BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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  
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          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.


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          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    

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          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

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