BILL ANALYSIS �
AB 1364
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Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1364 (Ting) - As Amended: April 25, 2013
Policy Committee: Higher
EducationVote:9-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reverses a budget-related 5% reduction (from $1,551 to
$1,473) to the Cal Grant B access award-resulting from a
Governor's veto-and instead increases this stipend fourfold (to
the lesser of $5,900 or the student's calculated financial
need,) and requires adjustment of the stipend annually
thereafter based on changes in the California Consumer Price
Index.
FISCAL EFFECT
General Fund cost of about $700 million in 2014-15, with similar
ongoing costs that will depend on changes in the number of Cal
Grant B recipients and the annual inflation adjustment.
COMMENTS
1)Background . The Cal Grant Entitlement Program guarantees
financial aid awards to recent high school graduates and
community college transfer students who meet financial,
academic, and other eligibility requirements. Cal Grants cover
full systemwide tuition at the public universities for up to
four years and a portion of tuition costs at nonpublic
institutions. About 269,000 students received new or renewed
Cal Grant awards in 2012-13 at a General Fund cost of about
$1.6 billion.
2)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
AB 1364
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eligibility, reducing the Cal Grant B stipend amount, 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.
3)Cal Grant B Stipend . When the Cal Grant B program began as the
"College Opportunity Grant" (COG) in the late 1960s,
policymakers acknowledged that the lowest income students
needed assistance with other college costs, such as living
expenses, textbooks, and supplies. In 1969-70, the first
stipend was set at $900. The stipend was approximately 20% of
the indirect costs in 1989-90, as determined by the CSAC.
Since that time its value has declined in relative terms each
year. In the 2012-13 Budget Act, the Governor used his veto
authority to reduce the access award by 5% to $1,473-an amount
that does not even pay for the average cost of books and
supplies ($1,656) as estimated by CSAC in 2011-12.
4)Purpose . According to the author, "AB 1364 will help to ensure
fairness and allow California students to achieve their goals
by bringing the amount of the Cal Grant access award to where
it should be today if it had rightfully kept pace with
inflation. Further, AB 1364 ties the award to the Consumer
Price Index (CPI) going forward. If this award had kept pace
with inflation, it would be valued at around $6,000 today."
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.
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c) AB 1285 (Fong) expands Cal Grant B funding by
eliminating the 2% cap on the number of Cal Grant B awards
that cover the first year of tuition and fees.
d) 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.
e) 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.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081