Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1318

Introduced by Assembly Member Bonilla

February 22, 2013

An act begin insert to amend Sections 66021.2 and 69432.7 of the Education Code, end insert relating to student financial aid.

LEGISLATIVE COUNSEL’S DIGEST

AB 1318, as amended, Bonilla. Student financial aid: Cal Grant Program.

Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program (Cal Grant Program), establishes the Cal Grant A and B Entitlement Awards, the California Community College Transfer Cal Grant Entitlement Awards, the Competitive Cal Grant A and B Awards, the Cal Grant C Awards, and the Cal Grant T Awards under the administration of the Student Aid Commission, and establishes eligibility requirements for awards under these programs for participating students attending qualifying institutions begin insert , as defined end insert .

This bill would begin delete express the intent of the Legislature to enact legislation affecting end delete begin insert add provisions to end insert the Cal Grant Program begin insert that would set the maximum Cal Grant award levels for students attending nonpublic postsecondary educational institutions that are accredited by the Western Association of Schools and Colleges, commencing with the 2014-15 award year. The bill would provide that a postsecondary educational institution headquartered in the state, registered as a nonprofit public benefit corporation, and accredited by the Western Association of Schools and Colleges would not be deemed a qualifying institution if the total amount of institutional aid provided to California students by all institutions to which this clause is applicable, in the aggregate, in any award year, is less than 50% of the total Cal Grant awards received by their students, except for institutions meeting prescribed conditions end insert .

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

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(a) California relies on private nonprofit colleges and
universities accredited by the Western Association of Schools and
Colleges (WASC) to help meet the state’s higher education needs,
educating 24 percent of the state’s undergraduates.

end insert begin insert

(b) California provides Cal Grant support to approximately
26,000 students annually attending WASC accredited private
nonprofit colleges and universities, and additional California
students attending these institutions are educated at zero cost to
the state.

end insert begin insert

(c) Eighty-five percent of all students attending California’s
WASC accredited private nonprofit colleges and universities
receive institutionally funded student aid.

end insert begin insert

(d) California’s WASC accredited private nonprofit colleges
and universities effectively educate a diverse state population, and
have a four-year graduation rate for Cal Grant students in excess
of 60 percent.

end insert begin insert

(e) The maximum award for Cal Grant students attending WASC
accredited private nonprofit colleges and universities has not
increased since 1999:

end insert begin insert

(1) It was cut by almost 15 percent for the 2005-06 and 2006-07
cohorts.

end insert begin insert

(2) It was cut by 5 percent for new and renewal grants for the
2012-13 award year, and is scheduled to be cut an additional 1.5
percent in the 2013-14 award year and 11 percent in the 2014-15
award year for new awardees.

end insert begin insert

(3) Even if the maximum award had not been cut, its value has
decreased by over 30 percent due to inflation.

end insert begin insert

(4) In inflation-adjusted dollars, the maximum award for the
2014-15 award year will be the lowest amount California has
invested in academically qualified, financially deserving students
that attend private nonprofit WASC accredited institutions.

end insert begin insert

(f) Cal Grant students attending private nonprofit WASC
accredited institutions are a good investment for the state because
of all of the following:

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(1) They have a high persistence and graduation rate.

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(2) They free up capacity at public institutions.

end insert begin insert

(3) They are unlikely to need Cal Grant assistance for their
children.

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(g) The Cal Grant program effectively and successfully helps
California’s private nonprofit colleges and universities to recruit,
retain, and graduate historically underrepresented students from
low-income families. Cal Grants are a ladder of opportunity, and
they leverage nonpublic student aid to help students graduate from
college without excessive student debt:

end insert begin insert

(1) Cal Grant recipients are 33 percent Latino, 18 percent Asian
American, 6 percent African American, 1 percent Native American,
1 percent Pacific Islander, 4 percent two or more races, 13 percent
unknown, and 24 percent Caucasian.

end insert begin insert

(2) Cal Grant recipients are some of California’s financially
neediest students, with an average family income for Cal Grant A
students of $40,896.

end insert begin insert

(h) Cal Grant students at California’s WASC accredited private
nonprofit colleges and universities account for less that 2 percent
of California’s postsecondary education budget.

end insert begin insert

(i) Cal Grant students at WASC accredited private nonprofit
colleges and universities deserve to be treated similarly to as
similar students attending public institutions.

end insert begin insert

(j) Predictable and stable funding formulas and eligibility
requirements ensure that the state maximizes its investment and
allows families to plan and pay for higher education.

end insert begin insert

(k) Legislative action is needed to adopt a reasonable formula
that supports predictability and supports parity for students at
private nonprofit colleges.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 66021.2 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

66021.2.  

Consistent with the state’s historic commitment to
provide educational opportunity by ensuring both student access
to and selection of an institution of higher education for students
with financial need, the long-term policy of the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
established pursuant to Chapter 1.7 (commencing with Section
69430) of Part 42 shall be as follows:

(a) Commencing with the 2001-02 academic year and every
year thereafter, an applicant for a Cal Grant A or B award shall
receive an award that is not in excess of the financial need amount
determined by the Student Aid Commission pursuant to Section
69432.9 if he or she complies with all of the following
requirements:

(1) Demonstrates financial need under the criteria adopted
pursuant to Section 69432.9.

(2) Attains a grade point average, as defined in Section 69432.7,
meeting the requirements of Chapter 1.7 (commencing with Section
69430) of Part 42.

(3) Complies with each of the eligibility criteria applicable to
the type of Cal Grant award for which he or she is applying.

(b) (1) The maximum Cal Grant A award for a student attending
the University of California or the California State University shall
equal the mandatory systemwide fees in each of those segments.

(2) The maximum Cal Grant B award for a student to which
this subdivision is applicable shall equal the mandatory systemwide
fees in the segment attended by the student, except for community
college students who receive waivers from the Board of Governors
of the California Community Colleges, plus the access award
calculated as specified in Article 3 (commencing with Section
69435) of Chapter 1.7 of Part 42, except that in the first year of
enrollment in a qualifying institution, the maximum award shall
be only for the amount of the access award.

(c) The maximum Cal Grant awards for students attending
nonpublic institutions shall be as follows:

(1) The maximum Cal Grant A award shall equal the tuition
award level established in the Budget Act of 2000, or the amount
as adjusted in subsequent annual budget acts.

(2) The maximum Cal Grant B award shall equal the amount
of the tuition award as established in the Budget Act of 2000, or
the amount as adjusted in subsequent annual budget acts, plus the
amount of the access costs specified in Section 69435, except that,
in the first year of enrollment in a qualifying institution, the
maximum award shall be only for the amount of the access award.

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(3) (A) Notwithstanding paragraphs (1) and (2), the maximum
Cal Grant award for students attending nonpublic institutions
accredited by the Western Association of Schools and Colleges
shall be set and maintained at 80 percent of the estimated average
General Fund cost of educating a Cal Grant eligible student at
the University of California or the California State University, as
calculated by the commission, except as provided in subparagraphs
(B) to (E), inclusive.

end insert begin insert

(B) For the 2014-15 award year, the maximum award shall be
70 percent of the amount calculated pursuant to subparagraph
(A).

end insert begin insert

(C) For the 2015-16 award year, the maximum award shall be
80 percent of the amount calculated pursuant to subparagraph
(A).

end insert begin insert

(D) For the 2016-17 award year, the maximum award shall be
90 percent of the amount calculated pursuant to subparagraph
(A).

end insert begin insert

(E) For the 2017-18 award year and each award year
thereafter, the maximum award shall be 100 percent of the amount
calculated pursuant to subparagraph (A).

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(d) Commencing with the 2000-01 academic year, and each
academic year thereafter, the Cal Grant C award shall be utilized
only for occupational or technical training.

(e) Commencing with the 2000-01 academic year, and each
academic year thereafter, the Cal Grant T award shall be used only
for one academic year of full-time attendance in a program of
professional preparation that has been approved by the California
Commission on Teacher Credentialing.

(f) An institution of higher education in this state that
participates in the Ortiz-Pacheco-Poochigian-Vasconcellos Cal
Grant Program shall not reduce its level of per capita need-based
institutional financial aid to undergraduate students, excluding
loans, below the total level awarded in the 2000-01 academic year.

(g) The implementation of the policy set forth in this section
shall maintain a balance between the state’s policy goals of
ensuring student access to and selection of an institution of higher
education for students with financial need and academic merit.

(h) It is the policy of the State of California that the
Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program
supplement the federal Pell Grant program.

(i) An award under the Ortiz-Pacheco-Poochigian-Vasconcellos
Cal Grant Program shall not guarantee admission to an institution
of higher education or admission to a specific campus or program.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 69432.7 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

69432.7.  

As used in this chapter, the following terms have the
following meanings:

(a) An “academic year” is July 1 to June 30, inclusive. The
starting date of a session shall determine the academic year in
which it is included.

(b) “Access costs” means living expenses and expenses for
transportation, supplies, and books.

(c) “Award year” means one academic year, or the equivalent,
of attendance at a qualifying institution.

(d) “College grade point average” and “community college
grade point average” mean a grade point average calculated on the
basis of all college work completed, except for nontransferable
units and courses not counted in the computation for admission to
a California public institution of higher education that grants a
baccalaureate degree.

(e) “Commission” means the Student Aid Commission.

(f) “Enrollment status” means part- or full-time status.

(1) “Part time,” for purposes of Cal Grant eligibility, means 6
to 11 semester units, inclusive, or the equivalent.

(2) “Full time,” for purposes of Cal Grant eligibility, means 12
or more semester units or the equivalent.

(g) “Expected family contribution,” with respect to an applicant,
shall be determined using the federal methodology pursuant to
subdivision (a) of Section 69506 (as established by Title IV of the
federal Higher Education Act of 1965, as amended (20 U.S.C. Sec.
1070 et seq.)) and applicable rules and regulations adopted by the
commission.

(h) “High school grade point average” means a grade point
average calculated on a 4.0 scale, using all academic coursework,
for the sophomore year, the summer following the sophomore
year, the junior year, and the summer following the junior year,
excluding physical education, reserve officer training corps
(ROTC), and remedial courses, and computed pursuant to
regulations of the commission. However, for high school graduates
who apply after their senior year, “high school grade point average”
includes senior year coursework.

(i) “Instructional program of not less than one academic year”
means a program of study that results in the award of an associate
or baccalaureate degree or certificate requiring at least 24 semester
units or the equivalent, or that results in eligibility for transfer from
a community college to a baccalaureate degree program.

(j) “Instructional program of not less than two academic years”
means a program of study that results in the award of an associate
or baccalaureate degree requiring at least 48 semester units or the
equivalent, or that results in eligibility for transfer from a
community college to a baccalaureate degree program.

(k) “Maximum household income and asset levels” means the
applicable household income and household asset levels for
participants, including new applicants and renewing recipients, in
the Cal Grant Program, as defined and adopted in regulations by
the commission for the 2001-02 academic year, which shall be
set pursuant to the following income and asset ceiling amounts:

 

CAL GRANT PROGRAM INCOME CEILINGS

 

 

	Cal Grant A, C, and T	Cal Grant B
Dependent and Independent students with dependents*
Family Size
Six or more	$74,100	$40,700
Five	$68,700	$37,700
Four	$64,100	$33,700
Three	$59,000	$30,300
Two	$57,600	$26,900
Independent
Single, no dependents	$23,500	$23,500
Married	$26,900	$26,900

 

*Applies to independent students with dependents other than a
spouse.

 

CAL GRANT PROGRAM ASSET CEILINGS

 

 

	Cal Grant A, C, and T	Cal Grant B
Dependent**	$49,600	$49,600
Independent	$23,600	$23,600

 

**Applies to independent students with dependents other than a
spouse.

 

The commission shall annually adjust the maximum household
income and asset levels based on the percentage change in the cost
of living within the meaning of paragraph (1) of subdivision (e)
of Section 8 of Article XIII B of the California Constitution. The
maximum household income and asset levels applicable to a
renewing recipient shall be the greater of the adjusted maximum
household income and asset levels or the maximum household
income and asset levels at the time of the renewing recipient’s
initial Cal Grant award. For a recipient who was initially awarded
a Cal Grant for an academic year before the 2011-12 academic
year, the maximum household income and asset levels shall be the
greater of the adjusted maximum household income and asset
levels or the 2010-11 academic year maximum household income
and asset levels. An applicant or renewal recipient who qualifies
to be considered under the simplified needs test established by
federal law for student assistance shall be presumed to meet the
asset level test under this section. begin delete Prior to end delete begin insert Before end insert disbursing any
Cal Grant funds, a qualifying institution shall be obligated, under
the terms of its institutional participation agreement with the
commission, to resolve any conflicts that may exist in the data the
institution possesses relating to that individual.

(l) (1) “Qualifying institution” means an institution that
complies with paragraphs (2) and (3) and is any of the following:

(A) A California private or independent postsecondary
educational institution that participates in the Pell Grant Program
and in at least two of the following federal campus-based student
aid programs:

(i) Federal Work-Study.

(ii) Perkins Loan Program.

(iii) Supplemental Educational Opportunity Grant Program.

(B)  begin delete A end delete begin insert (i) end insert begin insert   end insert begin insert Except as provided in clause (ii), a end insert nonprofit
institution headquartered and operating in California that certifies
to the commission that 10 percent of the institution’s operating
budget, as demonstrated in an audited financial statement, is
expended for purposes of institutionally funded student financial
aid in the form of grants, that demonstrates to the commission that
it has the administrative capacity to administer the funds, that is
accredited by the Western Association of Schools and Colleges,
and that meets any other state-required criteria adopted by
regulation by the commission in consultation with the Department
of Finance. A regionally accredited institution that was deemed
qualified by the commission to participate in the Cal Grant Program
for the 2000-01 academic year shall retain its eligibility as long
as it maintains its existing accreditation status.

begin insert

(ii) No postsecondary educational institution headquartered in
the state, registered as a nonprofit public benefit corporation
pursuant to Part 2 (commencing with Section 5110) of Division 2
of Title 1 of the Corporations Code, and accredited by the Western
Association of Schools and Colleges shall be deemed a qualifying
institution if the total amount of institutional aid provided to
California students by all institutions to which this clause is
applicable, in the aggregate, in any award year, is less than 50
percent of the total Cal Grant awards received by their students,
unless that institution has fewer than 50 students receiving Cal
Grant awards and charges an annual tuition that is no more than
50 percent of the average of the annual tuition charged by all
institutions to which this clause is applicable.

end insert

(C) A California public postsecondary educational institution.

(2) (A) The institution shall provide information on where to
access California license examination passage rates for the most
recent available year from graduates of its undergraduate programs
leading to employment for which passage of a California licensing
examination is required, if that data is electronically available
through the Internet Web site of a California licensing or regulatory
agency. For purposes of this paragraph, “provide” may exclusively
include placement of an Internet Web site address labeled as an
access point for the data on the passage rates of recent program
graduates on the Internet Web site where enrollment information
is also located, on an Internet Web site that provides centralized
admissions information for postsecondary educational systems
with multiple campuses, or on applications for enrollment or other
program information distributed to prospective students.

(B) The institution shall be responsible for certifying to the
commission compliance with the requirements of subparagraph
(A).

(3) (A) The commission shall certify by October 1 of each year
the institution’s latest three-year cohort default rate and graduation
rate as most recently reported by the United States Department of
Education.

(B) For purposes of the 2011-12 academic year, an otherwise
qualifying institution with a three-year cohort default rate reported
by the United States Department of Education that is equal to or
greater than 24.6 percent shall be ineligible for initial and renewal
Cal Grant awards at the institution, except as provided in
subparagraph (F).

(C) For purposes of the 2012-13 academic year, and every
academic year thereafter, an otherwise qualifying institution with
a three-year cohort default rate that is equal to or greater than 15.5
percent, as certified by the commission on October 1, 2011, and
every year thereafter, shall be ineligible for initial and renewal Cal
Grant awards at the institution, except as provided in subparagraph
(F).

(D) (i) An otherwise qualifying institution that becomes
ineligible under this paragraph for initial and renewal Cal Grant
awards shall regain its eligibility for the academic year for which
it satisfies the requirements established in subparagraph (B), (C),
or (G), as applicable.

(ii) If the United States Department of Education corrects or
revises an institution’s three-year cohort default rate or graduation
rate that originally failed to satisfy the requirements established
in subparagraph (B), (C), or (G), as applicable, and the correction
or revision results in the institution’s three-year cohort default rate
or graduation rate satisfying those requirements, that institution
shall immediately regain its eligibility for the academic year to
which the corrected or revised three-year cohort default rate or
graduation rate would have been applied.

(E) An otherwise qualifying institution for which no three-year
cohort default rate or graduation rate has been reported by the
United States Department of Education shall be provisionally
eligible to participate in the Cal Grant Program until a three-year
cohort default rate or graduation rate has been reported for the
institution by the United States Department of Education.

(F) (i) An institution that is ineligible for initial and renewal
Cal Grant awards at the institution under subparagraph (B), (C),
or (G) shall be eligible for renewal Cal Grant awards for recipients
who were enrolled in the ineligible institution during the academic
year before the academic year for which the institution is ineligible
and who choose to renew their Cal Grant awards to attend the
ineligible institution. Cal Grant awards subject to this subparagraph
shall be reduced as follows:

(I) The maximum Cal Grant A and B awards specified in the
annual Budget Act shall be reduced by 20 percent.

(II) The reductions specified in this subparagraph shall not
impact access costs as specified in subdivision (b) of Section
69435.

(ii) This subparagraph shall become inoperative on July 1, 2013.

(G) For purposes of the 2012-13 academic year, and every
academic year thereafter, an otherwise qualifying institution with
a graduation rate of 30 percent or less for students taking 150
percent or less of the expected time to complete degree
requirements, as reported by the United States Department of
Education and as certified by the commission pursuant to
subparagraph (A), shall be ineligible for initial and renewal Cal
Grant awards at the institution, except as provided for in
subparagraphs (F) and (I).

(H) Notwithstanding any other law, the requirements of this
paragraph shall not apply to institutions with 40 percent or less of
undergraduate students borrowing federal student loans, using
information reported to the United States Department of Education
for the academic year two years before the year in which the
commission is certifying the three-year cohort default rate or
graduation rate pursuant to subparagraph (A).

(I) Notwithstanding subparagraph (G), an otherwise qualifying
institution with a three-year cohort default rate that is less than 10
percent and a graduation rate above 20 percent for students taking
150 percent or less of the expected time to complete degree
requirements, as certified by the commission pursuant to
subparagraph (A), shall remain eligible for initial and renewal Cal
Grant awards at the institution through the 2016-17 academic year.

(J) The commission shall do all of the following:

(i) Notify initial Cal Grant recipients seeking to attend, or
attending, an institution that is ineligible for initial and renewal
Cal Grant awards under subparagraph (C) or (G) that the institution
is ineligible for initial Cal Grant awards for the academic year for
which the student received an initial Cal Grant award.

(ii) Notify renewal Cal Grant recipients attending an institution
that is ineligible for initial and renewal Cal Grant awards at the
institution under subparagraph (C) or (G) that the student’s Cal
Grant award will be reduced by 20 percent, or eliminated, as
appropriate, if the student attends the ineligible institution in an
academic year in which the institution is ineligible.

(iii) Provide initial and renewal Cal Grant recipients seeking to
attend, or attending, an institution that is ineligible for initial and
renewal Cal Grant awards at the institution under subparagraph
(C) or (G) with a complete list of all California postsecondary
educational institutions at which the student would be eligible to
receive an unreduced Cal Grant award.

(K) By January 1, 2013, the Legislative Analyst shall submit
to the Legislature a report on the implementation of this paragraph.
The report shall be prepared in consultation with the commission,
and shall include policy recommendations for appropriate measures
of default risk and other direct or indirect measures of quality or
effectiveness in educational institutions participating in the Cal
Grant Program, and appropriate scores for those measures. It is
the intent of the Legislature that appropriate policy and fiscal
committees review the requirements of this paragraph and consider
changes thereto.

(m) “Satisfactory academic progress” means those criteria
required by applicable federal standards published in Title 34 of
the Code of Federal Regulations. The commission may adopt
regulations defining “satisfactory academic progress” in a manner
that is consistent with those federal standards.

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end delete

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SECTION 1.  

It is the intent of the Legislature to enact
legislation affecting the Cal Grant Program.

end delete