BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: SB 15
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|Author: |Block |
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|Version: |March 25, 2015 Hearing |
| |Date: April 8, 2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Kathleen Chavira |
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Subject: Postsecondary education: financial aid
SUMMARY
This bill statutorily establishes the Cal Grant award at
$9,084 for recipients attending private postsecondary
education institutions accredited by Western Association of
Schools and Colleges (WASC), increases the number of
statutorily authorized competitive Cal Grant awards from
22,500 to 30,000, and establishes a Graduation Incentive Grant
program for undergraduate students at the California State
University.
BACKGROUND
Existing law authorizes the Cal Grant Program, administered by
the California Student Aid Commission, to provide grants to
financially needy students to attend college. The program
consists of the Cal Grant A, Cal Grant B, and Cal Grant C
programs, and eligibility is based upon financial need, grade
point average, California residency, and other eligibility
criteria, as specified in Education Code § 69433.9.
(Education Code 69430-69433.9)
Existing law includes both the Entitlement and the Competitive
Cal Grant awards. Under the Competitive program, the state
provides a maximum of 22,500 Cal Grant A and B awards to
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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)
Current law provides for a long-term Cal Grant policy that
requires that the maximum Cal Grant A award and the Cal Grant
B award, for students attending each respective segment, equal
the amount of the mandatory systemwide fees at the University
of California and the California State University, as
specified. This policy also requires that the maximum Cal
Grant award for students attending nonpublic institutions
equal the tuition award level established in the Budget Act of
2000, or the amount as adjusted in subsequent annual budget
acts. (EC § 66021.2)
Notwithstanding the provisions of EC 66021.2, current law,
enacted through the 2012 budget, sets the maximum amount of
the Cal Grant award for students who attend private
postsecondary institutions. Beginning in the 2013-14 award
year, this amount is $4,000 for new recipients attending
private for-profit institutions. For new recipients attending
private non-profit or for-profit institutions accredited by
WASC, the amount is set at $9,084 for the 2013-14 award year
and $8,056 for 2014-15. The scheduled reduction in 2014-15
was postponed for one year but is currently proposed to be
reduced to $8,056 for the 2015-16 budget year. (EC § 69432)
ANALYSIS
This bill:
1. Permanently restores the Cal Grant annual award amount to
$9,084 for recipients attending a private postsecondary
education institution accredited by WASC and deletes the
scheduled reduction to $8,056 for new recipients in the
2015-16 award year.
2. Increases the number of statutorily authorized
competitive Cal Grant Awards from 22,500 to 30,000
annually.
3. Establishes the Graduation Incentive Grant (GIG) Program
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to be awarded beginning in the 2015-16 academic year to
matriculated undergraduate students with financial need
at the California State University (CSU). Specifically
it:
A. Clarifies that the purpose of the
award is to provide additional financial aid to
offset the total cost of education, including the
cost of housing, textbooks and transportation.
B. Requires, in order to be eligible,
that a student:
i) Be a matriculated
undergraduate at the CSU.
ii) Be a California resident or be exempt
from non-resident tuition as the result of the
provisions of AB 540.
iii) Have an expected family contribution
(EFC) of no more than $12,000, to be determined
as specified.
iv) Be enrolled in at least 12 semester
units (or equivalent), have a declared major
and maintain satisfactory academic progress at
the participating institution.
v) Not be incarcerated, in
default on any student loan, or have failed to
repay a state or federal grant if so required.
C. Outlines the specific grant amounts
and unit requirements for an award annually as
$1,000 if 30 semester units (45 quarter units) are
completed the first year, $1,500 if 60 semester
units (90 quarter units) are completed the second
year, $2,000 if 90 semester units (135 quarter
units) are completed the third year.
D. Establishes specific eligibility
requirements for transfer students. Specifically it:
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i) Requires that a student
who transfers with an Associate Degree for
Transfer be eligible to receive an award in the
first academic year of enrollment at the
California State University (CSU).
ii) Makes other transfer students
eligible to receive an award after completing
their first college year at the CSU.
E. Requires awarding of the Graduation Incentive
Grant (GIG) Program at
the same time as the overall financial aid package,
clarifies that the GIG
is a supplemental grant, prohibits its supplanting
of any other grants or
scholarships, and prohibits the GIG from resulting
in total grant or scholarship aid from exceeding a
student's total cost of attendance.
F. Authorizes the CSU Trustees to adopt
regulations to administer the GIG.
G. Requires, by April 1, 2017, annual
reporting on the GIG program, and specifically
requires that the CSU:
i) Report to the Legislature
on the number of students overall completing
the required number of units in the year prior,
the number of first-time freshman and transfer
students (disaggregated by Associate for
Transfer degree recipients and other transfer
degree recipients) successfully completing the
required units and qualifying for the GIG
award, the number of eligible students who
successfully meet the unit requirements of the
program, as well as the average grade point
average of GIG recipients.
ii) Disaggregate the data by discipline,
race, ethnicity, gender and socioeconomic
status.
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H. Provides that the program
requirements are not operative in a fiscal year
unless the Trustees determine that sufficient
funding has been provided for the program, and
requires that funding for the program be considered
supplemental to the CSU's operating budget.
4. Declares the Legislature's intent to appropriate funds in
the 2015-16 fiscal year to:
A. Eliminate the 5 percent tuition
increase adopted by the Regents in 2014.
B. Provide additional course offerings
and support services for students to complete a
bachelor's degree in four years or less at both the
CSU and UC.
STAFF COMMENTS
1. Need for the bill. In December 2014, the Senate
announced a comprehensive plan for higher education in
California. The stated purpose of the plan is to
establish higher education policies that promote
affordability, access, and completion for California
students. In addition to providing direct assistance to
students to afford college and finish their degrees, the
plan includes additional funding for the UC and the CSU
to support enrollment growth, provide more course
offerings, and increase student support services. While
several of these objectives are proposed to be met
through the budget process, this bill contains the policy
changes necessary to implement and support the plan.
These include the elimination of the cut to the Cal Grant
award for recipients attending Western Association of
Schools and Colleges (WASC) accredited non-public
institutions in California, an increase in the total
number of annual competitive Cal Grant awards, and the
establishment of a new grant program to incentivize
timely degree completion at the CSU.
2. The Graduation Incentive Grant. According to the author,
the grant program established by this bill is based upon
the experience of several universities that have adopted
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policies to incentivize students to take 15 units per
term in an effort to expedite completion. According to a
2013 report by Complete College America, The Game
Changers: Are states implementing the best reforms to get
more college graduates?, the University of Hawaii's "A 15
to Finish" campaign educated students on the benefits of
taking 15 units per semester and increased the number of
freshmen enrolling at that level from 15 percent to 24
percent systemwide, and from 38 percent to 56 percent at
its flagship campus. Additionally, Adams State University
in Colorado increased the number of credits taken by its
students by 11 percent in two years after offering $500
incentive scholarships to students who completed 30
credits per year.
According to the CSU, in 2013-14, 50 percent of the
almost 392,000 enrolled students were full-time students,
but enrolled in only 12-14 units (35 percent were
enrolled for 15 units or more). While 12-14 units meets
the "full-time" requirements for financial aid
eligibility, a CSU student must complete an average of 15
units each semester in order to be on pace to graduate
within four years. It appears many students forgo the
additional units in order to accommodate time to work to
meet the costs of their education, while some students
are unaware that completing 15 units each semester is
necessary to graduate within four years.
This bill proposes to improve completion rates at the CSU
by incentivizing students to enroll in the requisite
number of units necessary to complete their degrees
within four years.
3. Why is it important? Aside from benefitting the state
through increased access and more efficient movement of
students through the CSU system, accelerating degree
completion also reduces the overall cost of higher
education for students and families. In The Real Cost of
College: Time and Credits to Degree in California, the
Campaign for College Opportunity reports that every
additional year of enrollment in college increases the
total cost by more than $26,000 in tuition, fees, books,
and living expenses, as well as more than $22,000 in lost
lifetime wages. A CSU student who takes six years to
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earn a bachelor's degree will spend an additional $58,000
more on tuition, fees, books and other expenses, and will
earn $52,900 less, over his/her lifetime, than someone
who graduated in four years. As a result of these
additional two years, this student would incur $110,900
in extra expenses and lost wages.
According to the CSU Academic Sustainability Plan
(prepared by the CSU as required by the Budget Act of
2014) current 4-year graduation rates for the Fall 2009
cohort of students are 17.3 percent for all students and
10.8 percent for students receiving Pell grants. The
projected 4-year graduation rate for the Fall 2013 cohort
is 18.5 percent for all students and 11.2 percent for
students receiving Pell grants.
This bill provides an additional tool for the CSU to
address the specific policy objective of improving
completion rates.
4. Who is eligible? This bill outlines various eligibility
criteria for the Graduation Incentive Grant (GIG) Program
including a financial need determination based upon
expected family contribution (EFC). The EFC is also the
basis for determining eligibility for the State
University Grants program (SUG) which provides need-based
grants to CSU undergraduates, post-baccalaureate, and
graduate students. According to the CSU, the systemwide
priority for SUG awards is an EFC of $4,000 or less,
which equates to an average annual parental adjusted
gross income of $20,245. This bill establishes an EFC of
$12,000 to be eligible for the GIG which equates to an
adjusted gross income of $92,000. In addition to the
traditionally low-income students who would be eligible
for the GIG, this program would offer an option for
assistance to students and families with moderate to
middle incomes.
The bill also extends eligibility for the GIG upon
enrollment to students who complete the Associate
Transfer Degree, ostensibly to acknowledge that the
student has opted for a streamlined transfer program that
has accelerated their progress through the community
colleges and will get them through the CSU more
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expeditiously than other transfer routes.
This bill proposes to increase both affordability and
access by expanding eligibility for aid and the overall
assistance available to meet the total costs of
attendance for CSU students and families.
5. Is there a need? The following reports highlight the
increasing costs of higher education in California and
the need to provide additional assistance to both lower
and middle-income families to meet the total cost of
college attendance.
A. Higher Education in California: Student
Costs, a 2014 report by the Public Policy Institute
of California, notes that in-state tuition at the UC
and CSU has risen more dramatically than at other
public universities in other states over the past
decade. At the same time, federal, state, and
institutional grant and scholarship programs that
help make college affordable for students from
lower- and middle-income families expanded. The
report notes that, on average, students from
families with incomes of less than $75,000 who
receive federal financial aid pay little to no
tuition at either CSU or UC, and even families
making up to $110,000 pay less than full tuition if
they receive federal financial aid of some kind.
However, the report finds that the total amount a
student pays for college can far exceed the cost of
tuition as students pay for room and board, books,
and related educational and living expenses. In
2011-2012, the estimated average price of attendance
at the CSU was $19,267, of which only 34 percent
($6,486) was tuition.
B. CSU Preliminary Institutional Financial Aid
Report, 2014-15, issued by the CSU in March 2015,
reports that the aggregate cost of attendance for
undergraduates at the CSU in 2015-16 was $21,000.
When financial aid resources are not adequate to
meet the full amount necessary to meet the total
cost of attendance, a student is said to have "unmet
need." This can occur when a student does not work
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the requisite number of hours to earn full
work-study awarded, elects not to borrow, or
decreases their costs (by sharing an apartment with
several roommates, for example). In 2015-16, the
aggregate outstanding unmet need for CSU students
was $7,786. In addition, the CSU reports that in
2013-14, 80 percent of undergraduate financial aid
recipients had their tuition fees fully covered by
grants or waiver, while 48 percent of CSU students
graduated with an average loan debt of $15,657.
This bill proposes to address affordability by providing an
additional source of grant funding to meet costs other than
tuition/fees for students who already receive grants and
scholarships for this purpose. In addition, students who do
not currently receive state or institutional grant assistance
would be eligible for the GIG to assist with their costs of
attendance.
1. Intent language. Successful implementation of the
Graduation Incentive Grant (GIG) Program requires the
availability of courses in which students can enroll. In
addition, support services are necessary to ensure that
students can successfully complete the increased unit
loads, and that they understand the importance of their
course taking patterns and the degree applicability of
the units they complete. This bill declares the intent
of the Legislature to appropriate funding in the 2015-16
fiscal year to ensure the provision of course sections
and support services for CSU students to complete their
degrees within four years
2. Why increase the Cal Grant award for non-public
institutions? The primary purpose for restoring the Cal
Grant award amount is to ensure the continued access of
students to Western Association of Schools and Colleges
(WASC) accredited non-public institutions in California.
Below is a summary of information about the sector and
the Cal Grant recipients it serves.
A. WASC accredited non-public institutions. The
institutions that would benefit from the provisions
of this bill are generally members of the
Association of Independent California Colleges and
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Universities (AICCU) which represents 75 private,
nonprofit, WASC accredited colleges and
universities. These institutions include research
universities, liberal arts colleges, religiously
affiliated institutions, and specialized colleges
and universities that focus on the arts, theater and
music.
The AICCU reports that their member institutions
enroll over 320,000 students, comprised of 184,000
undergraduate students and 144,000 graduate
students. AICCU institutions award over 50% of all
graduate degrees in California and approximately 21%
of the baccalaureate degrees. The sector produces
40% of the teaching credentials, 65% of the legal
professional degrees, 39% of the business degrees,
43% of the heath degrees and 27% of the engineering
degrees in the state. California residents make up
approximately 70% of the undergraduate population.
B. Who is served? According to the Association of
Independent California Colleges and Universities
(AICCU), Cal Grant students at their member
institutions are overwhelmingly the first in their
families to go to college and from historically
underrepresented groups in higher education. AICCU
reports that data collected over the years has
consistently demonstrated that Cal Grant students
graduate at a higher level than the general student
population in the sector even with the barriers they
confront. According to the AICCU's survey of their
member institutions, 62% of their Cal Grant students
graduate in 4-years (similar to the 4-year rate at
the UC) and 63% are first generation college
students.
Approximately 41% of the Cal Grant population at
AICCU institutions is Latino, 27% Caucasian, 17%
Asian and Pacific Islander, 7% African American.
Based upon data from the California Student Aid
Commission, the average family income for Cal Grant
A students is $41,300 and $16,523 for Cal B Students
(CSAC data). The average institutional aid award to
a Cal Grant student is $15,059. The AICCU reports
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that the independent sector educates over 28,000
California students through the Cal Grant program.
The following are examples of the AICCU member
institutions and the proportion of their students
who are Cal Grant recipients:
Cal Baptist University - Riverside (33.5%)
Holy Names College - Oakland (31.8%)
La Sierra University - Riverside (38.7%)
Mills College - Oakland (38.4%)
Mount St. Mary's - Los Angeles (54%)
Simpson University - Redding (38.6%)
University of the Pacific - Stockton (41.6%)
William Jessup University - Rocklin (36.1%)
According to the AICCU, for the majority of their
member institutions, who are tuition dependent, as
Cal Grant award amounts are reduced, their options
are to increase loan or work contributions, leave a
gap in the financial aid package for families to
address, or to reduce their enrollment of low-income
students.
This bill proposes to increase access and affordability
of higher education in California by restoring the amount
of the Cal Grant award at these private institutions to
the levels in place prior to the cuts implemented via
budget action.
3. Increasing the number of Competitive Grants. According
to an April 2013 report by The Institute for College
Access & Success (TICAS), Strengthening Cal Grants to
Better Serve Today's Students, in 2010-11 the majority of
Cal Grant recipients (72%) received grants as a high
school entitlement award, 5% received transfer
entitlement awards, and competitive awards went to 18% of
all Cal Grant recipients. According to the TICAS report,
many otherwise eligible applicants miss the application
deadline or enroll well after they have graduated from
high school, and these are particular concerns for the
lowest income students who miss timely application
because they are unaware of the financial aid that is
available. For these students the alternative would be a
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Competitive Cal Grant.
However, as noted in the background of this analysis,
only 22,500 Competitive Cal Grants are statutorily
authorized annually. According to TICAS, in the 2012-13
Cal Grant award cycle, there was only one competitive Cal
Grant available for every 17 eligible applicants.
This bill would propose to increase both access and
affordability by increasing the number of Competitive Cal
Grants authorized annually by 7,500 awards.
SUPPORT
American Federation of State, County and Municipal Employees,
AFL-CIO
Asian Americans Advancing Justice
Association of Independent California Colleges and
Universities
California Baptist University
California Community United Institute
California Federation of Teachers
California State University
Campaign for College Opportunity
Education Trust West
Los Angeles Area Chamber of Commerce
Los Angeles Community College District
Los Rios Community College District
National Association of Social Workers, California Chapter
North Bay Leadership Council
San Diego Christian College
San Francisco Chamber of Commerce
South Orange Community College District
Southern California College Access Network
University of San Diego
University of Southern California
University of the Pacific
OPPOSITION
None received.
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