BILL ANALYSIS SB 1460 Page 1 Date of Hearing: June 22, 2010 ASSEMBLY COMMITTEE ON HIGHER EDUCATION Marty Block, Chair SB 1460 (Cedillo) - As Amended: June 2, 2010 SENATE VOTE : 24-9 SUBJECT : Student financial aid: eligibility: California Dream Act of 2010. SUMMARY : Establishes, beginning July 1, 2011, the California Dream Act for the purposes of expanding eligibility for state-administered financial aid to students exempted from paying nonresident tuition through specified provisions of law [created by AB 540 (Firebaugh), Chapter 814, Statutes of 2001] and extends the AB 540 nonresident tuition exemption to graduates of adult education and technical schools, provided the individual spent at least one year in a California high school. Specifically, this bill : 1)Makes AB 540 students eligible to apply for and participate in any state-administered student financial aid program, including institutional aid, to the full extent permitted by federal law, beginning July 1, 2011. 2)Makes AB 540 students eligible to apply for and participate in the California Community Colleges (CCC) Board of Governors (BOG) fee waiver program, beginning July 1, 2011, and declares this provision to be consistent with specified immigration law. 3)Requests the University of California (UC) Board of Regents and requires the California State University (CSU) Board of Trustees and the CCC BOG, beginning July 1, 2011, to establish procedures and forms to enable AB 540 students to apply for and participate in all student aid programs administered by these segments, to the full extent permitted by federal law. 4)Makes, beginning January 1, 2011, AB 540 students eligible to receive a scholarship that is derived from nonstate funds received for the purpose of scholarships. 5)Expands, beginning July 1, 2011, the AB 540 exemption to include attendance and graduation from California technical SB 1460 Page 2 and adult schools, provided the student attended a California high school for at least one year. 6)Finds and declares that this bill is a state law within the meaning of subsection (d) of Section 1621 of Title 8 of the United States Code. EXISTING LAW : 1)Provides for a variety of student financial aid programs including the Cal Grant programs, the CCC BOG fee waiver, a variety of systemwide and/or campus-specific grant and/or loan programs, and other state-administered financial aid programs. Participation in these programs is, among other criteria, typically needs-based and limited to California residents. 2)Exempts specified California nonresidents from paying nonresident tuition at UC, CSU, and CCC, also known as the AB 540 nonresident tuition waiver, if they meet all of the following: a) Attended a California high school for three or more years; b) Graduated from a California high school or attained an equivalent degree; c) Registered or attended an accredited California higher education institution beginning of after fall of the 2001-02 academic year; and, d) If an alien without lawful immigration status, have filed an affidavit stating that the student has filed an application to legalize his or her immigration status or will file such an application as soon as he or she is eligible to so do. 3)Designates secondary schools as high schools, technical schools, and adult schools. FISCAL EFFECT : The Senate Appropriations Committee estimates costs of more than $40 million per year in additional financial aid awards when fully implemented. COMMENTS : Background : Students who qualify for the AB 540 SB 1460 Page 3 nonresident tuition waiver are typically aliens without lawful immigration status or United States citizens or Permanent Residents who are residents of another state. Martinez v. Regents : In 2005, Martinez v. Regents of the University of California et al. was filed against UC, CSU, and CCC, challenging the legality of AB 540. In October 2006, a California Superior Court ruled in favor of AB 540, stating its provisions were in accordance with federal law. In September 2008, a California Court of Appeal overturned the Superior Court's ruling in Martinez v. Regents and held that California state law authorizing in-state tuition to "illegal aliens" is preempted by federal immigration law and, thus, void. The decision was appealed, and in December 2008, the California Supreme Court agreed to review the case. It is unclear when the Supreme Court will begin its review. The AB 540 exemption remains in effect at UC, CSU, and CCC while the appeal is pending review. Need for this bill : Federal law prohibits undocumented students from receiving any aid from the federal government, such as Pell Grants and federal student loans, and prevents states from offering public benefits to undocumented students unless the state passes a statute expressly qualifying undocumented students for such benefits. The California Student Aid Commission estimates the nine-month cost of education (which includes books, supplies, food, rent, transportation, and other miscellaneous items) in 2010-11 for California students living off-campus to be $16,497, in addition to systemwide and campus fees. What aid would be available to AB 540 students ? This bill provides eligibility for state-administered financial aid programs, including Cal Grant Entitlement awards, Cal Grant Competitive awards, CCC Transfer Entitlement awards, Cal Grant C awards, as well as Assumption Program of Loans for Education awards, State Nursing Assumption Program of Loans for Education awards, Child Development grants, and Law Enforcement Personnel Dependents grants. In addition, AB 540 students would be eligible for UC- and CSU-administered need-based financial aid programs (which are funded by returning, on average, one-third of student fees to the institutional aid programs), as well as CCC fee waivers. How many students would be affected ? According to the segments, SB 1460 Page 4 AB 540 students make up less than 1% of enrollment at all three systems, as follows: UC enrolled 1,941 students (3/10% of the student body and 68% of the AB 540 students were U.S. citizens or "documented" immigrants); CSU enrolled 3,633 AB 540 students (less than 1% of the student body); and CCC enrolled 34,057 AB 540 students (less than 1% of the student body). CSU and CCC do not identify the immigration status of AB 540 students but believe that undocumented students make up a larger proportion of these students than they do at UC. Adding adult schools : Current law defines a secondary school as a high school, adult school or technical school. Since AB 540 considers only high school attendance in order to qualify for the nonresident tuition waiver, high school students who combine high school attendance with attendance at an adult or technical school may jeopardize their eligibility for the nonresident tuition exemption if their attendance at the high school is for less than three years. This bill addresses this situation by allowing two of the three years of required attendance to be at an adult or technical school, provided the student attends a California high school for one year. Private aid administration : This bill also includes a provision to require UC, CSU, and CCC to administer private financial aid awards. According to the author, this section is intended to assist eligible students in obtaining some type of aid-while the other provisions that would allow them significantly more financial aid go into effect. In administering private scholarships and aid, the segments comply with the provisions determined by the entity/individual who establishes the scholarship fund. Unless otherwise specified, AB 540 students should be eligible for private scholarships administered by the segments. Arguments in support : The author states that undocumented students cannot finance their college education because they are ineligible for federal grants and loans and are unable to legally work. Supporters argue that, in light of recent reports highlighting the need for 1 million more workers with college degrees to sustain our economy, the state cannot afford to exclude people or prevent students from attending college. Arguments in opposition : Opponents argue that the state has limited funds available to provide financial aid, this bill would encourage illegal immigration, and increasing financial SB 1460 Page 5 aid benefits will place greater burdens on California taxpayers when we are facing a $20 billion structural budget deficit. UC amendment request : UC has requested an amendment to indemnify UC, CSU, and CCC against legal damages resulting from a successful legal challenge should this bill be enacted. Following enactment of AB 540, AB 1543 (Firebaugh), Chapter 19, Statutes of 2002, was enacted to indemnify UC, CSU, and CCC from legal damages that could result from a successful challenge to AB 540. Previous legislation : Since 2003, the Legislature has considered several bills that were substantively similar to this measure, including SB 160 (Cedillo) of 2005 and SB 1 (Cedillo) of 2007, both of which were almost identical to this measure and were ultimately vetoed by the Governor. The most recent similar bill to go before the Governor was SB 1301 (Cedillo) of 2008; the Governor's veto message read: I share the author's goal of making affordable education available to all California students, but given the precarious fiscal condition the state faces at this time, it would not be prudent to place additional demands on our limited financial aid resources as specified in this bill. For this reason, I am unable to sign this bill. In addition, SB 160 (Cedillo) of 2009, AB 2083 (Nunez) of 2008, and SB 160 (Cedillo) of 2007 contained similar provisions to this bill, and all were ultimately held under submission in the Senate Appropriations Committee. REGISTERED SUPPORT / OPPOSITION : Support American Civil Liberties Union California Catholic Conference California Communities United Institute California Federation of Teachers California Postsecondary Education Commission California State University California Teachers Association Community College League of California Hispanic Association of Colleges and Universities Los Angeles Community College District SB 1460 Page 6 Los Angeles Unified School District Rio Hondo Community College District San Jose-Evergreen Community College District University of California Student Association Opposition Concerned Women for America Howard Jarvis Taxpayers Association Analysis Prepared by : Sandra Fried / HIGHER ED. / (916) 319-3960