Debt Collection Act — passed both houses of the California legislature earlier this year.

Under the new law, which will go into effect on Jan. 1, 2019, debt collectors are prohibited from reporting unpaid school-related debts to any credit reporting agency. Schools are also barred from selling unpaid debts to any third parties. The law does not apply to debts incurred through acts of vandalism or to cover the cost of replacing books or other supplies that are loaned to a student and not returned to the school.

“Going after parents who are struggling financially or don’t know they even owe money to a school is unproductive and harmful,” said Assemblywoman Lorena Gonzalez Fletcher [D-San Diego], who introduced the proposed legislation. “Penalizing kids for their families’ inability to pay a bill is downright cruel.”

Gonzalez Fletcher introduced the bill after hearing that the San Diego Unified School District had placed collection accounts for 380 parents with collection agencies for overdue bus fees.

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