BILL ANALYSIS Ó
AB 970
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Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 970 (Fong) - As Introduced: February 18, 2011
Policy Committee: Higher
EducationVote:6-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill phases in elimination of the restriction in the Cal
Grant B program that, in the first year of enrollment, denies
tuition benefits and instead provides only a stipend for "access
costs"-i.e. costs for books, supplies, living expenses, and
transportation-to 98% of Cal Grant B recipients.
Specifically, this bill:
1)Increases from 2% to 25% the number of first-year Cal-Grant B
recipients eligible for tuition and fee payments in the
2012-13 academic year.
2)Increases the above percentage to:
a) 50% in 2013-14.
b) 75% in 2014-15.
c) 100% in 2015-16.
FISCAL EFFECT
Additional GF costs of about $42 million in 2012-13, when an
additional 6,000 Cal Grant B recipients would receive tuition
benefits, increasing to $140 million in 2015-16, when an
additional 20,000 recipients would receive tuition benefits.
These estimates are based on the estimated number of awards to
be paid in 2011-12 and assume 5% annual fee increases at the
University of California (UC) and the California State
University after 2011-12.
COMMENTS
1)Background . In both the entitlement and competitive Cal Grant
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programs, a very low-income student qualifies for a Cal Grant
B, while middle-income students qualify for a Cal Grant A. In
recognition that Cal Grant B serves the lowest income
students, the annual award pays for tuition and fees and a
small stipend (currently $1,551) toward books, supplies, food
and rent. (Cal Grant A pays for tuition and fees only.) When
the Cal Grant B program was authorized (in the early 1960s as
the "College Opportunity Grant Program") it was assumed that
the lowest income students would not go to a four-year college
or university, but rather would choose to go to a community
college first. Therefore, the program allowed for first-year
tuition and fee payments for only the top 2% of the Cal Grant
B recipients.
This assumption is no longer presumed to be valid, but the Cal
Grant B program still does not pay tuition and fees in the
first year for 98% of the recipients. Thus the majority of
those Cal Grant B students who initially enroll in a four-year
institution must take on additional debt to cover their
first-year tuition unless they are fortunate enough to receive
other, offsetting financial aid, such as from the institution
itself.
2)Inequity of Current Policy . Some lower income (Cal Grant B)
students receive a smaller lifetime award than higher income
(Cal Grant A) students. A Cal Grant B award recipient
enrolling at a private college may receive $3,504 less over
the lifetime of the grant than the Cal Grant A recipient at
the same school. This is because the first-year tuition
benefit (currently a maximum of $11,124) is more than four
years of the access grant (currently $1,551) received under
Cal Grant B. In 2007-08, for the first time students attending
the UC faced the same situation. As a result, UC is beginning
to shift its students from Cal Grant B to Cal Grant A awards,
when possible, to provide students with the highest four-year
award.
3)Prior Legislation . AB 1761 (Fong) of 2010, AB 2365 (De La
Torre) of 2008 and AB 302 (De La Torre) of 2007, which were
similar to this measure, were all held on this committee's
Suspense File. AB 2813 (De La Torre)/Chapter 822 of 2006,
included similar provisions, which were removed by this
committee.
4)Not the Time ? SB 70/Chapter 7 of 2011, a trailer bill to the
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pending 2011-12 Budget Act, includes policy changes that will
result in an estimated $125 million General Fund reduction in
the Cal Grant program. Given this significant reduction, and
the state's unresolved budget situation, the program expansion
proposed in this bill, however meritorious, may not be
practical.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081