BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2506 (Thurmond) - Student financial aid: Chafee grant awards
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|Version: June 29, 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 provides that an eligible current or former
foster youth is entitled to receive a Chafee grant award, and
requires postsecondary education institutions to meet
eligibility requirements to receive Chafee funds, similar to
existing provisions of the Cal Grant program.
Fiscal
Impact:
The California Student Aid Commission (Commission) indicates
that this bill would cost about $980,000 in the first year and
would result in ongoing costs of about $8 million. This
estimate assumes 1,230 new awards at an average amount of
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$3,234 and also takes into account funding provided in the
Budget Act of 2016 for this program. Costs will ultimately
depend upon the actual number of eligible applicants.
(General Fund)
The Commission also cites the need for two additional
positions and about $135,000 General Fund to address the
increase in applications and customer service related to the
Chafee grants.
Background: Existing law establishes requirements for postsecondary
education institutions to participate in the Cal Grant program,
including a graduation rate of above 30 percent and a three-year
cohort student loan default rate of less than 15.5 percent.
(Education Code Section 69432.7)
Existing law establishes the federal John H. Chafee Foster Care
Independence Program to provide, among other benefits, education
and training vouchers of up to $5,000 to qualifying current and
former foster youth. (United States Code, Tile 42, Section 677)
To qualify for a Chafee Education and Training Voucher (ETV),
students must: (1) be a current or former foster youth, with
dependency established or continued by the court between 16 to
18 years old, and (2) be under the age of 22.
The Commission administers the Chafee ETV, which is funded by
federal and state monies, through a Memorandum of Understanding
(MOU) with the California Department of Social Services.
Students must fill out the FAFSA, or California Dream Act
Application, and the California Chafee grant application.
Currently, there is no application deadline or 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.
The Chafee ETV is not an entitlement, unlike the Cal Grant
program. This bill makes the Chafee grant an entitlement in
California and requires institutions to meet the standards
established in statute for participation in the Cal Grant
program.
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Proposed Law:
This bill provides that an eligible current or former foster
youth is entitled to receive a Chafee grant award, and requires
postsecondary education institutions to meet eligibility
requirements to receive Chafee funds, similar to existing
provisions of the Cal Grant program.
Specifically, this bill:
Chafee Entitlement
Deems a current or former foster youth to be entitled to
a Chafee grant award if the student meets the federal grant
requirements and submits a FAFSA and a Chafee grant
application between January 1 and September 2 of each
calendar year.
State Standards for Institutions
Establishes, to the extent permitted by federal law, the
state standards for postsecondary educational institutions
to qualify for the Chafee Educational and Training Voucher
program authorized by federal law.
Provides that an otherwise qualifying institution that
has a three-year cohort default rate that is 15.5 percent
or higher or that has a graduation rate of 30 percent or
less, as specified, is ineligible for the use of Chafee
grant awards at the institution.
Provides that an institution may regain its eligibility
for the academic year following the year in which it
satisfies the three-year cohort default rate and the
graduation rate standard.
Exempts institutions with 40 percent or less of
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undergraduate students borrowing federal loans from these
requirements.
Commission Requirements
Requires the Commission to certify 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.
Requires the Commission to notify initial and renewal
recipients if an institution that they are seeking to
attend, or attending, is ineligible for Chafee grant awards
under state standards and provide them with a list of
eligible, under state standards, postsecondary education
institutions in the state.
Finally, this bill provides legislative intent that the MOU
entered into between the California Department of Social
Services and the Commission for the administration of the Chafee
ETV program be amended to reflect its provisions.
Staff
Comments: This bill makes the Chafee grant an entitlement in California
so that an eligible student would be awarded a grant, regardless
of sufficient or available funding. Therefore enactment of this
bill would lessen the state's ability to control the costs of
this program in the future, including in the event of another
recession.
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