BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1721


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          Date of Hearing:  April 27, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          1721 (Medina) - As Introduced January 28, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill makes several expansions to the Cal Grant program,  
          including to provide additional financial aid opportunities to  
          California Community College (CCC) students. Specifically, this  
          bill: 


          1)Increases the Cal Grant B access award, which can be used by  
            students for tuition, student fees, and other costs, to  








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            $3,000. This amount would continue to be authorized to be  
            adjusted through the annual Budget Act, and is currently  
            established at $1,648.


          2)Extends the qualifying age limit for a CCC Transfer  
            Entitlement Program award from 27 to 30.


          3)Requires, in order to qualify for a CCC Transfer Entitlement,  
            that the awardee had attended the CCC within three years of  
            transfer rather than having attended the CCC within the  
            preceding academic year.


          4)Increases the number of new Competitive Cal Grant awards from  
            25,750 to 30,000 annually.


          FISCAL EFFECT:


          1)Cal Gran Award Cost: When all the above changes are  
            fully-phased in, annual GF cost would be about $470 million  
            annually. 


             a)   Increase Cal Grant B Access Award: Based on the current  
               number of Cal Grant B recipients, annual costs would be  
               about $275 million.


             b)   CCC Transfer Entitlement Expansion: Estimated GF costs  
               of $90 million in 2016-17, increasing to $155 million in  
               2019-20 and thereafter.


             c)   Increase Competitive Cal Grant Awards: Estimated GF  
               costs of $15 million in 2016-17, increasing to $40 million  








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               in 2019-20 and thereafter.


          2)CSAC will incur ongoing administrative costs of $200,000 (GF)  
            for the equivalent of two positions associated with  
            implementing program expansions, responding to additional  
            inquiries from applicants and institutions, and information  
            technology modifications.


          





          COMMENTS:


          1)Purpose. According to the author, "?Overall, only 32% of  
            students at California colleges and universities complete  
            credentials on time, and low-income students are much less  
            likely than higher income students to enroll in or complete  
            college. A major factor in a student's enrollment and success  
            in college is his or her ability to pay for fees and tuition,  
            textbooks, transportation, housing, food, and other access  
            costs. California has made an important investment in  
            need-based financial aid through the Cal Grant Program and the  
            BOG Fee Waiver program, but despite this commitment, access  
            grants for qualifying students are insufficient to cover  
            non-tuition college costs, and many low-income students are  
            left out of the program entirely.


          2)Cal Grant B Access Awards. The Cal Grant B program began as  
            the "College Opportunity Grant" (COG) in the late 1960s.  At  
            that time, policymakers acknowledged that the lowest income  
            students needed assistance with other college costs, such as  
            living expenses, textbooks, and supplies.  In 1969-70, the  








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            first stipend was set at $900.  The stipend was approximately  
            20% of the indirect costs in 1989-90, as determined by CSAC.   
            Since that time it has declined in relative terms; the current  
            access award of $1,648 is only about one-quarter of what the  
            original award would be had it kept pace with inflation.


          3)Transfer Entitlement Program. This program provides  
            financially needy CCC students whom did not receive a Cal  
            Grant A or B award after leaving high school with a "second  
            chance" to receive an award upon transfer to a baccalaureate  
            degree-granting institution. According to information provided  
            by CSAC, an estimated 60,000 to 75,000 CCC transfer students  
            could benefit from a Transfer Entitlement, yet only about  
            17,800 new and renewal award offers are made annually.  CSAC  
            indicates that the remaining students may be disqualified for  
            a variety of reasons.  This bill addresses two possible causes  
            of underutilization in the Transfer Entitlement:


             a)   Age limitation. Increasing the age limitation from 28 to  
               31, as is proposed in this bill, would increase the  
               eligibility pool by over 23,000 students. 



             b)   Gap years.  In 2012, the education budget trailer bill  
               added a requirement to the Transfer Entitlement that  
               students had to attend a CCC in the academic year  
               immediately preceding the award year. This bill would  
               provide for up to three "gap years" for Transfer  
               Entitlement students.  According to CSAC, in 2013-14 a  
               one-year gap-year was authorized, resulting in an  
               additional 2,280 award offers.  

          4)Competitive Cal Grant Awards. The Cal Grant Entitlement  
            Programs 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  








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            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.  Over 300,000 applicants compete for only 25,750 awards  
            annually. This bill increases the number of competitive awards  
            to 30,000.

          Analysis Prepared by:Chuck Nicol / APPR. / (916)  
          319-2081