BILL ANALYSIS Ó SB 62 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 62 (Pavley) - As Amended February 1, 2016 ----------------------------------------------------------------- |Policy |Higher Education |Vote:|12 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill makes various modifications to the Assumption Program of Loans for Education (APLE), including: 1)Amending the definition of "eligible school" to mean a school serving a percentage of students classified as an English learner, eligible for a free or reduced-price meal, or is a foster youth, as determined by the Superintendent of Public Instruction (SPI), and eliminating the requirement that an eligible school must rank in the lowest two deciles on the Academic Performance Index (API). SB 62 Page 2 2)Eliminating the requirement that an applicant has received or is approved to receive a loan under the Federal Family Education Loan Program, and instead requiring that an applicant has demonstrated financial need. 3)Removing the provision allowing up to 400 APLE loan assumption agreements to go to credentialed teachers, as specified, each year. 4)Amending the provision allowing loan forgiveness of $1,000 per year for those who teach math, science or special education by eliminating the requirement that the school for such teachers is in the lowest 60 percentile of the API. This bill also authorizes the California Student Aid Commission (CSAC) to continue to implement APLE as it read on January 1, 2015, for the allocation of funds for loan agreements made before that date and for the purpose of collecting payments from former program participants. FISCAL EFFECT: Administrative costs for the SPI and CSAC to adopt the program modifications of this bill should be minor and absorbable. There have been no authorizations for new APLE warrants for several years. Since current law already requires new warrants to be authorized through the Budget Act, this bill does not impose any new cost pressures. COMMENTS: SB 62 Page 3 1)Background. The APLE program, established in 1983, provides loan assumption benefits to credentialed teachers. Generally, APLE warrants are given to credential candidates and then redeemed for the loan assumption benefit once the candidate has earned a credential and completed a year of eligible teaching. The program, which is designed to increase the number of qualified teachers in disadvantaged schools or high-priority subject areas, "forgives" up to $11,000 of college loan debt for a person who teaches for four consecutive years in a qualifying school or subject area--$2,000 for the first year of teaching and $3,000 for each of the next three years. Additional loan forgiveness of $1,000 per year over the four years (a total of $15,000) is provided for those who teach math, science or special education, and an additional $1,000 is provided (a total of $19,000) for those who teach math, science or special education in schools with an academic performance index (API) of 1 or 2 (for a total of $19,000). 2)Purpose. According to the California Commission on Teacher Credentialing (CTC), enrollment in teacher preparation programs has fallen from almost 78,000 a decade ago to less than 20,000 in 2013. The number of newly-issued CTC credentials has fallen every year for the past decade. The California Teachers Association contends that one-third of California's teachers are at or near retirement age. According to the author, many reasons exist as to why the state has a shortage of teachers; from the costs of obtaining a college degree, to the low salaries teachers make. The author contends, "Eliminating California's teacher recruitment and financial aid programs over the past decade has not helped matters." SB 62 Page 4 As mentioned above, no new APLE warrants have been authorized for several years. The 2015 Budget Act (AB 93, Weber), as enacted by the Legislature on June 15, authorized 1,000 new warrants. However, SB 97 (Senate Budget and Fiscal Review), which provided subsequent amendments to AB 93, deleted this authorization. The 2016 Budget Act similarly does not authorize any new APLE warrants. 3)Prior Legislation. SB 1264 (Pavley) of 2014, which was held in the Senate Appropriations, proposed to establish the Educator Excellence Program, an assumption loan program for up to 6,500 teachers who satisfied specified criteria. SB 212 (Pavley) of 2013, which was also held in the Senate Appropriations, sought to appropriate $5 million, from an unspecified funding source, for 7,200 new warrants for the assumption of school loans for teachers in areas with identified teacher shortages. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081