BILL ANALYSIS �
AB 1241
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1241 (Weber) - As Introduced: February 22, 2013
Policy Committee: Higher
EducationVote:12-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the Cal Grant Entitlement program period of
eligibility by three years, allowing an applicant for Cal Grant
A and B Entitlement Awards to submit a financial aid application
no later than March 2 of the 4th academic year, rather than the
1st academic year, after high school graduation.
FISCAL EFFECT
1)The California Student Aid Commission estimates, based on
current applications for the Entitlement Program among recent
graduates and those one year out of high school, that about
40,000 additional students between two and four years out of
high school would apply for an Entitlement Program award.
General Fund costs would depend on the number of these
students accepting awards, but would range from $75 million to
$150 million in the first year if 50% to 100% of these
students did so.
This bill may increase access to the Competitive Cal Grant
program (for older students not currently eligible for the
Entitlement program) as some students receiving these awards
would now be eligible for Entitlement awards, freeing up
Competitive awards for other students. (The Competitive
program is limited to 22,500 awards annually, however, and
receives over 150,000 applications each year.)
2)The commission also anticipates ongoing GF administrative
costs of $140,000 for two positions to process additional
applications and awards and respond to phone and email
inquiries, and one-time information technology costs of
AB 1241
Page 2
$120,000.
COMMENTS
1)Background . The Cal Grant A and B Entitlement Programs
guarantee 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
four years and a portion of tuition costs at nonpublic
institutions. For students who do not qualify for the
entitlement awards, the state also provides a relatively small
number of Cal Grants under a competitive program. These awards
are capped at 22,500 annually, and one-half are set aside for
community college students. Demand for these awards far
exceeds supply. About 269,000 students received new or renewed
Cal Grant awards in 2012-13 at a General Fund cost of about
$1.6 billion.
The Cal Grant A high school entitlement award 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) and apply within one year of
graduation.
Cal Grant B high school entitlement award provides funds to
eligible low-income high school graduates who have at least a
2.0 GPA and apply within one year of graduation. The award
provides up to $1,473 for book and living expenses for the
first year and each year following for up to four full-time
years (or equivalent). After the first year, the award also
provides tuition funding at qualifying postsecondary
institutions.
2)Purpose . This bill would application to the Cal Grant
Entitlement Program up to the fourth year after high school
graduation. According to the author, "The sticker price of an
education at a four year college or university has forced many
qualified high school students to prolong their educational
goals and get a job and save up enough money to cover the cost
of college. Furthermore, those qualified students coming from
first generation and under-resourced backgrounds are often
without the counseling to explain the financial aid process
for public higher education. The current eligibility
AB 1241
Page 3
requirements for the Cal Grant A and B Entitlement Program
penalizes those students for their inability to access or for
their decision not to attend higher education immediately
after high school graduation."
3)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.
4)Related Legislation . There are several other measures on
today's committee agenda that either reverse budget-related
Cal Grant reductions or propose significant expansions to the
Cal Grant program.
a) AB 1085 (Gaines and Morrell) reverses, for 2013-14 only,
a recent budget action to reduce maximum Cal Grants awards
for students attending nonpublic postsecondary educational
institutions.
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
AB 1241
Page 4
Consumer Price Index.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081