BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 606
AUTHOR: Williams
AMENDED: April 11, 2013
FISCAL COMM: Yes HEARING DATE: June 19, 2013
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Community colleges financial aid pilot program.
SUMMARY
This bill 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.
BACKGROUND
Current law provides for a variety of student financial aid
programs including the Cal Grant programs and the Community
College Board of Governors (BOG) Fee Waiver program.
Current law requires that eligibility for a Cal Grant and
the determination of financial need be accomplished using
the federal financial need methodology and application (the
Federal Application for Student Assistance, or 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 � 69432.9,
� 69433)
Current law requires the BOG to charge each student a $46
per unit per semester fee effective with the summer term of
2012. Current law exempts certain students from this fee
requirement, as specified, including students who meet
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specified income requirements. (EC � 76300)
Current law 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
California Community Colleges.
Current law also requires the California Community College
Chancellor's Office (CCCCO) to develop a statement to
individual students receiving the Community College Board
of Governors (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 and to request colleges
to provide this statement to all students who meet this
description.
(EC � 76071)
ANALYSIS
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 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
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application for either a BOG fee waiver or a
FAFSA.
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 by
actions that include, but are not limited to:
i) Identifying strategies
and best practices for increasing the number
of students who submit the Free Application
for Federal Student Aid (FAFSA).
ii) Examining and developing
strategies for increasing student
participation in financial aid programs
beyond the BOG Fee Waiver program.
iii) Identify the extent to which
students claim the federal American
Opportunity Tax Credit and strategies for
increasing the number of students who do so.
2) Encourages the CCCCO to pursue both private and
federal funding to support implementation and
operation of the pilot program.
3) Requires the California Community College Chancellor's
Office (CCCCO) to provide information on the
strategies and techniques employed by participating
campuses and data on student participation in state
and federal financial aid programs to the Legislative
Analyst's Office (LAO) by January 10, 2016.
4) Requires the LAO, based upon the information received,
to:
a) Report to the Legislature on the
results of the pilot program.
b) Make recommendations for statewide
expansion of the pilot.
c) Include in its report a
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statistical analysis of financial aid
applications and awards before and after the
pilot and a summary of the major strategies and
techniques employed by participating campuses.
5) Repeals these provisions as of January 1, 2017.
STAFF COMMENTS
1) Need for the bill . According to the author, this
measure is necessary to gather information on the
reasons and strategies specific to California's
students and community colleges to determine why
California Community College (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. 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
2009 research brief issued by MPR Associates, Inc.
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.
2) Related budget activity . The Governor's proposed
budget for 2013-14 would have required all students
seeking financial aid to fill out a Free Application
for Federal Student Aid (FAFSA) form. In the May
Revision, this proposal was modified to allow students
one academic term to provide financial need
documentation and delay implementation of the new
policies to the 2014-15 academic year. A pilot
program would allow for closer examination of the
unique student population served by the California
Community Colleges in order to identify best practices
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for ensuring the colleges' commitment to access while
maximizing the potential for California students to
benefit from federal financial aid programs.
3) Further clarification . This bill proposes a pilot
program to examine, among other things, strategies and
best practices for increasing the use of the FAFSA,
and the extent of the use of the American Opportunity
Tax Credit and strategies for increasing the number of
community college students who claim this credit. To
further clarify:
a) Free Application for Federal Student Aid
(FAFSA). 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 UC
and the CSU, work-study awards, scholarships, and
federal student loans.
b) American Opportunity Tax Credit. Is a
federal 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, which means a student can
receive the credit even if no taxes are owed.
According to the author, it is unclear as to how
many CCC students know about this tax credit and
take advantage of the tax credit.
4) Board of Governors (BOG) fee waiver . The BOG Fee
Waiver program provides for an exemption 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.
According to the CCC Chancellor's Office,
approximately 80% of BOG fee waiver recipients filed a
FAFSA in 2010 - 2011. The Chancellor's Office also
found that the BOG fee waiver program has grown
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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.
In a recent report, The Impact of Budget Cuts on the
California Community Colleges, Public Policy Institute
of California (PPIC) suggested that, absent an
increase in state or local funding, bridging the gap
between demand and supply would likely require
additional money from students and families.
Alternatively, PPIC suggests 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. The PPIC
opines that reducing eligibility thresholds may not
necessarily discourage access, given that lower income
students are likely to be eligible for federal grants
and 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, the report 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.
5) Prior legislation . This bill is substantively similar
to legislation previously considered by this
committee. These include:
AB 91 (Portantino, 2011) passed by this committee in
June 2011, by a vote of 8-2, and was subsequently
vetoed by Governor Brown, whose veto message read:
This bill orders the Chancellor of the Community
Colleges to set up a pilot program at local
campuses to figure out how to motivate their
students to apply for financial aid. This is a
matter that each community college can handle on
its own.
AB 1997 (Portantino, 2010) passed by this committee in
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June 2010, by a vote of 7-3, and was subsequently
vetoed by Governor Schwarzenegger, whose veto message
read:
Nothing under current law prohibits the
California Community College Chancellor's Office
from working with local community colleges to
meet the objectives of this bill. Furthermore,
the annual budget act was augmented several years
ago to provide the community colleges an
additional $34.2 million for financial aid
outreach efforts that were expected to assist
students with maximizing federal and state
financial aid.
SUPPORT
Campaign for College Opportunity
OPPOSITION
None received.