BILL ANALYSIS �
AB 1241
Page 1
ASSEMBLY THIRD READING
AB 1241 (Weber)
As Amended May 24, 2013
Majority vote
HIGHER EDUCATION 12-0 APPROPRIATIONS 13-0
-----------------------------------------------------------------
|Ayes:|Williams, Ch�vez, Bloom, |Ayes:|Gatto, Bocanegra, |
| |Fong, Fox, Jones-Sawyer, | |Bradford, |
| |Levine, Medina, Olsen, | |Ian Calderon, Campos, |
| |Quirk-Silva, Weber, Wilk | |Eggman, Gomez, Hall, |
| | | |Ammiano, Linder, Pan, |
| | | |Quirk, Weber |
| | | | |
-----------------------------------------------------------------
SUMMARY : Extends the Cal Grant Entitlement program period of
eligibility from one to two years, effective January 1, 2015,
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 third academic year after his or her high school
graduation.
EXISTING LAW : Provides a variety of student financial aid grant
and loan programs, administered by the California Student Aid
Commission (CSAC), 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 : According to the Assembly Appropriations
Committee, General Fund (GF) costs would depend on the numbers
of these students accepting awards but would range from $65
million to $135 million beginning in 2015-16. 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.) The CSAC 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 : 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. Applicants must
apply within one year of high school graduation. The state also
provides a relatively small number of competitive Cal Grants to
students who do not qualify for entitlement awards, half of
which are set aside for community college students; these awards
are capped at 22,500, and demand far exceeds supply. 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.
Pertinent to this bill, Cal Grant programs include the
following:
1)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) on a four-point scale and apply
within one year of graduation.
2)Cal Grant B high school entitlement award 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 $1,473 for book and
living expenses for the first year and each year following for
up to four years (or equivalent for four full time years).
After the first year, the award also provides tuition fee
funding at qualifying postsecondary institutions.
The maximum tuition awards for Cal Grant A and B are equal to
the mandatory systemwide tuition fees at the University of
California ($12,192) and the California State University
($5,472), and $9,223 at private for-profit and independent
non-profit institutions (until 2013-14 when these award amounts
will be reduced per the Budget Act of 2012).
Recent budget actions. As a result of recent budget deficits
AB 1241
Page 3
and growing costs to the program, several changes to the Cal
Grant program over 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. Several measures have been introduced
to restore these cuts and/or expand access to the Cal Grant
program.
Analysis Prepared by : Jeanice Warden / HIGHER ED. / (916)
319-3960
FN: 0000929