BILL ANALYSIS �
AB 1976
Page 1
ASSEMBLY THIRD READING
AB 1976 (Quirk-Silva)
As Amended May 23, 2014
Majority vote
HIGHER EDUCATION 10-0 APPROPRIATIONS 13-0
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|Ayes:|Williams, Bloom, Fong, |Ayes:|Gatto, Bocanegra, |
| |Fox, | |Bradford, |
| |Jones-Sawyer, Levine, | |Ian Calderon, Campos, |
| |Linder, Medina, | |Eggman, Gomez, Holden, |
| |Quirk-Silva, Weber | |Linder, Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
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SUMMARY : Requires the California Student Aid Commission (CSAC)
to establish a "take rate" utilizing data from the three award
years immediately preceding in order to estimate the maximum
number of award offers that CSAC may make without exceeding
22,500 acceptances. Authorizes CSAC to exceed the 22,500 limit
in any academic year and then reduce the target number of awards
in the subsequent year by the number of awards granted over
22,500.
EXISTING LAW establishes the Cal Grant program awards,
administered by CSAC, to provide tuition and access cost
assistance to eligible students attending qualified
institutions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, 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 about $5.2 million in 2015-16 and
$12.6 million in 2018-19 associated with achieving full
utilization of the 22,500 awards authorized under current law.
COMMENTS : Upon submission of a completed application, which
includes the Free Application for Federal Student Aid (FAFSA)
and grade point average (GPA) requirements, each student's
electronic file is reviewed by CSAC for overall eligibility.
Students who do not meet the requirements for an Entitlement Cal
Grant award are considered for the Competitive program. CSAC
AB 1976
Page 2
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. 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 |
|------------+-------------+---------------+----------------|
AB 1976
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| 2013-14 | 19,302 | 85.80% |3,198 |
| | | | |
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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 Cal Grant awards, and
expanded training for financial aid administrators. CSAC does
not appear to have increased the number of award offers based on
the take-rate of awards. 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 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 22,500 awards. CSAC would also be authorized
to exceed the award limit in one academic year and then reduce
the target number of awards, by the prior year award overage, in
the immediate subsequent year.
Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960
FN: 0003664