Bill Text: CA AB789 | 2023-2024 | Regular Session | Chaptered

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Bill Title: Student financial aid: Cal Grants: satisfactory academic progress.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2023-10-08 - Chaptered by Secretary of State - Chapter 544, Statutes of 2023. [AB789 Detail]

Download: California-2023-AB789-Chaptered.html

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Assembly Bill No. 789

CHAPTER 544

An act to amend Section 69432.7 of the Education Code, relating to student financial aid.

[ Approved by Governor  October 08, 2023. Filed with Secretary of State  October 08, 2023. ]

LEGISLATIVE COUNSEL'S DIGEST

AB 789, Berman. Student financial aid: Cal Grants: satisfactory academic progress.

Existing law, the Cal Grant Program, establishes the Cal Grant A and 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. Existing law establishes eligibility requirements for awards under these programs for participating students attending qualifying institutions. For a student to qualify for a Cal Grant award, existing law requires that the student, among other things, make satisfactory academic progress at a qualifying institution. Existing law defines “satisfactory academic progress” as those criteria required by applicable federal standards published in Title 34 of the Code of Federal Regulations. Existing law authorizes the commission to adopt regulations defining “satisfactory academic progress” in a manner that is consistent with the federal standards.

This bill would require, as part of the criteria to be a qualifying institution under the Cal Grant Program, an institution, by the start of the 2024–25 academic year, to comply with various requirements regarding “satisfactory academic progress” standards used to determine if a student qualifies for a Cal Grant and to develop and implement policies defining “satisfactory academic progress” in a manner that is consistent with the federal standards. The bill would delete the commission’s authorization to adopt regulations defining “satisfactory academic progress.”

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares all of the following:

(a) California has made substantial gains in ensuring low-income students receive financial aid at the onset of their academic careers through the expansion of the Cal Grant and California College Promise Grant programs.

(b) In order to maintain a Cal Grant or federal financial aid, students must meet certain satisfactory academic progress (SAP) standards, governed by Section 1091 of Title 20 of the United States Code and Section 668.34 of Title 34 of the Code of Federal Regulations.

(c) A report released in July 2021, titled “The Overlooked Obstacle – How Satisfactory Academic Progress Policies Impede Student Success and Equity” (“The Overlooked Obstacle”), found that 24 percent of first-year California Community College students receiving a federal Pell Grant did not meet SAP standards during their first two consecutive academic terms. Black and Native American students were twice as likely as White and Asian students to not meet those standards. Students not meeting SAP standards was also found to be a significant issue at four-year universities.

(d) A 2021 study comparing the characteristics of students who did not meet SAP standards to those who did meet those standards found no difference in the students’ motivation to attend and succeed in college. However, the students who did not meet those standards had significantly more life responsibilities, such as childcare and employment demands, and fewer resources, including access to food and housing, flexible work schedules, and reliable transportation.

(e) Students who are deemed as not meeting their institution’s SAP standards during any two consecutive academic terms or one year of enrollment must have their Cal Grant and federal financial aid terminated unless they successfully appeal that determination.

(f) Current federal regulations allow students to appeal the loss of financial aid due to special circumstances as defined by each individual postsecondary educational institution. Some postsecondary educational institutions that participate in state-funded financial aid programs do not take full advantage of federal flexibility related to grounds for appeal, unnecessarily limiting students’ ability to maintain financial aid.

(g) “The Overlooked Obstacle” further revealed that 87 percent of the California Community College students who did not make SAP standards during their first two consecutive academic terms either disenrolled or lost their financial aid.

SEC. 2.

 Section 69432.7 of the Education Code is amended to read:

69432.7.

 As used in this chapter, the following terms have the following meanings:

(a) An “academic year” is July 1 to June 30, inclusive. The starting date of a session shall determine the academic year in which it is included.

(b) “Access costs” means living expenses and expenses for transportation, supplies, technology, and books.

(c) “Award year” means one academic year, or the equivalent, of attendance at a qualifying institution.

(d) “College grade point average” and “community college grade point average” mean a grade point average calculated on the basis of all college work completed, except for nontransferable units and courses not counted in the computation for admission to a California public institution of higher education that grants a baccalaureate degree.

(e) “Commission” means the Student Aid Commission.

(f) “Enrollment status” means part- or full-time status.

(1) “Part time,” for purposes of Cal Grant eligibility, means 6 to 11 semester units, inclusive, or the equivalent.

(2) “Full time,” for purposes of Cal Grant eligibility, means 12 or more semester units or the equivalent.

(g) “Expected family contribution,” with respect to an applicant, shall be determined using 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.)) and applicable rules and regulations adopted by the commission.

(h) “High school grade point average” means a grade point average calculated on a 4.0 scale, using all academic coursework, for the sophomore year, the summer following the sophomore year, the junior year, and the summer following the junior year, excluding physical education, Reserve Officers’ Training Corps (ROTC), and remedial courses, and computed pursuant to regulations of the commission. However, for high school graduates who apply after their senior year, “high school grade point average” includes senior year coursework.

(i) “Instructional program of not less than one academic year” means a program of study that results in the award of an associate or baccalaureate degree or certificate requiring at least 24 semester units or the equivalent, or that results in eligibility for transfer from a community college to a baccalaureate degree program.

(j) “Instructional program of not less than two academic years” means a program of study that results in the award of an associate or baccalaureate degree requiring at least 48 semester units or the equivalent, or that results in eligibility for transfer from a community college to a baccalaureate degree program.

(k) (1) “Maximum household income and asset levels” means the applicable household income and household asset levels for participants, including new applicants and renewing recipients, in the Cal Grant Program, as defined and adopted in regulations by the commission for the 2001–02 academic year, which shall be set pursuant to the following income and asset ceiling amounts:

CAL GRANT PROGRAM INCOME CEILINGS

	Cal Grant A, C, and T	Cal Grant B
Dependent and Independent students with dependents*
Family Size
Six or more	$74,100	$40,700
Five	$68,700	$37,700
Four	$64,100	$33,700
Three	$59,000	$30,300
Two	$57,600	$26,900
Independent
Single, no dependents	$23,500	$23,500
Married	$26,900	$26,900

*Applies to independent students with dependents other than a
spouse.

CAL GRANT PROGRAM ASSET CEILINGS

	Cal Grant A, C, and T	Cal Grant B
Dependent** _____ _____	$49,600	$49,600
Independent _____ _____	$23,600	$23,600

**Applies to independent students with dependents other than a
spouse.

 

(2) The commission shall annually adjust the maximum household income and asset levels based on the percentage change in the cost of living within the meaning of paragraph (1) of subdivision (e) of Section 8 of Article XIII B of the California Constitution. The maximum household income and asset levels applicable to a renewing recipient shall be the greater of the adjusted maximum household income and asset levels or the maximum household income and asset levels at the time of the renewing recipient’s initial Cal Grant award. For a recipient who was initially awarded a Cal Grant for an academic year before the 2011–12 academic year, the maximum household income and asset levels shall be the greater of the adjusted maximum household income and asset levels or the 2010–11 academic year maximum household income and asset levels. An applicant or renewal recipient who qualifies to be considered under the simplified needs test established by federal law for student assistance shall be presumed to meet the asset level test under this section. Before disbursing any Cal Grant funds, a qualifying institution shall be obligated, under the terms of its institutional participation agreement with the commission, to resolve any conflicts that may exist in the data the institution possesses relating to that individual.

(l) (1) “Qualifying institution” means an institution that complies with paragraphs (2) to (4), inclusive, and is any of the following:

(A) A California private or independent postsecondary educational institution that participates in the Pell Grant Program and in at least two of the following federal student aid programs:

(i) Federal Work-Study Program.

(ii) Federal Stafford Loan Program.

(iii) Federal Supplemental Educational Opportunity Grant Program.

(B) A nonprofit institution headquartered and operating in California that certifies to the commission that 10 percent of the institution’s operating budget, as demonstrated in an audited financial statement, is expended for purposes of institutionally funded student financial aid in the form of grants, that demonstrates to the commission that it has the administrative capacity to administer the funds, that is accredited by the Western Association of Schools and Colleges, and that meets any other state-required criteria adopted by regulation by the commission in consultation with the Department of Finance. A regionally accredited institution that was deemed qualified by the commission to participate in the Cal Grant Program for the 2000–01 academic year shall retain its eligibility as long as it maintains its existing accreditation status.

(C) A California public postsecondary educational institution.

(2) (A) The institution shall provide information on where to access California license examination passage rates for the most recent available year from graduates of its undergraduate programs leading to employment for which passage of a California licensing examination is required, if that data is electronically available through the internet website of a California licensing or regulatory agency. For purposes of this paragraph, “provide” may exclusively include placement of an internet website address labeled as an access point for the data on the passage rates of recent program graduates on the internet website where enrollment information is also located, on an internet website that provides centralized admissions information for postsecondary educational systems with multiple campuses, or on applications for enrollment or other program information distributed to prospective students.

(B) The institution shall be responsible for certifying to the commission compliance with the requirements of subparagraph (A).

(3) (A) The commission shall certify by November 1 of each year the institution’s latest official three-year cohort default rate and graduation rate as most recently reported by the United States Department of Education. For purposes of this section, the graduation rate is the percentage of full-time, first-time degree or certificate-seeking undergraduate students who graduate in 150 percent or less of the expected time to complete degree requirements as most recently reported publicly in any format, including preliminary data records, by the United States Department of Education.

(B) For purposes of the 2011–12 academic year, an otherwise qualifying institution with a three-year cohort default rate reported by the United States Department of Education that is equal to or greater than 24.6 percent shall be ineligible for initial and renewal Cal Grant awards at the institution.

(C) For purposes of the 2012–13 academic year, and every academic year thereafter, an otherwise qualifying institution with a three-year cohort default rate that is equal to or greater than 15.5 percent, as certified by the commission on October 1, 2011, and every year thereafter, shall be ineligible for initial and renewal Cal Grant awards at the institution.

(D) (i) An otherwise qualifying institution that becomes ineligible under this paragraph for initial and renewal Cal Grant awards shall regain its eligibility for the academic year for which it satisfies the requirements established in subparagraph (B), (C), or (F), as applicable.

(ii) If the United States Department of Education corrects or revises an institution’s three-year cohort default rate or graduation rate that originally failed to satisfy the requirements established in subparagraph (B), (C), or (F), as applicable, and the correction or revision results in the institution’s three-year cohort default rate or graduation rate satisfying those requirements, that institution shall immediately regain its eligibility for the academic year to which the corrected or revised three-year cohort default rate or graduation rate would have been applied.

(E) An otherwise qualifying institution for which no three-year cohort default rate or graduation rate has been reported by the United States Department of Education shall be provisionally eligible to participate in the Cal Grant Program until a three-year cohort default rate or graduation rate has been reported for the institution by the United States Department of Education.

(F) For purposes of the 2012–13 academic year, and every academic year thereafter, an otherwise qualifying institution with a graduation rate of 30 percent or less, as certified by the commission pursuant to subparagraph (A), shall be ineligible for initial and renewal Cal Grant awards at the institution, except as provided for in subparagraph (H).

(G) Notwithstanding any other law, the requirements of this paragraph shall not apply to institutions with 40 percent or less of undergraduate students borrowing federal student loans, using information reported to the United States Department of Education for the academic year two years before the academic year in which the commission is certifying the three-year cohort default rate or graduation rate pursuant to subparagraph (A).

(H) Notwithstanding subparagraph (F), an otherwise qualifying institution that maintains a three-year cohort default rate that is less than 15.5 percent and a graduation rate above 20 percent for students taking 150 percent or less of the expected time to complete degree requirements, as certified by the commission pursuant to subparagraph (A), shall be eligible for initial and renewal Cal Grant awards at the institution through the 2016–17 academic year.

(I) The commission shall do all of the following:

(i) Notify initial Cal Grant recipients seeking to attend, or attending, an institution that is ineligible for initial and renewal Cal Grant awards under subparagraph (C) or (F) that the institution is ineligible for initial Cal Grant awards for the academic year for which the student received an initial Cal Grant award.

(ii) Notify renewal Cal Grant recipients attending an institution that is ineligible for initial and renewal Cal Grant awards at the institution under subparagraph (C) or (F) that the student’s Cal Grant award will be reduced by 20 percent, or eliminated, as appropriate, if the student attends the ineligible institution in an academic year in which the institution is ineligible.

(iii) Provide initial and renewal Cal Grant recipients seeking to attend, or attending, an institution that is ineligible for initial and renewal Cal Grant awards at the institution under subparagraph (C) or (F) with a complete list of all California postsecondary educational institutions at which the student would be eligible to receive an unreduced Cal Grant award.

(iv) (I) Establish an appeal process for an otherwise qualifying institution that fails to satisfy the three-year cohort default rate and graduation rate requirements in subparagraphs (C) and (F), respectively.

(II) The commission may grant an appeal for an academic year only if the commission has determined the institution has a cohort size of 20 individuals or less and the cohort is not representative of the overall institutional performance.

(III) Notwithstanding subclause (II), the commission may grant an appeal for the 2023–24 academic year if the institution failed to meet the three-year cohort default rate solely due to acquisition of an out-of-state institution that impacted its three-year cohort default rate, and the acquired out-of-state institution has since closed any time between the 2019–20 to 2022–23 academic years, inclusive. The institution’s Cal Grant eligibility shall not be transferrable if the institution is bought or sold during the 2023–24 fiscal year. This authority shall be in effect for an appeal for the 2023–24 academic year only and shall sunset on July 1, 2023. The institution’s Cal Grant eligibility shall not be transferrable to a new site acquired by the institution.

(4) By the start of the 2024–25 academic year, the institution shall develop and implement policies defining “satisfactory academic progress” in a manner that is consistent with the federal standards published in Title 34 of the Code of Federal Regulations. The institution shall also comply with all of the following requirements:

(A) Set the standards for grade point average and pace of completion at the minimum federal standards as determined by Section 668.34(a) of Title 34 of the Code of Federal Regulations.

(B) Provide information to students about the institution’s “satisfactory academic progress” standards and financial aid appeals process during new student orientation and include student-friendly language on the institution’s internet website and financial aid award letters regarding the standards and appeals process. The institution shall request its faculty to include student-friendly language on course syllabi regarding the standards and appeals process.

(C) Notify a student when the student has not achieved the “satisfactory academic progress” standards following every term of enrollment, regardless of the frequency at which “satisfactory academic progress” is formally evaluated. This subparagraph does not preclude an institution from conducting the formal evaluation annually.

(D) Evaluate whether a student satisfies the grade point average and pace of completion standards set forth in subparagraph (A) based on cumulative measures. An institution shall not require a student to satisfy the minimum grade point average and pace of completion standards for each individual term. This paragraph does not preclude an institution from requiring a student on “financial aid probation” as defined by Section 668.34(b) of Title 34 of the Code of Federal Regulations to comply with the terms of the student’s academic plan in order to maintain financial aid eligibility.

(E) Exclude remedial coursework from maximum timeframe calculations if the institution offers remedial coursework.

(F) Allow a student who fulfills the terms and conditions of the student’s academic plan to remain on “financial aid probation” as defined by Section 668.34(b) of Title 34 of the Code of Federal Regulations, including continuing to receive financial aid for any term for which the student fulfills the terms and conditions of the student’s academic plan.

(G) In the case of a “satisfactory academic progress” determination for a transfer student, when calculating maximum timeframe as defined by Section 668.34(b) of Title 34 of the Code of Federal Regulations, only include those credits from other institutions that count towards the student’s current program of study.

(H) Accept both electronic and hard copy financial aid appeals for any student who is ineligible to receive financial aid due to the determination that the student did not meet “satisfactory academic progress,” as defined by the institution where the student is enrolled, subject to all of the following:

(i) A student who loses financial aid eligibility may appeal the determination during any subsequent term following loss of financial aid eligibility. The institution shall not limit the total number of appeals that may be submitted by a student throughout the duration of the student’s enrollment. The institution may limit the number of appeals per term, but each appeal that is denied shall be subject to the second review process pursuant to clause (vi). The institution shall not impose deadlines for submitting an appeal that are earlier than three weeks before the end of each term.

(ii) A student who previously disenrolled while being ineligible to receive financial aid may appeal the loss of financial aid upon reenrollment, and the timing for consideration of the appeal shall allow the student, if the student meets the criteria for financial aid reinstatement, to qualify for reinstatement upon the first term of reenrollment.

(iii) The institution shall provide a student who is ineligible to receive financial aid with written notice of the financial aid appeals process, including the process for a student to file an appeal, information about the second review process for an appeal that is denied as described in clause (vi), and how a student may request a second review.

(iv) In reviewing a student’s appeal, the institution may consider any additional special circumstances that the institution deems appropriate, and shall consider a broad range of special circumstances, including, but not limited to, any of the following:

(I) Death of a relative or other significant person.

(II) Injury or illness, including, but not limited to, behavioral health conditions, of the student or a relative or other significant person.

(III) Pregnancy or birth of a child.

(IV) Homelessness.

(V) Loss of childcare.

(VI) Loss or change in employment.

(VII) Loss of access to personal or public transportation.

(VIII) Being a victim of a serious crime, including, but not limited to, domestic abuse, even if the crime was not reported or did not result in criminal prosecution or civil liability.

(IX) Natural disaster.

(X) Change of major.

(v) The institution shall review a student’s appeal and notify the student of the appeal decision within 45 days of submission of a complete appeal. The institution shall not disenroll a student for nonpayment of tuition and fees while the student’s appeal is pending.

(vi) The institution shall provide a second review process for an appeal that is denied if requested by the student. The second review shall be conducted by a reviewer who did not participate in the first review.

(vii) The institution shall waive any requirement for third-party written documentation of the special circumstances forming the basis of an appeal if that documentation cannot be reasonably obtained by the student and the student signs a statement attesting to the veracity of the special circumstances presented as the grounds for appeal.

(viii) This subparagraph shall not be interpreted to require institutions to provide retroactive financial aid for a term preceding the term in which a student reenrolls.

(m) “Satisfactory academic progress” means those criteria required by applicable federal standards published in Title 34 of the Code of Federal Regulations.