BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 25
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|Author: |Gipson |
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|Version: |April 8, 2015 Hearing |
| |Date: June 24, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Olgalilia Ramirez |
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Subject: Financial aid: Cal Grant program: renewal
SUMMARY This bill requires the California Student Aid Commission
(CSAC) to establish an appeal process for institutions failing
to meet Cal Grant program participation requirements and
authorizes the CSAC to grant an appeal for one academic year to
an institution with a small cohort of 20 individuals or less, as
specified.
BACKGROUND
1)Existing law authorizes the Cal Grant program, administered by
the CSAC, to provide grants to financially needy students to
attend a college or university. The Cal Grant programs include
both the entitlement and the competitive Cal Grant awards. The
program consists of the Cal Grant A, Cal B, and Cal Grant C
programs, and eligibility is based upon financial need, grade
point average, California residency and other criteria.
(Education Code 69430-69433.9)
2)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:
a) 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
percent to be eligible for Cal Grant awards at the
institution.
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b) For 2012-13, and every academic year thereafter,
colleges must maintain three year cohort default rates
below 15.5 percent in order to be eligible for initial and
renewal Cal Grant awards at the institution.
c) For 2012-13 and every academic year thereafter, an
institution must maintain a graduation rate above 30
percent to be eligible for Cal Grant awards at the
institution.
d) There is an exception to these requirements for an
institution with a three- year cohort default rate of below
15.5 percent and a graduation rate above 20 percent through
the 2016-17 academic year. (EC § 69432.7)
3)Existing law provides that the cohort default rate and
graduation requirements do not apply to institutions with 40
percent or less of its students borrowing federal student
loans. (EC § 69432.7)
ANALYSIS
This bill:
1)Requires the CSAC to establish an appeal process for an otherwise
qualifying institution that fails to satisfy existing
three-year CDR and graduation rate requirements.
2)Specifically authorizes the CSAC to grant an appeal for one
academic year if the commission determines the cohort of
students at the institution is 20 or less and that cohort is
not representative of the institution's overall performance.
STAFF COMMENTS
1)Need for the bill: As a condition of participating in the Cal
Grant program, institutions are required to meet specified
criteria including a 3-year cohort default rate below 15.5
percent and maintain a 20% graduation rate for the 2015-2016
academic year. According to the author, program participation
requirements have exposed the vulnerability of smaller
specialized Universities, where first time full time freshman
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(FTFTF) students typically have lower enrollment rates and
therefore, present volatility to campus Cal Grant eligibility.
The author asserts that the risk of losing Cal Grant
eligibility to the instability of a small sample size could
lead institutions to stop enrolling FTFTF students who would
otherwise be eligible to enroll, or to completely eliminate
programs that may attract these students.
This bill provides an otherwise qualifying institution, with a
very small cohort size that becomes ineligible due to CDR and
graduation rate requirements the opportunity to regain Cal
Grant eligibility following one academic year for which it
satisfied the specified thresholds.
2)Appeal process? Although some institutions deemed ineligible to
participate in the Cal Grant program have appealed to CSAC,
there is no statutory or regulatory guidance provided
regarding such a process. Current law allows an institution to
regain eligibility if the United State Department of Education
corrects or revises an institution's three-year CDR or
graduation rate that results in the institution satisfying
rate requirements. Most recently the CSAC heard from Marymount
California University, National Hispanic University, and
Charles R. Drew University of their institutional eligibility
to participate in the Cal Grant Program in 2014-15. Those
institutions whose CDR or graduation rate where miscalculated
successfully regained their eligibility.
3)Effect on schools. For the 2015-2016 academic year a total of 33
schools were found to be Cal Grant ineligible. Schools on the
ineligible list failed to meet one or both of the required
thresholds for the 2015-16 academic year. As mentioned schools
must keep their federal student loan CDR below 15.5 percent
and maintain their graduation rate above 20 percent. Included
among the list of ineligible schools is Charles R. Drew
University of Medicine and Science (CDU). CDU contends that
its unsatisfactory status is attribute to having a small
cohort of FTFTF undergraduate students, nine in 2005 and four
in 2006 (cohorts from whom the recent graduation rate derived)
are not representative of its ability to recruit and retain
undergraduate students with Cal Grant eligibility. Although
CDU tried to appeal its status to CSAC, current law constrains
the CSAC's ability to remedy the situation. The bill provides
CSAC with the statutory authority to establish an appeal
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process and grant an appeal to institutions whose small cohort
size is not representative of the institutions overall
performance, as specified. It is unclear how many schools
would fall under the 20 individuals or less threshold
specified in the bill.
4)Effect on Students. Initial and renewal Cal Grant recipients are
not able to use their Cal Grant awards at institutions that
fail to meet institutional CDR requirements; however, Cal
Grant awards are mobile, meaning if a student chooses to
transfer from one institution to another the award would
follow the student to the new school provided that the
institution is Cal Grant eligible.
5)Prior Legislation.
AB 640 (Hall, 2014) similar to this bill, would have required
CSAC to implement an appeal process for schools that fail to
meet the CDR and graduation rate requirements and authorized
CSAC to consider cohort size. AB 640 was held in the Senate
Appropriations Committee.
SB 1149 (Galgiani) was substantially similar to AB 640. SB
1149 was heard and passed by this Committee by a vote of 9-0
but was subsequently held in the Senate Appropriations
Committee.
SUPPORT
American Federation of State, County and Municipal Employees
(AFSCME)
Association of Independent California Colleges and Universities
(AICCU)
Charles Drew University of Medicine and Science
Our Lady of Victory Catholic Church
San Jose Evergreen Community College District
St. Aloysius Gonzaga Catholic Church
St. Lawrence of Brindisi Church
OPPOSITION
None received.
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