BILL ANALYSIS �
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THIRD READING
Bill No: AB 423
Author: Brown (D), et al.
Amended: 8/22/14 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : Student Tuition Recovery Fund: claims
SOURCE : Author
DIGEST : This bill provides that a student who uses a Cal
Grant or a Pell Grant to pay tuition at a qualifying institution
is not thereby made ineligible to apply for payment from the
Student Tuition Recovery Fund (STRF). This bill also provides
that, when the application of a student who uses a Cal Grant to
pay tuition at a qualifying institution for payment from the
STRF is granted, the Bureau for Private Postsecondary Education
(Bureau) pays that amount to the Student Aid Commission.
Senate Floor Amendments of 8/22/14 delete prior version of the
bill and insert the current language.
ANALYSIS : Existing law, the California Private Postsecondary
Education Act of 2009, which is repealed on January 1, 2015,
provides for, among other things, student protections and
regulatory oversight of private postsecondary institutions in
the state. The act is enforced by the Bureau in the Department
of Consumer Affairs. The act requires the Bureau to adopt
regulations governing the administration and maintenance of the
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STRF, including requirements relating to assessments on students
and student claims against the STRF, a continuously appropriated
fund.
This bill:
1.Provides that a student who uses a Cal Grant or a Pell Grant
to pay tuition at a qualifying institution is not thereby made
ineligible to apply for payment from the STRF.
2.Provides that, when the application of a student who uses a
Cal Grant to pay tuition at a qualifying institution for
payment from the STRF is granted, the Bureau pays that amount
to the Student Aid Commission.
3.Becomes operative only if an act that becomes operative on or
before January 1, 2015, delays or eliminates the January 1,
2015, repeal date of the California Private Postsecondary
Education Act of 2009.
Comments
The STRF fund is more than able to sustain this proposed
expansion. On March 18, 2014 the State Auditor reported that
the current STRF ending balanced for 2013-14 is over $33
million, which exceeds the $25 million ceiling set by statute.
Given current STRF fee assessments, the fund balance will
continue to grow by an average of 10% every year between now and
2019-20.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/26/14)
Legal Aid Foundation of Los Angeles
PQ:nl 8/26/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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