BILL ANALYSIS Ó AB 1721 Page 1 ASSEMBLY THIRD READING AB 1721 (Medina) As Amended May 31, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Higher |12-1 |Medina, Baker, Bloom, |Olsen | |Education | |Chávez, Irwin, | | | | |Jones-Sawyer, Levine, | | | | |Linder, Low, | | | | |Santiago, Weber, | | | | |Williams | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |15-1 |Gonzalez, Bloom, |Bigelow | | | |Bonilla, Bonta, | | | | |Calderon, Daly, | | | | |Eggman, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Obernolte, Quirk, | | | | |Santiago, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ AB 1721 Page 2 SUMMARY: Expands the number of Cal Grant awards with the intent to provide additional financial aid resources to California Community College (CCC) students. Specifically, this bill: 1)Increases the number of Competitive Cal Grant awards from 25,750 to 34,000. 2)Provides that 19,000 Competitive Cal Grant awards shall be reserved for CCC students. 3)Authorizes CCC students enrolled in occupational or career and technical training (CTE) courses leading to industry valued credentials of no less than four months in length at a CCC to be eligible for Competitive Cal Grant B awards. 4)Provides that the number of Cal Grant C awards shall be the same as the number that were paid in the 2015-16 fiscal year. EXISTING LAW: 1)Establishes the Cal Grant program, administered by the California Student Aid Commission (CSAC), to provide tuition and access cost assistance to eligible students attending qualified institutions: a) Cal Grant A Entitlement Awards. Students that meet income, asset and other eligibility requirements, have at least a 3.0 grade point average (GPA), and apply either the year they graduate from high school or the following year are entitled to an award that provides coverage for tuition and fees. b) Cal Grant B Entitlement Awards. Students that meet income and asset (lower thresholds than Cal Grant A) and AB 1721 Page 3 other eligibility requirements, have at least a 2.0 GPA and apply either the year they graduate from high school or the following year are entitled to a living allowance and tuition and fee assistance. Awards for first-year students are limited to an allowance for books and living expenses. In the second and subsequent years, the award provides tuition and fee support. c) CCC Transfer Entitlement Awards. Cal Grant A and B awards are guaranteed to every student who graduated from a California high school after June 30, 2000, was a California resident at the time of high school graduation, transferred to a qualifying baccalaureate-degree granting institution from a CCC during the award year, was under the age of 28 at the time of the transfer, and had a minimum CCC GPA of 2.4. d) Competitive Cal Grant A and B Awards. 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, 25,750 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 CCC students. e) Cal Grant C Awards. Students attending qualifying occupational, technical, and vocational programs are eligible for up to $547 for books and equipment and $2,462 for tuition and fees. 2)Maximum award amounts for California State University (CSU) and University of California (UC) are established in the annual Budget Act and have traditionally covered all systemwide tuition and fees. The maximum tuition award for AB 1721 Page 4 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 (WASC)-accredited for-profit institutions is $8,056 (commencing 2015-16). CCC students do not receive a Cal Grant tuition award as the Board of Governors (BOG) Fee Waiver program fully covers enrollment fees (but not other costs of attendance) for financially needy students. FISCAL EFFECT: According to the Assembly Appropriations Committee, estimated General Fund costs for increasing the Cal Grant Competitive Awards are $14 million in 2016-17, increasing to about $50 million in 2019-20 and thereafter. COMMENTS: Purpose of this bill. According to the author, "to remain economically competitive, California will need to produce 2.4 million more degrees by 2025 than the state is currently on track to produce. 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. The author notes that, after taking into account the total cost of attendance and all available financial aid, on average it is more expensive for a needy student to go to a CCC than to attend the UC or CSU. This bill aims to renew California's commitment to CCC affordability by making important changes to the Cal Grant program to better assist CCC students." Increasing the number of Competitive Cal Grant Awards. As previously noted, the Cal Grant Entitlement Programs guarantee AB 1721 Page 5 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 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; Competitive Program award recipients must significantly exceed minimum requirements. According to The Institute for College Access and Success (TICAS), denied Competitive Program applicants have an average family income of less than $21,000, a family size of three, and GPA of 2.9. This bill proposes to increase the number of Competitive Cal Grants from 25,750 to 34,000. According to supporters, this increase will help California's neediest students take more classes, go to school full-time, and complete their college degree. Authorizing CCC CTE students to receive a Cal Grant B. Under existing law, CCC CTE students at a CCC enrolled in programs of between 4 months and 1 year in length are eligible for a Cal Grant C award. The Cal Grant C award requires students to apply by March 1, and provides CCC students only $547 to cover non-tuition related costs. Currently, the Cal Grant C program is underutilized, it is estimated that 3,000 grants will go unclaimed in 2016-17. The Cal Grant B Access Award provides CCC students enrolled in programs of more than one year in length an access grant of $1,656; the Competitive award cycle for CCC students provides students until September to file an application. By moving (currently unclaimed) Cal Grant C awards from the C program, and making CCC CTE students eligible for the Cal Grant B award, this bill will increase grant award amounts available to CCC CTE students and provide them with additional time to file financial aid applications. AB 1721 Page 6 Analysis Prepared by: Laura Metune / HIGHER ED. / (916) 319-3960 FN: 0003103