BILL ANALYSIS Ó
AB 1501
Page 1
Date of Hearing: May 1, 2012
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Marty Block, Chair
AB 1501 (John Perez) - As Amended: February 9, 2012
SUBJECT : Student financial aid: Middle Class Scholarship
Program.
SUMMARY : Establishes the Middle Class Scholarship Program
(MCSP), which would provide a grant, as specified, for students
at the University of California (UC) and the California State
University (CSU) with family incomes below $160,000.
Specifically, this bill :
1)Provides UC and CSU students a scholarship award equal to at
least two-thirds of the amount that is charged for mandatory
systemwide fees when combined with other financial aid
received by the student, beginning with the 2012-13 academic
year, for students who meet the following conditions:
a) The student's annual household income does not exceed
one hundred fifty thousand dollars ($150,000), using income
calculations consistent with those used by the Cal Grant
Program, as defined. For students with incomes between
$150,000 and $160,000, the scholarship shall be reduced by
10% for each $1,000 that the student's annual income
exceeds $150,000.
b) The student is either a resident of the state or is
exempt from paying nonresident tuition.
c) The student completes and submits a Free Application for
Federal Student Aid (FAFSA) or, if unable to complete a
FAFSA, submits an application determined by the university
he or she attends to be equivalent to the FAFSA for
purposes of this bill.
d) The student makes a timely application for publicly
funded student financial aid from programs for which he or
she is eligible, other than the program established by this
bill, including federal, institutional, and state student
financial aid programs.
2)Requires UC and CSU to maintain their respective institutional
AB 1501
Page 2
student financial aid programs at a level that, at a minimum,
is equivalent to the level maintained during the 2011-12
academic year.
3)States legislative intent that:
a) MCSP shall augment and not replace other state-supported
financial aid and institutional aid programs and federal
grants.
b) The amount of the student financial aid provided to
students under this bill be increased to accommodate
increases in the cost of mandatory systemwide fees charged
to UC and CSU students that may occur during and after the
2011-12 academic year.
c) UC and CSU do not raise mandatory systemwide fees that
would decrease the value of a scholarship award under this
article.
4)States that this act shall become operative only if AB 1500 of
the 2011-12 Regular Session is chaptered and establishes a
Middle Class Scholarship Fund.
5)Appropriates from the Middle Class Scholarship Fund the
necessary monies to fund MCSP scholarships, as determined by
the California Student Aid Commission (CSAC), to CSAC for
allocation to UC and CSU for implementation of MCSP and
requires UC and CSU to provide CSAC with any information
necessary for determination of this amount.
6)Authorizes CSAC to expend any remaining MCSP funds in any
academic year for purposes of the Cal Grant Program, as
specified.
7)Appropriates $150 million to the Chancellor of the California
Community Colleges (CCC) from the Middle Class Scholarship
Fund for allocation to CCC districts based on calculations of
full-time equivalent students and specifies these funds shall
be expended for the provision of grants to students to reduce
the impact of enrollment fees or to help cover the cost of
textbooks and other educational expenses.
8)Requires UC, CSU and CCC to report on the implementation of
MCSP funds as part of existing reporting requirements, as
AB 1501
Page 3
specified.
9)Contains an urgency clause.
EXISTING LAW establishes the Cal Grant Entitlement Programs to
provide grant assistance for tuition/fee payment at the UC, CSU
and private institutions in California, to the extent that
students are financially and academically eligible for such
support. (Education Code § 69530)
FISCAL EFFECT : Unknown
COMMENTS : This bill is a companion measure to AB 1500 (John
Perez), pending in the Assembly Revenue and Taxation Committee,
which would modify the Single Sales Factor law and is estimated
to provide $1 billion for the Middle Class Scholarship Fund.
Background . Since 2007-08, which is considered the last
"normal" budget year, state budget challenges have decreased
funding to higher education by 21% at UC, 26% at CSU and 12% at
CCC, resulting in enrollment caps and reduced course offerings
and student services, among other cost-savings measures. In
addition, UC and CSU have raised fees-68% at UC and 76% at CSU.
The Legislature has, for the most part, protected the Cal Grant
Program, which covers mandatory systemwide tuition/fees for low
income students. However, with the exception of modest
institutional aid assistance, middle income students have borne
the brunt of these fee increases.
Need for the bill . According to the author, middle income
families that make too much to qualify for state financial aid
have been squeezed by the increased fee levels. More and more
students have to work longer hours and increase their debt
burden and, as fees and other costs increase, the work and loan
burden on students has increased at a faster rate than grant
aid. Increased costs can hinder a student's progress toward a
degree, forcing students to cut their class load, work more
hours, leave school temporarily, or drop out of school entirely.
Middle class families that have students in the higher
education systems are forced to take on ever increasing student
loan debt loads or simply forgo the dream of higher education.
How will this work ? CSU and UC students will fill out the
standard financial aid forms. All students with family incomes
less than $150,000 who do not already have mandatory systemwide
AB 1501
Page 4
tuition/fees covered by existing financial aid programs will
receive a Middle Class Scholarship that covers two-thirds of
tuition/fees. Families with incomes between $150,000-160,000
would receive a reduced scholarship benefit. This will cost
approximately $850 million per year.
1)At CSU, it is estimated that approximately 150,000 students
will receive the Middle Class Scholarship and save $4,000 each
per year. Thus, middle income CSU students will pay $1,970
per year of the $5,970 mandatory systemwide tuition/fees.
2)At UC, it is estimated approximately 44,000 students will
receive the Middle Class Scholarship and save up to $8,169
each per year. Thus, middle income UC students will pay
$4,023 per year of the $12,192 mandatory systemwide
tuition/fees.
3)At CCC, 40% of students currently receive fee waivers. This
bill would provide $150 million to expand affordability
efforts at the CCC district level, including expanding the use
of fee waivers or providing grants to cover the costs of books
or other educational expenses.
Related legislation . SB 1466 (De Leon), pending in the Senate,
would increase to $150,000 the maximum household income for all
Cal Grant recipients. There have been several bills to
establish stable and predictable fee policies and notification
requirements, including most recently AB 970 (Fong, 2011),
pending in the Senate, and SB 969 (Liu, 2010), which died on the
Assembly Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
Alhambra Unified School District Board of Education
American Federation of State, County and Municipal Employees
American Federation of Teachers Guild
Associated Students of Chico State
Associated Students of Sacramento State
Associated Students of University of California
Associated Students of University of California, Davis
Associated Students of University of California, Merced
Associated Students of University of California, San Diego
California Community Colleges Chancellor's Office
AB 1501
Page 5
California Communities United Institute
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Faculty Association
California Federation of Teachers
California Hospital Association
California Labor Federation
California Medical Association
California Public Defenders Association
California Professional Firefighters
California School Employees Association
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California State Student Association
California State University
California Student Aid Commission
California YouthBuild Coalition
City of Los Angeles City Council
City of Sacramento City Council
Coalition of California Utility Employees
Community College League of California
Councilmember Richard Alarcón, 7th District
Councilmember Joe Buscaino, 15th District
Councilmember Tony Cardenas, 6th District
Councilmember Eric Garcetti, 13th District
Councilmember Jose Huizar, 14th District
Councilmember Paul Koretz, 5th District
Councilmember Bill Rosendahl, 11th District
Councilmember Herb Wesson, 10th District
Councilmember Dennis Zine, 3rd District
Engineers and Scientists of CA, IEPTE Local 20
Equality California
Faculty Association of California Community Colleges
International Longshore and Warehouse Union
International Union of Elevator Constructors
Jockey's Guild
Laborers' Locals 777 and 792
Los Angeles County Democratic Party
Los Angeles County Federation of Labor, AFL-CIO
Los Angeles County Sheriff's Department
Los Angeles Unified School District
Los Rios Community College District
Nury Martinez, Member, Board of Education, City of Los Angeles
Montebello Unified School District
AB 1501
Page 6
Professional and Technical Engineers, IFPTE Local 21
Professional Engineers in California Government
San Diego County Court employees Association
San Francisco Youth Commission
Santa Monica-Malibu Unified School District Board of Education
Shasta College Student Senate
Student Senate for California Community Colleges
Teamsters
UFCW Western State Council
UNITE-HERE, AFL-CIO
University of California
University of California Student Association
University of California, Riverside Student Association
Wendy Greuel, Controller, City of Los Angeles
Western Association for College Admission Counseling
Western States Council of Sheet Metal Workers
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960