BILL ANALYSIS �
AB 2566
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2566 (Weber) - As Introduced: February 21, 2014
Policy Committee: Higher
EducationVote:13-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill, effective 2015-16, extends the Cal Grant Entitlement
program period of eligibility by one year, allowing an applicant
for Cal Grant A and B Entitlement Awards to submit a financial
aid application no later than March 2 of the 2nd academic year,
rather than the 1st academic year, after high school graduation.
FISCAL EFFECT
1)Cal Grants awards: $35 million to $70 million (General Fund)
in 2015-16, for increased awards, depending on the number of
awards actually accepted and paid. Costs would increase
annually, as more individuals become eligible. The California
Student Aid Commission (CSAC) CSAC estimates award costs
increasing to between $71 million and $114 million in 2018-19.
2)General Fund implementation costs of $264,000 in 2014-15, and
$143,000 annually thereafter, for two permanent positions and
one limited-term position to collect and process GPA
verification forms, test new award notification, and process
appeals; process increased communications to the call center;
and develop and deploy system changes to accept the new
applications.
COMMENTS
1)Background . The Cal Grant A and B Entitlement Programs
guarantee financial aid awards to recent high school graduates
and community college transfer students who meet financial,
academic, and other eligibility requirements. Cal Grants cover
full systemwide tuition at the public universities for up to
AB 2566
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four years and a portion of tuition costs at nonpublic
institutions. For students who do not qualify for the
entitlement awards, the state also provides a relatively small
number of Cal Grants under a competitive program. These awards
are capped at 22,500 annually, and one-half are set aside for
community college students. Demand for these awards far
exceeds supply. About 269,000 students received new or renewed
Cal Grant awards in 2012-13 at a General Fund cost of about
$1.6 billion.
The Cal Grant A high school entitlement award 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) and apply within one year of
graduation.
Cal Grant B high school entitlement award provides funds to
eligible low-income high school graduates who have at least a
2.0 GPA and apply within one year of graduation. The award
provides up to $1,473 for book and living expenses for the
first year and each year following for up to four full-time
years (or equivalent). After the first year, the award also
provides tuition funding at qualifying postsecondary
institutions.
2)Purpose . This bill allows for application to the Cal Grant
Entitlement Program up to the second year after high school
graduation. According to the author, "The sticker price of an
education at a four year college or university has forced many
qualified high school students to prolong their educational
goals and get a job and save up enough money to cover the cost
of college. Furthermore, those qualified students coming from
first generation and under-resourced backgrounds are often
without the counseling to explain the financial aid process
for public higher education. The current eligibility
requirements for the Cal Grant A and B Entitlement Program
penalizes those students for their inability to access or for
their decision not to attend higher education immediately
after high school graduation."
3)Prior Legislation . In 2013, AB 1241 (Weber) proposed to extend
program eligibility until the fourth year after high school.
The bill was subsequently amended in this committee to extend
eligibility until the third year after high school, and
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further amended in the Senate to extend eligibility until only
the second year-as does AB 2566. AB 1241 was then held on
Suspense in Senate Appropriations.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081