BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 130 (Cedillo)
Hearing Date: 07/11/2011 Amended: 05/02/2011
Consultant: Jacqueline Wong-HernandezPolicy Vote: Education 7-3
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BILL SUMMARY: AB 130 requires, beginning January 1, 2012, that
students who are exempted from paying nonresident tuition by AB
540 (Chapter 814, Statutes of 2001) attending the California
State University (CSU), the California Community Colleges (CCC),
or the University of California (UC) be eligible to receive a
scholarship derived from nonstate funds (received for the
purpose of scholarships) at the segment where the student is
enrolled.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Cost pressure: financial aid Potentially significant
cost pressure General/Federal
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STAFF COMMENTS: This bill may meet the criteria for referral to
the Suspense File.
AB 540 (Firebaugh, 2001) exempts specified California
nonresidents from paying nonresident tuition at UC, CSU and the
CCCs if they have met all of the following:
1) Attended a California high school for three or more years; 2)
graduated from a California high school or attained an
equivalent degree; 3) registered or attended an accredited
California higher education institution not before fall of the
2001-02 academic year; and 4) filed an affidavit, if an alien
without lawful immigration status, stating that the student has
filed an application to legalize his or her immigration status
or will file such an application as soon he or she is eligible
to so do. (Education Code § 68130)
Undocumented students "without lawful immigration status" have
AB 130 (Cedillo)
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been eligible for
in-state tuition in public post-secondary institutions in
California, if they meet the other AB 540 requirements, for the
past decade. However, these "AB 540 students" are not generally
eligible for federal, state, or institution-based financial aid.
AB 540 students can receive private scholarships from
foundations and individuals separate from the institutions they
attend, but are generally not eligible to receive scholarships
or other aid that is provided at the discretion of a UC, CSU, or
CCC campus, regardless of the original funding source.
The provisions of this bill specify that these undocumented CCC,
CSU, and UC students shall be eligible to receive "a scholarship
that is derived from nonstate funds received, for the purpose of
scholarships, by the segment at which he or she is a student."
Allowing AB 540 students to compete for nonstate funded
scholarships is unlikely to have direct state costs. It could,
however, create cost pressure on the UC, CSU, and CCCs by
increasing the number of students eligible for the scholarships.
Private scholarships (e.g. alumni association scholarships or
other endowed awards) administered by public postsecondary
institutions are used as part of a recipient student's total
financial aid package. Currently, the UC and CSU determine a
student's and his or her family's "expected contribution" to the
student's college expenses. Any amount beyond that contribution
is filled by a mix of any of the following: student loans,
parent loans, federal and state aid, institutional aid (from the
campus), and private scholarships. If a student receives a
private scholarship, that amount is functionally deducted from
the amount of need the institution cobbles together the mix of
funds to fill. To the extent that AB 540 students secure
competitive scholarships that would have otherwise been won by
resident students, those resident students will have additional
unmet need, which creates cost pressure on other institutional
aid. The individual institutions creating those students'
financial aid packages could choose to simply issue the student
more loans (at a cost to the student, not the state), but they
could also choose to provide additional institutional aid which
comes from UC and CSU budgets and student fees.
Staff notes that this bill does not define "scholarship" as
distinct from other forms of financial aid, including federal
grants, institutional aid derived from student fees, etc. The
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terms "scholarship" and "financial aid" are often used
interchangeably, and higher education statutes do not define
scholarship. The UC has indicated that it considers scholarships
to only be merit-based awards and funds from gifts and
endowments, as distinct from need-based aid, and would implement
this bill with that interpretation. According to the
Chancellor's Office, CCCs would consider the Community College
Scholarship Endowment, a broader award (derived from private
funds) which gives grants to students primarily based upon their
financial need, to be "scholarships".
The terms "scholarship" and "financial aid" are often used
synonymously. The uncodified legislative findings and
declarations in this bill state the intent of the Legislature
that AB 540 students "shall be eligible for all financial aid."
The bill language, however, states that they would be eligible
for scholarships. The author may wish to clarify which funds the
bill seeks to make available.