BILL ANALYSIS �
AB 1285
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1285 (Fong) - As Amended: April 2, 2013
Policy Committee: Higher
EducationVote:10-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill eliminates the restriction in the Cal Grant B program
that, in the first year of enrollment, denies tuition benefits
and instead provides only a stipend for access costs-i.e. costs
for books, supplies, living expenses, and transportation-to 98%
of Cal Grant B recipients.
FISCAL EFFECT
Based on the current number of Cal Grant B recipients and
average award amounts at each segment of higher education,
first-year General Fund costs are estimated at $117 million. The
annual cost could increase considerably thereafter as more
freshman Cal Grant B recipients choose a four-year college
rather than community college due to the availability of the
tuition benefit in their first year.
COMMENTS
1)Background . In both the entitlement and competitive Cal Grant
programs, a very low-income student qualifies for a Cal Grant
B, while low- and middle-income students qualify for a Cal
Grant A. In recognition that Cal Grant B serves the lowest
income students, the annual award pays for tuition and fees
and a small stipend (currently $1,473) toward books, supplies,
food and rent. (Cal Grant A pays for tuition and fees only.)
When the Cal Grant B program was authorized (in the early
1960s as the College Opportunity Grant Program it was assumed
the lowest income students would not go to a four-year college
AB 1285
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or university, but rather would choose to go to a community
college first. Therefore, the program allowed for first-year
tuition and fee payments for only the top 2% of the Cal Grant
B recipients.
This assumption is no longer presumed to be valid, but the Cal
Grant B program still does not pay tuition and fees in the
first year for 98% of the recipients. Thus the majority of
those Cal Grant B students who initially enroll in a four-year
institution must take on additional debt to cover their
first-year tuition unless they are fortunate enough to receive
additional financial aid, such as from the institution itself.
2)Purpose . According to the author, this bill is necessary to
give Cal Grant B students full financial assistance for four
years, thereby expanding their access to higher education and
allowing low income students to attend the college of their
choice.
3)Inequity of Current Policy . Some lower income (Cal Grant B)
students receive a smaller lifetime award than higher income
(Cal Grant A) students. This is because the first-year tuition
benefit (currently a maximum of $12,192) is more than four
years of the access grant (currently $1,473) received under
Cal Grant B. Starting in 2007-08, students attending the
University of California (UC) faced the same situation. As a
result, UC shifts its students from Cal Grant B to Cal Grant A
awards, when possible, to provide students with the highest
four-year award.
4)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 by 5%
(from $1,551 to $1,473), 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.
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5)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 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.
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