BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1318 (Bonilla) - Cal Grant Awards at Private Postsecondary
Institutions
Amended: June 26, 2014 Policy Vote: Education 7-0
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Jacqueline Wong-Hernandez
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1318 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 (WASC) and requires
these colleges, as a condition of funding the Cal Grant maximum
award established by the bill, to annually report specified
performance metrics determined by the Association of Independent
California Colleges and Universities (AICCU). The AICCU is
required to, in turn, prepare a cumulative report to the
Legislature, Governor, Department of Finance, and Legislative
Analyst's Office beginning March 15, 2015.
Fiscal Impact:
Cal Grant awards: The California Student Aid Commission
(CSAC) estimates that increasing Cal Grant award levels for
private, WASC-accredited colleges, as required by this bill,
will result in additional costs of $12.3 million in 2015-16,
$34.9 million in 2016-17, $65.3 million in 2017-18, and $102
million in 2018-19 (General Fund). Annually thereafter,
adjustments would be based on the calculation of base
funding, as specified.
Background: The Cal Grant was originally created in 1955 (as the
California State Scholarship Program) to provide scholarships
only to students who attended private nonprofit colleges in
California, in order to make it easier for students to attend
private college and thereby increase capacity in the California
State University or University of California systems. After the
public postsecondary institutions began charging fees, the Cal
Grant was expanded to include them.
Existing law authorizes the Cal Grant Program, administered by
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the 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 program
consists of the Cal Grant A, Cal Grant B, and Cal Grant C
awards, and eligibility is based upon financial need, grade
point average, California residency, and other eligibility
criteria, as specified. (Education Code � 69433.9)
Existing 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 (UC) and the California State University (CSU), as
specified. This policy also requires that the maximum Cal Grant
award for students attending nonpublic institutions equal the
tuition award level 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 nonprofit
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)
Proposed Law: This bill establishes a maximum Cal Grant award
for a student attending a WASC-accredited nonpublic
postsecondary educational institution. Specifically, this bill:
1) Requires that the award be set and maintained at 75% of
the base funding per Cal Grant student at the UC and the
CSU.
2) Requires, as a condition for funding of the Cal Grant
maximum award, the submission of performance metrics and
further: a) requires the performance metrics be submitted
in a cumulative report generated by the AICCU; b) requires
the report to contain specific student and campus data and
to be submitted to the Governor, the Legislature, the
Department of Finance and the Legislative Analyst's Office
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by March 15, 2015, and by that date annually thereafter.
3) Establishes a phase-in of the maximum allowable award,
as follows:
a) For the 2015-16 award year, the maximum award
shall be 70% of the amount calculated pursuant to #1.
b) For the 2016-17 award year, the maximum award
shall be 80% of the amount calculated pursuant to #1.
c) For the 2017-18 award year, the maximum award
shall be 90% of the amount calculated pursuant to #1.
d) For the 2018-19 award year and each award year
thereafter, the maximum award shall be 100% of the
amount calculated pursuant to #1.
Staff Comments: This bill would increase and stabilize Cal Grant
funding for awards to students attending WASC-accredited private
postsecondary institutions in California, by linking them to the
amount of base funding the state provides to the UC and CSU (per
Cal Grant recipient student). Base funding is the combination of
General Fund, Lottery, and property tax funds provided by the
state to the UC and CSU.
The CSAC projects that individual awards, which are currently
capped at $8,056, would increase to $9,674 in 2015-16, $11,056
in 2016-17, $12,438 in 2017-18, and $13,820 in 2018-19 (at full
implementation). The corresponding statewide cost, based on the
number of Cal Grant award recipients attending WASC-accredited
private postsecondary institutions in 2013-14, would be $12.3
million in 2015-16, $34.9 million in 2016-17, $65.3 million in
2017-18, and $102 million in 2018-19 and annually thereafter
(General Fund).
The only state funding provided to private postsecondary
institutions is through Cal Grant awards to qualifying students
who, in turn, utilize awards to offset education expenses. While
the award amounts vary by the type of institution the student
attends, the award itself is linked to the student: an awardee
can use his or her award at any qualifying institution. To the
extent that the increased Cal Grant award levels incentivize (or
allow) students who would otherwise have attended public
postsecondary institutions (especially the UC), to attend
private postsecondary institutions, there could be substantial
state savings
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