Amended in Assembly April 2, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 1318


Introduced by Assembly Member Bonilla

February 22, 2013


An act to amendbegin delete Sectionsend deletebegin insert Sectionend insert 66021.2begin delete and 69432.7end delete of the Education Code, relating to student financial aid.

LEGISLATIVE COUNSEL’S DIGEST

AB 1318, as amended, Bonilla. Student financial aid: Cal Grant Program.

Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Programbegin delete (Cal Grant Program)end delete, establishes the Cal Grant A and B Entitlement Awards, the California Community College Transfer Cal Grant Entitlement Awards, the Competitive Cal Grant A and B Awards, the Cal Grant C Awards, and the Cal Grant T Awards under the administration of the Student Aid Commission, and establishes eligibility requirements for awards under these programs for participating students attending qualifying institutions, as defined.

This bill would add provisionsbegin delete to the Cal Grant Programend delete that would set the maximum Cal Grant award levels for students attendingbegin insert nonprofit,end insert nonpublic postsecondary educational institutions that are accredited by the Western Association of Schools and Colleges, commencing with the 2014-15 award year. The bill would provide that abegin insert nonprofit, nonpublicend insert postsecondary educational institutionbegin delete headquartered in the state, registered as a nonprofit public benefit corporation, andend delete accredited by the Western Association of Schools and Colleges would begin deletenot end deletebe deemed a qualifying institution if the total amount of institutional aidbegin insert, as defined,end insert provided to Californiabegin insert residentend insert students bybegin delete all institutions to which this clause is applicable, in the aggregateend deletebegin insert that institutionend insert, in any award year, isbegin insert noend insert less than 50% of the total Cal Grant awards received by their students, except for institutions meeting prescribed conditions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) California relies on private nonprofit colleges and universities
4accredited by the Western Association of Schools and Colleges
5(WASC) to help meet the state’s higher education needs, educating
624 percent of the state’s undergraduates.

7(b) California provides Cal Grant support to approximately
826,000 students annually attending WASC accredited private
9nonprofit colleges and universities, and additional California
10students attending these institutions are educated at zero cost to
11the state.

12(c) Eighty-five percent of all students attending California’s
13WASC accredited private nonprofit colleges and universities
14receive institutionally funded student aid.

15(d) California’s WASC accredited private nonprofit colleges
16and universities effectively educate a diverse state population, and
17have a four-year graduation rate for Cal Grant students in excess
18of 60 percent.

19(e) The maximum award for Cal Grant students attending WASC
20accredited private nonprofit colleges and universities has not
21increased since 1999:

22(1) It was cut by almost 15 percent for the 2005-06 and 2006-07
23cohorts.

24(2) It was cut by 5 percent for new and renewal grants for the
252012-13 award year, and is scheduled to be cut an additional 1.5
26percent in the 2013-14 award year and 11 percent in the 2014-15
27award year for new awardees.

28(3) Even if the maximum award had not been cut, its valuebegin delete hasend delete
29begin insert would have end insert decreased by over 30 percent due to inflation.

P3    1(4) In inflation-adjusted dollars, the maximum award for the
22014-15 award year will be the lowest amount California has
3invested in academically qualified, financially deserving students
4that attend private nonprofit WASC accredited institutions.

5(f) Cal Grant students attending private nonprofit WASC
6accredited institutions are a good investment for the state because
7of all of the following:

8(1) They have a high persistence and graduation rate.

9(2) They free up capacity at public institutions.

10(3) They are unlikely to need Cal Grant assistance for their
11children.

12(g) The Cal Grant program effectively and successfully helps
13California’s private nonprofit colleges and universities to recruit,
14retain, and graduate historically underrepresented students from
15low-income families. Cal Grants are a ladder of opportunity, and
16they leverage nonpublic student aid to help students graduate from
17college without excessive student debt:

18(1) Cal Grant recipients are 33 percent Latino, 18 percent Asian
19American, 6 percent African American, 1 percent Native American,
201 percent Pacific Islander, 4 percent two or more races, 13 percent
21unknown, and 24 percent Caucasian.

22(2) Cal Grant recipients are some of California’s financially
23neediest students, with an average family income for Cal Grant A
24students of $40,896.

25(h) Cal Grant students at California’s WASC accredited private
26nonprofit colleges and universities account for less that 2 percent
27of California’s postsecondary education budget.

28(i) Cal Grant students at WASC accredited private nonprofit
29colleges and universities deserve to be treated similarly to as similar
30students attending public institutions.

31(j) Predictable and stable funding formulas and eligibility
32requirements ensure that the state maximizes its investment and
33allows families to plan and pay for higher education.

34(k) Legislative action is needed to adopt a reasonable formula
35that supports predictability and supports parity for students at
36private nonprofit colleges.

37

SEC. 2.  

Section 66021.2 of the Education Code is amended to
38read:

39

66021.2.  

Consistent with the state’s historic commitment to
40provide educational opportunity by ensuring both student access
P4    1to and selection of an institution of higher education for students
2with financial need, the long-term policy of the
3Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
4established pursuant to Chapter 1.7 (commencing with Section
569430) of Part 42 shall be as follows:

6(a) Commencing with the 2001-02 academic year and every
7year thereafter, an applicant for a Cal Grant A or B award shall
8receive an award that is not in excess of the financial need amount
9determined by the Student Aid Commission pursuant to Section
1069432.9 if he or she complies with all of the following
11requirements:

12(1) Demonstrates financial need under the criteria adopted
13pursuant to Section 69432.9.

14(2) Attains a grade point average, as defined in Section 69432.7,
15meeting the requirements of Chapter 1.7 (commencing with Section
1669430) of Part 42.

17(3) Complies with each of the eligibility criteria applicable to
18the type of Cal Grant award for which he or she is applying.

19(b) (1) The maximum Cal Grant A award for a student attending
20the University of California or the California State University shall
21equal the mandatory systemwide fees in each of those segments.

22(2) The maximum Cal Grant B award for a student to which
23this subdivision is applicable shall equal the mandatory systemwide
24fees in the segment attended by the student, except for community
25college students who receive waivers from the Board of Governors
26of the California Community Colleges, plus the access award
27calculated as specified in Article 3 (commencing with Section
2869435) of Chapter 1.7 of Part 42, except that in the first year of
29enrollment in a qualifying institution, the maximum award shall
30be only for the amount of the access award.

31(c) The maximum Cal Grant awards for students attending
32nonpublic institutions shall be as follows:

33(1) The maximum Cal Grant A award shall equal the tuition
34award level established in the Budget Act of 2000, or the amount
35as adjusted in subsequent annual budget acts.

36(2) The maximum Cal Grant B award shall equal the amount
37of the tuition award as established in the Budget Act of 2000, or
38the amount as adjusted in subsequent annual budget acts, plus the
39amount of the access costs specified in Section 69435, except that,
P5    1in the first year of enrollment in a qualifying institution, the
2maximum award shall be only for the amount of the access award.

3(3) begin delete(A)end deletebegin deleteend deleteNotwithstanding paragraphs (1) and (2),begin delete the maximumend delete
4begin insert and notwithstanding Section 69432:end insert

5begin insert(A)end insertbegin insertend insertbegin insertThe maximumend insert Cal Grant award forbegin delete students attending
6nonpublic institutionsend delete
begin insert a student attending a nonprofit, nonpublic
7postsecondary educational institution end insert
accredited by the Western
8Association of Schools and Colleges shall be set and maintained
9at 80 percent of thebegin delete estimated average General Fund cost of
10educating a Cal Grant eligibleend delete
begin insert base funding per Cal Grantend insert student
11at the University of Californiabegin delete orend deletebegin insert andend insert the California State
12University, as begin deletecalculated by the commissionend deletebegin insert determined by the
13average state support per student plus the average Cal Grant
14award for the University of California and the California State
15Universityend insert
, except as provided inbegin delete subparagraphs (B) to (E)end deletebegin insert clauses
16(i) to (iv)end insert
, inclusive.

begin delete

17(B)

end delete

18begin insert(end insertbegin inserti)end insert For the 2014-15 award year, the maximum award shall be
1970 percent of the amount calculated pursuant to subparagraph (A).

begin delete

20(C)

end delete

21begin insert(ii)end insert For the 2015-16 award year, the maximum award shall be
2280 percent of the amount calculated pursuant to subparagraph (A).

begin delete

23(D)

end delete

24begin insert(iii)end insert For the 2016-17 award year, the maximum award shall be
2590 percent of the amount calculated pursuant to subparagraph (A).

begin delete

26(E)

end delete

27begin insert(iv)end insert For the 2017-18 award year and each award year thereafter,
28the maximum award shall be 100 percent of the amount calculated
29pursuant to subparagraph (A).

begin insert

30(B) A nonprofit, nonpublic postsecondary educational institution
31accredited by the Western Association of Schools and Colleges
32shall be deemed a qualifying institution if the total amount of
33institutional aid provided to California resident students by that
34institution, in any award year, is no less than 50 percent of the
35total Cal Grant awards received by its students, unless that
36institution has fewer than 50 students receiving Cal Grant awards
37or charges an annual tuition that is no more than 50 percent of
38the average of the annual tuition charged by all institutions to
39which this subparagraph is applicable.

end insert
begin insert

40(C) As used in this paragraph:

end insert
begin insert

P6    1(i) “Average state support per student” means the total General
2Fund support for the University of California and the California
3State University divided by the number of California resident
4full-time equivalent students for each four-year public segment.

end insert
begin insert

5(ii) “Institutional aid” includes scholarships and fellowships
6granted and funded by a postsecondary educational institution or
7by a department within that institution, and includes scholarships
8targeted to certain individuals based on, for example, state of
9residence, major field of study, or athletic team participation, for
10which the institution designates the recipient.

end insert

11(d) Commencing with the 2000-01 academic year, and each
12academic year thereafter, the Cal Grant C award shall be utilized
13only for occupational or technical training.

14(e) Commencing with the 2000-01 academic year, and each
15academic year thereafter, the Cal Grant T award shall be used only
16for one academic year of full-time attendance in a program of
17professional preparation that has been approved by the California
18Commission on Teacher Credentialing.

19(f) An institution of higher education in this state that
20participates in the Ortiz-Pacheco-Poochigian-Vasconcellos Cal
21Grant Program shall not reduce its level of per capita need-based
22institutional financial aid to undergraduate students, excluding
23loans, below the total level awarded in the 2000-01 academic year.

24(g) The implementation of the policy set forth in this section
25shall maintain a balance between the state’s policy goals of
26ensuring student access to and selection of an institution of higher
27education for students with financial need and academic merit.

28(h) It is the policy of the State of California that the
29Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
30supplement the federal Pell Grant program.

31(i) An award under the Ortiz-Pacheco-Poochigian-Vasconcellos
32Cal Grant Program shall not guarantee admission to an institution
33of higher education or admission to a specific campus or program.

begin delete
34

SEC. 3.  

Section 69432.7 of the Education Code is amended to
35read:

36

69432.7.  

As used in this chapter, the following terms have the
37following meanings:

38(a) An “academic year” is July 1 to June 30, inclusive. The
39starting date of a session shall determine the academic year in
40which it is included.

P7    1(b) “Access costs” means living expenses and expenses for
2transportation, supplies, and books.

3(c) “Award year” means one academic year, or the equivalent,
4of attendance at a qualifying institution.

5(d) “College grade point average” and “community college
6grade point average” mean a grade point average calculated on the
7basis of all college work completed, except for nontransferable
8units and courses not counted in the computation for admission to
9a California public institution of higher education that grants a
10baccalaureate degree.

11(e) “Commission” means the Student Aid Commission.

12(f) “Enrollment status” means part- or full-time status.

13(1) “Part time,” for purposes of Cal Grant eligibility, means 6
14to 11 semester units, inclusive, or the equivalent.

15(2) “Full time,” for purposes of Cal Grant eligibility, means 12
16or more semester units or the equivalent.

17(g) “Expected family contribution,” with respect to an applicant,
18shall be determined using the federal methodology pursuant to
19subdivision (a) of Section 69506 (as established by Title IV of the
20 federal Higher Education Act of 1965, as amended (20 U.S.C. Sec.
211070 et seq.)) and applicable rules and regulations adopted by the
22commission.

23(h) “High school grade point average” means a grade point
24average calculated on a 4.0 scale, using all academic coursework,
25for the sophomore year, the summer following the sophomore
26year, the junior year, and the summer following the junior year,
27excluding physical education, reserve officer training corps
28(ROTC), and remedial courses, and computed pursuant to
29regulations of the commission. However, for high school graduates
30who apply after their senior year, “high school grade point average”
31includes senior year coursework.

32(i) “Instructional program of not less than one academic year”
33means a program of study that results in the award of an associate
34or baccalaureate degree or certificate requiring at least 24 semester
35units or the equivalent, or that results in eligibility for transfer from
36a community college to a baccalaureate degree program.

37(j) “Instructional program of not less than two academic years”
38means a program of study that results in the award of an associate
39or baccalaureate degree requiring at least 48 semester units or the
P8    1equivalent, or that results in eligibility for transfer from a
2community college to a baccalaureate degree program.

3(k) “Maximum household income and asset levels” means the
4applicable household income and household asset levels for
5participants, including new applicants and renewing recipients, in
6the Cal Grant Program, as defined and adopted in regulations by
7the commission for the 2001-02 academic year, which shall be
8set pursuant to the following income and asset ceiling amounts:


9

 

CAL GRANT PROGRAM INCOME CEILINGS

P8   1129P8   31

 

 

Cal Grant A,
C, and T

Cal Grant B

Dependent and Independent students with dependents*

Family Size

  Six or more

$74,100  

$40,700  

  Five

$68,700  

$37,700  

  Four

$64,100  

$33,700  

  Three

$59,000  

$30,300  

  Two

$57,600  

$26,900  


Independent


  Single, no dependents

$23,500  

$23,500  

  Married

$26,900  

$26,900  

29P8   31

 

26*Applies to independent students with dependents other than a
27spouse.
28

 

CAL GRANT PROGRAM ASSET CEILINGS

P8   31

 

 

Cal Grant A,
C, and T

Cal Grant B


Dependent**   


$49,600  


$49,600  

Independent   

$23,600  

$23,600  

 

37**Applies to independent students with dependents other than a
38spouse.
39

P9    1The commission shall annually adjust the maximum household
2income and asset levels based on the percentage change in the cost
3of living within the meaning of paragraph (1) of subdivision (e)
4of Section 8 of Article XIII B of the California Constitution. The
5maximum household income and asset levels applicable to a
6renewing recipient shall be the greater of the adjusted maximum
7household income and asset levels or the maximum household
8income and asset levels at the time of the renewing recipient’s
9initial Cal Grant award. For a recipient who was initially awarded
10a Cal Grant for an academic year before the 2011-12 academic
11year, the maximum household income and asset levels shall be the
12greater of the adjusted maximum household income and asset
13levels or the 2010-11 academic year maximum household income
14and asset levels. An applicant or renewal recipient who qualifies
15to be considered under the simplified needs test established by
16federal law for student assistance shall be presumed to meet the
17asset level test under this section. Before disbursing any Cal Grant
18funds, a qualifying institution shall be obligated, under the terms
19of its institutional participation agreement with the commission,
20to resolve any conflicts that may exist in the data the institution
21possesses relating to that individual.

22(l) (1) “Qualifying institution” means an institution that
23complies with paragraphs (2) and (3) and is any of the following:

24(A) A California private or independent postsecondary
25educational institution that participates in the Pell Grant Program
26and in at least two of the following federal campus-based student
27aid programs:

28(i) Federal Work-Study.

29(ii) Perkins Loan Program.

30(iii) Supplemental Educational Opportunity Grant Program.

31(B) (i) Except as provided in clause (ii), a nonprofit institution
32headquartered and operating in California that certifies to the
33commission that 10 percent of the institution’s operating budget,
34as demonstrated in an audited financial statement, is expended for
35purposes of institutionally funded student financial aid in the form
36of grants, that demonstrates to the commission that it has the
37administrative capacity to administer the funds, that is accredited
38by the Western Association of Schools and Colleges, and that
39meets any other state-required criteria adopted by regulation by
40the commission in consultation with the Department of Finance.
P10   1A regionally accredited institution that was deemed qualified by
2the commission to participate in the Cal Grant Program for the
32000-01 academic year shall retain its eligibility as long as it
4maintains its existing accreditation status.

5(ii) No postsecondary educational institution headquartered in
6the state, registered as a nonprofit public benefit corporation
7pursuant to Part 2 (commencing with Section 5110) of Division 2
8of Title 1 of the Corporations Code, and accredited by the Western
9Association of Schools and Colleges shall be deemed a qualifying
10institution if the total amount of institutional aid provided to
11California students by all institutions to which this clause is
12applicable, in the aggregate, in any award year, is less than 50
13percent of the total Cal Grant awards received by their students,
14unless that institution has fewer than 50 students receiving Cal
15Grant awards and charges an annual tuition that is no more than
1650 percent of the average of the annual tuition charged by all
17institutions to which this clause is applicable.

18(C) A California public postsecondary educational institution.

19(2) (A) The institution shall provide information on where to
20access California license examination passage rates for the most
21recent available year from graduates of its undergraduate programs
22leading to employment for which passage of a California licensing
23 examination is required, if that data is electronically available
24through the Internet Web site of a California licensing or regulatory
25agency. For purposes of this paragraph, “provide” may exclusively
26include placement of an Internet Web site address labeled as an
27access point for the data on the passage rates of recent program
28graduates on the Internet Web site where enrollment information
29is also located, on an Internet Web site that provides centralized
30admissions information for postsecondary educational systems
31with multiple campuses, or on applications for enrollment or other
32program information distributed to prospective students.

33(B) The institution shall be responsible for certifying to the
34commission compliance with the requirements of subparagraph
35(A).

36(3) (A) The commission shall certify by October 1 of each year
37the institution’s latest three-year cohort default rate and graduation
38rate as most recently reported by the United States Department of
39Education.

P11   1(B) For purposes of the 2011-12 academic year, an otherwise
2qualifying institution with a three-year cohort default rate reported
3by the United States Department of Education that is equal to or
4greater than 24.6 percent shall be ineligible for initial and renewal
5Cal Grant awards at the institution, except as provided in
6subparagraph (F).

7(C) For purposes of the 2012-13 academic year, and every
8 academic year thereafter, an otherwise qualifying institution with
9a three-year cohort default rate that is equal to or greater than 15.5
10percent, as certified by the commission on October 1, 2011, and
11every year thereafter, shall be ineligible for initial and renewal Cal
12Grant awards at the institution, except as provided in subparagraph
13(F).

14(D) (i) An otherwise qualifying institution that becomes
15ineligible under this paragraph for initial and renewal Cal Grant
16awards shall regain its eligibility for the academic year for which
17it satisfies the requirements established in subparagraph (B), (C),
18or (G), as applicable.

19(ii) If the United States Department of Education corrects or
20revises an institution’s three-year cohort default rate or graduation
21rate that originally failed to satisfy the requirements established
22in subparagraph (B), (C), or (G), as applicable, and the correction
23or revision results in the institution’s three-year cohort default rate
24or graduation rate satisfying those requirements, that institution
25shall immediately regain its eligibility for the academic year to
26which the corrected or revised three-year cohort default rate or
27graduation rate would have been applied.

28(E) An otherwise qualifying institution for which no three-year
29cohort default rate or graduation rate has been reported by the
30United States Department of Education shall be provisionally
31eligible to participate in the Cal Grant Program until a three-year
32cohort default rate or graduation rate has been reported for the
33institution by the United States Department of Education.

34(F) (i) An institution that is ineligible for initial and renewal
35Cal Grant awards at the institution under subparagraph (B), (C),
36or (G) shall be eligible for renewal Cal Grant awards for recipients
37who were enrolled in the ineligible institution during the academic
38year before the academic year for which the institution is ineligible
39and who choose to renew their Cal Grant awards to attend the
P12   1ineligible institution. Cal Grant awards subject to this subparagraph
2shall be reduced as follows:

3(I) The maximum Cal Grant A and B awards specified in the
4annual Budget Act shall be reduced by 20 percent.

5(II) The reductions specified in this subparagraph shall not
6impact access costs as specified in subdivision (b) of Section
769435.

8(ii) This subparagraph shall become inoperative on July 1, 2013.

9(G) For purposes of the 2012-13 academic year, and every
10academic year thereafter, an otherwise qualifying institution with
11a graduation rate of 30 percent or less for students taking 150
12percent or less of the expected time to complete degree
13requirements, as reported by the United States Department of
14Education and as certified by the commission pursuant to
15subparagraph (A), shall be ineligible for initial and renewal Cal
16Grant awards at the institution, except as provided for in
17subparagraphs (F) and (I).

18(H) Notwithstanding any other law, the requirements of this
19paragraph shall not apply to institutions with 40 percent or less of
20undergraduate students borrowing federal student loans, using
21information reported to the United States Department of Education
22for the academic year two years before the year in which the
23commission is certifying the three-year cohort default rate or
24graduation rate pursuant to subparagraph (A).

25(I) Notwithstanding subparagraph (G), an otherwise qualifying
26institution with a three-year cohort default rate that is less than 10
27percent and a graduation rate above 20 percent for students taking
28150 percent or less of the expected time to complete degree
29requirements, as certified by the commission pursuant to
30subparagraph (A), shall remain eligible for initial and renewal Cal
31Grant awards at the institution through the 2016-17 academic year.

32(J) The commission shall do all of the following:

33(i) Notify initial Cal Grant recipients seeking to attend, or
34attending, an institution that is ineligible for initial and renewal
35Cal Grant awards under subparagraph (C) or (G) that the institution
36is ineligible for initial Cal Grant awards for the academic year for
37which the student received an initial Cal Grant award.

38(ii) Notify renewal Cal Grant recipients attending an institution
39that is ineligible for initial and renewal Cal Grant awards at the
40institution under subparagraph (C) or (G) that the student’s Cal
P13   1Grant award will be reduced by 20 percent, or eliminated, as
2appropriate, if the student attends the ineligible institution in an
3academic year in which the institution is ineligible.

4(iii) Provide initial and renewal Cal Grant recipients seeking to
5attend, or attending, an institution that is ineligible for initial and
6renewal Cal Grant awards at the institution under subparagraph
7(C) or (G) with a complete list of all California postsecondary
8educational institutions at which the student would be eligible to
9receive an unreduced Cal Grant award.

10(K) By January 1, 2013, the Legislative Analyst shall submit
11to the Legislature a report on the implementation of this paragraph.
12The report shall be prepared in consultation with the commission,
13 and shall include policy recommendations for appropriate measures
14of default risk and other direct or indirect measures of quality or
15effectiveness in educational institutions participating in the Cal
16Grant Program, and appropriate scores for those measures. It is
17the intent of the Legislature that appropriate policy and fiscal
18committees review the requirements of this paragraph and consider
19changes thereto.

20(m) “Satisfactory academic progress” means those criteria
21required by applicable federal standards published in Title 34 of
22the Code of Federal Regulations. The commission may adopt
23regulations defining “satisfactory academic progress” in a manner
24that is consistent with those federal standards.

end delete


O

    97