BILL ANALYSIS �
AB 606
Page 1
Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 606 (Williams) - As Amended: April 1, 2013
SUBJECT : Student financial aid: community colleges.
SUMMARY : Requires the California Community College
Chancellor's Office (CCCCO) to establish a voluntary pilot
program to increase student participation in state and federal
financial aid programs, outlines the parameters of the pilot,
and requires the Legislative Analyst's Office (LAO) to report to
the Legislature on the results of the pilot program and to make
recommendations for its statewide expansion. Specifically, this
bill :
1)Requires the CCCCO to establish a voluntary pilot program to
increase student participation in state and federal financial
aid programs. More specifically it:
a) Requires the CCC Chancellor to select no more than 10
campuses from those that volunteer to participate;
b) Requires, to the extent possible, that the geographic,
economic and demographic diversity of participating
campuses be ensured;
c) Establishes the following two target populations of
potentially eligible students to be identified for
participation in the pilot program:
i) Those who complete an application for either a CCC
Board of Governors (BOG) fee waiver but not a Free
Application for Federal Student Aid (FAFSA), and,
ii) Those who do not receive any campus, state, or
federal aid.
d) Establishes the goal of the pilot program to increase
student participation in both state and federal financial
aid programs and take advantage of the federal American
Opportunity Tax Credit by actions that include, but are not
limited to:
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i) Identifying strategies and best practices for
increasing the number of students who submit the FAFSA,
ii) Examining and developing strategies for increasing
student participation in financial aid programs beyond
the BOG Fee Waiver program, and,
iii) Identifying, to the extent possible, the extent to
which students claim the federal American Opportunity Tax
Credit and developing strategies for increasing the
number of students who claim the credit.
2)Encourages the CCCCO to pursue both private and federal
funding to support implementation and operation of the pilot
program.
3)Requires the Legislative Analyst's Office (LAO) to report to
the Legislature by January 10, 2016, as specified, based on
information provided by the CCCCO on the strategies and
techniques employed by participating campuses and data on
student participation in state and federal financial aid
programs.
4)Repeals these provisions as of January 1, 2017.
EXISTING LAW :
1)Provides for a variety of student financial aid programs
including the Cal Grant programs and the CCC (BOG) fee waiver
program. Current law requires that eligibility for a Cal
Grant and the determination of financial need be accomplished
using FAFSA, and that this application be used for all
programs funded by the state or a public institution of
post-secondary education as well as all federal programs
administered by a postsecondary educational institution.
Current law makes an exception to this requirement for the BOG
fee waiver program which is authorized to use a simplified
application designed for that sole purpose (Education Code
[EC] � 69432.9 and � 69433).
2)Requires the CCCCO to develop a statement that individual
students will be asked to sign, which acknowledges that
federal and state funds are available to assist with the costs
of college and that information regarding these programs, and
assistance in applying for those funds can be obtained at the
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financial aid office. The Chancellor is required to request
the colleges to require students to sign this acknowledgment
in the application for enrollment at all campuses of the CCC.
Additionally, current law requires the CCCCO to develop a
statement to individual students receiving the BOG fee waiver,
who did not apply for federal student aid, informing them
about the benefits of the federal programs, the application
process, and the availability of assistance to apply for these
programs; the CCCCO is required to request colleges to
provide this statement to all students who meet this
description (EC � 76071).
FISCAL EFFECT : In an analysis of a virtually identical bill in
2011, the Senate Appropriations Committee determined that
greater participation in aid programs will result in more
federal aid for CCC students but will also lead to increased
state costs through increased access to Cal Grant B awards.
Assuming a 10% increase in student participation in aid for 10
representative CCC campuses, this bill would drive new General
Fund costs of approximately $440,000. Further, the activities
for administering the pilot would likely result in costs of
approximately $60,000 to $80,000. There would also be
undetermined costs for implementation at the campus level,
though the local districts would undertake the activities at
their own discretions. The CCCCO is hopeful of receiving
federal grants or private donations to assist with costs.
COMMENTS : Background : The FAFSA is the core document used to
determine eligibility for all major federal and state financial
aid programs, including Cal Grant, Pell Grant, institutional aid
at the University of California and the California State
University, work-study awards, scholarships, and federal student
loans. The BOG Fee Waiver program provides relief from CCC fees
for financially needy students. A CCC student may apply for a
BOG fee waiver by submitting a FAFSA or by submitting a Short
Form, which requires less information and is simpler to complete
than the FAFSA.
The federal American Opportunity Tax Credit is a credit that can
be claimed for expenses paid for tuition, certain fees, and
course materials for higher education. The tax credit refunds
up to $2,500 in educational costs for students with modified
adjusted gross incomes of $80,000 or less ($160,000 or less for
joint filers). Additionally, 40% of the credit (up to $1,000)
is refundable; this means a student can receive the credit even
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if he/she owes no tax. Currently, it is unclear as to how many
CCC students know about this tax credit and take advantage of
the tax credit.
Need for the bill . Several reports have highlighted the fact
that CCC students have significant financial need but are the
least likely to take advantage of the federal financial aid
support that is available to them. A research brief issued by
MPR Associates, Inc. in October 2009 (and based upon 2006 - 2007
enrollment data - the most recent comprehensive data on this
issue) noted that fewer than 230,000 (about 10%) of degree
seeking students at the CCC received federal Pell Grants. The
most common form of financial aid was a BOG fee waiver, given to
540,000 students (26% of enrolled students). About 305,000 of
these students received only a fee waiver and of those, 110,000
applied for federal aid but did not receive it with the most
common reasons for not qualifying being 1) they were part-time,
2) their income or expected family contribution was too high, or
3) they did not meet citizenship, academic, or other
requirements for federal financial aid.
Additionally, the Institute for College Success & Access (TICAS)
issued a report (March 2010) finding that only 33% of CCC
students apply for federal financial aid compared to 46% of
community college students in other states. TICAS argued that
CCC students are less likely than those in other states to
complete the FAFSA. It is possible that CCC students are
therefore not accessing an estimated $500 million in federal aid
that would otherwise be available to them. Despite not having
more recent comprehensive data available, according to the CCC
Chancellor's Office, approximately 80% of BOG fee waiver
recipients filed a FAFSA in 2010 - 2011. The Chancellor's
Office found that the BOG fee waiver program has grown
substantially over the past eight years. For example, in 2002-
2003, 597,000 CCC students received $102.7 million in BOG fee
waivers compared to 2010 - 2011, those figures grew more than
89% over the comparison year, with over 1,130,000 students
receiving more than $410 million in BOG fee waivers.
According to the author, this measure attempts to gather
specific information on the reasons and strategies specific to
California's students and community colleges to determine why
CCC students do not submit the FAFSA in greater numbers and to
identify intervention strategies to increase their participation
in state and federal financial aid programs.
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Public Policy Institute of California (PPIC) report . Last
month, PPIC issued a report that found it may be worth
re-evaluating the need-based criterion of the BOG fee-waiver
system. According to PPIC, BOG waivers currently limit the CCC's
ability to generate revenue from about one-third of their
students. Income thresholds are relatively high, suggesting
that marginal BOG-qualifying students may be able to pay CCC
fees at the current level. The LAO's 2011-12 budget analysis
cites the example of an independent student living alone
qualifying for a BOG waiver with an income of up to $45,000, or
$80,000 with one child. Reducing such thresholds may not
necessarily discourage access, given that lower income students
are likely to be eligible for federal grants. PPIC finds that
it is possible that BOG waivers crowd out funding that might
come from the federal government.
PPIC suggests one option for addressing this situation would be
to require students to apply for federal financial aid in order
to receive a BOG waiver. Additionally, PPIC recommends high
schools, colleges, and the state should strive to ensure that
students are made aware of the availability of federal aid, and
should make every effort to help students complete the necessary
forms.
Increased Pell Grant awards : Funding for Pell Grants has
doubled since 2008-the award is $5,550 for the 2010-2011 award
year, and starting with the 2013-2014 academic year, the maximum
grant will automatically increase by the Consumer Price Index
rate. These increased Pell Grant awards will provide additional
direct aid to low-income students and families in future years.
Student success : The Institute for Higher Education Leadership
& Policy (IHELP) in its report, Rules of the Game: Barriers to
Completion (February 2007), found that enrollment patterns are
related to student success. In particular, completion was more
likely among those who: attended full time in a majority of
terms enrolled; enrolled continuously without taking time off;
completed an orientation course; dropped few of their courses;
or registered on time for most of their courses. Only about 33%
of students enrolled full time (12+ units) in a majority of the
terms they attended, yet these students were four times more
likely to complete than the two-thirds who enrolled part-time in
most terms.
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Previous legislation : AB 91 (Portantino , 2011) contained
virtually identical provisions to this measure, was vetoed by
Governor Brown as unnecessary since the CCCCO can work with CCC
districts to meet the objectives of this bill. AB 1997
(Portantino, 2010), which contained virtually identical
provisions to this bill and AB 91, was vetoed by Governor
Schwarzenegger for the same reasons AB 91 was vetoed. AB 668
(Portantino), Chapter 607, Statutes of 2007, required the CCCCO
to develop statements for students regarding the availability of
federal financial aid. As introduced, this bill would have
provided a financial incentive to CCC campuses for every student
who received a Pell Grant.
REGISTERED SUPPORT / OPPOSITION :
Support
California Communities United Institute
Kern Community College District
Los Angeles Community College District
Los Rios Community College District
Service Employees International Union (SEIU)
West Kern Community College District
Yosemite Community College District
Opposition
None on file.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960