BILL ANALYSIS Ó
SB 1466
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Date of Hearing: July 3, 2012
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Marty Block, Chair
SB 1466 (De Leon) - As Amended: June 25, 2012
SENATE VOTE : 32-6
SUBJECT : Student financial aid: Cal Grant Program eligibility.
SUMMARY : Establishes eligibility for Cal Grants that are
funded by the Higher Education Investment Tax Credit (HEITC)
program, subject to specified priorities, until either all HEITC
funds are expended or December 1, 2018, contingent upon
enactment of SB 1356 (de Leon). Specifically, this bill :
1)Allows a student whose household income is $100,000 or less to
be eligible for a Cal Grant, subject to specified priorities.
2)Requires the California Student Aid Commission (CSAC) to grant
the following priorities when using HEITC funds to award Cal
Grant awards authorized by this bill:
a) Students who meet the eligibility requirements
established for a Cal Grant A, B, or Transfer Entitlement
Award for the 2011-12 academic year.
b) Students who meet the eligibility requirements
established for a Competitive Cal Grant A or B Award for
the 2011-12 academic year, up to the maximum number of
awards authorized for Competitive Cal Grant A or B Awards
in the annual Budget Act.
c) All other students who meet the eligibility requirements
established for a Cal Grant Award for the 2011-12 academic
year, except that these students may have a maximum
household income no greater than $100,000.
3)Conditions enactment of this bill on passage of SB 1356 (de
Leon), which establishes the HEITC.
4)Sunsets the program when the funds are expended or effective
December 1, 2018.
EXISTING LAW :
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1)Authorizes the Cal Grant Program, administered by CSAC, to
provide grants to financially needy students to attend
college. The Cal Grant programs include both the entitlement
and the competitive Cal Grant awards. 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. These programs
currently operate as follows:
a) Cal Grant A High School Entitlement Program provides
tuition fee funding for the equivalent of four full-time
years at qualifying postsecondary institutions to eligible
lower and middle income high school graduates who have at
least a 3.0 grade point average (GPA) on a four-point scale
and apply within one year of graduation.
b) Cal Grant B High School Entitlement Program provides
funds to eligible low-income high school graduates who have
at least a 2.0 GPA on a four-point scale and apply within
one year of graduation. The award provides up to $1,551 for
books and living expenses for the first year and each year
following for up to four years (or equivalent of four
full-time years). After the first year, the award also
provides tuition fee funding at qualifying postsecondary
institutions.
c) Community College Transfer Program provides a Cal Grant
A or B to eligible high school graduates who have a
community college GPA of at least 2.4 on a four point scale
and transfer to a qualifying baccalaureate degree granting
college or university.
d) Cal Grant Competitive Award Program provides 22,500 Cal
Grant A and B awards available 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.
e) Cal Grant C Program provides funding for financially
eligible lower income students preparing for occupational
or technical training. The authorized number of new awards
is 7,761. For new and renewal recipients, the current
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tuition and fee award is up to $2,592 and the allowance for
training-related costs is $576. (Education Code §
69430-69450)
2)Authorizes the Cal Grant T program to provide assistance to
individuals who attend teacher credential programs at colleges
and universities approved by the California Commission on
Teacher Credentialing. According to CSAC, the Governor and
California State Legislature have not permitted new awards for
the Cal Grant T program since the 2002-2003 academic year.
3)Requires that the maximum household income and asset levels
for the Cal Grant program be adopted and defined in
regulations by CSAC and that these ceilings be annually
adjusted based upon changes in the cost of living. (EC §
69432.7)
FISCAL EFFECT : According to the Senate Appropriations
Committee's analysis of this bill when the income ceiling was
$150,000, minor and absorbable workload increase to CSAC to
administer increased Cal Grants and potentially substantial
General Fund savings, to the extent that HEITC funding supplants
General Fund support for Cal Grants. To the extent that
expanded Cal Grant eligibility and funding covers additional
students, it may supplant institutional aid from the segments.
COMMENTS : Need for the bill . Due to California's fiscal
crisis, the state's contribution to higher education has
steadily declined, and the author's office calculates that the
share of expenditures borne by students in the form of fees has
tripled from 13% in 2000 to 40% in 2011. According to the
author, this bill provides an opportunity to leverage federal
dollars to help offset increases in college tuition in
California and make a public school education more affordable
for middle-income Californians.
Cal Grants . This bill would increase the household income
ceiling for Cal Grants to $100,000, provided other Cal Grant
priorities are met. Below are current income eligibility
levels:
Cal Grant Income Ceilings
Family size: Cal Grant A & C
Cal Grant B
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Six or more $92,600 $50,900
Five $85,900 $47,100
Four $80,100 $42,100
Three $73,700 $37,900
Two $72,000 $33,600
Cal Grant Asset levels
Dependent students $62,000
Independent students $29,500
The current maximum award for Cal Grants A and B are equal to
the mandatory systemwide tuition fees at UC ($12,192) and CSU
($5,472). With regard to private for-profit and independent
non-profit institutions, the maximum award has been $9,708 since
2000, with the exception of two years (2004-2006), where the
award levels were reduced by 14%, to a total of $8,322.
Recent budget actions . On June 27, the Legislature approved SB
1016 (Committee on Budget and Fiscal Review), the education
trailer bill, which cut the Cal Grant Program by $103 million by
reducing the award amount for students attending for-profit
institutions to $4,000 from $9,708 and for students attending
private nonprofit institutions to $8,056 from $9,084 over two
years. The bill also requires institutions with more than 40%
of undergraduates borrowing federal student loans to maintain a
federal student cohort default rate below 15.5% and a 30%
minimum six year graduation rate (for a four year program) to be
eligible to participate in the Cal Grant program. Cal Grant
eligibility requirements were unchanged.
Contingency language . The provisions of this bill are contingent
upon the enactment of SB 1356 (de Leon) which:
1)Establishes the Higher Education Investment Tax Credit Program
Special Fund.
2)Establishes a tax credit equal to 50-60%, depending on the
year, of contributions to the Special Fund.
3)Requires that all revenue in this fund be allocated to CSAC
for purposes of awarding Cal Grants to students eligible
pursuant to the provisions of this bill.
4)Provides for a repeal of the tax credit in December 2016.
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Related legislation . AB 1501 (J. Perez), pending in the Senate
Appropriations Committee, would provide partial fee waivers for
UC and CSU students with family incomes below $160,000.
REGISTERED SUPPORT / OPPOSITION :
Support
California Catholic Conference
Community College League of California
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960