BILL ANALYSIS Ó
AB 131
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Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 131 (Cedillo) - As Amended: April 6, 2011
Policy Committee: Higher
EducationVote:6-3
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill expands eligibility, effective July 1, 2012, for
state-administered student financial aid to nonresident (AB 540)
students who are exempted from paying nonresident tuition and
expands eligibility for this AB 540 exemption. Specifically,
this bill:
1)Makes AB 540 students eligible to apply for and participate
in:
a) Any state-administered student financial aid program,
including institutional aid, to the full extent permitted
by federal law, and stipulates the number of financial aid
awards received by California resident students may not be
reduced because of this expanded eligibility.
b) The California Community Colleges (CCC) Board of
Governors (BOG) fee waiver program and declares this
provision to be consistent with specified immigration law.
2)Stipulates that AB 540 students are not eligible for
Competitive Cal Grant Awards unless funds remain available
after all eligible non-AB 540 students have received such
awards.
3)Requests the University of California (UC) Board of Regents
and requires the California State University (CSU) Board of
Trustees and the CCC BOG 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.
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4)Expands eligibility for the AB 540 exemption, effective
January 1, 2012, to include attendance and graduation from
California technical and adult schools, provided the student
attended a California high school for at least one year.
(Current law requires attendance for at least three years at a
California high school.)
FISCAL EFFECT
All costs would begin in 2012-13.
1)Cal-Grants . The California Student Aid Commission (CSAC),
based on current estimated enrollment of AB 540 students at
the UC, CSU, and the CCC and assuming similar application and
award rates, estimates additional annual General Fund costs of
about $13 million for Cal Grants Entitlement Awards beginning
in 2013-14.
Applications for the Competitive Grants far exceed the number
of grants available, thus no AB 540 students are likely to
receive grant awards in this program.
In addition to grant costs, the commission, in order to
accommodate this new, unique cohort of students, will incur
(a) first-year GF costs of about $700,000 for IT programming
and other implementation activities and (b) ongoing GF costs
of about $250,000 for IT and program support.
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 estimates, based on current numbers of AB 540
students, their demographic profile, and average aid
awards, that about 390 to 488 students would be eligible
for $3.8 million to $4.6 million in UC institutional aid.
b) CSU indicates enrollment of about 3,600 AB 540 students.
Assuming up to one-half of these students received
institutional aid, with an average award of $4,200, the
amount of such aid going to AB 540 students would total
about $7.6 million.
3)CCC Fee Waivers . The revenue loss from CCC BOG fee waivers is
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offset by increased Proposition 98 funding, and is thus a
direct state cost. According to the Chancellor's Office of the
CCC, there were 36,000 AB 540 students in the system in
2009-10. Assuming these students averaged six credits per
semester, total fee revenue would be $15.6 million. If 45% of
those students received fee waivers (the statewide average),
the revenue loss (and Proposition 98 cost) would be $7
million.
4)Expanding eligibility for the AB 540 exemption, thus allowing
more students to pay in-state tuition, would result in revenue
loss to the UC, the CSU, and the CCC from these students, who
would otherwise pay nonresident tuition. For example, if the
cohort of AB 540 students at the CCC increased by just 2.5%
(900 students) and these students take an average of six units
per semester, the total revenue loss would be about $1.7
million. A similar impact at CSU would result in a revenue
loss of about $400,000. One could argue, however, that many in
this cohort are not even attending the CCC or CSU due to the
high cost of nonresident tuition/fees, thus the above revenue
losses are likely overstated. On the other hand, making
available an AB 540 exemption to those who have attended
technical or adult schools would create additional enrollment
pressures, to varying degrees, at the segments, and thus the
associated state per-student subsidy costs.
5)The availability of state financial aid to AB 540 students
would likely, over time, increase their participation in
public postsecondary education, and thus increase all of the
above costs. Conversely, to the extent the availability of
this aid increases the success rate of these students and
reduces the time required for them to attain their educational
goals, the segments will benefit from these increased
efficiencies.
COMMENTS
1)Background . Pursuant to AB 540 (Firebaugh)/Chapter 814 of
2001, two groups of students who have attended and graduated
from California high schools receive non-resident tuition
status: those who do not have legal immigration status and
thus cannot establish state residency, and those who are US
citizens but are residents of another state. 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.
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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 November 2010, the California Supreme Court, in a
unanimous decision, reversed the Court of Appeal and thus
ruled in favor of AB 540.
2)Purpose . Students who receive a waiver of non-resident tuition
at UC, CSU and the CCC still face significant costs, including
resident fees, books, supplies, food, rent, transportation,
and other miscellaneous items. The student aid commission
estimates the nine-month cost of education in 2010-11 for
California students living off-campus to be $16,497, in
addition to systemwide and campus fees. Moreover, federal law
prohibits undocumented students from receiving any aid from
the federal government, such as Pell Grants and federal
student loans. Supporters of AB 131 argue that, in light of
recent reports highlighting the state's need for one million
more workers with college degrees, California cannot afford to
exclude people or prevent students from attending college,
thus providing state and institutional financial assistance to
all qualified students is essential.
3)Expanded AB 540 Eligibility . 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 therefore allows 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.
4)Related Legislation . AB 130 (Cedillo), also on today's
committee agenda, makes AB 540 students eligible to receive a
scholarship derived from nonstate funds received for the
purpose of scholarships.
5)Prior Legislation . Numerous bills have sought to expand
financial aid to AB 540 students. Most recently, in 2010, SB
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1460 (Cedillo), which dealt with institutional financial aid
and the adult school provisions, and AB 1413 (Fuentes), which
dealt with Student Aid Commission programs, were vetoed by
Governor Schwarzenegger, mainly for financial reasons. SB 1301
(Cedillo) of 2008, which only dealt with UC and CSU
institutional aid, was vetoed.
SB 1 (Cedillo) of 2007, which made AB 540 students eligible
for Cal Grant Entitlement Awards and community college fee
waivers, was also vetoed for financial reasons, as was SB 160
(Cedillo) of 2005.
In addition, SB 160 (Cedillo) of 2009, AB 2083 (Nunez) of
2008, and SB 160 (Cedillo) of 2007 were all held on Suspense
in Senate Appropriations.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081