BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 15 (Block) - Postsecondary education: financial aid:
Graduation Incentive Grant program
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|Version: March 25, 2015 |Policy Vote: ED. 8 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Jillian Kissee |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill statutorily establishes the maximum 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 (CSU).
This bill also provides legislative intent to provide additional
funding to the University of California (UC) to eliminate
tuition increases previously adopted by the Board of Regents in
November 2014. In addition, the bill declares the intent of the
Legislature to provide additional funding for UC and CSU for
additional course offerings and support services.
Fiscal
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Impact:
This bill results in increased annual state costs in the
hundreds of millions General Fund. (see staff comments)
According to the author's office, this bill reflects a portion
of a broader higher education plan that is estimated to result
in General Fund costs of $158 million in 2015-16; $111 million
in 20016-17; and $66 million in 2017-18 after taking into
account other items being proposed and discussed in the budget
process.
Background: Existing law authorizes the Cal Grant Program, administered by
the California Student Aid Commission, to provide grants to
students in financial need 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. (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
applicants who meet financial, academic, and general program
eligibility requirements. Half of these awards are reserved for
students enrolled at a community college and meet a specified
deadline. (EC § 69437-§ 69437.7)
Current law also sets the maximum amount of the Cal Grant award
for students who attend private postsecondary institutions. For
new recipients attending private for-profit institutions, this
amount is $4,000. For new recipients attending private
non-profit or for-profit institutions accredited by WASC, the
amount is set at $9,084 for the 2014-15 award year and $8,056
for 2015-16. (EC § 69432)
Proposed Law:
Graduation Incentive Grant Program : This bill establishes a new
incentive grant program for eligible CSU undergraduate students
with financial need beginning in the 2015-16 academic year.
Some criteria by which a student may qualify for a grant include
that the student: (1) is a California resident or exempt from
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paying nonresident tuition, as specified; (2) has an expected
family contribution of not more than $12,000 after filing a Free
Application for Federal Student Aid or California Dream
Application; (3) maintains satisfactory academic progress, as
determined by the CSU; (4) has enrolled in at least 12 semester
units in each term for which the grant is received; and (5) has
declared a major.
The grant provides $1,000 if a student completes 30 semester
units by the end of the first year; $1,500 if the student
completes 60 semester units by the end of the second year; and
$2,000 if the student completes 90 semester units by the end of
the third year. This bill also includes corresponding
equivalent quarter units for each year.
This bill requires the grant to be considered supplemental and
to not supplant any other grant or scholarship aid. The bill
provides that the grant is awarded on a year-to-year basis,
contingent upon adequate state funding and maintenance of the
student's eligibility. This bill prohibits the grant award
program from being operative in a fiscal year unless the CSU
Trustees determine that sufficient funding has been provided for
the fiscal year in the annual Budget Act or other statute. The
grant award must be considered supplemental to the operating
budget of the CSU.
Cal Grant Awards : This bill eliminates the 11 percent reduction
in Cal Grant A and B awards for new recipients attending private
nonprofit postsecondary educational institutions scheduled for
the 2015-16 award year. It also increases the number of
Competitive Cal Grant A and B awards to be awarded annually by
7,500.
Reporting Requirement : This bill also requires the CSU to report
various items to the Legislature by April 1, 2017, including:
(1) the number of students who successfully completed 30
semester units, 60 semester units, 90 semester units, and 120
semester units in the previous year; (2) the number of
first-time freshman who successfully completed 30 semester units
in the first year and the number of first-time freshman who
enroll in the subsequent college year with fewer than 30
semester units; (3) the number of transfer students who
qualified for the grant award, as specified; (4) the number of
eligible students who met the unit completion requirements of
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the grant award; and (5) the average grade point average of the
grant award recipients.
Legislative Intent to Provide Additional Funding : Finally this
bill includes Legislative intent to: (1) appropriate funds to
the UC Regents for the 2015-16 fiscal year to eliminate the 5
percent tuition increase adopted by the Regents in November 2014
and (2) appropriate funding to UC and CSU for additional course
offerings and support services to aid students in completing a
bachelor's degree in four years or less.
Staff
Comments: This bill contains four main components that drive
increases in state costs:
1. Incentive Grant for CSU Students: Costs in 2015-16 of
$48 million and by 2017-18 there is estimated to be ongoing
costs of $100 million. To the extent this grant encourages
more eligible students to stay on track according the grant
requirements, costs for the grant program could increase.
2. Maintain Cal Grant awards for students at nonprofit
colleges at current level: Costs in 2015-16 of $9 million
and by 2018-19 estimated ongoing costs of $29 million at
full implementation.
3. Increase the number of competitive Cal Grant awards from
22,500 to 30,000: Costs in 2015-16 of $22 million and by
full implementation in 2018-19, ongoing costs of $54
million.
4. Expand student support services and course offerings for
UC and CSU: Ongoing costs of $150 million ($50 million of
which is attributed to course offerings).
Staff notes to the extent incentive grants, support services,
or course offerings reduce the time it takes for students to
earn a degree, associated potential savings could offset a
portion of these costs.
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.
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Some of these objectives are proposed to be met through the
budget process, such as enrollment growth and identifying
additional sources of revenue. This bill contains the policy
changes necessary to implement and support the plan. Therefore,
staff notes that under this broader plan, increases in General
Fund are anticipated to be $158 million in 2015-16; $111 million
in 20016-17; and $66 million in 2017-18.
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