Bill Text: CA AB3240 | 2023-2024 | Regular Session | Chaptered
Bill Title: California Ban on Scholarship Displacement Act of 2021: Cal Grant awards.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2024-09-28 - Chaptered by Secretary of State - Chapter 851, Statutes of 2024. [AB3240 Detail]
Download: California-2023-AB3240-Chaptered.html
Assembly Bill
No. 3240
CHAPTER 851
An act to amend Section 70047 of, and to amend, repeal, and add Section 70048 of, the Education Code, relating to student financial aid.
[
Approved by
Governor
September 28, 2024.
Filed with
Secretary of State
September 28, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
AB 3240, Calderon.
California Ban on Scholarship Displacement Act of 2021: Cal Grant awards.
Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.
Existing law, the Cal Grant Program, establishes the Cal Grant A Entitlement Awards, the Cal Grant B Entitlement Awards, the California Community College Expanded Entitlement Awards, the California Community College Transfer Entitlement Awards, the Competitive Cal Grant A and B Awards, the Cal Grant C Awards, and the Cal Grant T Awards
under the administration of the Student Aid Commission. The Cal Grant Reform Act revises and recasts the provisions establishing and governing the existing Cal Grant Program into a new Cal Grant Program. Existing law specifies that the act becomes operative only if General Fund moneys over the multiyear forecasts beginning in the 2024–25 fiscal year are available to support ongoing augmentations and actions, and if funding is provided in the annual Budget Act to implement the act.
The California Ban on Scholarship Displacement Act of 2021 prohibits an institution of higher education from reducing the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student’s gift aid exceeds the student’s annual cost of attendance, as specified, and prohibits the institution of
higher education from considering receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for qualification for institutional gift aid.
This bill, commencing July 1, 2025, would expressly extend those protections to students who are eligible for a Cal Grant award.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 70047 of the Education Code is amended to read:70047.
As used in this article, unless the context requires otherwise, the following definitions apply:(a) An “academic year” is July 1 to June 30, inclusive. The start date of a session shall determine the academic year in which it is included.
(b) “Cost of attendance” means the student’s tuition and fees, books and supplies, living expenses, transportation expenses, and any other student expenses used to calculate a student’s financial need for purposes of student aid programs under Title IV of the federal Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.).
(c) “Expected family contribution” means a student’s expected family contribution
calculated according to the federal methodology pursuant to subdivision (a) of Section 69506 as established by Title IV of the federal Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.).
(d) (1) “Financial need” means, as used in subdivision (a) of Section 70048, the cost of attendance minus the expected family contribution.
(2) “Financial need” means, as used in subdivision (b) of Section 70048, the cost of attendance minus the student aid index.
(e) “Gift aid” means all financial aid designated for the student’s educational expenses, including a grant, scholarship, tuition waiver, fellowship stipend, or other third-party payment, that is not a loan or pursuant to a work-study program.
(f) “Institutional gift
aid” means gift aid that is paid for by the institution of higher education from its funds and the recipient of the aid is selected by the institution.
(g) “Institution of higher education” or “institution” means any public or private postsecondary educational institution in the state that receives, or benefits from, state-funded financial assistance or enrolls students who receive state-funded student financial assistance.
(h) “Private scholarship” means financial assistance awarded to students based on one or more factors, including, but not limited to, academic merit, talent, or a particular area of study, by a private company, foundation, or nonprofit organization, or a public charity or service group. A federal, state, or institutional scholarship, including, but not limited to, financial aid
provided by the Middle Class Scholarship Program established by Article 22 (commencing with Section 70020), shall not be considered a private scholarship.
(i) “Scholarship displacement” means the reduction of institutional gift aid due to private scholarship awards.
(j) “Student” means any California resident that enrolls in any institution of higher education to obtain an undergraduate degree.
(k) “Student Aid Index” means, with respect to a student, an index that reflects an evaluation of a student’s approximate financial resources to contribute toward the student’s postsecondary education expenses for the academic year.
SEC. 2.
Section 70048 of the Education Code is amended to read:70048.
(a) Commencing with the 2023–24 academic year, an institution of higher education shall not reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student’s gift aid exceeds the student’s annual cost of attendance.(b) The institution may reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act by no more than the amount of the student’s gift aid that is in excess of the student’s
annual cost of attendance.
(c) The institution shall not consider receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for qualification for institutional gift aid.
(d) To ensure financial aid is maximized, an institution is encouraged to implement efforts to avoid scholarship displacement through consultation with scholarship providers and students to avoid situations where institutional gift aid and private scholarships can only be used for specific purposes.
(e) This article shall not be interpreted or implemented in a manner inconsistent with state or federal law. The provisions of this
article are severable. If any provision of this article or its application is held invalid due to a conflict with federal requirements, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(f) This section shall become inoperative on July 1, 2025, and, as of January 1, 2026, is repealed.
SEC. 3.
Section 70048 is added to the Education Code, to read:70048.
(a) An institution of higher education shall not reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student’s gift aid exceeds the student’s annual cost of attendance.(b) The institution may reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act by no more than the amount of the student’s gift aid that is in excess
of the student’s annual cost of attendance.
(c) The institution shall not consider receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act for qualification for institutional gift aid.
(d) To ensure financial aid is maximized, an institution is encouraged to implement efforts to avoid scholarship displacement through consultation with scholarship providers and students to avoid situations where institutional gift aid and private scholarships can only be used for specific purposes.
(e) This article shall not be interpreted or implemented in a manner inconsistent with
state or federal law. The provisions of this article are severable. If any provision of this article or its application is held invalid due to a conflict with federal requirements, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(f) This section shall become operative on July 1, 2025.
