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 AB 131 Page 2 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. AB 131 Page 3 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, AB 131 Page 4 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 AB 131 Page 5 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