BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1241 (Weber) - Cal Grant Entitlement Program Eligibility
Amended: July 2, 2013 Policy Vote: Education 8-0
Urgency: No Mandate: No
Hearing Date: August 30, 2013
Consultant: Jacqueline Wong-Hernandez
SUSPENSE FILE.
Bill Summary: AB 1241 expands the timeframe after high school
graduation during which students are eligible for the Cal Grant
Entitlement Program by one additional academic year, beginning
in the 2015-16 award year.
Fiscal Impact:
Administration: The California Student Aid Commission
(CSAC) anticipates implementation costs of $264,000 in
2013-14, and $143,000 annually thereafter, for two permanent
positions and one limited-term position. The CSAC would
need: 1 Associate Governmental Program Analyst to collect
and process GPA verification forms, test new award
notification, and process appeals; 1 Program Technician II
in the customer service call center to process increased
communications; 1 limited-term contract programmer to
develop and deploy system changes to accept the new
applications.
Cal Grant awards: $35.1 million - $70.2 million (General
Fund) in 2014-15, for increased awards. The increased
eligibility is likely to result in $70.2 million in new Cal
Grants awarded, but the exact expenditure will be determined
by the number of awards actually (accepted by the student
and) paid. Costs would increase annually, as more
individuals become eligible. The CSAC estimates increased
award costs of $57.4 million - $91.8 million in 2015-16,
$67.8 million - $108.5 million in 2016-17, and $71.5 million
- $114.4 million in 2017-18.
Background: Existing law authorizes the Cal Grant Program,
administered by CSAC, 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
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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. (Education Code 69430-69433.9)
The Cal Grant A High School Entitlement Program 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 GPA
on a four-point scale and apply within one year of graduation.
(EC � 69434)
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. Existing 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. (EC � 69435.3)
Existing 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. (EC � 69437-� 69437.7)
Proposed Law: AB 1241 expands the timeframe after high school
graduation during which students are eligible for the Cal Grant
Entitlement Program, beginning in the 2015-16 award year, by one
additional academic year. This extends the application deadline
to March 2 of the second academic year after his or her high
school graduation (or equivalent).
Related Legislation: The 2011 and 2012 Budget Acts made
significant changes to the Cal Grant Program. Additionally,
several bills have been introduced in the current session that
would make changes to the Cal Grant program, including:
AB 1287 (Quirk-Silva) alters a budget-related reduction that
requires renewing Cal Grant recipients to meet annual income and
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asset criteria to maintain program eligibility, by allowing
certain disqualified students to re-enter the program if they
subsequently meet eligibility requirements. That bill is also
being heard in this Committee on August 12, 2013.
AB 1364 (Ting) increases the maximum amount of the Cal Grant B
access award to $1,710, beginning in the 2014-15 academic year,
and provides for its annual increase based upon the California
Consumer Price Index for All Urban Consumers. That bill is also
being heard in this Committee on August 12, 2013.
SB 285 (de Leon) provides for the use of funds from the College
Access Tax Credit Fund to increase the amount of the Cal Grant B
Access Award up to a maximum of $5,000 per award per academic
year. That bill is awaiting action in the Assembly
Appropriations Committee.
Staff Comments: This bill would extend the eligibility for the
Cal Grant High School Entitlement Program to low-income high
school graduates (who meet eligibility requirements and) who
apply within two years of graduation, instead of within one
year. The cost of this change will be determined by the number
of students who meet the Cal Grant eligibility for an award and
do not (apply for or) accept it within one year of graduation,
but who subsequently attend college and would use it if eligible
the following year. Any increase in awards resulting from this
bill will be funded by the General Fund.
The CSAC estimates that an additional 19,730 students would
apply for and be eligible to receive Cal Grant High School
Entitlement awards, pursuant to this bill's eligibility
extension. Of that number, the CSAC estimates that nearly 4,000
students would otherwise have been eligible for Transfer
Entitlement awards (for students who attend community colleges,
and then receive entitlement awards). This bill will therefore
likely result in a net increase of 15,740 entitlement awards
eligible for disbursement, for a total of $70.2 million in
additional awards. The CSAC has indicated that its general award
acceptance rate (the number of eligible students who actually
make use of their awards) is 75%. If this new cohort of Cal
Grant award recipients accepts its awards at the same rate, the
cost would be approximately $52.7 million. The ranges provided
in the Fiscal Impact assume an uptake rate of 50%-80% in future
years.
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