BILL ANALYSIS �
AB 1976
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1976 (Quirk-Silva) - As Amended: April 3, 2014
Policy Committee: Higher
EducationVote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases the authorization for Cal Grant A and B
competitive awards. Specifically, this bill:
1)Increases the authorization for new competitive Cal Grant A
and B awards from 22,500 to 50,000 annually, commencing in
2015-16.
2)Requires the California Student Aid Commission (CSAC) to use a
prescribed methodology, based on an estimated take-rate for
the prior three years, to determine how many awards to offer
in order to reach the 50,000 cap for awards actually paid out.
3)Authorizes the commission to exceed the award limit in an
academic year, but then requires the commission to compensate
with fewer awards in the following year.
FISCAL EFFECT
Based on current average award amounts and the distribution of
awards to students at each of the public postsecondary segments
and students at non-public institutions, General Fund costs
would be $64 million in 2015-16, increasing to $154 million in
2018-19. Of this total, about $5.2 million in 2015-16 and $12.6
million in 2018-19 would be associated with achieving full
utilization of the 22,500 awards authorized under current law.
The remaining costs are associated with increasing the cap on
awards to 50,000.
COMMENTS
AB 1976
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1)Background . Students who are not eligible for Cal Grant
entitlement awards-mainly because they are more than one year
out of high school-may apply for a Cal Grant A or B
Competitive award. The award benefits and other eligibility
requirements are the same as the entitlement program, but
awards are not guaranteed. Annually, 22,500 Cal Grant
Competitive awards are available-one-half for eligible
students who apply by March 2 and one-half solely for
community college students who apply by either March 2 or
September 2 deadlines.
In terms of applications, the competitive program is severely
oversubscribed. In 2012-13, there were about 317,500 eligible
applications for the 22,500 authorized awards. Moreover, not
all of the authorized awards are being used each year. In the
last three years, CSAC has offered awards to between 3,000 and
6,500 students more than the 22,500 cap, yet the actual number
of paid awards has been between 6,100 and 3,200 below the cap.
2)Purpose . This bill addresses two issues. Given the
overwhelming oversubscription of the program, this bill
increases the annual number of awards to 50,000. To address
the underutilization, the bill requires CSAC to base its total
award offerings on recent take-rates (the proportion of awards
offered to awards paid out).
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081