BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 1976
AUTHOR: Quirk-Silva
AMENDED: May 23, 2014
FISCAL COMM: Yes HEARING DATE: June 25, 2014
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Competitive Cal Grant Awards.
SUMMARY
This bill requires the California Student Aid Commission
(CSAC), beginning in the 2015-16 award year, to award
Competitive Cal Grants using data from the three award
years immediately preceding to calculate a take-rate to
estimate the number of awards to be granted to achieve a
target of 22,500 awards, and then reduces the target number
of awards in the subsequent year by the number of awards
granted over 22,500.
BACKGROUND
Current law authorizes the Cal Grant Program, administered
by the California Student Aid Commission, to provide grants
to financially needy students to attend college. The Cal
Grant programs include both the entitlement and the
competitive Cal Grant awards. The program consists of the
Cal Grant A, Cal Grant B, and Cal Grant C programs, and
eligibility is based upon financial need, grade point
average, California residency, and other eligibility
criteria, as specified in Education Code � 69433.9.
(Education Code � 69430-69433.9)
Current law provides for the Cal Grant A and B Entitlement
programs. The
Cal Grant A High School Entitlement Program provides
tuition fee funding for the equivalent of four full-time
years at qualifying postsecondary institutions to eligible
lower and middle income high school graduates who have at
least a 3.0 grade point average (GPA) on a four-point scale
and apply within one year of graduation. (Education Code �
69434)
AB 1976
Page 2
The Cal Grant B High School Entitlement Program provides
funds to eligible low-income high school graduates who have
at least a 2.0 GPA on a four-point scale and apply within
one year of graduation. The award provides up to $1,551 for
books and living expenses for the first year and each year
following for up to four years (or equivalent of four
full-time years). After the first year, the award also
provides tuition fee funding at qualifying postsecondary
institutions. Current law authorizes up to 2 percent of new
Cal Grant B recipients to be eligible for payment of
tuition or fees or both in their first academic year of
attendance. (Education Code � 69435.3)
Current law also establishes the Cal Grant Competitive
Award Program and provides 22,500 Cal Grant A and B awards
to applicants who meet financial, academic, and general
program eligibility requirements. Half of these awards are
reserved for students enrolled at a community college and
who met the September 2 application deadline. (Education
Code � 69437-� 69437.7)
ANALYSIS
This bil l:
1) Requires the California Student Aid Commission (CSAC),
beginning in the 2015-16 award year to:
a) Establish a target of 22,500
Competitive Cal Grant awards to be paid.
b) Estimate the "take rate" for
awards by calculating an average of the number of
awards offered and taken for the three years
immediately prior.
c) Use the calculated "take rate" to
estimate the number of awards to be granted to
achieve the target of 22,500 awards.
d) For awards granted in the 2016-17
award year and subsequent, requires an adjustment
of the target rate and the take rate to consider
and adjust for the total amount of awards paid in
AB 1976
Page 3
the prior year.
2) Authorizes the CSAC to exceed the 22,500 award limit
if acceptances exceed that amount provided that the
CSAC uses the adjustment formula outlined in 1(d) in
2016-17 and subsequent award years to grant awards.
STAFF COMMENTS
1) Need for the bill . According to the author, in
2012-13, while the pool of qualified applicants for
the competitive Cal Grant exceeded 317,500, fewer than
20,000 of the 22,500 authorized awards were actually
paid. In most years the CSAC only pays about
two-thirds of their offers (17,000). According to the
author, the CSAC is concerned about making grant
offers that result in a take rate that exceeds the
statutorily imposed cap, creating a liability that the
CSAC cannot fulfill.
2) Competitive versus entitlement program . According to
an April 2013 report by The Institute for College
Access & Success (TICAS), Strengthening Cal Grants to
Better Serve Today's Students, in 2010-11 the majority
of Cal Grant recipients (72%) received grants as a
high school entitlement award, 5% received transfer
entitlement awards, and competitive awards went to 18%
of all Cal Grant recipients. According to the TICAS
report, many otherwise eligible applicants miss the
application deadline or enroll well after they have
graduated from high school, and
these are particular concerns for the lowest income
students who miss timely application because they are
unaware of the financial aid that is available. For
these students the alternative would be a Competitive
Cal Grant.
However, as noted in the background of this analysis,
only 22,500 Competitive Cal Grants are statutorily
authorized annually. According to TICAS, in the
2012-13 Cal Grant award cycle, there was only one
competitive Cal Grant available for every 17 eligible
applicants.
AB 1976
Page 4
CSAC reports that in the 2013-14 award year, more than
370,000 qualified students applied for the Competitive
Cal Grant. The average GPA of these applicants was
3.46.
3) Current process. Under current law, if any awards are
not distributed upon initial allocation, the CSAC is
required to make awards to as many eligible students
as possible and as practical, without exceeding an
annual cumulative total of 22,500 awards. The chart
below outlines the recent history of awards under the
Competitive Program.
-------------------------------------------------------
| Award |Award | Awards | Take |Percentage | Number |
| Year |Offers| Paid | Rate |of 22,500 | unpaid |
| | | | |paid | |
|---------+------+--------+--------+-----------+--------|
| 2011-12 |25,459| 17,157| 67% | 76% | 5,343 |
| | | | | | |
|---------+------+--------+--------+-----------+--------|
| 2012-13 |26,237| 16,412| 63% | 73% | 6,088 |
| | | | | | |
|---------+------+--------+--------+-----------+--------|
| 2013-14 |28,970| 19,302| 67% | 86% |3,198 |
| | | | | | |
-------------------------------------------------------
According to the CSAC, the current paid rate is 88.3
percent with projections for the rate at the end of
the 2014-15 year projected to be between 90-92
percent. CSAC's efforts to improve the take rate have
focused upon institutional training, contacting
colleges about unpaid students and direct
communication with students.
4) How would this bill address this issue ? CSAC reports
that it currently awards beyond the 22,500 cap
anticipating that not all students will utilize their
award. However, this bill would authorize the CSAC to
exceed the award limit of 22,500 in an academic year
AB 1976
Page 5
when the number of acceptances exceeds that amount.
The bill would provide for an adjustment in the next
award year to reduce the number of awards, with the
intent of averaging 22,500 awards over multiple award
years. This bill would give the CSAC the assurance
that they can guarantee an award even if their
calculation results in their exceeding the statutory
cap of 22,500 awards.
SUPPORT
Alliance for a Better Community
California Competes
California Federation of Teachers
California State Student Association
California Teachers Association
Californians for Shared Prosperity
Campaign for College Opportunity
Earn
National Association of Social Workers
Southern California College Access Network
Student Senate for California Community Colleges
The Institute for College Access & Success
University of California Student Association
Young Invincibles
OPPOSITION
None received.