BILL ANALYSIS Ó
AB 573
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 573
(Medina) - As Introduced February 24, 2015
SUBJECT: Student financial aid: Cal Grant Program: Student
Aid Commission
SUMMARY: Requires the California Student Aid Commission (CSAC)
to establish a complete listing of California postsecondary
educational institutions and identify which institutions are
eligible and ineligible for participation in the Cal Grant
program, and to make this information readily available on
CSAC's Internet Web site.
EXISTING LAW:
1)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
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and the competitive Cal Grant awards. The program consists of
the Cal Grant A, Cal Grant B, and Cal Grant C programs;
eligibility is based upon financial need, grade point average,
residency, and other eligibility criteria. (Education Code
Section 69430-69433.9)
2)Requires institutions to meet specified criteria in order to
participate in the Cal Grant program, including, for
institutions with more than 40% of undergraduate students
borrowing federal student loans, (a) a three-year cohort
default rate (CDR) equal to or below 15.5%; and, (b) a
graduation rate above 20% for the 2015-16, 2016-17 and the
2017-18 academic years, and above 30% for subsequent academic
years. (EDC 69432.7)
3)Requires CSAC to notify initial and renewal Cal Grant
recipients of changes and the impact to their awards and to
provide affected Cal Grant recipients with a complete list of
all California postsecondary educational institutions at which
the student would be eligible to receive an unreduced Cal
Grant Award. (EDC 69432.7)
FISCAL EFFECT: Unknown
COMMENTS: Background. In an effort to increase accountability
over public financial aid expenditures and address the budget
deficit, as a part of the 2011-12 Budget Act, California
established requirements linking an institution's participation
in the Cal Grant Program to the percentage of students borrowing
federal loans and the number of students defaulting on those
federal loans within three years of entering repayment. To
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participate in the Cal Grant program in the 2011-12 academic
year, an institution was required to have a CDR of less than
24.6%. In 2011-12, 76 institutions failed to meet the CDR
requirements.
According to information provided by the Legislative Analyst's
Office (LAO), about 3,200 students offered new Cal Grant awards
in 2011-12 were planning to attend schools deemed ineligible.
About 550 of these students instead attended eligible schools,
and another 450 requested leaves of absence to preserve their
award for later use. The remaining 2,200 students did not claim
their Cal Grants and information concerning college attendance
is unavailable. For students receiving renewal Cal Grant
awards, of the 1,700 attending ineligible institutions
approximately 60% remained at their institution and received a
reduced award (an option no longer available to students), 9%
transferred to eligible colleges, and another 4% took leaves of
absence. No information is available on the remaining students.
In the 2012-13 Budget Act, the requirements regarding loan
defaults were tightened to require a CDR of less than 15.5%, and
a graduation rate of greater than 30%, as reported by the
Integrated Postsecondary Education Data System (IPEDS). IPEDS
graduation data calculates the percentage of first-time,
full-time students who began in the fall term and graduate
within 150% of the published program length. For example, the
2012 graduation rate for bachelor's degree programs is based on
the number of students who began their pursuit as a full-time,
first-time student in the fall of 2006.
In the 2015-16 academic year, institutions are required to
maintain a CDR of less than 15.5% and a graduation rate of
greater than 20%. As reported by CSAC, 301 institutions have
been deemed Cal Grant eligible; an additional 23 institutions
have been identified as potentially eligible, pending receipt of
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additional data. CSAC published a list of 21 ineligible
institutions. According to CSAC, institutions that had been
eligible for three or more consecutive years (2013-14, 2014-15,
and 2015-16) were not included in the 2015-16 ineligible
institution list.
Purpose of this bill. According to the author, currently CSAC
does not post a complete list of Cal Grant ineligible
institutions on its website. This bill is intended to ensure
that CSAC provides a comprehensive list of Cal Grant eligible
and ineligible institutions so that students have access to
information that will allow them to make informed educational
choices.
REGISTERED SUPPORT / OPPOSITION:
Support
California Student Aid Commission
The Institute for College Access and Success
AB 573
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Opposition
None on File
Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960