BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1028 (Jackson) - Cal Grant C Awards Amended: May 6, 2014 Policy Vote: Education 8-1 Urgency: No Mandate: Yes Hearing Date: May 23, 2014 Consultant: Jacqueline Wong-Hernandez SUSPENSE FILE. AS AMENDED. Bill Summary: SB 1028 requires the California Student Aid Commission (CSAC), in selecting students to receive a Cal Grant C award, to give special consideration to students who meet specified criteria, including the employment status of the applicant, increases the annual award amount for all Cal Grant C recipients to between $3,009-$5,000 if sufficient funds are available, authorizes the use of the awards for living expenses, and establishes new criteria and processes for identifying areas of occupational and workforce training which qualify for the awards. Fiscal Impact (as approved on May 23, 2014): Administration: Potentially significant costs to the CSAC to coordinate with specified state, local, and private entities to identify priority occupational areas, and to make application scoring changes. The bulk of the costs would be for an additional Associate Governmental Programs Analyst, at a cost of approximately $80,000, to act as the lead for implementing these provisions. Program publicity: Potentially significant costs to develop and implement a plan to publicize the Cal Grant Program to California's long-term unemployed. Background: Existing law authorizes the Cal Grant Program, administered by the 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 (GPA), California residency, and other eligibility criteria, as specified. (Education Code 69430-69433.9) SB 1028 (Jackson) Page 1 Cal Grant C awards assist with tuition and training costs at occupational or vocational programs and may be used for institutional fees, charges, and other costs, including tuition, plus training-related costs, such as special clothing, local transportation, required tools, equipment, supplies, and books. Current law establishes the total number of Cal Grant C awards as the number awarded in the 2000-01 fiscal year (7,761) with the maximum award amount and the total amount of funding being determined in the annual Budget Act. Current law requires the CSAC to consult with appropriate state and federal agencies to develop areas of occupational and technical training for which students may utilize Cal Grant C awards. The commission, if necessary, may also consult with nongovernmental stakeholders that develop or provide workforce training or employ graduates of occupational and technical training programs for this purpose. These areas of occupational and technical training are required to be regularly reviewed and updated at least every five years, beginning in 2012. The CSAC is also required to undertake various activities to support the granting of priority to certain Cal Grant C applicants. Specifically, the CSAC is required to: Give priority in granting Cal Grant C awards to students pursuing occupational or technical training in areas that meet at least two of the following criteria: high employment need, high employment salary or wage projections, and high employment growth. The CSAC is required to determine areas of occupational or technical training that meet these criteria in consultation with the Employment Development Department (EDD) using projections available through the Labor Market Information Data Library. Publish, and retain, on its Internet Web site a current list of the areas of occupational or technical training that meet these criteria and to update this list as necessary. Examine the graduation rates and job placement data of eligible programs, and commencing with the 2014-15 academic year, to give priority to Cal Grant C applicants seeking to enroll in programs that rate high in graduation rates and job placement data. SB 1028 (Jackson) Page 2 The Legislative Analyst's Office (LAO) is required to submit a report to the Legislature on the outcomes of the Cal Grant C program on or before April 1, 2015, and on or before April 1 of each odd-numbered year thereafter, as specified. (EC § 69439) Proposed Law: This bill requires the CSAC, in selecting students to receive a Cal Grant C award, to give special consideration to the social and economic situation of applicants by giving additional weight to disadvantaged applicants, applicants who face economic hardship, and applicants who face particular barriers to employment. This bill requires that the criteria to be considered for purposes of determining social and economic hardship include, but not be limited to, all of the following: a) family income and household size; b) household status, including whether the student is a single parent or the child of a single parent; and, c) the employment status of the applicant, and whether the applicant is unemployed, giving greater weight to the "long-term unemployed." This bill increases the annual award amount of a Cal Grant C to at least $3,009 and no more than $5,000, if sufficient funds are available. It authorizes the use of Cal Grant C awards for books and living expenses and requires that the CSAC consider, in determining the individual award amount: a) the financial means available to the student to fund the course of study; b) the costs of attendance; and, c) other state and federal programs available to the applicant. This bill specifies the state entities with which the CSAC is required to consult, requires that the CSAC update the priority areas of occupational and technical training by January 1, 2016, and expands the criteria which must be met for an occupational or technical training area to qualify a student for priority in the granting of a Cal Grant C awards, as specified. This bill further requires the CSAC to consult with the EDD, the Chancellor's Office of the California Community Colleges, the California WIB and local WIBs to develop a plan to publicize the Cal Grant Program to California's long-term unemployed and to be used by those agencies when they come into contact with people experiencing long-term unemployment, and a plan to make students receiving awards aware of job search and placement services available through the EDD and the local WIB. SB 1028 (Jackson) Page 3 Staff Comments: This bill requires that "if sufficient funds are available" the annual Cal Grant C award amount be increased to $3,009-$5,000. Sufficient funds exist in the General Fund, but they would trade off with other General Fund expenditures. Such an increase would drive General Fund costs in the millions of dollars annually. This bill creates significant additional workload for the CSAC to take on various required activities relative to its changes to the Cal Grant C program. The CSAC has indicated it would require an additional PY and OE&E totaling $90,000. One of the tasks this bill requires of CSAC, is coordination the California WIB and local WIBs to develop a plan to publicize the Cal Grant Program to California's long-term unemployed and to be used by those agencies when they come into contact with people experiencing long-term unemployment, and a plan to make students receiving awards aware of job search and placement services available through the EDD and the local WIB. Implementing a publicity plan to be used by CSAC, and the WIBs will likely drive additional costs, the extent of which will be determined by the plan. Committee amendments delete the Cal Grant C award increase, and specify that local workforce investment boards are only required to participate in coordination efforts with the CSAC to the extent that they are required to complete those activities pursuant to federal law.