BILL ANALYSIS �
AB 1976
Page 1
Date of Hearing: April 1, 2014
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
AB 1976 (Quirk-Silva) - As Introduced: February 19, 2014
SUBJECT : Student financial aid: Competitive Cal Grant A and B
awards.
SUMMARY : Authorizes 50,000 Competitive Cal Grant A and B
awards, commencing with the 2015-16 academic year, and
authorizes the California Student Aid Commission (CSAC) to
utilize data from the three award years immediately preceding in
order to estimate the maximum number of award offers that CSAC
may make without exceeding 50,000 acceptances. Authorizes CSAC
to exceed the 50,000 award limit in any academic year and then
reduce the number of awards in the subsequent year by the number
of awards granted over 50,000.
EXISTING LAW :
1)Establishes the Cal Grant program awards to provide tuition
and access cost assistance to eligible students attending
qualified institutions:
a) Cal Grant A Entitlement Awards. Students that meet
income, asset and other eligibility requirements, have at
least a 3.0 grade point average, and apply either the year
they graduate from high school or the following year are
entitled to an award that provides coverage for tuition and
fees.
b) Cal Grant B Entitlement Awards. Students that meet
income and asset (lower thresholds than Cal Grant A) and
other eligibility requirements, have at least a 2.0 GPA and
apply either the year they graduate from high school or the
following year are entitled to a living allowance and
tuition and fee assistance. Awards for first-year students
are limited to an allowance for books and living expenses
($1,473). In the second and subsequent years, the award
provides tuition and fee support.
c) California Community College (CCC) Transfer Entitlement
Awards. Cal Grant A and B awards are guaranteed to every
student who graduated from a California high school after
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June 30, 2000, was a California resident at the time of
high school graduation, transferred to a qualifying
baccalaureate-degree granting institution from a CCC during
the award year, was under the age of 28 at the time of the
transfer, and had a minimum California Community College
GPA of 2.4.
d) Competitive Cal Grant A and B Awards. Students who are
not eligible for entitlement awards may compete for a Cal
Grant A or B Competitive award. The award benefits and
eligibility requirements are the same as the entitlement
program, but awards are not guaranteed. Annually, 22,500
Cal Grant Competitive awards are available. Of these,
11,250 are for students who do not qualify for a Cal Grant
Entitlement award, but who otherwise meet the Cal Grant
requirements. The remaining awards are set aside for
eligible CCC students.
e) Cal Grant C Awards. Students attending qualifying
occupational, technical, and vocational programs are
eligible for up to $547 for books and equipment and $2,462
for tuition and fees. In 2012-13, applicants competed for
7,761 grants; applicants are ranked by work experience,
educational history, vocational aptitude, and occupational
goal.
f) Cal Grant T Awards. Designed to help post-baccalaureate
students pursue their initial California teaching
credential, funding for new Cal Grant T awards has not been
authorized since 2002-03.
2)Maximum award amounts for CSU and UC are established in the
annual Budget Act and have traditionally covered all
systemwide tuition and fees. The maximum tuition award for
Cal Grant A and B for students attending private for-profit
colleges is $4,000 (commencing 2013-14), and for students
attending non-profit or WASC-accredited for-profit
institutions is $8,056 (commencing 2014-15).
FISCAL EFFECT : Unknown
COMMENTS : Background . Upon submission of a completed
application, which includes the Free Application for Federal
Student Aid (FAFSA) and GPA requirements, each student's
electronic file is reviewed by CSAC for overall eligibility.
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Students who do not meet the requirements for an Entitlement Cal
Grant award are considered for the Competitive program. CSAC
uses a 200-point scoring system to evaluate applications for the
Competitive Cal Grant awards. Scoring is based on income
levels, GPA, access equalizer, parents' education level, and
student or parent household status. Students are placed in
cohorts based on scoring of approximately 1,000-2,000 students,
and cutoff scores are established to determine which cohorts
will be offered an award. According to CSAC, cutoff scores are
set with the goal of getting as close to 22,500 as possible. In
2001-02, the first award cycle, the take-rate in the Competitive
program was 79.7%; meaning nearly 20% of grants were unclaimed
by students. The take-rate declined slightly each year, until
2013-14, when CSAC expanded efforts to maximize award use.
Purpose of this bill . According to the author, in 2012-13,
317,500 qualified applicants competed for only 22,500 awards,
and of those statutorily authorized awards, a large number went
unused. According to the author, CSAC is fearful of making
additional award offers in case too many students accept grants,
creating a liability CSAC cannot fulfill. This bill would make
three important changes to the Competitive Cal Grant Program:
(1) increase the maximum number of Competitive Cal Grant A and B
Awards to 50,000 annually; (2) authorize CSAC to establish a
take-rate upon which to base the number of award offers each
year; and (3) authorize CSAC to exceed the 50,000 award limit in
an academic year, if the take-rate exceeds expectations, and
reduce the number of awards by the overage in the subsequent
academic year.
Increasing the number of Competitive Cal Grant Awards . On
October 7, 2013, the Assembly Higher Education Committee held an
oversight hearing to examine affordability in California's
public colleges and universities. As witnesses testified, a
student's ability to pay for college is a major factor in
enrollment and completion of a degree program; significant unmet
need results in students being less likely to enroll and, once
enrolled, low-income students are also less likely to complete
their degree program. Financial aid plays a vital role in
leveling the playing field and increasing access, retention, and
completion rates. California has made a substantial commitment
to college affordability through the Cal Grant Program; still,
there is room for improvement. Among the recommendations
provided to the Committee, witnesses encouraged an increase in
the number of awards provided in the Competitive Cal Grant
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Program. This bill would increase the maximum number of
Competitive Cal Grant Awards to 50,000.
Underutilization in the Competitive Award . CSAC currently
offers awards to more than 22,500 students in each academic
year. The chart below shows the total numbers of awards offered
for the past several years.
-----------------------------------------------------
| Award Year |Total Awards Offered | Over Statutory |
| | | Limit |
|-------------+---------------------+-----------------|
| 2011-12 | 25,459 | 2,959 (13%) |
|-------------+---------------------+-----------------|
| 2012-13 | 26,237 | 3,737 (17%) |
|-------------+---------------------+-----------------|
| 2013-14 | 28,970 |6,470 |
| | |(29%) |
-----------------------------------------------------
Despite CSAC making offers to more students than the allowable
statutory limit, each year Competitive Cal Grant awards are
unclaimed. The chart below shows the number of awards claimed
(both recipients and eligible deferments) in recent academic
years.
-----------------------------------------------------------
| Award Year | Total Paid | Percentage of | Number of |
| | Recipients | 22,500 | Grants NOT |
| | | | Awarded |
|------------+-------------+---------------+----------------|
| 2011-12 | 17,157 | 76.30% | 5,343 |
|------------+-------------+---------------+----------------|
| 2012-13 | 16,412 | 72.90% | 6,088 |
|------------+-------------+---------------+----------------|
| 2013-14 | 19,302 | 85.80% |3,198 |
| | | | |
-----------------------------------------------------------
In an attempt to address underutilization, CSAC efforts have
largely focused on increasing the number of students claiming
awards. CSAC has increased the number of messages sent to
students, established procedures to assist campuses in
processing and paying students Competitive awards, and expanded
training for financial aid administrators. CSAC does not appear
AB 1976
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to have focused efforts on increasing the number of award offers
based on the take-rate of awards. This bill would authorize,
but not require, CSAC to use data from the preceding three award
years to establish a take-rate to determine a maximum number of
award offers that could be made without exceeding 50,000 awards.
CSAC would also be authorized to exceed the 50,000 award limit
in one academic year and then reduce the number of awards, by
the prior year award overage, in the immediate subsequent year.
Committee staff recommends amendments to require CSAC to
establish a specific method for calculating the take-rate and
number of award offers to make in each academic year, as
follows:
Education Code �69473(b):
(5)(A) In granting awards for the 2015-16 award year, the
commission shall do all of the following:
(i) Establish a target of 50,000 awards to be paid.
(ii) Establish a take-rate for awards by dividing the total
number of awards paid by the total number of offers made
during the three award years immediately preceding the 2015-16
award year.
(iii) Estimate the number of award offers that the commission
may make to achieve the target for awards paid by dividing
50,000 by the take-rate estimated pursuant to clause (ii).
(B) In granting awards under this article for the 2016-17 award
year and subsequent award years, the commission shall do all of
the following:
(i) Calculate a target for awards to be paid by subtracting
the number of awards paid in the previous award year from the
target for awards paid in the previous award year and adding
the result to 50,000.
(ii) Estimate the take-rate for awards by dividing the total
number of awards paid by the total number of offers made
during the three award years immediately preceding that award
year.
(iii) Estimate the number of award offers that the commission
may make to achieve the target for awards paid calculated
pursuant to clause (i) by dividing the target by the take-rate
estimated pursuant to clause (ii).
AB 1976
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(6) Notwithstanding paragraphs (1 to (4), inclusive, the
commission may exceed the 50,000 award limit in an academic year
when the number of acceptances exceeds 50,000, provided that, in
the 2016-17 award year and subsequent award years, the
commission grants awards in accordance with subparagraph (B) of
paragraph (5).
REGISTERED SUPPORT / OPPOSITION :
Support
American Civil Liberties Union
Kern Community College District
Las Angeles Community College District
National Association of Social Workers - California Chapter
South Orange Community College District
The Institute for College Access and Success (TICAS)
Yosemite Community College District
Young Invincibles
Opposition
None on file.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960