BILL ANALYSIS �
AB 1085
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1085 (Beth Gaines and Morrell) - As Amended: April 16, 2013
Policy Committee: Higher
EducationVote:11-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, for 2013-14 only, reverses a recent budget action to
reduce maximum Cal Grant awards for students attending private
for-profit and nonprofit postsecondary educational institutions.
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 to $9,708.
FISCAL EFFECT
One-time General Fund cost of about $27 million to provide
increased Cal Grant awards to an estimated 26,000 eligible
students attending non-public postsecondary institutions in
2013-14.
COMMENTS
1)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. Cal Grants cover
full systemwide tuition at the public universities for up to
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four years and a portion of tuition costs at nonpublic
institutions. About 269,000 students received new or renewed
Cal Grant awards in 2012-13 at a General Fund cost of about
$1.6 billion.
2)Budget Actions . As part of the solution to the state's budget
deficits, several changes to the Cal Grant program in recent
years reduced eligibility and benefits, including requiring
annual student financial needs assessments to maintain
eligibility, reducing the Cal Grant B stipend amount, enacting
institutional graduation and student loan default rate minimum
thresholds for maintaining program eligibility, and reducing
the award amount for students attending private institutions.
These reductions, combined with actions taken in the 2011-12
Budget Act, impacted more than 170,000 students and reduced
the Cal Grant program by about $200 million.
With regard to non-public institutions, the 2012 education
trailer bill (SB 1016, Committee on Budget and Fiscal Review)
implemented the following reductions in maximum tuition award
levels beginning in 2013-14:
a) For new recipients attending independent non-profit
institutions and private for-profit, WASC-accredited
institutions as of July 1, 2012, maximum grant awards will
be 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.
b) For new recipients attending all other private
for-profit institutions, maximum grant awards will be
reduced by 59%, from $9,708 to $4,000.
3)Purpose . 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."
4)Related Legislation . There are several other measures on
today's committee agenda that either reverse budget-related
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Cal Grant reductions or propose significant expansions to the
Cal Grant program.
a) AB 1241 (Weber) extends 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 apply no later than March 2 of the 4th academic
year after high school graduation.
b) AB 1285 (Fong) expands 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.
c) AB 1287 (Quirk-Silva) reverses a budget-related
reduction that requires renewing Cal Grant recipients to
meet annual income and asset criteria to maintain program
eligibility.
d) AB 1318 (Bonilla) links the Cal Grant award amount for
students attending WASC-accredited nonpublic colleges and
universities to a portion of the state's average cost of
educating students in the public university segments.
e) AB 1364 (Ting) reverses a budget-related 5% reduction to
the Cal Grant B access award, resulting from a Governor's
veto, and furthermore increases this stipend fourfold, from
$1,473 to $5,900, and indexes the stipend to changes in the
Consumer Price Index.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081