BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1590| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1590 Author: Wieckowski (D) Amended: 8/13/14 in Senate Vote: 21 SENATE EDUCATION COMMITTEE : 6-0, 6/4/14 AYES: Liu, Wyland, Block, Hancock, Huff, Monning NO VOTE RECORDED: Correa, Vacancy, Vacancy SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 75-0, 4/24/14 (Consent) - See last page for vote SUBJECT : Cal Grant Program SOURCE : Author DIGEST : This bill 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. This bill 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. Senate Floor Amendments of 8/13/14 update the Education Code section being amended to reflect revisions made in the 2014-15 Budget. In addition, the amendments delete obsolete provisions CONTINUED AB 1590 Page 2 and make several technical changes. ANALYSIS : Existing law authorizes the Cal Grant Program, administered by CSAC, to provide grants to financially needy students to attend college. The Cal Grant Programs include both the entitlement and the competitive Cal Grant awards. The Program consists of the Cal Grant A, Cal Grant B, and Cal Grant C Programs, and eligibility is based upon financial need, grade point average, California residency, and other eligibility criteria, as specified. The 2012 and 2013 Budget Acts established new requirements for institutional participation in the Cal Grant Program (SB 70, Chapter 7, Statutes of 2011, and SB 1016, Chapter 38, Statutes of 2012) by providing that: 1.For the 2011-12 academic year, an otherwise qualifying institution for the Cal Grant Program must maintain a three-year cohort default rate equal to or below 24.6% to be eligible for Cal Grant awards at the institution. 2.For 2012-13, and every academic year thereafter, colleges must maintain three year cohort default rates below 15.5% in order to be eligible for initial and renewal Cal Grant awards at the institution. 3.For 2012-13 and every academic year thereafter, an institution must maintain a graduation rate above 30% to be eligible for Cal Grant awards at the institution. 4.There is an exception to these requirements for an institution with a three- year cohort default rate of below 10% and a graduation rate above 20% through the 2016-17 academic year. In addition, the budget required that, until July 1, 2013, an institution that is ineligible for initial or renewal Cal Grant awards because it fails to meet cohort default rate or graduation rate requirements is eligible for a Cal Grant award for 20% less of the fee portion of the maximum Cal Grant A and B awards for those students who were enrolled at the institution in the academic year prior to the institution's ineligibility. It also prohibited the reductions from impacting the access costs covered by the Cal Grant B award. CONTINUED AB 1590 Page 3 Finally, the budget required that the CSAC notify initial and renewal Cal Grant recipients of these changes and the impact to their awards, as appropriate. In addition, the CSAC is required to provide affected Cal Grant recipients with a complete list of all California postsecondary educational institutions at which the student will be eligible to receive an unreduced Cal Grant award. Existing law provides that the cohort default rate and graduation requirements do not apply to institutions with 40% or less of its students borrowing federal student loans. Existing law requires the Legislative Analyst Office (LAO) to submit a report on the implementation of the changes to Cal Grant eligibility implemented by the Budget Act of 2012, by January 1, 2013. This bill: 1.Makes changes to the requirements which must be met in order to be a "qualifying institution" for purposes of the Cal Grant Program: A. Replaces the requirement that a California private or independent postsecondary educational institution that participates in the Pell Grant Program also participate in the Perkins Loan Program with the Stafford Loan Program. B. Requires that the CSAC certify the institution's official three-year cohort default rate and graduation rate. C. Changes the date by which the CSAC must certify an institution's latest official three-year cohort default rate and graduation rate, from October 1 to November 1. D. Consolidates the definition of graduation rate within a single subdivision. 1.Makes other technical and conforming changes. 2.Delete's obsolete LAO reporting requirements. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes CONTINUED AB 1590 Page 4 Local: No SUPPORT : (Verified 8/13/14) California Counsel Economic Education California State Student Association California Student Aid Commission ASSEMBLY FLOOR : 75-0, 4/24/14 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Grove, Hagman, Hall, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Gray, Harkey, Mansoor, Nazarian, Vacancy PQ:e 8/14/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED