BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 1241
AUTHOR: Weber
AMENDED: May 24, 2013
FISCAL COMM: Yes HEARING DATE: June 26, 2013
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Cal Grant Entitlement Program.
SUMMARY
This bill expands the timeframe after high school
graduation during which students are eligible for the Cal
Grant Entitlement Program by two additional academic years,
beginning in the 2015-16 award year.
BACKGROUND
Current law authorizes the Cal Grant Program, administered
by the California Student Aid Commission, to provide grants
to financially needy students to attend college. The Cal
Grant programs include both the entitlement and the
competitive Cal Grant awards. The program consists of the
Cal Grant A, Cal Grant B, and Cal Grant C programs, and
eligibility is based upon financial need, grade point
average, California residency, and other eligibility
criteria, as specified in Education Code � 69433.9.
(Education Code 69430-69433.9)
The Cal Grant B High School Entitlement Program 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 $1,551 for
books and living expenses for the first year and each year
following for up to four years (or equivalent of four
full-time years). After the first year, the award also
provides tuition fee funding at qualifying postsecondary
institutions. Current law authorizes up to 2 percent of new
Cal Grant B recipients to be eligible for payment of
tuition or fees or both in their first academic year of
attendance. (Education Code � 69435.3)
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Current law also establishes the Cal Grant Competitive
Award Program and provides 22,500 Cal Grant A and B awards
to applicants who meet financial, academic, and general
program eligibility requirements. Half of these awards are
reserved for students enrolled at a community college and
who met the September 2 application deadline. (Education
Code � 69437-� 69437.7)
ANALYSIS
This bill , beginning in the 2015-16 award year, extends
eligibility for the Entitlement Cal Grant A and B awards by
two additional years, by granting eligibility to students
who apply by the third academic year after graduating high
school.
STAFF COMMENTS
1) Need for the bill . 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, get a
job, and save up enough money to cover the cost of
college. The author contends that qualified students
coming from first generation and under-resourced
backgrounds often do not receive counseling to explain
the financial aid process for public higher education.
The current eligibility requirements for the Cal Grant
A and B Entitlement Program penalizes those students
for their inability to access and navigate the higher
education system, or for their decision not to attend
higher education immediately after high school
graduation.
2) Competitive versus entitlement program . According to
an April 2013 report by The Institute for College
Access & Success (TICAS), Strengthening Cal Grants to
Better Serve Today's Students, in 2010-11 the majority
of Cal Grant recipients (72%) received grants as a
high school entitlement award, 5% received transfer
entitlement awards, and competitive awards went to 18%
of all Cal Grant recipients. According to the TICAS
report, many otherwise eligible applicants miss the
application deadline or enroll well after they have
graduated from high school, and these are particular
concerns for the lowest income students who miss
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timely application because they are unaware of the
financial aid that is available. For these students
the alternative would be a Competitive Cal Grant.
However, as noted in the background of this analysis,
only 22,500 Competitive Cal Grants are statutorily
authorized annually. According to TICAS, in the
2012-13 Cal Grant award cycle, there was only one
competitive Cal Grant available for every 17 eligible
applicants.
3) Recent statutory changes to the Cal Grant program . The
2011 and 2012 Budget Acts made significant changes to
the Cal Grant Program. These included tighter
eligibility criteria for participating institutions, a
reduction in the award level for non-public
institutions, tighter eligibility criteria for renewal
recipients, the reduction of the amount of the Cal
Grant access award, and codified restrictions on the
use of the transfer entitlement award. According to an
analysis by the Assembly Appropriations Committee,
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 previously noted reductions,
coupled 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 Legislative Analyst Office (LAO) overview .
The LAO recently prepared an overview of financial aid
proposals for the Legislature. The LAO noted that
current law (Education Code � 69500) establishes that
the primary purpose of student assistance programs is
to provide all Californians equal opportunity and
access to postsecondary education. The Legislative
Analyst Office (LAO) also noted that some proposals
could serve other objectives, such as expansion of
institutional choice and improved affordability.
Finally, the LAO provided the following ranking of
various proposals for the Budget Conference Committee
based upon the likelihood of their improving access,
consistent with the statutory purpose outlined in
current law.
a) Increase Cal Grant amounts for living
expenses, books and vocational education.
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b) Increase Cal Grant amounts for qualifying
private colleges.
c) Increase the number of Cal Grants directed
at older, nontraditional students.
d) Increase funding to University of
California, California State University and
community colleges for enrollment growth.
e) Cover first-year tuition for low- income
students who generally do not qualify for tuition
aid because they have a sub-3.0 GPA.
f) Eliminate income and asset test for grant
renewals.
g) Fund middle-class scholarship program.
5) Middle Class Scholarship . As part of the 2013-14
Budget, the Legislature recently enacted, AB 94
(Committee on Budget, 2013), which among other things,
establishes the Middle Class Scholarship Act. Under
the Act, up to $305 million will be provided annually
to pay up to 40 percent of a student's UC or CSU
tuition for families earning up to $100,000 annually
in household income. The Act also provides that
financial aid would decrease, on a sliding scale, to
10 percent of tuition at $150,000 in household income.
6) Fiscal impact. This bill does not create new
eligibility for the Cal Grant Program. Rather, it
extends the time during which an eligible student may
still apply and be considered for the Entitlement
program. These same students would otherwise be
eligible for the Competitive Cal Grant program,
although, given the demand, would not be guaranteed an
award. It's unclear how many additional students would
actually apply for and receive an entitlement grant as
a result of the time extension, however the overall
impact, absent any other changes, would be a shift of
some students from the Competitive Program to the
Entitlement Program and an opportunity to serve
additional students under the Competitive Program,
which would result in an increased cost to the
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program.
7) Step at a time ? Recent budget actions regarding the
funding of the Cal Grant program have resulted in many
significant changes and impacts to students in need of
financial assistance to meet their college costs. How
long should a student be granted an opportunity for an
entitlement award to attend college? Is the extension
of an entitlement a greater policy priority than, for
example, reinstating the award level for students at
nonpublic institutions, or increasing the award amount
for those students who already receive a Cal Grant? In
order to allow an opportunity to consider the impacts
of the expansion of eligibility as a policy lever to
achieve access, versus other possible interventions,
staff recommends the bill be amended to extend
eligibility for the entitlement program for one
additional academic year, rather than two.
SUPPORT
California Community College League
California Competes
California Federation of Teachers
California State Student Association
California Student Aid Commission
Education Trust West
Los Angeles NAACP
Public Advocates
Southern California College Access Network
The Institute for College Access & Success
Young Invincibles
OPPOSITION
None received.