BILL ANALYSIS Ó
AB 831
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
831 (Bonilla) - As Introduced February 26, 2015
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill establishes a formula for determining the maximum Cal
Grant award for students attending private nonprofit
postsecondary educational institutions. Specifically, this bill:
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1)Establishes the maximum Cal Grant award amount for students
attending private nonprofit institutions at 75% of the base
funding per Cal Grant student at the University of California
(UC) and the California State University (CSU), i.e. the sum
of the weighted average state General Fund support per student
for UC and CSU plus the weighted average maximum Cal Grant
award for UC and CSU.
2)Phases-in implementation of the amount derived in (1) as
follows:
a) $9,084 for 2015-16.
b) 70% for 2016-17.
c) 80% for 2017-18.
d) 90% for 2018-19.
e) 100% for 2019-20 and thereafter.
3)Requires private nonprofit institutions, where students are
receiving Cal Grant as calculated above, to report to the
Association of Independent California Colleges and
Universities, which shall report the cumulative information
annually to the Legislature, the Governor, the Legislative
Analyst's Office, and the Department of Finance. The report is
to include specified information on enrollment, numbers of Cal
Grant recipients, graduation rates, and number of degrees
awarded.
FISCAL EFFECT:
Based on the number of students currently attending the state's
eligible private nonprofit postsecondary educational
institutions and receiving Cal Grants, additional General Fund
costs from the increased maximum grant awards would total about
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$29 million in 2015-16 and increase to $160 million in 2019-20
and thereafter.
COMMENTS:
1)Background. The Cal Grant Entitlement Program guarantees
financial aid awards to recent high school graduates and
community college transfer students who meet financial,
academic, and other eligibility requirements. Cal Grants cover
full systemwide tuition at the public universities for up to
four years and a portion of tuition costs at nonpublic
institutions. 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 and $8,056 for 2015-16.
Prior to 2001-02, the state had a longstanding statutory
policy linking the maximum Cal Grant for financially needy
students attending private institutions to the average General
Fund cost of educating a financially needy student at UC and
CSU. When the Cal Grant Entitlement program was created in
2000, this policy was replaced with a new provision linking
the maximum private-student Cal Grant award to whatever amount
was specified in the annual budget act.
The Legislative Analyst's Office has long recommended
re-establishing the private Cal Grant formula to establish a
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rational policy basis for the award and promote consistency
among student groups. The LAO has noted that the state
benefits from providing some students an incentive, via a Cal
Grant, to attend a nonpublic school rather than a state
institution, which also receives a state subsidy to serve that
student. According to the author's office, in 2012, the
average cost to the state for a Cal Grant student attending a
nonprofit university was $8,800. The state subsidy for a Cal
Grant student at UC is approximately $24,151 and at CSU is
$12,636.
2)Purpose. 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. This bill also contains reporting provisions
consistent with the reporting required of UC and CSU pursuant
to AB 94 (Committee on Budget)/Chapter 50 of 2013.
3)Prior Legislation. AB 1318 (Bonilla) of 2014 was substantially
similar to this bill, except that AB 1318 also applied to
students attending for-profit institutions accredited by the
Western Association of Schools and Colleges (WASC). AB 1318
was held by the author on the Senate Floor.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081
AB 831
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