BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 131
                                                                  Page  1

          Date of Hearing:   March 15, 2011

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                                 Marty Block, Chair
                    AB 131 (Cedillo) - As Amended:  March 8, 2011
           
          SUBJECT  :   Student financial aid.

           SUMMARY  :   Expands eligibility for state-administered financial 
          aid to students exempted from paying nonresident tuition through 
          specified provisions of law Ýcreated by AB 540 (Firebaugh), 
          Chapter 814, Statutes of 2001].  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, 2012.

          2)Requires the California Student Aid Commission (CSAC), the 
            California State University (CSU), and the California 
            Community Colleges (CCC), and requests the University of 
            California (UC), to establish forms and procedures to allow 
            specified students to apply for and participate in all 
            state-funded student financial aid programs administered by 
            these entities.

          3)Prohibits the number of institutional financial aid awards 
            received by California resident students from diminishing as a 
            result of this bill, and requests UC comply with this 
            provision.

          4)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.

          5)Requires reimbursement to CCC districts if the Commission on 
            State Mandates determines that this act contains costs 
            mandated by the state (pursuant to Part 7 of Division 4 of 
            Title 2 of the Government Code).

           EXISTING LAW  :

          1)Provides for a variety of student financial aid programs 
            including the Cal Grant programs, the CCC Board of Governors 
            (BOG) fee waiver, a variety of systemwide and/or 








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            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 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.

           FISCAL EFFECT  :   According to an August 2010 analysis of an 
          identical bill ÝSB 1460 (Cedillo) of 2010, which was vetoed], 
          the Assembly Appropriations Committee determined the following 
          costs for 2011-12:
           
           1)Cal Grants:  CSAC estimated additional annual General Fund 
            costs for Cal Grants of $38 million.

          2)Institutional aid:  For UC and CSU, making AB 540 students 
            eligible for institutional aid will not increase overall 
            spending but may change the mix of recipients and/or the 
            amounts they received. 

             a)   UC estimated, based on current numbers of AB 540 
               students, their demographic profile, and average aid 
               awards, that about 605 students would have been eligible 
               for $1.8 million in UC institutional aid. 

             b)   CSU indicated enrollment of about 3,600 AB 540 students. 








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               Assuming these students receive institutional aid in 
               proportion to all other CSU students (about 25%), about 900 
               students would have been eligible for about $2.4 million in 
               aid, assuming an average award of $2,661.

          3)CCC fee waivers:  The revenue loss from CCC BOG fee waivers 
            would be offset by increased Proposition 98 funding-thus a 
            direct state cost.  According to the CCC Chancellor's Office, 
            there were 34,000 AB 540 students in the system in 2008-09.  
            Assuming these students averaged six credits per semester, 
            total fee revenue would have been $10.6 million.  If 45% of 
            those students received fee waivers (the statewide average), 
            the revenue loss (and Proposition 98 cost) would be $4.8 
            million.

           COMMENTS  :    Background  :  Students who are eligible for resident 
          tuition under the provisions of AB 540 are typically persons 
          without lawful immigration status or United States citizens or 
          Permanent Residents who are residents of another state and would 
          be ineligible for state-administered or campus-based financial 
          aid programs without the provisions of AB 540.  

           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.  CSAC 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, UC and CSU 
          institutional aid, CCC BOG fee waivers, 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.  This bill explicitly 
          denies eligibility for Cal Grant Competitive awards to AB 540 
          students.  

           How many students would be affected  ?  According to the segments, 








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          in 2009-10, AB 540 students were a small fraction of enrollment 
          at all three systems, as follows: 1,941 at UC (of these 32% were 
          undocumented immigrants); 3,633 at CSU; and 38,203 at CCC.  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.

           UC/CSU institutional aid  :  UC and CSU divert 33% of student fee 
          revenue and receive some state support to fund their 
          institutional aid programs.  According to UC and CSU, making AB 
          540 students eligible for institutional aid will not increase 
          overall spending but may change the mix of recipients and/or the 
          amounts they received.  

           Suggested amendment  :  Current law (Section 68130.7) indemnifies 
          UC, CSU, and CCC from damages that may result from a legal 
          challenge to the nonresident tuition exemption created by AB 
          540.  To remain consistent, staff recommends Section 66021.6 
          (which extends institutional aid to AB 540 students) be added to 
          Section 68130.7.
           
          Related legislation  :  Two related measures are scheduled to be 
          heard by this Committee on March 15, 2011: AB 130 (Cedillo) of 
          2011 would narrowly expand the AB 540 exemption, and AB 63 
          (Donnelly) would prohibit undocumented students from qualifying 
          for resident tuition under the provisions of AB 540.
           
          Previous legislation  :  Since 2003, the Legislature has 
          considered several bills that were substantively similar to this 
          measure.  The most recent measures, SB 1460 (Cedillo) of 2010 
          and SB 1301 (Cedillo) of 2009 were vetoed by Governor 
          Schwarzenegger.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Civil Liberties Union
          American Federation of State, County and Municipal Employees
          California Catholic Conference
          California Communities United Institute
          California Federation of Teachers
          California Immigrant Policy Center
          Coalition for Immigrant Rights of Los Angeles
          Equality California








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          Faculty Association of the California Community Colleges
          Peralta Community College District
          University of California

           Opposition 
           
          Concerned Women for America of California

           
          Analysis Prepared by  :    Sandra Fried / HIGHER ED. / (916) 
          319-3960