(a) It is the intent of the Legislature that, each fiscal year, funds shall be appropriated in the annual Budget Act to participating institutions for purposes of the DREAM Program.

(b) The annual Budget Act shall allocate funding to participating institutions based on the number of eligible students attending the institution who applied for student financial aid pursuant to Section 69508.5 the prior academic year.

(c) (1) Each participating institution shall deposit funds appropriated pursuant to subdivision (a) in a DREAM revolving fund established by each institution, subject to subdivision (e). DREAM loans shall be awarded from, and DREAM loan repayments shall be deposited into, these revolving funds.

(2) In accordance with subdivision (d), participating institutions shall make DREAM loan repayment revenue available to offset state and institutional contributions to the DREAM loan program so that, as much as practicable, the respective annual costs to the state and to participating institutions shall be reduced equally.

(d) At the start of each academic year, before DREAM loans for that academic year are awarded, each participating institution shall contribute discretionary funds into its DREAM revolving fund so that the sum of the institution’s contribution of funds and the institution’s share of DREAM loan repayments equals or exceeds 50 percent of all funds in the institution’s DREAM revolving fund for each year of an institution’s participation.

(e) A participating institution shall not receive any additional state funds if the receipt of these funds would reduce the percentage of the DREAM revolving fund derived from the sum of the institution’s contribution of funds and DREAM loan repayments to less than the specified percentage of all funds in the institution’s DREAM revolving fund as described in subdivision (d).

(f) (1) In the event that an institution terminates its participation in the DREAM Program, the institution shall continue to service DREAM loans, collect DREAM loan repayments, and perform all due diligence required by the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.) until the last students at that institution issued loans under the DREAM Program prior to the institution terminating its participation have repaid their loans.

(2) An institution described in paragraph (1) that terminates its participation in the DREAM Program shall annually repay all funds provided by the state as the institution collects DREAM loan repayments.

(g) (1) The California State University and the University of California shall annually report to the Legislature as part of their respective annual financial aid reports the dollar amount of each DREAM loan awarded and number of students for whom a DREAM loan was awarded that academic year.

(2) Each institution, including an institution described in subdivision (f), shall annually report all of the following:

(A) The total amount of funding in the institution’s DREAM revolving fund.

(B) The annual amount contributed by the state to the institution’s DREAM revolving fund.

(C) The annual amount contributed by the institution to the institution’s DREAM revolving fund.

(D) The annual administrative costs of the DREAM Program at the institution.

(Added by Stats. 2014, Ch. 754, Sec. 3. (SB 1210) Effective January 1, 2015.)