BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1590
                                                                  Page  1

          Date of Hearing:   April 9, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  AB 1590 (Wieckowski) - As Amended: March 24, 2014 

          Policy Committee:                              Higher  
          EducationVote:12-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill: 

          1)Requires the California Student Aid Commission (CSAC) to  
            certify cohort default rate and graduation rate data, for  
            postsecondary educational institutions seeking to participate  
            in the Cal Grant Program, by November 1 instead of October 1  
            annually.

          2)Revises federal loan program participation requirements for  
            private Cal Grant qualifying institutions to include  
            participation in the Stafford Loan Program rather than the  
            Perkins Loan Program.

           FISCAL EFFECT  

          Minor absorbable costs to CSAC.

           COMMENTS  

           1)Background  . The 2011-12 Budget Act in part established  
            requirements linking an institution's participation in the Cal  
            Grant Program to the percentage of students borrowing federal  
            loans and the number of students defaulting on those loans  
            within three years of entering repayment.  In the 2012-13  
            Budget Act, the requirements regarding loan defaults were  
            tightened and a graduation rate requirement was established.  
            Based on data certified by CSAC, in the current academic year,  
            122 institutions (primarily for-profit colleges) are  
            ineligible to participate in the program.









                                                                  AB 1590
                                                                  Page  2

            Consistent with a recommendation of the Legislative Analyst's  
            Office, this bill moves the certification date from October 1  
            to November 1 to coincide with U.S. Department of Education  
            (USDE) schedule for posting graduation rates, and require CSAC  
            to use the most recent available data published by USDE.

           2)Stafford vs. Perkins Loans  .  Current law requires private Cal  
            Grant qualifying institutions to participate in at least two  
            of three outlined federal campus-based student aid programs  
            (Federal Work-Study, Perkins Loan Program, or Supplemental  
            Educational Opportunity Grant Program).   This bill removes  
            the Perkins Loan Program and replaces it with the Stafford  
            Loan Program.  The Perkins Loan Program is limited only to  
            those schools who already participate. The Stafford Loan  
            Program is offered at more institutions, and available to more  
            students. For 2012-13, nearly 500 California institutions  
            participated in Stafford Loan Programs, while only 121  
            California institutions participated in Perkins Loan Programs.  


           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081