BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 606 (Williams) - Community Colleges: Student Financial Aid  
          Pilot Program
          
          Amended: April 11, 2013         Policy Vote: Education 9-0
          Urgency: No                     Mandate: No
          Hearing Date: August 30, 2013                                
          Consultant: Jacqueline Wong-Hernandez                       
          
          SUSPENSE FILE.

          
          Bill Summary: AB 606 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. The pilot program  
          would sunset on January 1, 2017.

          Fiscal Impact: 
              CCCCO administration: $60,000-$80,000 (General Fund) for a  
              .5 PY to administer the pilot program on 10 campuses.
              CalGrants: Approximately $270,000 (General Fund) in  
              increased CalGrant awards in 2015-16; $828,000 (General  
              Fund) in increased CalGrant awards in 2016-17.
              LAO report: Minor and absorbable costs to produce the  
              required report.

          Background: Existing law provides for a variety of student  
          financial aid programs for community college students, including  
          the Cal Grant programs and the Community College Board of  
          Governors (BOG) Fee Waiver program. 

          Existing law requires the determination of a student's financial  
          need, 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,  be accomplished using  
          the federal financial need methodology and application (the  
          Federal Application for Student Assistance, or FAFSA). This  
          requirement applies to eligibility for a Cal Grant. 








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          Existing 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)

          Existing law requires the CCCCO to develop a statement that  
          individual students will be asked to sign, acknowledging 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 direct students to sign this acknowledgment in the  
          application for enrollment at all campuses of the California  
          Community Colleges.  

          Current law further requires the CCCCO to develop a statement to  
          individual students receiving the BOG Fee Waiver, but 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)

          Proposed Law: AB 606 establishes a 3-year pilot program to  
          increase participation among community college students in state  
          and federal financial aid programs. This bill requires the CCCCO  
          to administer the pilot program and select up to 10 community  
          college campuses (CCCs) to voluntarily participate in the  
          program. This bill also requires the CCCCO to provide specified  
          information about the pilot program to the LAO by January 10,  
          2016, and requires the LAO to report to the Legislature on the  
          results of the program and recommendations regarding statewide  
          expansion. This bill will sunset on January 1, 2017.

          Related Legislation: AB 91 (Portantino) 2011 was substantially  
          similar to this bill, and was vetoed by Governor Brown, with the  
          following veto message:

              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.








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          AB 1997 (Portantino) 2010 was also similar to this bill, and was  
          vetoed by Governor Schwarzenegger, with the following veto  
          message:

              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.

          Staff Comments: This program would endeavor to identify (and  
          increase financial aid participation for) two target  
          populations: 1) Students potentially eligible for state and  
          federal financial aid who complete a BOG fee waiver application  
          but do not complete a FAFSA; and 2) students who may be eligible  
          for financial aid who receive no financial aid at all, because  
          they do not apply for any. The program would focus on  
          identifying strategies for increasing FAFSA applications, and  
          for developing strategies for increasing student participation  
          in state and federal aid programs beyond BOG fee waivers. CCC  
          students who qualify for BOG waivers are likely to be eligible  
          for federal and state financial aid, as well.

          The CCCCO would be required to submit specified information to  
          the LAO by January 10, 2016 for use in an LAO report to the  
          Legislature that would describe the results of the pilot and  
          make recommendations for statewide expansion of the program. The  
          CCCCO has indicated that administering the pilot would likely  
          require a .5 PY, resulting in costs of approximately $60,000 to  
          $80,000, and that it would seek federal funding for this  
          position. In the absence of federal funding, this position would  
          be funded by the General Fund.

          Greater participation in applying  for aid programs will likely  
          result in substantial additional federal aid (primarily Pell  
          Grants) for students in participating CCCs, but will also lead  
          to increased state costs through increased access to CalGrant B  
          awards. If the pilot program involves 10 participating campuses  
          that are demographically representative of the CCC system, the  








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          California Student Aid Commission estimates that this bill would  
          result in additional CalGrant awards totaling approximately  
          $270,000 in 2015-16 and $828,000 (General Fund) in 2016-17.