BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1721 (Medina) - Student financial aid:  Cal Grant Program
          
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          |Version: June 22, 2016          |Policy Vote: ED. 9 - 0          |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Jillian Kissee      |
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          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.







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          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,  








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          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.








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          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.


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