BILL ANALYSIS Ó AB 1590 Page 1 Date of Hearing: April 9, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 1590 (Wieckowski) - As Amended: March 24, 2014 Policy Committee: Higher EducationVote:12-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill: 1)Requires the California Student Aid Commission (CSAC) to certify cohort default rate and graduation rate data, for postsecondary educational institutions seeking to participate in the Cal Grant Program, by November 1 instead of October 1 annually. 2)Revises federal loan program participation requirements for private Cal Grant qualifying institutions to include participation in the Stafford Loan Program rather than the Perkins Loan Program. FISCAL EFFECT Minor absorbable costs to CSAC. COMMENTS 1)Background . The 2011-12 Budget Act in part established requirements linking an institution's participation in the Cal Grant Program to the percentage of students borrowing federal loans and the number of students defaulting on those loans within three years of entering repayment. In the 2012-13 Budget Act, the requirements regarding loan defaults were tightened and a graduation rate requirement was established. Based on data certified by CSAC, in the current academic year, 122 institutions (primarily for-profit colleges) are ineligible to participate in the program. AB 1590 Page 2 Consistent with a recommendation of the Legislative Analyst's Office, this bill moves the certification date from October 1 to November 1 to coincide with U.S. Department of Education (USDE) schedule for posting graduation rates, and require CSAC to use the most recent available data published by USDE. 2)Stafford vs. Perkins Loans . Current law requires private Cal Grant qualifying institutions to participate in at least two of three outlined federal campus-based student aid programs (Federal Work-Study, Perkins Loan Program, or Supplemental Educational Opportunity Grant Program). This bill removes the Perkins Loan Program and replaces it with the Stafford Loan Program. The Perkins Loan Program is limited only to those schools who already participate. The Stafford Loan Program is offered at more institutions, and available to more students. For 2012-13, nearly 500 California institutions participated in Stafford Loan Programs, while only 121 California institutions participated in Perkins Loan Programs. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081