BILL ANALYSIS Ó
AB 2787
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Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 2787
(Chávez) - As Amended April 12, 2016
SUBJECT: Student financial aid: Middle Class Scholarship
Program: private nonprofit postsecondary educational
institutions
SUMMARY: Expands the Middle Class Scholarship Program (MCS) to
include students attending private nonprofit postsecondary
educational institutions that participate in the Cal Grant
Program, and provides that the maximum award amount will be 40%
of the maximum award that the student would have received under
the Cal Grant Program.
EXISTING LAW:
1)Establishes the MCS to provide, commencing with the 2014-15
academic year, and subject to available and sufficient
appropriations, an undergraduate student enrolled in the
California State University (CSU) or the University of
California (UC), who meets eligibility requirements, an award.
2)Provides that the MCS award amount shall, when combined with
other federal, state, or institutionally administered student
grants or fee waivers, is up to 40% of the amount charged to
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that student in that academic year for mandatory systemwide
tuition and fees.
3)Eligibility requirements provide that:
a) The student's annual household income does not exceed
$150,000. For awards distributed for the 2016-17 academic
year and subsequent academic years, CSAC is required to
shall annually adjust the maximum income level in
accordance with changes in the cost of living;
b) The student's household asset level shall not exceed
$150,000. For awards distributed in the 2016-17 academic
year and subsequent academic years, CSAC is required to
annually adjust the maximum household asset level
consistent with changes in cost of living;
c) The student satisfies other eligibility requirements for
a Cal Grant award, as specified;
d) The student is exempt from paying nonresident tuition;
e) The student completes and submits a Free Application for
Federal Student Aid (FAFSA) application by no later than
March 2;
f) The student makes a timely application or applications
for all other federal, state, or institutionally
administered grants or fee waivers for which the student is
eligible;
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g) The student maintains satisfactory academic progress;
h) The student is pursuing his or her first undergraduate
baccalaureate degree or has completed a baccalaureate
degree and has been admitted to, and is enrolled in, a
program of professional teacher preparation at an
institution approved by the California Commission on
Teacher Credentialing; and,
i) The student is enrolled at least part time.
4)Provides that the percentage of the award shall be reduced by
0.6 percent per $1,000 of household annual income in excess of
$100,000.
5)Provides that the minimum annual scholarship amount for
full-time enrollment is $90.
6)Provides that, for 2014-15, 2015-16, and 2016-17 academic
years, the maximum amount of a student's scholarship award
shall be 35 percent, 50 percent, and 75 percent, respectively,
of the total scholarship award amount that the student would
otherwise be eligible to receive.
7)Prohibits UC and CSU from supplanting their respective
institutional need-based grants with the funds provided for
scholarships under the MCS, and requires institutions to
maintain funding amounts at levels that, at minimum, are equal
to the level maintained for undergraduate students in 2013-14.
8)Requires UC and CSU to report on MCS implementation.
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FISCAL EFFECT: Unknown.
COMMENTS: Purpose of this bill. The author provided the
following background information in regards to this bill:
1)What problem is this bill seeking to address? Please present
all relevant (and specific) facts that demonstrate the need
for this bill. According to the author's background materials
"the Middle Class Scholarship program provides undergraduate
students with family incomes up to $150,000 and a maximum
household amount of $150,000, a scholarship to attend UC or
CSU campuses. Given that tuition rates, not just in public
institutions but also in private non-profit institutions, have
steadily increased year after year, college has become
increasingly less affordable. This scholarship ultimately
helps to alleviate some of the increasing costs of attending
college; however, it only applies to public institutions. It
does not currently address the cost burdens incurred by
students attending private non-profit institutions."
2)What is the deficiency in current law that this bill seeks to
remedy? Why is legislation necessary to resolve this problem?
According to the author, "this bill will extend the MCS to
students attending private non-profit institutions and thus
help all students, regardless of what institution they are
attending, alleviate some of the cost burdens associated with
rising tuition costs while they are attending."
3)How will the enactment of this bill address this problem?
According to the author, "this bill will extend the MCS to
apply to both public and private non-profit institutions."
Issues to consider. The author and Committee may wish to
consider the following:
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1)Funding. This bill does not appropriate funding to support
costs associated with extending MCS to cover students enrolled
in nonprofit postsecondary educational institutions. Does the
author intend for MCS to not be applicable to students at
independent institutions until it is subsequently funded? Is
this expansion intended to be an entitlement or a competitive
grant program? In the absence of additional funds what would
the impact of this bill be on existing MCS recipients?
2)Supplanting campus aid. Public institutions are required to
report to the Legislature regarding campus need-based aid
programs. This reporting ensures that the institutions comply
with the requirements that MCS funds are not used to supplant
existing campus aid programs. There is no provision of this
bill that would ensure against MCS funds supplanting private,
nonprofit institutional campus based aid. Is it prudent to
expend state resources in a way that potentially supplants
campus based aid?
3)Other financial aid priorities. As discussed in more detail
in the analysis of other bills before this Committee, the Cal
Grant program is still missing hundreds of thousands of
low-income students. While the Budget Act of 2015-16
increased the number of annual competitive Cal Grants to
25,750, this number still falls far short of meeting demand.
In 2014, for example, over 300,000 students had income and
asset levels to qualify for a Cal Grant. Should expanding the
MCS to middle-class students attending nonprofit, private
colleges be prioritized over other financial aid program
expansions?
REGISTERED SUPPORT / OPPOSITION:
Support
AB 2787
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California Chamber of Commerce
Opposition
None on File
Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960