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. AB 606 (Williams) Page 1 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. AB 606 (Williams) Page 2 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 AB 606 (Williams) Page 3 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.