BILL ANALYSIS �
AB 1590
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1590 (Wieckowski)
As Amended August 13, 2014
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: |75-0 |(April 24, |SENATE: |36-0 |(August 18, |
| | |2014) | | |2014) |
-----------------------------------------------------------------
Original Committee Reference: HIGHER ED.
SUMMARY : Requires the California Student Aid Commission (CSAC),
in administering the Cal Grant Program, to certify cohort
default rate and graduation rate data for institutions seeking
to participate by November 1 and to use the most recent
publically available data. Revises the federal loan program
participation requirements for private Cal Grant qualifying
institutions.
The Senate amendments are technical and clarifying in nature,
and reflect changes made to this code section in the 2014-15
Budget Act.
EXISTING LAW requires, as a condition of participation in the
Cal Grant Program, an institution with more than 40% of
undergraduate students borrowing federal student loans to
maintain either 1) a three-year cohort default rate of less than
15.5% and a graduation rate of greater than 30% (within 150% of
program length) or 2) a three-year cohort default rate of less
than 10% and a graduation rate of greater than 20% (within 150%
of program length).
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : In an effort to increase accountability over public
financial aid expenditures and address the budget deficit, as a
part of the 2011-12 Budget Act, California 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 federal
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. In
AB 1590
Page 2
the 2014-15 academic year, 122 institutions (primarily
for-profit colleges) are ineligible to participate. Cal Grant
students attending or seeking to attend ineligible institutions
are required to transfer to an eligible institution in order to
receive their Cal Grant award.
In January 2013, the Legislative Analyst's Office (LAO) reported
to the Legislature on CSAC implementation of the Cal Grant
requirements and provided recommendations for refining the
standards. Among its recommendations, LAO suggested changing
the date by which CSAC is required to certify default rate and
graduation data and requiring CSAC to utilize the most recently
available data. This bill would move the certification date
from October 1 to November 1 to coincide with United States
Department of Education (USDE) schedule for posting graduation
rates, and require CSAC to use the most recent available data
published by USDE.
Existing 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 (Direct Loan) Program. The
Author notes that the Perkins Loan Program is limited to those
schools who already participate, no new institutions may enroll.
The federally backed 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 : Laura Metune / HIGHER ED. / (916)
319-3960
FN: 0004716
AB 1590
Page 3