BILL ANALYSIS Ó
SB 285
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Date of Hearing: August 6, 2013
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Das Williams, Chair
SB 285 (DeLeón) - As Amended: May 21, 2013
SENATE VOTE : 39-0
SUBJECT : Student financial aid: Cal Grant Program
SUMMARY : Provides for the use of funds from the College Access
Tax Credit Fund (Fund) to increase Cal Grant B access awards up
to a maximum of $5,000 per award per academic year, contingent
upon enactment of SB 284 (De León). Specifically, this bill :
1)Provides that monies appropriated from the Fund are in
addition to other monies appropriated for the Cal Grant
Program, and that during the existence of the Fund the amount
of the Cal Grant B access award may not be adjusted below the
amount in the 2012 Budget Act.
2)Requires the Treasurer, on April 1, 2015, and each April 1
thereafter, to certify the amount of moneys available for
distribution from the Fund for the following academic year and
provides that the amount available for distribution may not
exceed 85% of the Fund balance.
3)Requires the California Student Aid Commission (Commission) to
determine the amount of the supplemental awards to be granted
and to include that amount in the annual budget change
proposals previously submitted to the Department of Finance by
the Commission. Upon appropriation by the Legislature to the
Commission in the annual Budget Act, the monies become
available for making awards to students.
4)Provides that any moneys available in the fund after making
supplemental awards shall remain in the fund for allocation in
future fiscal years.
5)Provides that disbursements from the Fund shall be made for
the following purposes:
a) To supplement awards made for "access costs" as defined
under the provisions of the Cal Grant Program. Limits the
amount of the supplemental award, when added to the annual
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access award amount established by the Budget Act, to
$5,000.
b) To defray the administrative costs incurred by the
Commission in connection with these responsibilities.
6)Provides that awards are only payable to the extent moneys are
available from the Fund. Requires the Commission to inform
award recipients that the award is for one academic year only,
is not an entitlement, and that future supplemental awards are
subject to the availability of moneys in the Fund.
7)Becomes operative only if SB 284 (De León) is enacted and
becomes operative on or before January 1, 2014.
EXISTING LAW authorizes the Cal Grant Program, administered by
the Commission, to provide grants to financially needy students
to attend college, as follows:
1)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.
2)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.
3)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.
4)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
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community college and who met the September 2 application
deadline.
5)Cal Grant C Program provides funding for financially eligible
lower income students preparing for occupational or technical
training.
6)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. The Governor and the California State
Legislature have not permitted new awards for the Cal Grant T
program since the 2002-2003 academic year.
FISCAL EFFECT : According to the Senate Appropriations
Committee, $140,000 in staffing to CSAC to administer the
program expansion, and, to the extent that expanded Cal Grant
Access Awards provide additional funding to students in
California's public postsecondary institutions it may supplant
some institutional aid from the segments.
COMMENTS : Background . In the first award year, Cal Grant B
students are awarded a grant to cover access costs, defined as
living expenses and expenses for transportation, supplies, and
books. After the freshman year, the Cal Grant B award may also
include tuition and fee coverage in the same amount as the Cal
Grant A award. Current law limits the access award to $1,551,
but allows the amount to be adjusted in the annual Budget Act.
The 2012 Budget Act reduced the award to $1,473; that amount was
maintained in the 2013 Budget Act. According to the Commission,
in 2012-13, the average income for new Cal Grant B recipients
was $16,511. There were a total of 128,426 new recipients of Cal
Grant B. The largest number and percentage of Cal Grant B
recipients were at the California Community Colleges (48%).
Purpose of this bill . According to the author, this legislation
will increase the underfunded Cal Grant B access award amount
for California's lowest income students to improve graduation
rates. The Author notes that, adjusted for inflation, the Cal
Grant B access award today should be $5,900; instead it has lost
most of its purchasing power over time and is currently set at
only $1,473. According to the author, there is significant
research that shows that students who work more hours take
longer to graduate; Grant aid is the proven equalizer that
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allows low-income students to persist and complete degrees at
rates that equal those of their higher-income peers. This bill,
in coordination with SB 284, is intended to enable the
Commission to double the Cal Grant B access award during tough
economic times.
Contingent enactment . The implementation of this bill is
contingent upon the funding source established in SB 284 (De
León), which would, for taxable years 2014 through 2016, allow
taxpayers, upon receipt of California Educational Facilities
Authority certification, to receive a tax credit for a specified
percentage of cash contributions made to the Fund. SB 284 is
scheduled to be heard in the Revenue and Taxation Committee on
August 12, 2013.
Related legislation . AB 1364 (Ting), which was approved by this
Committee by a vote of 9-3 on April 9, 2013, proposes to,
beginning in the 2014-15 academic year, increase the maximum
amount of the Cal Grant B access award to $1,710, and provide
for annual adjustment upward based upon the California Consumer
Price Index beginning January 15, 2014. AB 1364 is currently
pending in the Senate Appropriations Committee.
Prior legislation . SB 1466 (De Leon, 2012), as heard in this
committee, expanded eligibility for a Cal Grant to include a
student with a household income up to $100,000, 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 July 2012 by a
vote of 8-1, but was subsequently amended to address a different
subject.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of Independent California Colleges and Universities
Community College League of California
Faculty Association of California Community Colleges
Los Angeles Area Chamber of Commerce
Opposition
None on File
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Analysis Prepared by : Laura Metune / HIGHER ED. / (916)
319-3960