BILL ANALYSIS �
AB 606
Page 1
ASSEMBLY THIRD READING
AB 606 (Williams and Quirk-Silva)
As Amended April 11, 2013
Majority vote
HIGHER EDUCATION 12-0 APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|Williams, Ch�vez, Bloom, |Ayes:|Gatto, Harkey, Bigelow, |
| |Fong, Jones-Sawyer, | |Bocanegra, Bradford, Ian |
| |Levine, Waldron, Medina, | |Calderon, Campos, |
| |Olsen, Quirk-Silva, | |Donnelly, Eggman, Gomez, |
| |Weber, Wilk | |Hall, Ammiano, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
| | | | |
-----------------------------------------------------------------
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,
AB 606
Page 2
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:
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, 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.
AB 606
Page 3
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
Sections 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
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
Section 76071).
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the bill has the following associated costs:
1)Assuming 10 participating campuses are representative of the
entire system, and assuming increases, by the third year of
the pilot program, in new financial aid awards to students at
these campuses of 10% for the High School Entitlement Cal
Grant B and 5% for the Transfer Entitlement Cal Grant A and B,
General Fund costs would be about $200,000 in 2014-15 and
about $600,000 in 2015-16.
2)The CCCCO will incur annual costs of around $75,000 to
administer the pilot program.
It should be noted that to the extent the pilot program leads to
increases in federal financial aid awards to students at the
participating colleges, and further implementation leads to
increased state and federal financial aid awards to students
throughout the community college system, this could result in
overall gains in student success and reductions in the average
time for students to complete their educational goals, with
resulting efficiency benefits to CCC.
AB 606
Page 4
COMMENTS : 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
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.
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
AB 606
Page 5
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.
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.
Public Policy Institute of California (PPIC) report. In March
2013, 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.
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
AB 606
Page 6
& 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.
Previous legislation: AB 91 (Portantino) of 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) of 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.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960
FN: 0000783