BILL ANALYSIS                                                                                                                                                                                                    

                                                                     AB 573

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          Date of Hearing:  April 28, 2015


                                 Jose Medina, Chair

          AB 573  
          (Medina) - As Introduced February 24, 2015

          SUBJECT:  Student financial aid:  Cal Grant Program:  Student  
          Aid Commission


          SUMMARY:  Requires the California Student Aid Commission (CSAC)  
          to establish a complete listing of California postsecondary  
          educational institutions and identify which institutions are  
          eligible and ineligible for participation in the Cal Grant  
          program, and to make this information readily available on  
          CSAC's Internet Web site.

          EXISTING LAW:  

          1)Authorizes the Cal Grant program, administered by CSAC, to  
            provide grants to financially needy students to attend  
            college.  The Cal Grant programs include both the entitlement  


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            and the competitive Cal Grant awards.  The program consists of  
            the Cal Grant A, Cal Grant B, and Cal Grant C programs;  
            eligibility is based upon financial need, grade point average,  
            residency, and other eligibility criteria.  (Education Code  
            Section 69430-69433.9)

          2)Requires institutions to meet specified criteria in order to  
            participate in the Cal Grant program, including, for  
            institutions with more than 40% of undergraduate students  
            borrowing federal student loans, (a) a three-year cohort  
            default rate (CDR) equal to or below 15.5%; and, (b) a  
            graduation rate above 20% for the 2015-16, 2016-17 and the  
            2017-18 academic years, and above 30% for subsequent academic  
            years. (EDC 69432.7)

          3)Requires CSAC to notify initial and renewal Cal Grant  
            recipients of changes and the impact to their awards and to  
            provide affected Cal Grant recipients with a complete list of  
            all California postsecondary educational institutions at which  
            the student would be eligible to receive an unreduced Cal  
            Grant Award.  (EDC 69432.7)

          FISCAL EFFECT:  Unknown

          COMMENTS:  Background.  In an effort to increase accountability  
          over public financial aid expenditures and address the budget  
          deficit, as a part of the 2011-12 Budget Act, California  
          established requirements linking an institution's participation  
          in the Cal Grant Program to the percentage of students borrowing  
          federal loans and the number of students defaulting on those  
          federal loans within three years of entering repayment.  To  


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          participate in the Cal Grant program in the 2011-12 academic  
          year, an institution was required to have a CDR of less than  
          24.6%.  In 2011-12, 76 institutions failed to meet the CDR  

          According to information provided by the Legislative Analyst's  
          Office (LAO), about 3,200 students offered new Cal Grant awards  
          in 2011-12 were planning to attend schools deemed ineligible.   
          About 550 of these students instead attended eligible schools,  
          and another 450 requested leaves of absence to preserve their  
          award for later use.  The remaining 2,200 students did not claim  
          their Cal Grants and information concerning college attendance  
          is unavailable.  For students receiving renewal Cal Grant  
          awards, of the 1,700 attending ineligible institutions  
          approximately 60% remained at their institution and received a  
          reduced award (an option no longer available to students), 9%  
          transferred to eligible colleges, and another 4% took leaves of  
          absence. No information is available on the remaining students.

          In the 2012-13 Budget Act, the requirements regarding loan  
          defaults were tightened to require a CDR of less than 15.5%, and  
          a graduation rate of greater than 30%, as reported by the  
          Integrated Postsecondary Education Data System (IPEDS).  IPEDS  
          graduation data calculates the percentage of first-time,  
          full-time students who began in the fall term and graduate  
          within 150% of the published program length.  For example, the  
          2012 graduation rate for bachelor's degree programs is based on  
          the number of students who began their pursuit as a full-time,  
          first-time student in the fall of 2006. 

          In the 2015-16 academic year, institutions are required to  
          maintain a CDR of less than 15.5% and a graduation rate of  
          greater than 20%.  As reported by CSAC, 301 institutions have  
          been deemed Cal Grant eligible; an additional 23 institutions  
          have been identified as potentially eligible, pending receipt of  


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          additional data.  CSAC published a list of 21 ineligible  
          institutions.  According to CSAC, institutions that had been  
          eligible for three or more consecutive years (2013-14, 2014-15,  
          and 2015-16) were not included in the 2015-16 ineligible  
          institution list.

          Purpose of this bill.  According to the author, currently CSAC  
          does not post a complete list of Cal Grant ineligible  
          institutions on its website.  This bill is intended to ensure  
          that CSAC provides a comprehensive list of Cal Grant eligible  
          and ineligible institutions so that students have access to  
          information that will allow them to make informed educational  





          California Student Aid Commission

          The Institute for College Access and Success


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          None on File


          Analysis Prepared by:Laura Metune / HIGHER ED. / (916) 319-3960