BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1721 (Medina) - Student financial aid: Cal Grant Program ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 22, 2016 |Policy Vote: ED. 9 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Jillian Kissee | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: This bill increases the number of competitive Cal Grant awards by 8,250, bringing the total number of awards to 34,000 per year, and expands the number of these awards available to, and reserved for, community college students. Fiscal Impact: According to the California Student Aid Commission (Commission), this bill results in costs of approximately $14 million in the first year, increasing to $52 million General Fund in the fourth year and thereafter. Administrative costs to implement this bill are anticipated to be minor. AB 1721 (Medina) Page 1 of ? Background: Existing law authorizes the Cal Grant program, administered by the Commission, to provide grants to students who have financial need to attend a college or university. The Cal Grant programs include both the entitlement and the competitive Cal Grant awards. The program consists of the Cal Grant A, Cal Grant B, and Cal Grant C and eligibility is based upon financial need, grade point average (GPA), California residency, and other criteria. (Education Code § 69430-69433) The Cal Grant A High School Entitlement Program provides tuition fee funding for the equivalent of four full-time years at qualifying postsecondary institutions to eligible lower and middle income high school graduates who have at least a 3.0 GPA on a four-point scale and apply within one year of graduation. (Education Code § 69434) The Cal Grant B High School Entitlement Program provides funds to eligible low-income high school graduates who have at least a 2.0 GPA on a four-point scale and apply within one year of graduation. The award provides $1,648 for books and living expenses for the first year and each year following for up to four years (or equivalent of four full-time years). After the first year, the award also provides tuition fee funding at qualifying postsecondary institutions. (Education Code § 69435.3) The Cal Grant Competitive Award Program provides 25,750 Cal Grant A and B awards to applicants who meet financial, academic, and general program eligibility requirements. Half of these awards are reserved for students enrolled at a community college and who met the September 2 application deadline. (Education Code § 69437-§ 69437.7) According to the Commission's website, eligibility for this program is geared toward nontraditional students, such as those who did not go to college right after high school, and takes into account not only GPA, but also time out of high school, family income, parents' education levels, high school performance standards and other factors, such as whether the student comes from a single-parent household or was a foster youth. Proposed Law: This bill increases competitive Cal Grant awards by 8,250, AB 1721 (Medina) Page 2 of ? bringing the total number of awards to 34,000, and expands the number of these awards available to, and reserved for, community college students. Current law provides for a 50-50 split of the total number of authorized competitive Cal Grant awards (25,750) to be available to all students, including California Community College (CCC) students and reserved specifically for CCC students. This bill instead allocates a larger portion of awards (56 percent) specifically for CCC students. CCC students would also be eligible for the additional 2,125 awards available to all students. Related Legislation: AB 1357 (Block, 2016) required, contingent upon funding provided in the annual budget act, that the Commission annually augment the award amount of all recipients of Cal Grant B Entitlement awards and Competitive Cal Grant B awards who are enrolled at the CCC by $1,500 starting in the 2017-18 award year. AB 1357 failed passage in this committee. AB 1449 (Medina, 2016) exempts a student from the high school graduation requirement of the California Community College Transfer Cal Grant Entitlement Program, if the student was a California resident on his or her 18th birthday. AB 1449 is pending in this committee. Staff Comments: The Budget Act of 2015 provided an additional $8 million, growing to $23.4 million by 2018-19, to provide an additional 3,250 competitive Cal Grant awards. This brings the total number of awards to 25,750. The Budget Act of 2015 also provided $39 million in ongoing Proposition 98 funds for purposes of the Full-Time Student Success Grant Program, to be distributed to students who are receiving the Cal Grant B Access Award and are taking 12 units or more, to assist CCC students with their living costs. The Budget Act of 2016 provides $41 million for this program which also includes CCC students who are receiving Cal Grant C awards. The award is required not to exceed $600 per student annually. AB 1721 (Medina) Page 3 of ? Recommended Amendments: Staff recommends setting an implementation date for the 2017-18 award year so as to not require mid-year award adjustments if this bill were to be enacted. -- END --