BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 1466
Author: De León (D)
Amended: 5/2/12
Vote: 21
SENATE EDUCATION COMMITTEE : 8-1, 4/25/12
AYES: Lowenthal, Alquist, Blakeslee, Hancock, Liu, Price,
Simitian, Vargas
NOES: Huff
NO VOTE RECORDED: Runner, Vacancy
SENATE APPROPRIATIONS COMMITTEE : 5-2, 5/21/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
SUBJECT : Cal Grant Program eligibility expansion
SOURCE : Author
DIGEST : This bill expands eligibility for a Cal Grant,
beginning in the 2014-15 academic year and until either all
funds in the Higher Education Investment Tax Credit (HEITC)
program are expended or December 1, 2018. This bill allows
a student who household income is $150,000 or less to be
eligible for a Cal Grant, subject to specified funding
prioritization, and contingent upon legislation that
creates the HEITC.
ANALYSIS : Existing law authorizes the Cal Grant Program,
administered by the California Student Aid Commission
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(CSAC), to provide grants to financially needy students to
attend college. The Cal Grant programs include both the
entitlement and the competitive Cal Grant awards, and
eligibility is based upon financial need, grade point
average (GPA), California residency, and other eligibility
criteria, as specified in Education Code Section 69433.9.
These programs currently operate as follows:
Cal Grant A - High School Entitlement Program . Cal Grant
A provides tuition fee funding for the equivalent of four
full-time years at qualifying postsecondary institutions to
eligible lower and middle income high school graduates who
have at least a 3.0 GPA, and apply within one year of
graduation.
Cal Grant B - High School Entitlement Program . Cal Grant B
provides funds to eligible low-income high school graduates
who have at least a 2.0 GPA, and apply within one year of
graduation. The award provides up to $1,551 for books and
living expenses for the first year and each year following
for up to four years (or equivalent of four full-time
years). After the first year, the award also provides
tuition fee funding at qualifying postsecondary
institutions.
Cal Grant Community College Transfer Program . The
Transfer Program provides a Cal Grant A or B to eligible
high school graduates who have a community college GPA of
at least 2.4, and transfer to a qualifying baccalaureate
degree granting college or university.
Cal Grant Competitive Award Program . The Award Program
provides 22,500 Cal Grant A and B awards available to
applicants who meet financial, academic, and general
program eligibility requirements. Half of these awards are
reserved for students enrolled at a community college and
who met the September 2 application deadline.
Cal Grant C Program . Cal Grant C provides funding for
financially eligible lower income students preparing for
occupational or technical training. The authorized number
of new awards is 7,761. For new and renewal recipients,
the current tuition and fee award is up to $2,592 and the
allowance for training-related costs is $576.
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Existing law requires that the maximum household income and
asset levels for the Cal Grant program be adopted and
defined in regulations by the CSAC and that these ceilings
be annually adjusted based upon changes in the cost of
living. Cal Grant funding is annually appropriated in the
Budget Act, and reductions to the program translate to
award reductions.
This bill, commencing with the 2014-15 academic year,
establishes eligibility for Cal Grants funded by the HEITC,
subject to specified priorities. This bill provides that
HEITC funding will be used, until exhausted, to fund grants
for qualifying students whose household income does not
exceed $150,000, as specified, and in the following order
of priority:
1. Students who meet the eligibility requirements
established for a Cal Grant A, B, or Transfer
Entitlement Award for the 2011-12 academic year.
2. Students who meet the eligibility requirements
established for a Competitive Cal Grant A or B Award for
the 2011-12 academic year, up to the maximum number of
awards authorized for Competitive Cal Grant A or B
Awards in the annual Budget Act.
3. All other students who meet the eligibility requirements
established for a Cal Grant Award for the 2011-12
academic year, except that these students may have a
maximum household income no greater than $150,000.
Comments
Cal Grants . The current maximum award for Cal Grants A and
B are equal to the mandatory systemwide tuition fees at the
University of California (UC) ($12,192) and California
State University (CSU) ($5,472). With regard to private
for-profit and independent non-profit institutions, the
maximum award has been $9,708 since 2000, with the
exception of two years (2004-2006), where the award levels
were reduced by 14%, to a total of $8,322.
The Governor's budget proposal for 2012-13 includes $300
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million in cuts to the Cal Grant program. These cuts are
accomplished by reducing the amount of the award for new
and continuing students at the private non-profit and
for-profit institutions, and by increasing the GPA
requirements for new applicants to the Cal Grant program
from 3.0 to 3.25, Cal Grant B Awards from 2.0 to 2.75, and
Community College Transfer awards from 2.4 to 2.75.
According to a recent Budget Subcommittee on Education
analysis, the GPA changes would affect approximately 24,700
students, 46% of which are at the California Community
Colleges (CCC), 34% at the CSU, 8% at non-profit
independent institutions, 7% at private for-profit
colleges, and 5% at the UC. The resulting savings for
budget purposes of the GPA changes is estimated at $97.2
million.
Contingency language . The provisions of this bill are
contingent upon the enactment of SB 1356 (De Leon) which:
Establishes the Higher Education Investment Tax Credit
Program Special Fund.
Establishes a tax credit equal to 65% of contributions to
the Special Fund.
Requires that all revenue in this fund be allocated to
the Student Aid Commission for purposes of awarding Cal
Grants to students eligible pursuant to the provisions of
SB 1466 (De Leon).
Provides for a repeal of the tax credit in December 2018.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Minor and absorbable workload increase to the California
Student Aid Commission (CSAC) to administer increased Cal
Grants.
Potentially substantial General Fund savings, to the
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extent that HEITC funding supplants General Fund support
for Cal Grants.
To the extent that expanded Cal Grant eligibility and
funding covers additional students, it may supplant
institutional aid from the segments.
SUPPORT : (Verified 5/22/12)
California Catholic Conference
California College Democrats
California Student Aid Commission
University of California Students Association
ARGUMENTS IN SUPPORT : Due to California's fiscal crisis,
the state's contribution to higher education has steadily
declined, and since 2000, the author's office calculates
that the share of expenditures borne by students in the
form of fees has tripled from 13% to 40% in 2011.
According to the author, this bill provides an opportunity
to leverage federal dollars to help offset skyrocketing
college tuition in California and make a public school
education more affordable for middle-income Californians.
PQ:mw 5/22/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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