BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 1318
AUTHOR: Bonilla
AMENDED: May 29, 2014
FISCAL COMM: Yes HEARING DATE: June 18, 2014
URGENCY: No CONSULTANT: Kathleen Chavira
SUBJECT : Cal Grant award at nonpublic postsecondary
institutions.
SUMMARY
This bill establishes a statutory formula which increases
and stabilizes the amount of the current Cal Grant award
for students attending private colleges accredited by the
Western Association of Schools and Colleges and requires
these colleges, as a condition of funding the Cal Grant
maximum award established by the bill, to annually report
specified performance metrics to the Legislature, Governor,
Department of Finance, and Legislative Analyst's Office
beginning March 15, 2015.
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.
Current law provides for a long-term Cal Grant policy that
requires that the maximum Cal Grant A award and the Cal
Grant B award, for students attending each respective
segment, equal the amount of the mandatory systemwide fees
at the University of California and the California State
University, as specified. This policy also requires that
the maximum Cal Grant award for students attending
nonpublic institutions equal the tuition award level
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established in the Budget Act of 2000, or the amount as
adjusted in subsequent annual budget acts.
(EC � 66021.2)
Notwithstanding the provisions of EC 66021.2, current law,
enacted through the 2012 budget, sets the maximum amount of
the Cal Grant award for students who attend private
postsecondary institutions. Beginning in the 2013-14 award
year, this amount is $4,000 for new recipients attending
private for-profit institutions. For new recipients
attending private non-profit institutions or private
for-profit WASC accredited institutions, the amount is set
at $9,084 for the 2013-14 award year and $8,056 for
2014-15. (EC � 69432)
ANALYSIS
This bill :
1) Establishes a maximum Cal Grant award for a student
attending a nonpublic postsecondary educational
institution accredited by the Western Association of
Schools and Colleges (WASC). More specifically it:
a) Requires that the award be set and
maintained at 75 percent of the base funding per
Cal Grant student at the UC and the CSU.
b) Requires, as a condition for
funding of the Cal Grant maximum award, the
submission of performance metrics and further:
i) Requires the
performance metrics be submitted in a
cumulative report generated by the
Association of Independent California
Colleges and Universities.
ii) Requires the report in (i) be
submitted to the Governor, the Legislature,
the Department of Finance and the
Legislative Analyst's Office by March 15,
2015, and by that date annually thereafter.
iii) Requires the report to include
specified data for each institution
including:
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(1) The
percentage of undergraduates who are
California residents, the number and
percentage of transfer students from
California Community Colleges.
(2) The
number and percentage of Pell Grant
students.
(3) The
number and percentage of Cal Grant
recipients enrolled and their ethnic
composition (in percentages), median
amount of institutional aid.
(4) The
four and six year graduation rates for
freshman entrants disaggregated by Pell
Grant and Cal Grant recipients.
(5) Two
and three year graduation rates for
community college transfer students,
disaggregated by Pell Grant and Cal
Grant recipients.
(6) The
number of degrees awarded annually by
the institution to undergraduates
enrolled as freshmen, undergraduates
enrolled as transfer students, graduate
students and Pell Grant recipients.
(7) The
number of degrees and credentials
awarded in health-related fields,
teacher preparation and STEM fields.
2) Establishes a phasing in of the maximum allowable
award per the following schedule:
a) Requires that the maximum award be
70 percent of the amount calculated per the
formula established for the 2015-16 award year.
b) Requires that the maximum award be
80 percent of the amount calculated per the
formula established for the 2016-17 award year.
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c) Requires that the maximum award be
90 percent of the amount calculated per the
formula established for the 2017-18 award year.
d) Requires that the maximum award be
100 percent of the amount calculated per the
formula established for the 2018-19 award year.
3) Makes a number of related declarations and findings.
STAFF COMMENTS
1) Need for the bill . According to the author, "Since the
enactment of the Cal Grant Entitlement program there
has been no policy for setting the maximum award for
students attending private colleges and universities.
The absence of such a policy has led to a 33 percent
decline in the value of the award in current dollars,
and has led to an unpredictable and arbitrarily
determined award, which undermines the original
purpose of the Cal Grant program, which is to allow
financially needy students to choose an institution
that best serves their academic and financial needs.
AB 1318 seeks to strengthen the Cal Grant program and
the portability of the award. The majority of these
students are underrepresented in higher education and
35% of these students are first generation college
students." This bill would provide predictability and
stability for both institutions and students.
2) WASC accredited non-public institutions . The
institutions that would benefit from the provisions of
this bill are generally members of the Association of
Independent California Colleges and Universities
(AICCU) which represents 75 private, nonprofit, WASC
accredited colleges and universities. These
institutions include research universities, liberal
arts colleges, religiously affiliated institutions,
and specialized colleges and universities that focus
on the arts, theater and music.
The AICCU reports that their member institutions
enroll over 320,000 students, comprised of 184,000
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undergraduate students and 144,000 graduate students.
AICCU institutions award over 50% of all graduate
degrees in California and approximately 21% of the
baccalaureate degrees. The sector produces 40% of the
teaching credentials, 65% of the legal professional
degrees, 39% of the business degrees, 43% of the heath
degrees and 27% of the engineering degrees in the
state. California residents make up approximately 70%
of the undergraduate population.
3) Who is served ? According to the AICCU, Cal Grant
students at their member institutions are
overwhelmingly the first in their families to go to
college and from historically underrepresented groups
in higher education. AICCU reports that data collected
over the years has consistently demonstrated that Cal
Grant students graduate at a higher level than the
general student population in the sector even with the
barriers they confront. According to the AICCU's
survey of their member institutions, 62% of their Cal
Grant students graduate in 4-years (similar to the
4-year rate at the UC) and 63% are first generation
college students.
Approximately 41% of the Cal Grant population at AICCU
institution is Latino, 27% Caucasian, 17% Asian and
Pacific Islander, 7% African American. Based upon
data from the California Student Aid Commission, the
average family income for Cal Grant A students is
$41,300 and $16,523 for Cal B Students (CSAC data).
The average institutional aid award to a Cal Grant
student is $15,059.
According to the AICCU the following are examples of
their member institutions and the proportion of their
students who are Cal Grant recipients:
a) Cal Baptist University - Riverside (33.5%)
b) Holy Names College - Oakland (31.8%)
c) La Sierra University - Riverside (38.7%)
d) Mills College - Oakland (38.4%)
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e) Mount St. Mary's - Los Angeles (54%)
f) Simpson University - Redding (38.6%)
g) University of the Pacific - Stockton (41.6%)
h) William Jessup University - Rocklin (36.1%)
According to the AICCU, for the majority of their
member institutions, who are tuition dependent, as Cal
Grants have lost value over the years and the award
amount has been reduced, their options are to increase
loan or work contributions, leave a gap in the
financial aid package for families to address, or to
reduce their enrollment of low-income students.
4) Meeting California's needs . Several California
specific and national reports have highlighted the
need to improve overall educational attainment (i.e.
increase the percentage of adults with meaningful
postsecondary credentials) in order to regain and
maintain the State's role as an economic leader in a
global economy. According to California Competes, a
non-profit policy research organization, California
ranks 23rd among states in terms of the proportion of
adults ages 25 to 64 with an associate's degree or
above. In its report, Credential Crunch: How to Regain
California's Economic Standing , it suggests that
attainment goals must focus upon a target population,
the types of credentials, and a target date for
achievement and that California will need 2.3 million
additional degrees and certificates if it is to regain
its economic standing.
In light of recent budget deliberations and the status
of increased enrollment funding for California's
public four year colleges, the committee may wish to
consider:
a) Can the UC and CSU meet the current demand
for baccalaureate programs?
b) What would be necessary for our public
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higher education institutions to meet the
predicted shortage of college-educated workers
over the next decade?
c) What role should the private sector play,
and what policies are necessary if the private
sector is to play a role in meeting the need for
increased educational attainment of California's
citizenry?
5) History of the bill's formula provisions. This bill
establishes a formula for calculating the amount of a
Cal Grant award for students attending private
institutions. According to a 2005 report by the
California Postsecondary Education Commission (CPEC),
Recommendations for Adjusting the Maximum Cal Grant
Award at California's Nonpublic Colleges and
Universities, prior to the enactment of the Cal Grant
Entitlement program in 2000,the maximum Cal Grant
award for students attending non-public colleges and
universities was specified in state law. The current
formula in the bill reflects the same language which
had existed in statute prior to 2006 and, according to
the CPEC, was previously developed in consultation
with representatives from all of California's
postsecondary education institutions as well as the
Legislative Analyst's Office and the Department of
Finance. According to the CPEC, both the LAO and the
California Student Aid Commission recommended that the
Legislature adopt a long-term Cal Grant policy that
would link the maximum Cal Grant award for students
attending nonpublic colleges and universities to the
weighted average General Fund subsidy the state
provides for financially needy students attending the
UC and CSU.
While the CPEC endorsed the adoption of this long term
policy, it also recommended that in exchange for these
additional Cal Grant resources, the State ensure that
participating non-public colleges and universities
were held accountable to the state. CPEC recommended
that for those students receiving Cal Grant support,
that nonpublic institutions be required to annually
report data on the number of California Cal Grant and
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non-Cal Grant students enrolled along with the
retention and graduation rates of their Cal Grant
recipients versus non-Cal Grant recipients, which, in
combination with data from the State's public higher
education institutions would enable the State to
determine its success in providing financially needy
Californians with higher education access and choice.
This bill was recently amended to incorporate the
recommendations to require annual reporting of data on
Cal Grant students. The bill sets the amount of the
Cal Grant award at 75 percent of that provided to the
public 4-year institutions, but does not factor in a
weighted average general fund subsidy as recommended
by the LAO and CSAC.
6) Narrow application ? This bill proposes a policy for
establishing a Cal Grant award amount which would
apply only to the WASC accredited institutions, both
profit and non-profit, in an attempt to ensure that
"financially needy students can choose an institution
that best serves their academic and financial needs."
What is the policy rationale for excluding non-WASC
accredited institutions? Could this policy be subject
to challenges similar to those raised in Daghlian v.
DeVry University, Inc., 582 F. Supp. 2D 1231, 2008,
which found that California's then practice of solely
exempting the WASC accredited schools from state
oversight by the BPPVE violated the Commerce Clause of
the federal Constitution? If the state chooses to
implement a policy for determining participation in a
state funded financial aid program by nonpublic
entities, is the accrediting body an appropriate basis
for distinction?
7) Budget related activity . As part of the 2013-14
Budget, the Legislature recently enacted, AB 94
(Committee on Budget, 2013), which among other things,
requires the UC and the CSU to annually report on
specified performance measures for the preceding
academic year in order to inform budget and policy
decisions, and promote the effective and efficient use
of available resources. These performance measures
include data on the number of transfer students, the
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number and proportion of low-income students,
graduation rates, transfer rates, degree completions,
costs per degree, the number of STEM degrees and other
measures.
8) Data collection . This bill directs the AICCU to
prepare a cumulative report based upon information
submitted by member institutions. In order to ensure
data consistency and data integrity and in
anticipation of future statewide efforts to track
performance and improve education and workforce
outcomes across all segments staff recommends the bill
be amended to require the AICCU to work with the
public segments of higher education to ensure the data
are defined, collected and reported in a comparable
manner. Staff further recommends that the bill be
amended to require that the collection, reporting and
housing of data be done in a manner that ensures data
integrity and security and be in conformance with any
federal and state laws on the confidentiality of
student information.
9) Related LAO overview . Although never presented to the
Budget Conference Committee, the LAO did prepare an
overview of financial aid proposals to assist in
consideration of the various Cal Grant options before
that committee. 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 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 the
various proposals before the budget 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.
b) Increase Cal Grant amounts for qualifying
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private colleges.
c) Increase the number of Cal Grants directed
at older, nontraditional students.
d) Increase funding to UC, CSU 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.
SUPPORT
Association of Independent California Colleges and
Universities
Biola University
California Catholic Conference, Inc.
California Chamber of Commerce
Campaign for College Opportunity
Claremont Graduate University
Greater Redding Chamber of Commerce
Holy Names University
La Sierra University
Mills College
Mount St. Mary's College, Los Angeles
Pacific Oaks College
Pacific Union College
Pepperdine University
Pepperdine University, Seaver College
Point Loma Nazarene University
Saint Mary's College of California
Santa Clara University
Simpson University
Stanford University
Thomas Aquinas College
University of La Verne
University of Redlands
University of San Diego
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University of Southern California
Vanguard University
Western University
Whittier College
William Jessup University
OPPOSITION
None received.