BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2506|
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                                   THIRD READING 


          Bill No:  AB 2506
          Author:   Thurmond (D), et al.
          Amended:  8/16/16 in Senate
          Vote:     21 

           SENATE EDUCATION COMMITTEE:  9-0, 6/22/16
           AYES:  Liu, Block, Hancock, Huff, Leyva, Mendoza, Monning, Pan,  
            Vidak

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/11/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  78-1, 6/1/16 - See last page for vote

           SUBJECT:   Student financial aid:  Chafee grant awards


          SOURCE:    Author

          DIGEST:   This bill requires postsecondary education  
          institutions to meet eligibility requirements to receive Chafee  
          funds, similar to existing provisions of the Cal Grant program.


          ANALYSIS:  


          Existing law:


          1)Establishes the California Student Aid Commission (CSAC) for  
            the purpose of administering specified student financial  
            programs. (Education Code § 69510, et seq.)








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          2)Establishes requirements for postsecondary education  
            institutions to participate in the Cal Grant program, and  
            requires, for the 2012-13 and subsequent academic years, an  
            institution to maintain a graduation rate above 30% and a  
            three-year cohort student loan default rate of less than  
            15.5%.  (EC § 69432.7)


          3)Establishes the federal John H. Chafee Foster Care  
            Independence Program to provide, among other benefits,  
            education and training vouchers to qualifying current and  
            former foster youth.  (United States Code, Title 42, § 677)


          This bill: 


          1)Establishes the standards for postsecondary educational  
            institutions to be classified as qualifying institutions for  
            the purposes of the Chafee Educational and Training Voucher  
            (ETV) program, to the extent permitted by federal law.


          2)Requires the following standards to apply, beginning with the  
            2017-18 academic year, in determining an institution's  
            eligibility for the use of initial and renewal Chafee grant  
            awards by its students:


             a)   Provides that an otherwise qualifying institution with a  
               three-year cohort default rate that is 15.5% or higher, as  
               certified by the CSAC, is ineligible for the use of Chafee  
               grant awards.


             b)   Authorizes an otherwise qualifying institution that  
               becomes ineligible to regain eligibility for the subsequent  
               academic year after satisfying a) - d).  This bill provides  
               that an institution is to immediately regain its  
               eligibility if the United States Department of Education  
               corrects or revises the institution's three-year cohort  
               default rate or graduation rate such that the requirements  







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               in a) - d) are met.


             c)   Provides that an otherwise qualifying institution for  
               which no three-year cohort default rate or graduation rate  
               has been reported is provisionally eligible for Chafee  
               grant awards until a three-year cohort default rate or  
               graduation rate has been reported for the institution by  
               the United States Department of Education.


             d)   An otherwise qualifying institution with a graduation  
               rate of 30% or less for students taking 150% of less of the  
               expected time to complete degree requirements, as reported  
               by the United States Department of Education and certified  
               by the CSAC, is ineligible for the use of Chafee grant  
               awards.


          3)Exempts from these standards institutions with 40% or less of  
            undergraduate students borrowing federal student loans, using  
            information reported to the United States Department of  
            Education for the prior two academic years.


          4)Entitles an individual who has received a Chafee grant for the  
            2016-17 academic year and who is enrolled at a postsecondary  
            educational institution to use a Chafee grant award for as  
            long as he or she is enrolled at that institution and is  
            making reasonable progress toward graduation or otherwise  
            completing the course of study.


          5)Requires the CSAC to notify initial or renewal recipients  
            seeking to attend, or attending, an institution that is  
            ineligible for Chafee grant funds that the institution is  
            ineligible for the use of Chafee grant awards.


          6)States legislative intent that the memorandum of understanding  
            between the Department of Social Services and the CSAC for the  
            administration of the Chafee grant be amended to reflect the  
            provisions of this bill.








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          7)States legislative findings and declarations relative to the  
            importance of quality education and the poor educational  
            outcomes for foster youth.


          Comments


          Chafee eligibility requirements.  To qualify for a Chafee ETV,  
          students must:


          1)Be a current or former foster youth, with dependency  
            established or continued by the court between ages 16-18.


          2)Be under the age of 22 years as of July 1 of the award year.


          Students must fill out the Free Application for Federal Student  
          Aid, or California Dream Act Application, and the California  
          Chafee grant application.  The Chafee ETV is not an entitlement,  
          unlike the Cal Grant program.  


          Qualifying institutions.  The Chafee ETV may be used at any  
          eligible California college as well as colleges in other states.  
           In California, students may use the Chafee grant at career and  
          technical schools, California Community Colleges, the California  
          State University, the University of California, independent  
          colleges, and private colleges.


          Existing law requires postsecondary education institutions to  
          maintain, in order for students to use Cal Grants to attend  
          those institutions, a graduation rate above 30% and a three-year  
          cohort student loan default rate of less than 15.5%.  This bill  
          requires institutions to meet the standards established in  
          statute for participation in the Cal Grant program.


          Funding.  In California, the Chafee ETV provides up to $5,000 in  
          grants to current and former foster youth.  The budget for the  







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          program is approximately $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 budget.  The 2016 Budget Act  
          includes an additional $3 million for the Chafee ETV.


          The maximum Chafee grant is $5,000 per academic year; the  
          average awarded grant in 2014-15 was $3,251.  The program serves  
          about 2,228 California students.




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, the CSAC  
          indicates that verifying institutions' eligibility for the use  
          of Chafee grant awards by its students would impose minor and  
          absorbable costs to the CSAC.  




          SUPPORT:   (Verified8/15/16)


          None received 


          OPPOSITION:   (Verified8/15/16)


          None received


          ASSEMBLY FLOOR:  78-1, 6/1/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  







                                                                    AB 2506  
                                                                    Page  6


            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández,  
            Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,  
            Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,  
            Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,  
            Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas,  
            Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,  
            Waldron, Weber, Wilk, Williams, Wood, Rendon
          NOES:  Harper
          NO VOTE RECORDED:  Beth Gaines

          Prepared by:Lynn Lorber / ED. / (916) 651-4105
          8/16/16 18:02:10


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