BILL ANALYSIS Ó SENATE COMMITTEE ON EDUCATION Alan Lowenthal, Chair 2011-2012 Regular Session BILL NO: SB 451 AUTHOR: Price AMENDED: February 16, 2011 FISCAL COMM: Yes HEARING DATE: March 23, 2011 URGENCY: No CONSULTANT:Kathleen Chavira SUBJECT : Cal Grant C awards. SUMMARY This bill requires the California Student Aid Commission (CSAC) to give priority in granting the Cal Grant C to students pursuing study in areas of high employment need, high salary or wage projection, or high growth and establishes related authority and requirements. BACKGROUND Current law authorizes the Cal Grant Program, administered by the CSAC, to provide grants to financially needy students to attend college. Cal Grant C awards assist with tuition and training costs at occupational or vocational programs and may be used for institutional fees, charges, and other costs, including tuition, plus training-related costs, such as special clothing, local transportation, required tools, equipment, supplies, and books. Current law establishes the total number of Cal Grant C awards as the number awarded in the 2000-01 fiscal year (7,761) with the maximum award amount and the total amount of funding being determined in the annual Budget Act. Current law requires the CSAC to consult with appropriate state and federal agencies order to determine areas of occupational or technical training in which the Cal Grant C can be awarded and authorizes the CSAC to use criteria it deems appropriate to select students to receive grants. The CSAC is also required to take into account other state and federal programs available to the applicant. The Cal Grant C may be renewed until the completion of the SB 451 Page 2 training, up to a maximum of two calendar years. (Education Code § 69439) ANALYSIS This bill : 1) Authorizes the CSAC to consult with nongovernmental stakeholders that develop or provide workforce training or employ graduates of occupational and technical training programs for the purpose of developing areas of occupational and technical training for which students may use Cal Grant C awards. 2) Requires the California Student Aid Commission (CSAC), at least every five years beginning in 2012, to regularly review and update the areas of occupational and technical training for which students may use Cal Grant C awards. 3) Requires the CSAC to prioritize the granting of Cal Grant C awards to students pursuing occupational or technical training in areas that meet at least two of the following criteria: a) High employment need. b) High employment salary or wage projections. c) High employment growth. 4) Requires the CSAC to consult with the Employment Development Department and use projections available through the Labor Market Information Data Library to determine areas of occupational or technical training that meet the criteria outlined in (3). 5) Requires the CSAC to publish and retain on its Internet web site a current list of the areas of occupational or technical training that meet the criteria outlined in (3) and to update this list as necessary. 6) Requires the Legislative Analyst's Office to submit a report to the Governor and the Legislature by April 1, 2015, and every two years thereafter, and that the report include, but not be limited to, information on SB 451 Page 3 the age, gender, segment of attendance, the occupational and technical training program categories prioritized, and the number/percentage of students who received selection priority established by the bill. STAFF COMMENTS 1) Need for the bill . According to the author, although the Cal Grant C program awards almost 8,000 grants annually for occupational and technical training, these awards do not track well with the state's most urgent labor needs. This bill has been introduced to ensure that CSAC strategically directs Cal Grant C funds to recipients seeking occupations in areas with high employment demand, growth potential, wages and/or importance to California's strategic initiatives. This bill will maximize the opportunities for Californians to acquire the necessary job skills to gain and keep employment. 2) Current program . According to the California Student Aid Commission (CSAC), eligible students receive a Cal Grant C Supplement application in mid-April, which must be completed and returned by May 15. Supplements are scored based on the student's work experience, educational history and vocational aptitude. Eligible students must enroll at least half-time in a vocational program at a California community or independent college or vocational school that is at least four months, but not more than two years. CSAC reports that, as of the 2009-10 academic year, Cal Grant C participating institutions included all 109 of the California Community Colleges, one University of California program, six two-year non-profit institutions, seven four-year for-profit institutions, one hospital school, and 42 distinct for-profit institutions. Although the vast majority of students who receive the Cal Grant C are enrolled in community college programs, almost two-thirds of the total funds awarded are paid to students enrolled in vocational for-profit programs. In order to participate in the program, an institution must have an approved Institutional Participation Agreement (IPA), a document which details requirements for participation as specified in statute, regulations, SB 451 Page 4 and CSAC policy. In approving IPAs, CSAC considers the length of a school's education programs and its administrative capability. CSAC does not currently restrict awards by occupational area, nor has it consulted recently with other agencies regarding occupational areas. Additionally, a recent LAO analysis reveals that in 2008-09, only 43% of students awarded a Cal Grant reported the occupational area which they were pursuing. 3) Who currently receives the Cal Grant ? According to the Legislative Analyst's Office (LAO), students meeting the general eligibility for the Cal Grant award may be considered for the Cal Grant C. There is no high school graduation requirement, minimum grade point average or maximum age for recipients. However, students must be California residents, have United States or eligible noncitizen status, complete US selective service requirements, enroll at least half-time at an eligible California institution, maintain satisfactory academic progress (defined by the institution) once enrolled, meet family income and asset ceilings, and not be in default on any student loan or owe any federal or state grant refund. According to the CSAC, approximately 50% of eligible applicants receive the limited number of awards. According to the LAO, about 80 percent of Cal Grant C recipients are independent students. In 2008-09, nearly 60 percent earned less than $18,000 annually, and 80 percent earned less than $30,000 annually. Two-thirds of the recipients were male, with nearly three quarters age 25 and over. According to an analysis provided by the author, the most recent data available (2008-09 application cycle) indicates that, of those Cal Grant awardees who reported the occupational area which they were pursuing, only 38% were in areas found by the Employment Development Department to be among the highest wage occupations in the state, 64% among the highest need occupations, and 35% in the fastest growing occupations SB 451 Page 5 4) What is the Labor Market Information Data Library ? The Labor Market Information Division (LMID) of the California Labor and Workforce Development Agency is the primary source of labor market and occupational information for the state. It maintains current labor market data as well as employment projections and wage data. Projections of employment by occupation are typically for a ten-year period. The Library provides access to several regularly generated reports, including reports detailing the information required by this bill for purposes of prioritizing Cal Grant C awards. In addition, Labor Market Consultants are available to assist workforce partners (such as Workforce Investment Act boards and staff, educators, and those engaged in economic development) and employers find, access, and use labor market information and services, and can assist in the development of customized reports, if necessary, for a nominal fee. 5) Prior Legislation . SB 957 (Price, 2010), which was substantively similar to this bill, passed this committee in March 2010 by a vote of 6-0. The bill was subsequently vetoed by Governor Schwarzenegger, whose veto message read, in pertinent part: I am concerned that this bill could limit students' choices or eliminate the possibility of an award for lower income students, simply because the occupational areas that they have chosen to pursue were not deemed a priority by the state. SUPPORT None received. OPPOSITION None received.