BILL ANALYSIS Ó
AB 831
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Date of Hearing: April 7, 2015
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 831
(Bonilla) - As Introduced February 26, 2015
SUBJECT: Student financial aid: Cal Grant Program
SUMMARY: Establishes a formula to determine the amount of Cal
Grant awards for students attending nonprofit, private colleges
based on the average General Fund subsidy the state provides for
financially needy students attending the University of
California and California State University. Specifically, this
bill:
1)Establishes findings and declarations regarding the importance
of private nonprofit colleges and universities accredited by
WASC to meet higher education needs and that stable
predictable funding formulas and eligibility requirements
ensure the state maximizes its investment by allowing families
to better plan and pay for higher education, in addition to
incentivizing private nonprofit colleges and universities to
enroll low-income Californians.
2)Establishes the maximum Cal Grant award amount for students
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attending private nonprofit institutions 75% of the base
funding per Cal Grant student at the UC and the CSU (the
average state support per student plus the average Cal Grant
award for UC and CSU), and phases in the maximum amounts as
follows:
a) $9,084 for 2015-16.
b) 70% of the amount calculated pursuant to (2) for
2016-17.
c) 80% of the amount calculated pursuant to (2) for
2017-18.
d) 90% of the amount calculated pursuant to (2) for
2018-19.
e) 100% of the amount calculated pursuant to (2) for
2019-20 and each year thereafter.
1)Requires, as a condition for the aforementioned funding, a
private nonprofit postsecondary educational institution to
submit performance metrics to the Association of Independent
California Colleges and Universities (AICCU).
2)Requires AICCU, in collaboration with the public higher
education segments, to determine a form and content for
consistent collection and reporting of required performance
metrics.
3)Requires AICCU to provide performance metric data in a
cumulative report to the Legislature, Governor, Department of
Finance, and Legislative Analyst's Office on or before March
15, 2016 and each year thereafter.
4)Requires the AICCU report to include all of the following data
with respect to each participating private nonprofit
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postsecondary educational institution:
a) The number of undergraduate students enrolled in that
institution and the percentage who are California
residents.
b) The number of graduate students enrolled in that
institution.
c) The number of transfer students from the California
Community Colleges (CCC) enrolled in that institution and
the percentage of undergraduate students of that
institution who are transfer students from the CCC.
d) The number of Pell Grant recipients enrolled in that
institution and the percentage of undergraduate students of
that institution who are Pell Grant recipients.
e) The number and percentage of Cal Grant recipients
enrolled in that institution and their ethnic composition
and the median amount of institutional aid provided to
them.
f) The four- and six-year graduation rates for freshman
entrants of that institution disaggregated by Pell and Cal
Grant recipients.
g) The two- and three-year graduation rates for transfer
students from the CCC disaggregated by Pell and Cal Grant
recipients.
h) The number of degrees awarded annually by the
institution in total and in each of the following
categories:
i) Undergraduate students who first enrolled in the
institution as freshmen.
ii) Undergraduate students who first enrolled in the
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institution as transfer students.
iii) Graduate students.
iv) Pell Grant recipients.
i) The number of degrees or credentials awarded in
health-related fields, teacher preparation, and the fields
of science, technology, engineering, and mathematics
(STEM).
5)Provides that the maximum award for new Cal Grant recipients
attending for-profit institutions accredited by the Western
Association of Schools and Colleges is $8,056.
6)Declares urgency for the statute to take effect immediately.
EXISTING LAW authorizes the Cal Grant Program, administered by
CSAC, to provide grants to financially needy students to attend
college. The maximum grants for Cal Grant A and B awards, for
students attending UC and CSU are equal to the amount of
mandatory systemwide fees at the respective segments. The
maximum award amount for students attending private institutions
is set at $4,000 for private for-profit institutions and for
private non-profit institutions or private for-profit WASC
accredited institutions, the amount is set at $9,084 for the
2014-15 award year and $8,056 for 2015-16.
FISCAL EFFECT: Unknown. However, the according to the Senate
Appropriations Committee analysis of similar legislation
authored in 2014, CSAC estimated that increasing Cal Grant award
levels for private, WASC-accredited colleges would result in
additional costs of $12.3 million in 2015-16, $34.9 million in
2016-17, $65.3 million in 2017-18, and $102 million in 2018-19
(General Fund).
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COMMENTS: Purpose of this bill. According to the author,
financially needy and academically deserving students should be
provided more choices when selecting a college. This bill
creates a Cal Grant award amount formula for students attending
private, nonprofit colleges and universities in order to create
fairness and predictability for students as they plan for
college.
The author notes that since the enactment of the Cal Grant
Entitlement program, there has been no policy for setting the
Cal Grant maximum award for students attending private,
nonprofit colleges and universities. The Cal Grant maximum for
students attending UC and CSU is equal to the system wide fees.
Since 2000, the Cal Grant award amount for students attending
private institutions has not been linked to any funding formula
and has been vulnerable to cuts resulting in a decline in value
by 37% in current dollars. Furthermore, the Cal Grant award for
students attending private, nonprofit institutions will receive
another 11% reduction for the upcoming school year should no
action be taken beforehand.
The author argues that the lack of a policy for determining the
Cal Grant award amount for students attending private, nonprofit
institutions has led to an unpredictable and arbitrarily
determined award amount. This process undermines the original
purpose of the Cal Grant program, which is to allow financially
needy students to choose an institution that best serves their
academic and financial needs. AB 831 seeks to strengthen the Cal
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Grant program and the portability of the award. It should be
noted that the majority of these students are underrepresented
in higher education and 35% of these students are the first in
their families to go to college. Students at California's
accredited private, nonprofit institutions have higher
graduation rates than students at public institutions and are
more likely to complete their degree in four years.
Background on Cal Grant Program. According to the Public Policy
Institute of California (PPIC), more than half of all
postsecondary students in California receive grant or
scholarship aid. The primary sources of financial aid funding
are the federal government (43% in 2012), the state government
(23% in 2012) and institutional aid (27% in 2012).
State grant aid in California is provided primarily through the
Cal Grant Program and the CCC Board of Governors Fee Waiver
program. Cal Grant A awards to cover full tuition and fees at
UC ($12,192) or CSU ($5,472), up to $8,056, beginning in
2015-16, at private colleges accredited by the Western
Association of Schools and Colleges (WASC), and up to $4,000 at
other private colleges. Cal Grant B awards provide additional
grant aid up to $1,648 for very low-income students to help pay
for access costs. Cal Grant C provides up to $2,462 in tuition
and $547 for living expenses for vocational students.
Cal Grant A and B Entitlement Awards guarantee awards to
students who meet specified GPA and income-related criteria and
apply within deadlines. The majority of Cal Grant recipients
(211,300 in 2013-14) receive an Entitlement 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
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available to applicants who did not receive an entitlement
award. In the Competitive program, over 300,000 applicants
compete annually for 22,500 awards.
Unmet need. According to The Institute for College Access and
Success (TICAS), the Cal Grant Program leaves the neediest
students underserved. Less than one quarter of the lowest
income aid applicants in California receives a Cal Grant and on
average lower income recipients are awarded smaller grants than
higher income recipients. TICAS notes that underrepresented
students are also less likely to receive grants, and their
grants tend to be smaller. The average student denied a Cal
Grant has an average family income of less than $21,000, a
family size of three, and a GPA of 2.9. The Committee may wish
to consider how the proposal contained in this bill, to increase
the maximum grant amount for students attending private
non-profit colleges, fits into overall higher education
affordability priorities.
Background on formula provisions. This bill establishes a
formula for calculating the amount of a Cal Grant award for
students attending private institutions. According to a 2005
report by the California Postsecondary Education Commission
(CPEC), prior to 2001 a formula for determining grant amounts of
non-public institutions similar to that established in this bill
was contained in statute. According to the CPEC, this formula
was developed in consultation with representatives from all of
California's postsecondary education institutions as well as the
Legislative Analyst's Office and the Department of Finance.
According to the CPEC, both the LAO and the California Student
Aid Commission recommended that the Legislature return to a
long-term Cal Grant policy that links the maximum award for
nonpublic institutions to the weighted average General Fund
subsidy the state provides for financially needy students
attending the UC and CSU. CPEC recommended that, in exchange
for these additional Cal Grant resources, institutions be
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required to annually report data on students to enable the State
to determine if funding was ensuring financially needy
Californians had higher education access and choice.
This bill contains reporting provisions consistent with the CPEC
recommendation and consistent with the reporting required of UC
and CSU pursuant to AB 94 (Committee on Budget), Chapter 50,
Statutes of 2013.
Prior Legislation. AB 1318 (Bonilla) of 2014 was substantially
similar to this bill except that under AB 1318, students
attending for-profit WASC accredited institutions would also
have been eligible for the increased award amount. AB 1318 was
held by the author on the Senate Floor.
REGISTERED SUPPORT / OPPOSITION:
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
Association of Independent California Colleges and Universities
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Biola University
California Institute of Technology
California Lutheran University
Charles Drew University of Medicine and Science
Claremont Graduate University
College Options
Dominican University of California
Fielding Graduate University
Fresno Pacific University
La Sierra University
Loyola Marymount University
Mills College
Marymount California University
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Mount Saint Mary's University
Pepperdine University
Point Loma Nazarene University
Sacramento Metropolitan Chamber of Commerce
Saint Mary's College of California
Samuel Merritt University
San Diego Christian College
Santa Clara University
Simpson University
Stanford University
University of La Verne
University of San Diego
University of the Pacific
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Vanguard University
William Jessup University
Opposition
California State Student Association
Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960