BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2506


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          Date of Hearing:  April 12, 2016


                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION


                                 Jose Medina, Chair


          AB 2506  
          (Thurmond) - As Amended March 30, 2016


          SUBJECT:  Student financial aid:  Chafee grant awards


          SUMMARY:  Requires the California Student Aid Commission (CSAC)  
          to provide a Chafee Educational and Training Voucher (Chafee) to  
          qualified students attending qualifying institutions.   
          Specifically, this bill:  


          1)Makes a number of findings and declarations, including:


             a)   Current and former foster youth who attend college  
               experience a low rate of persistence, transfer, and degree  
               completion. 


             b)   Receipt of financial aid plays an important role in  
               persistence, transfer, and degree completion. 


             c)   Access to the Chafee Educational and Training Voucher  
               (Chafee) is limited. One in four eligible applicants is not  
               awarded a grant due to limited funding.  










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             d)   Low educational attainment is a factor in the poor adult  
               outcomes experienced by youth in foster care. Compared to  
               their same-age counterparts, former foster youth at 26  
               years of age are 400 percent more likely to have been  
               incarcerated and 300 percent more likely to be living below  
               the federal poverty level.


             e)   The Legislature recognizes its responsibility to provide  
               and adequately fund postsecondary programs and services for  
               students who are current and former foster youth attending  
               public postsecondary institutions.


             f)   The Legislature recognizes the importance of quality  
               education, and has taken action in the past to ensure  
               financial aid is directed to postsecondary institutions at  
               which the graduation rate and cohort default rate reflect a  
               reasonable likelihood of student graduation and success.


             g)   It is necessary and appropriate to take steps to  
               encourage the enrollment, retention, and transfer of  
               current and former foster youth in California's public  
               colleges and universities by ensuring that all foster youth  
               who meet the eligibility criteria for the Chafee receive a  
               grant. 


          2)Establishes, to the extent permitted by federal law, standards  
            for postsecondary educational institutions to be classified as  
            Chafee qualifying institutions. 


          3)Requires the California Student Aid Commission (CSAC) to  
            certify by October 1 of each year a postsecondary educational  
            institution's latest three-year cohort default rate and  
            graduation rate as most recently reported by the United States  
            Department of Education.








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          4)Requires a federal Chafee participating institution to meet  
            the following, consistent with Cal Grant institutional  
            participation requirements: 


             a)   A three-year cohort default rate that is equal to or  
               less than 15.5 percent, as certified by the commission on  
               October 1, 2017, and on October 1 of any year thereafter.  


             b)   For purposes of the 2017-18 academic year, and every  
               academic year thereafter, a graduation rate of 30 percent  
               or greater for students taking 150 percent or less of the  
               expected time to complete degree requirements.


             c)   Provides that the aforementioned requirements do not  
               apply to institutions with 40% or less of undergraduate  
               students borrowing federal student loans. 


             d)   Provides that the aforementioned requirements do not  
               apply to institutions where an eligible Chafee grant  
               recipient is attending an institution outside of  
               California.


          5)Requires CSAC to notify Chafee grant recipients regarding  
            institutional ineligibility and to provide students with a  
            list of eligible institutions.


          6)Provides that, commencing with the 2017-18 academic year,  
            current and former foster youth are entitled to a Chafee grant  
            award, and that CSAC shall allocate that award to foster youth  
            that meet all of the following criteria:









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             a)   He or she meets the Chafee grant requirements as set  
               forth in the federal John H. Chafee Foster Care  
               Independence Program.


             b)   He or she submits a Free Application for Federal Student  
               Aid (FAFSA) and a Chafee grant application between January  
               1 and September 2 of each calendar year for the academic  
               year beginning in the fall of that calendar year.


          7)Provides that the amount of any individual Chafee grant award  
            shall depend on the cost of attendance at the qualifying  
            institution at which the student is enrolled. For each  
            applicant, the award amount shall not exceed the amount of the  
            calculated financial need.


          EXISTING LAW:  


          1)Establishes CSAC to administer California's student financial  
            aid programs.  CSAC administers the Chafee program funded by  
            federal and state monies provided through the California  
            Department of Social Services.


          2)Federal law establishes the John H. Chafee Foster Care  
            Independence Program to provide, among other benefits,  
            education and training vouchers to qualifying current and  
            former foster youth.  


          FISCAL EFFECT:  Unknown.


          COMMENTS:  Background.  The federal John H. Chafee Foster Care  
          Independence Program (CFCIP) was created in 1999 to offer  








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          assistance to current and former foster care youths in achieving  
          self-sufficiency.  Federal grants are offered to States who  
          submit a plan to assist youth in a wide variety of areas  
          designed to support a successful transition to adulthood.  The  
          Educational and Training Vouchers Program (ETV) for Youths Aging  
          out of Foster Care was added to the CFCIP in 2002.  ETV provides  
          resources specifically to meet the education and training needs  
          of youth aging out of foster care.  


          In California, the Chafee Grant for Foster Youth provides up to  
          $5,000 in grants to foster youth. The budget for the program is  
          about $11.5 million, which is evenly split between federal funds  
          ($5.6 million) and the state General Fund.  State funding for  
          the program is accounted for in the Department of Social  
          Services (DSS) budget, the funding is distributed to CSAC  
          through a Memorandum of Understanding (MOU) that outlines  
          program operations; CSAC then directs money to students pursuant  
          to the requirements of the MOU.  Current or former foster youth  
          qualify for the Chafee if they are under age 22 and were in  
          foster care in out-of-home placement at any time between the  
          ages of 16 and 18. The maximum grant is $5,000 per academic  
          year; the average awarded grant in 2014-15 was $3,251.  The  
          program serves about 2,228 students. 


          Purpose of this bill.  According to the author, this bill seeks  
          to address the low rates of college persistence and completion  
          among foster youth in California.  There are two deficiencies in  
          current law that AB 2506 seeks to remedy:


          1)Insufficient funding.  The funding available to the Chafee is  
            inadequate to meet the current demand, which has increased  
            considerably with the expansion of foster care in 2012. In the  
            2014-15 school year, 4,609 students applied for the Chafee ETV  
            and were determined to be eligible in 2014-15. However, due to  
            insufficient funds, 1,115 eligible applicants did not receive  
            a grant. Currently, there is no application deadline or  








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            guarantee of funds and applications are processed on a rolling  
            basis until all funds are expended.  This often results in  
            students not learning whether they received a grant until well  
            into the school term.  



            This bill would entitle all eligible students who apply for a  
            Chafee by September 2nd to receive a grant.  Committee staff  
            notes there is no funding source provided in this bill.  
            Additionally, issues such as maximum program awards are not  
            addressed in this bill.  Committee staff understands that the  
            author's intent is for the requirements of this bill to  
            supplement the existing requirements of the MOU; moving  
            forward this intent should be clarified in the bill.  





          2)Poor-quality institutions.  Current law does not require  
            Chafee grants to be used at postsecondary institutions that  
            meet baseline performance measures.  The Cal Grant Program  
            requires participating institutions to meet minimum rates of  
            graduation and loan repayment. The author notes reports of  
            for-profit colleges marketing specifically to vulnerable  
            student populations, including veterans and foster youth, in  
            order to access financial aid.
            This bill would prohibit Chafee grants from being used at  
            California institutions that fail to meet the graduation rate  
            and cohort default rate requirements of the Cal Grant program.  
             This change could affect existing grant recipients; moving  
            forward the author may wish to consider allowing existing  
            grant recipients to continue at their current institution.   
            Alternatively, the bill could reinstate any lost award years  
            to allow students to transfer to, and in some cases start over  
            at, higher-quality institutions.  










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          REGISTERED SUPPORT / OPPOSITION:




          Support


          Alliance for Children's Rights


          American Federation of State, County and Municipal Employees


          California Alliance of Children and Family Services


          California State University, San Marcos


          Cerritos College


          Children's Law Center of California


          Children Now


          First Place for Youth


          Foster Youth Success Initiative at Fullerton College


          Frontier High School


          Guardian Scholars Program, City College of San Francisco








                                                                    AB 2506


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          Junior Leagues of California


          Mission College


          National Association of Social Workers-California Chapter


          New Alternatives, Inc.


          Plumas Crisis Intervention and Resource Center


          Shasta College


          Skyline College


          Smith Renaissance Society at the University of California, Santa  
          Cruz


          University of Southern California


          Voices Youth Centers of California


          Woodland Community College




          Opposition








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          None on File




          Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960