BILL NUMBER: AB 2506INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Thurmond FEBRUARY 19, 2016 An act to add Section 69518.5 to the Education Code, relating to student financial aid. LEGISLATIVE COUNSEL'S DIGEST AB 2506, as introduced, Thurmond. Student financial aid: Chafee grants. Existing law establishes the Student Aid Commission as the state agency primarily responsible for the administration and coordination of student financial aid programs at California postsecondary educational institutions. Existing federal law establishes the Chafee Educational and Training Voucher program for the purposes of providing financial aid to current and former foster youth who are attending qualifying postsecondary educational institutions. This bill would specify the standards to be met by postsecondary educational institutions in order to be deemed to be qualifying institutions, to the fullest extent consistent with federal law, in this state with respect to the Chafee Educational and Training Voucher program. The bill would require the commission to ensure that every current and former foster youth who files a timely application and is eligible for the award of a Chafee Educational and Training Voucher be issued those funds. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares all of the following: (a) There are 66,000 children and youth in California's foster care system who have been removed from their biological families due to maltreatment and placed into the care and custody of the State of California. (b) (1) The Legislature recognizes the historic underrepresentation of foster youth in postsecondary programs and the need for equitable efforts that enhance the enrollment and retention of foster youth in public colleges and universities in California. (2) Current and former foster youth who attend college experience a low rate of persistence, transfer, and degree completion. Foster youth are 85 percent less likely to successfully complete 30 units or more anytime during community college as compared to the general student population. (3) Receipt of financial aid plays an important role in persistence, transfer, and degree completion. Fifty percent of foster youth who receive the Chafee Educational and Training Voucher complete three semesters or more of community college, as compared with 34 percent of foster youth who do not receive the Chafee Educational and Training Voucher. (4) Access to the Chafee Educational and Training Voucher is limited. One in four eligible applicants is not awarded a grant due to limited funding. Without improved access to financial aid, foster youth experience low educational attainment. (5) Low educational attainment is a factor in the poor adult outcomes experienced by youth in foster care. Compared to their same-age counterparts, former foster youth at 26 years of age are 400 percent more likely to have been incarcerated and 300 percent more likely to be living below the federal poverty level. (c) The Legislature recognizes its responsibility to provide and adequately fund postsecondary programs and services for students who are current and former foster youth attending public postsecondary institutions. (d) The Legislature recognizes the importance of quality education, and has taken action in the past to ensure financial aid is directed to postsecondary institutions at which the graduation rate and cohort default rate reflect a reasonable likelihood of student graduation and success. (e) Therefore, it is necessary and appropriate to take steps to encourage the enrollment, retention, and transfer of current and former foster youth in California's public colleges and universities by ensuring that all foster youth who meet the eligibility criteria for the Chafee Educational and Training Voucher receive a grant. Providing academic support to current and former foster youth in California's community colleges serves a significant governmental and public interest, namely the reduction in poverty and criminal justice involvement among youth who have been in foster care in California. SEC. 2. Section 69518.5 is added to the Education Code, to read: 69518.5. (a) This section applies to the standards for postsecondary educational institutions to be classified, to the fullest extent consistent with federal law, as qualifying institutions in this state for the purposes of the Chafee Educational and Training Voucher program authorized by the federal Promoting Safe and Stable Families Amendments of 2001 (Public Law 107-133). (b) The commission shall certify by October 1 of each year a postsecondary educational institution's latest three-year cohort default rate and graduation rate as most recently reported by the United States Department of Education. (c) The following standards shall apply in determining an institution's eligibility for the use of initial and renewal Chafee grant awards by its students, but only to the extent that these state standards are consistent with applicable federal law: (1) 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, 2017, and on October 1 of any year thereafter, shall be ineligible for the use of initial and renewal Chafee grant awards at the institution. (2) (A) An otherwise qualifying institution that becomes ineligible under this paragraph for initial and renewal Chafee grant awards may regain its eligibility for the academic year following an academic year in which it satisfies the requirements established in paragraph (1) or (4), as applicable. (B) 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 paragraph (1) or (4), 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. (3) 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 for Chafee grant awards until a three-year cohort default rate or graduation rate has been reported for the institution by the United States Department of Education. (4) For purposes of the 2017-18 academic year, and every academic year thereafter, an otherwise qualifying institution with a graduation rate of 30 percent or less for students taking 150 percent or less of the expected time to complete degree requirements, as reported by the United States Department of Education and as certified by the commission, shall be ineligible for the use of initial and renewal Chafee grant awards at the institution. (5) Notwithstanding any other law, the requirements of this subdivision do 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 year in which the commission is certifying the three-year cohort default rate or graduation rate. (d) The commission shall do all of the following: (1) Notify initial recipients seeking to attend, or attending, an institution that is ineligible for initial and renewal Chafee grant awards under paragraph (1) or (4) of subdivision (c) that the institution is ineligible, under state standards, for the use of initial awards for the academic year for which the student received an initial award. (2) Notify renewal recipients attending an institution that is ineligible, under state standards, for initial and renewal Chafee grant awards at the institution under paragraph (1) or (4) of subdivision (c). (3) Provide initial and renewal Chafee grant recipients seeking to attend, or attending, an institution that is ineligible for initial and renewal Chafee grant awards at the institution under paragraph (1) or (4) of subdivision (c) with a complete list of all California postsecondary educational institutions at which the student would be eligible, under state standards, to receive an unreduced Chafee grant award. (e) Notwithstanding any other law, the commission shall ensure that every current and former foster youth who files a timely application and is eligible for the award of a Chafee grant be issued those funds.