BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 15| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 15 Author: Block (D), et al. Amended: 3/25/15 Vote: 21 SENATE EDUCATION COMMITTEE: 8-0, 4/8/15 AYES: Liu, Huff, Block, Hancock, Leyva, Mendoza, Pan, Vidak SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza SUBJECT: Postsecondary education: financial aid: Graduation Incentive Grant program SOURCE: Author DIGEST: 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 (CSU). ANALYSIS: Existing law: SB 15 Page 2 1)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) 2)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 who met the September 2 application deadline. (Education Code § 69437-§ 69437.7) 3)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 (UC) and the CSU, 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) 4)Sets, notwithstanding the provisions of EC 66021.2, current law, enacted through the 2012 budget, 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) 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 SB 15 Page 3 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 to be awarded beginning in the 2015-16 academic year to matriculated undergraduate students with financial need at the 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 (Firebaugh, Chapter 814, Statutes of 2001). 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. SB 15 Page 4 d) Establishes specific eligibility requirements for transfer students. Specifically it: 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 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 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. 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. SB 15 Page 5 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 UC 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. 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 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)Intent language. Successful implementation of the 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 SB 15 Page 6 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: This bill results in increased annual state costs in the hundreds of millions General Fund. 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. SUPPORT: (Verified 5/28/15) 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 Hispanas Organized for Political Equity LA's Promise 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 The Education Trust-West University of San Diego University of Southern California SB 15 Page 7 University of the Pacific OPPOSITION: (Verified 5/28/15) None received Prepared by:Kathleen Chavira / ED. / (916) 651-4105 5/31/15 11:26:04 **** END ****