BILL ANALYSIS �
AB 1085
Page 1
Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 1085 (Gaines and Morrell) - As Introduced: February 22,
2013
SUBJECT : Cal Grant Program: maximum award amounts: private
institutions.
SUMMARY : Increases the maximum annual tuition award for Cal
Grant A and B awards for new recipients attending private
for-profit and nonprofit postsecondary educational institutions
to $9,708, as an urgency measure, commencing with the 2013-14
award year. Specifically, this bill :
1)Increases the maximum annual tuition for Cal Grant A and B
awards for new recipients attending private postsecondary
educational institutions from $4,000 to $9,708.
2)Increases the maximum annual tuition for Cal Grant A and B
awards for new recipients attending independent non-profit
institutions and private for-profit, Western Association of
Schools and Colleges (WASC)-accredited institutions from
$9,084 in 2013-14 and $8,056 in 2014-15 to $9,708.
3)Includes an urgency clause to allow the new award levels to go
into effect for the 2013-14 award year.
EXISTING LAW provides a variety of student financial aid grant
and loan programs, administered by the California Student Aid
Commission, to provide awards to needy and academically eligible
students, including the Cal Grant Entitlement Programs for
California residents who graduated from high school within one
year.
FISCAL EFFECT : Unknown but potentially significant. These
reduced award amounts were estimated to save $16 million in
2013-14 with increased savings in the following years.
COMMENTS : Cal Grant background . The Cal Grant Entitlement
Program guarantees financial aid awards to recent high school
graduates and community college transfer students who meet
financial, academic, and other eligibility requirements. The
state also provides a relatively small number of competitive Cal
AB 1085
Page 2
Grants to students who do not qualify for entitlement awards.
Cal Grants cover full systemwide tuition at the public
universities for up to four years and partly contribute to
tuition costs at nonpublic institutions. About 269,000 students
received new or renewed Cal Grant awards in 2012-13, totaling
about $1.6 billion.
Recent budget actions . As a result of recent budget deficits
and growing costs to the program, several changes to the Cal
Grant program in recent years reduced eligibility and benefits,
including annual student needs assessments to maintain
eligibility, a reduction in the Cal Grant B stipend amount,
institutional graduation and student loan default rate
thresholds for program eligibility, and a reduction in the award
amount for students attending private institutions. These cuts,
combined with actions taken in the 2011-12 Budget Act, impacted
more than 170,000 students and reduced the Cal Grant program by
at least $194.5 million.
Specifically, the 2012 education trailer bill [SB 1016
(Committee on Budget and Fiscal Review), Chapter 38, Statutes of
2012] implemented the following reductions in maximum tuition
award levels beginning in 2013-14:
1)For new recipients attending independent non-profit
institutions and private for-profit, WASC-accredited
institutions as of July 1, 2012, maximum grant awards were
reduced by 6.5%, from $9,708 to $9,084. In 2014-15, new
maximum tuition awards at non-profit institutions and
WASC-accredited for-profit institutions will be reduced by an
additional 10.5%, from $9,084 to $8,056.
2)For new recipients attending all other private for-profit
institutions, maximum grant awards were reduced by 59%, from
$9,708 to $4,000.
Need for this bill . According to the author, "With the cut to
Cal Grants, students may be priced out of private universities
and trade schools. These students may be forced to either drop
out of school altogether or transfer to a public school. If
students transferred to a public school, the non-partisan
Legislative analyst predicts that the state would end up paying
up to $12,500 for that same student at a CSU or $24,000 for a
student that attends a UC."
AB 1085
Page 3
Other measures to expand Cal Grant benefits . A similar measure,
AB 1318 (Bonilla), would link the Cal Grant award amount for
students attending private nonprofit colleges and universities
to the average cost of educating students in the public sector,
implementing a recommendation by the Legislative Analyst's
Office. Other measures before this Committee to increase Cal
Grant eligibility or benefits include:
1)AB 303 (Calderon) would extend eligibility to the Cal Grant
Entitlement program to California residents who are current or
former members of the United States Armed Forces.
2)AB 1241 (Weber) would extend the Cal Grant Entitlement program
period of eligibility from one to three years, allowing an
applicant for Cal Grant A and B Entitlement Awards to submit a
complete financial aid application no later than March 2 of
the 4th academic year after his or her high school graduation.
3)AB 1285 (Fong) would expand Cal Grant B funding by eliminating
the 2% cap on the number of Cal Grant B awards that cover the
first year of tuition and fees.
4)AB 1287 (Quirk-Silva) would remove statutory provisions
requiring renewing Cal Grant recipients to meet annual income
and asset criteria to maintain eligibility.
5)AB 1364 (Ting) would restore the Cal Grant B access award to
$1,551, the amount of the award prior to the Governor's 5%
veto in the 2012 Budget Act, and index the stipend to changes
in the Consumer Price Index.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
California Federation of Teachers
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960
AB 1085
Page 4