BILL ANALYSIS Ó AB 200 Page 1 ASSEMBLY THIRD READING AB 200 (Alejo and Jones-Sawyer) As Amended May 28, 2015 Majority vote ------------------------------------------------------------------ |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+-----------------------+------------------| |Higher |12-0 |Medina, Baker, Bloom, | | |Education | |Chávez, Harper, Irwin, | | | | |Levine, Linder, Low, | | | | |Santiago, Weber, | | | | |Williams | | | | | | | |----------------+------+-----------------------+------------------| |Appropriations |17-0 |Gomez, Bigelow, Bonta, | | | | |Calderon, Chang, Daly, | | | | |Eggman, Gallagher, | | | | |Eduardo Garcia, | | | | |Gordon, Holden, Jones, | | | | |Quirk, Rendon, Wagner, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Establishes the number of Competitive Cal Grant A and B awards to be 22,500 for the 2015-16 academic year, 50,000 for the AB 200 Page 2 2016-17 academic year, 60,000 for the 2017-18 academic year and each year thereafter. EXISTING LAW: Establishes the Cal Grant program awards to provide tuition and access cost assistance to eligible students attending qualified institutions. Students who are not eligible for entitlement awards may compete for a Cal Grant A or B Competitive award. The award benefits and eligibility requirements are the same as the entitlement program, but awards are not guaranteed. Annually, 22,500 Cal Grant Competitive awards are available. Of these, 50% are for students who do not qualify for a Cal Grant Entitlement award, but who otherwise meet the Cal Grant requirements. The remaining awards are set aside for eligible California Community College students. Maximum award amounts for California State University and University of California are established in the annual Budget Act and have traditionally covered all systemwide tuition and fees. The maximum tuition award for Cal Grant A and B for students attending private for-profit colleges is $4,000 (commencing 2013-14), and for students attending non-profit or Western Association of Schools and Colleges-accredited for-profit institutions is $8,056 (commencing 2015-16). FISCAL EFFECT: According to the Assembly Appropriations Committee, based on current average award amounts and the distribution of awards to students at each of the public postsecondary segments and students at non-public institutions, General Fund costs would be around $70 million in 2016-17, $150 million in 2017-18, $220 million in 2018-19, and $270 million in 2019-20 and thereafter. COMMENTS: A student's ability to pay for college is a major factor in enrollment and completion of a degree program; significant unmet need results in students being less likely to enroll and, once enrolled, low-income students are also less likely to complete their degree program. Financial aid plays a AB 200 Page 3 vital role in increasing access, retention, and completion rates. California has made a substantial commitment to affordability through the Cal Grant Program; still, there is room for improvement. Higher education affordability experts have consistently encouraged an increase in the number of awards provided in the Competitive Cal Grant Program. As previously noted, the Cal Grant Entitlement Programs guarantee awards to students who meet specified grade point average (GPA) and income-related criteria and apply within deadlines. The majority of Cal Grant recipients (211,300 in 2013-14) receive this type of award. The majority of Cal Grant applicants, however, do not qualify for an Entitlement award because they are more than a year out of high school, decide to go to college after the Entitlement application deadline, or do not meet age or other requirements when they transfer. Competitive Cal Grant A and B awards are available to middle and low income applicants who did not receive an entitlement award. Established in statute are minimum income/asset and academic performance requirements; generally aligned with the Entitlement requirements. However, because over 300,000 applicants compete for only 22,500 awards annually, Competitive Program award recipients must significantly exceed minimum requirements. In 2012-13, California Student Aid Commission reported that the typical Competitive Program award recipient was 31 years old, with a GPA of 3.41, a family size of 3.1, and a household income of $14,262. According to The Institute for College Access and Success (TICAS), hundreds of thousands of Competitive Program applicants meet eligibility requirements but are denied grants. TICAS notes that denied Competitive Program applicants have an average family income of less than $21,000, a family size of three, and GPA of 2.9. TICAS calculates that in 2001-02, at the inception of the Competitive Program, eligible applicants had a one in four chance of receiving a Competitive Program award. By AB 200 Page 4 2014-15, the chances of a qualified applicant receiving a Competitive Program award decreased to one in 17. This bill proposes to increase the number of Competitive Program awards from 22,500 for the 2015-16 academic year, to 60,000 by the 2017-18 academic year. According to supporters, this increase will help California's neediest students take more classes, go to school full-time, and ultimately complete their college degree in a timely manner. There is no opposition on file. Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960 FN: 0000688