BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 285
AUTHOR: De Leon
INTRODUCED: February 14, 2013
FISCAL COMM: Yes HEARING DATE: April 17, 2013
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : Cal Grant Program.
SUMMARY
This bill provides for the use of funds from the College
Access Tax Credit Fund (CATC) (to be established if
legislation is enacted to create the CATC) to increase the
amount of the Cal Grant B Access Award up to a maximum of
$5000 per award per academic year.
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. These
programs currently operate as follows:
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.
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
SB 285
Page 2
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.
Community College Transfer Program provides a Cal Grant A
or B to eligible high school graduates who have a
community college GPA of at least 2.4 on a four point
scale and transfer to a qualifying baccalaureate degree
granting college or university.
Cal Grant Competitive Award Program provides 22,500 Cal
Grant A and B awards available 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.
Cal Grant C Program provides funding for financially
eligible lower income students preparing for occupational
or technical training. The authorized number of new
awards is 7,761. For new and renewal recipients, the
current tuition and fee award is up to $2,592 and the
allowance for training-related costs is $576. (Education
Code § 69430 - § 69450)
Current law also authorizes the Cal Grant T program to
provide assistance to individuals who attend teacher
credential programs at colleges and universities approved
by the California Commission on Teacher Credentialing.
According to the California Student Aid Commission, the
Governor and the California State Legislature have not
permitted new awards for the Cal Grant T program since the
2002-2003 academic year.
ANALYSIS
This bill provides for the use of funds from the College
Access Tax Credit (CATC) Fund for purposes of increasing
the Cal Grant B access award. Specifically it:
1) Declares the intent that CATC Funds supplement other
funds appropriated for the Cal Grant Program and, once
the CATC Fund is established, prohibits the adjustment
of the Cal Grant B Access Award below the level set in
the Budget Act of 2012 ($1,473).
SB 285
Page 3
2) Requires the California Student Aid Commission (CSAC)
to certify the amount of moneys available for
distribution from the CATC fund beginning April 1,
2015, and annually thereafter by April 1st and
further:
a) Prohibits the amount available for
distribution in any year from exceeding 85
percent of the certified fund balance.
b) Requires the CSAC to thereafter
determine the amount of the supplemental awards
to be granted.
c) Appropriates the amount certified
by the CSAC to the CATC for the purpose of making
supplemental access costs awards under the Cal
Grant B program.
3) Requires that any funds remaining after all
supplemental awards are made be retained in the CATC
for allocation in future fiscal years.
4) Establishes the following conditions and restrictions
on the supplemental awards:
a) Requires that they be made for
"access costs" as defined under the provisions of
the Cal Grant Program.
b) Caps the amount of the
supplemental award, when combined with the annual
award amount established in the annual Budget
Act, at $5,000.
c) Provides that these awards are
only payable to the extent moneys are available
from the College Access Tax Credit Fund (CATC).
d) Requires the California Student
Aid Commission (CSAC) to inform award recipients
that the award is for one academic year only, not
an entitlement, and that future supplemental
awards are subject to the availability of moneys
in the CATC.
SB 285
Page 4
STAFF COMMENTS
1) Need for the bill . According to the author, adjusted
for inflation, a Cal Grant B award today should be
$5,900. Instead, it has lost most of its purchasing
power over time and is currently only $1,473.
Receiving more financial aid to cover non-tuition
costs will enable students to limit their work hours
while enrolled, reduce their need to borrow, and
ensure that they can focus on their studies and
graduate.
2) Access costs? Current law defines "access costs", for
purposes of the Cal Grant Program, as living expenses
and expenses for transportation, supplies, and books.
(EC § 69432.5)
3) Cal Grant A versus Cal Grant B . Cal Grant A awards are
provided to students to cover the cost of tuition or
fees at public colleges and to assist with these costs
at private colleges and some private career colleges.
Under Cal Grant B, a student is awarded a grant for
purposes of access costs for the first year. After
the freshman year, the Cal Grant B award may also
cover tuition and fees in the same amount as a Cal
Grant A. Current law provides that the amount of the
award for access costs cannot exceed $1,551, but
provides that this amount may be adjusted in the
annual Budget Act. (EC § 69435)
Traditionally, the amount of the Cal Grant A award, as
well as the portion of the Cal Grant B which covers
tuition and fees, has been set at a level which covers
the tuition/fees at California's public postsecondary
institutions. In 2013-14, the maximum awards for Cal
Grants A and B are equal to the mandatory systemwide
tuition fees at a University of California ($12,192)
and California State University ($5,472), $9,084 at
independent non-profit institutions and Western
Association of Schools and Colleges-accredited private
for-profit institutions, and $4,000 at all other
private for-profit institutions.
The Cal Grant B access award is statutorily capped at
$1,555, but was reduced by 5%, to $1473 in the 2012-13
SB 285
Page 5
Budget Act.
According to the CSAC, in 2010-11, the average income
for new Cal Grant B recipients was $17,407, versus
$45,735 for new Cal Grant A recipients. There were a
total of 35,747 new recipients for Cal Grant A and
94,710 new recipients of Cal Grant B. The largest
number and percentage of Cal Grant B recipients were
at the California Community Colleges (53%) while the
largest number and percentage of Cal Grant A
recipients were at the University of California (21%).
4) Inappropriate roles/authority . This bill requires the
CSAC to certify the amount of moneys available for
distribution from the CATC and then appears to give
the CSAC the ability to continuously appropriate these
funds to itself for the purpose of making these
awards. As drafted, the bill extends authorities and
roles to the CSAC which are generally held by the
State Treasurer and the Legislature. The companion
measure, SB 284 (De Leon) makes it clear that it is
the Treasurer who makes the related certifications and
that these funds are allocated to the CSAC upon
appropriation by the Legislature.
Staff recommends the bill be amended to clarify that:
a) The Treasurer shall annually certify the
amount available for
distribution.
b) The CSAC shall determine and recommend, as
part of its annual budget proposal, the amount of
the supplemental awards to be granted.
c) CATC Funds shall be made available to the
CSAC for the purposes outlined in the bill, upon
appropriation by the Legislature in the annual
Budget Act.
5) Contingency language needed . The ability to implement
the provisions of this bill will rely upon the
enactment of SB 284 (De Leon) which is pending hearing
in the Senate Governance and Finance Committee on
April 24, 2013. SB 284:
SB 285
Page 6
a) Establishes the College Access Tax Credit
Fund (CATC).
b) Establishes a tax credit equal to a
percentage of the contributions to the CATC.
c) Requires that all revenue in the CATC, upon
appropriation by the Legislature, be allocated to
the CSAC for purposes of awarding Cal Grants to
students eligible pursuant to the provisions of
the Education Code
d) Provides for a repeal of the tax credit in
December 2017.
Staff recommends the bill be amended to make the
provisions of this bill contingent upon the enactment
of SB 284.
c) Prior legislation . SB 1466 (De Leon,
2012) as amended by this committee, expanded
eligibility for a Cal Grant to include a student
with a household income up to $150,000, subject
to specified funding prioritization, and
contingent upon legislation that created a fund
for this purpose (SB 1356, De Leon, 2012). SB
1466 passed this committee in April 2012 by a
vote of 8-1, but was subsequently amended to
address a different subject.
SUPPORT
Association of Independent California Colleges and
Universities
California Catholic Conference
California Community College Association of Student
Trustees
California Competes
California State Student Association
California Student Aid Commission
Campaign for College Opportunity
Education Trust-West
Los Angeles Community College District
Public Advocates Inc.
Southern California College Access Network
SB 285
Page 7
Student Senate for California Community Colleges
The Institute for College Access & Success
Young Invincibles
OPPOSITION
None received.