Review of Recent Changes to The Cal Grant C Program

Review of Recent Changes to The Cal Grant C Program MAC TAYLOR • L E G I S L A T I V E A N A L Y S T • JUNE 22, 2015 AN LAO REPORT 2 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT EXECUTIVE SUMMARY Report Reviews Effects of Recent Changes to Cal Grant C Program. The Cal Grant C program provides financial aid to support California students pursuing occupational and technical training. With Chapter 627, Statutes of 2011 (SB 451, Price), and later with Chapter 692, Statutes of 2014 (SB 1028, Jackson), the Legislature modified the eligibility criteria for the Cal Grant C program. Specifically, the legislation prioritizes grants for applicants pursuing training in occupations that meet strategic workforce needs and those coming from disadvantaged backgrounds. To ensure these changes are having the intended effects, the Legislature requested that our office prepare a report on the implementation of the new rules and their impacts on Cal Grant C recipients, including (1) recipients’ demographic information, (2) which occupations were prioritized for grant applicants, (3) the number of applicants who received priority status, and (4) recipients’ employment outcomes. To track longer-term outcomes, legislation directs our office to prepare a similar report every two years. Prioritization Criteria Instituted, But Have Had Limited Effect on Cal Grant C Applicants Thus Far. Pursuant to Chapter 627, the California Student Aid Commission (CSAC) developed a list of training programs for occupations associated with high wages, growth, or employer need, for which Cal Grant C applicants would receive priority status. The list of 13 prioritized occupations includes several in the health care field, such as registered and licensed vocational nursing. (The commission will further refine this list in 2016 when it incorporates additional criteria pursuant to Chapter 692.) CSAC indicates that for the 2012-13 grant cohort, around 1,500 students qualified to receive a Cal Grant C offer because of the extra “priority points” they received for expressing intent to pursue one of these prioritized occupations. In 2013-14 and 2014-15, however, indicating intent to pursue one of the prioritized occupations did not advantage certain Cal Grant C applicants over others. This is because a drop in the number of Cal Grant C applicants, combined with an increase in the number of grants CSAC offered, resulted in essentially all applicants receiving grant offers in those years. Premature to Assess Prioritization Criteria’s Effect on Participant Outcomes, Recommend Waiting for More Data Before Making Further Refinements. Because employment data tend to lag several years, we are not yet able to assess whether the prioritization criteria have had any effect on the types of jobs attained by Cal Grant C recipients. Moreover, while data show recent cohorts of Cal Grant C recipients were more likely to pursue certificates or degrees in program areas related to CSAC’s prioritized occupations, whether this trend is due to the prioritization criteria—or rather a reflection of the underlying job market—still is unclear. Given these uncertainties, and the fact that CSAC has yet to fully implement the changes included in Chapter 692, we recommend the Legislature hold off on making additional refinements to Cal Grant C prioritization criteria until more data are available on the effects of the recent modifications. Completing Course of Study is Important Indicator for Successful Employment, Recommend Legislature Focus Future Efforts on Improving Completion Rates. We believe next steps in targeting the Cal Grant C program towards meeting state workforce needs should focus on helping www.lao.ca.gov Legislative Analyst’s Office 3 AN LAO REPORT grantees complete their training programs. Available data show that Cal Grant C recipients who complete a certificate or degree program are more likely to be employed and working in higher- skilled employment sectors than those who do not complete their training programs. Yet available data also show that only half of Cal Grant C recipients complete their courses of study. Moreover, typically recipients ultimately complete their programs only if they do so relatively quickly (within three years). To improve these completion rates, we recommend the Legislature ensure that statewide initiatives to improve student outcomes include adequate focus on students enrolling in career technical programs. A forthcoming report from a community college task force on workforce preparation could provide helpful ideas for future reforms. If Legislature Wants to Increase Grant Amounts for CCC Students, Recommend Making Change Through the Budget. One change contained in Chapter 692 may not be having its intended effect. Cal Grant C is allocated in two separate amounts—$2,462 per student annually for tuition and fees, and $547 for books and supplies—but because of fee waivers, students attending community colleges are only eligible to receive the smaller grant for books and supplies. Chapter 692 included language that expanded the allowable uses of Cal Grant C to include living expenses. According to representatives from the author’s office and certain stakeholders who were involved in developing the legislation, this was intended to increase the amount of Cal Grant C aid that CCC students could receive. Yet because that effect was not clearly stated in the legislation, highlighted in legislative analyses of the bill, or included in the budget act, CSAC and the Department of Finance do not share this interpretation of the language, and have not altered grant amounts. Should the Legislature wish to increase grant amounts for CCC students, we recommend making this change in the budget act provisional language that specifies the amounts and uses for Cal Grants. (If the Legislature opts to increase individual grant amounts, it also will need to determine whether it wants to maintain existing spending levels and provide grants to fewer students, or increase overall spending for Cal Grant C in order to provide the larger grants to the same number of students.) Recommend Shifting Ongoing Cal Grant C Reporting Requirements to CSAC. After we provide a companion to this report in 2017, we recommend the Legislature shift responsibility to CSAC for any subsequent Cal Grant C updates it requires. Statute currently requires that we report to the Legislature on Cal Grant C every two years. Absent future policy changes, however, we do not believe future reports—beyond an updated review two years from now—will necessitate a comparable level of legislative analysis from our office. We believe CSAC is well-positioned to provide any summary data the Legislature requires on Cal Grant C in the future. 4 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT INTRODUCTION The Cal Grant C program provides financial (3) the number of applicants who received priority aid to support California students pursuing status, and (4) recipients’ employment outcomes. To occupational and technical training. With track longer-term outcomes, legislation directs our Chapter 627, Statutes of 2011 (SB 451, Price), and office to prepare a similar report every two years. later with Chapter 692, Statutes of 2014 (SB 1028, While several of the Cal Grant C changes were Jackson), the Legislature modified the eligibility enacted too recently to yet allow for a conclusive criteria for the Cal Grant C program. Specifically, analysis of their impacts, this report summarizes the legislation prioritizes Cal Grant C applicants available data and highlights emerging issues. pursuing training in occupations that meet We begin by providing some background on strategic workforce needs and those coming the Cal Grant C program and recent legislative from disadvantaged backgrounds. To ensure changes. We then describe our key findings, these changes are having the intended effects, the including a detailed summary of the new rules, Legislature requested that our office prepare a initial indications of how the changes might report on the implementation of the new rules and be affecting Cal Grant C recipients, and trends their impacts on Cal Grant C recipients, including revealed by earlier cohorts of grant recipients. (1) recipients’ demographic information, (2) which Finally, we recommend how the Legislature might occupations were prioritized for grant applicants, make additional improvements to Cal Grant C. BACKGROUND Cal Grants financial aid to students pursuing a vocational program at California Community Colleges (CCC), Cal Grant Is State’s Primary Student Aid private colleges, or career technical schools. In Program. Cal Grants provide financial aid awards 2014-15, the state spent an estimated $10 million to financially needy students who meet academic for about 6,000 new Cal Grant C awards and nearly and other eligibility requirements. There are three 3,500 renewal awards. (The cap on the number types of Cal Grants: Cal Grant A (with higher of new annual awards is specified in statute at academic requirements), Cal Grant B (with a lower 7,761 and has not changed since 2000-01. As income eligibility ceiling), and Cal Grant C (for discussed below, CSAC typically offers more but vocational training). In 2014-15, the state spent pays fewer than the cap because around 40 percent $1.9 billion to award nearly 325,000 Cal Grants. of awardees ultimately do not claim their grants.) These awards are administered by the California Annual Cal Grant C awards are worth up to $2,462 Student Aid Commission (CSAC), which has the for tuition and $547 for books and supplies, and authority to grant awards based on the criteria may provide support for up to two years. Students listed in the relevant sections of the state Education attending CCC programs are only eligible to receive Code, as well as other criteria deemed appropriate the smaller stipend for books, not the tuition by CSAC. grant, whereas students attending other schools Cal Grant C Is Targeted for Technical and receive a combined grant. (This is because CCC Vocational Education. Cal Grant C provides www.lao.ca.gov Legislative Analyst’s Office 5 AN LAO REPORT students who receive Cal Grant C also qualify for New Prioritization Rules for Eligible CCC Board of Governors’ fee waivers.) The CCC Programs. Chapter 627 required CSAC to prioritize system is the primary destination of Cal Grant C the granting of Cal Grant C awards to students recipients, typically serving between 60 percent pursuing technical or vocational training in areas and 70 percent of all grantees. (As discussed later, that meet at least two of the criteria shown in grantees’ enrollment patterns have fluctuated Figure 1. (No such prioritization criteria previously somewhat in recent years based on changes to existed in legislation.) The bill required that CSAC eligibility standards for private colleges.) consult with the state’s Employment Development Department (EDD) to determine which areas Recent Legislative Changes to Cal Grant C of training meet these criteria. The legislation Policymakers Concerned About Cal Grant C also required that, beginning in 2014-15, CSAC Connection to Workforce Needs. The Cal Grant C prioritize applicants enrolling in programs that program was conceived as a way to support the rate high in graduation rates and job placement needs of the statewide workforce by aiding students data. The commission, however, must update its who wish to enter a given profession in acquiring data system before it can collect the information the necessary training, education, or certification. necessary to implement this requirement, which is The original legislation, however, was silent on expected to take several years. how best to align Cal Grant C-eligible training Prioritization Rules to Be Further Modified programs with statewide workforce needs. This led Beginning 2016. Chapter 692 made additional the Legislature to reexamine the grant program changes to the prioritization criteria established with an eye towards better aligning Cal Grant C by Chapter 627. As shown in Figure 1, the with strategic and emerging workforce needs. legislation added a new criterion and made slight Legislature Enacted New Rules for modifications to two of the previous criteria. Cal Grant C. With these objectives in mind, Additionally, Chapter 692 specified that to receive the Legislature enacted Chapter 627 in 2011 and priority consideration, not only must an applicant Chapter 692 in 2014 to bring Cal Grant C in line be pursuing an occupation that meets at least two with state workforce needs. These changes focused of the criteria, at least one of those must be from primarily on two areas: prioritizing students the latter two listed (associated with a high salary attending programs that meet strategic workforce Figure 1 needs, and focusing the Legislation Prioritizes Cal Grant C for Applicants Pursuing program on economically Occupations That Meet Certain Criteria disadvantaged and Chapter 627a Criteria Chapter 692b Criteria long-term unemployed (Effective as of 2012-13 Award Cycle) (Effective as of 2016-17 Award Cycle) applicants. (The Appendix High employer need High employer need or demand displays the Cal Grant C High employment growth High employment growth statute incorporating the High salary or wage projections High salary and wage projections changes in Chapters 627 Part of a well-articulated career pathway to a job providing economic security and 692.) a Chapter 627, Statutes of 2011 (SB 451, Price). Occupation must meet at least two criteria to be prioritized. b Chapter 692, Statutes of 2014 (SB 1028, Jackson). Occupation must meet at least two criteria to be prioritized. At least one must be high salary or part of a career pathway. 6 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT or part of a career pathway leading to economic who are long-term unemployed (defined as being security). The commission, however, will not unemployed for at least 26 weeks). These changes, implement these changes until it next revises its which will take effect beginning with the 2015-16 occupation priority areas, which the legislation grant cohort, are intended to address the fact requires be done by January 1, 2016 (affecting the that California has one of the highest long-term 2016-17 grant cohort). In modifying these areas, the unemployment rates in the nation. bill requires that CSAC consult with EDD, CCC, Expanded Definition of How Grant Can Be and the California Workforce Investment Board. Used. In addition to modifying prioritization Additional Prioritization Criteria Will Focus criteria, Chapter 692 made a change to the statute on Economically Disadvantaged Applicants. that articulates how students may use Cal Grant C Chapter 692 also broadened the criteria that CSAC awards. Besides tuition, fees, training-related may use to select applicants to receive Cal Grant C supplies, and books, students now may use the awards. Specifically, it directs CSAC to take the grants to help cover living expenses. (As described economic situation of applicants into account later, various parties have differing interpretations and give special consideration to students facing regarding the intended effects of this change.) economic hardship or hurdles to employment, or FINDINGS In this section, we describe our key findings Chapter 692 may not be having its intended effect. regarding the Cal Grant C program. First, Based on more robust outcome data available we describe how recent changes in eligibility from earlier cohorts of Cal Grant C recipients, we standards for colleges that participate in Cal Grant conclude by discussing general trends that could programs—unrelated to Chapters 627 and inform future policy decisions. 692—have affected the number of Cal Grant C Changes to Program Eligibility Standards applicants and offers. Next, we explain how CSAC Have Affected Cal Grant C Students implemented the changes required by Chapter 627, and provide some initial analysis of resulting Changes Modified Which Programs effects based on the limited outcome data that are Cal Grant C Recipients Can Attend. Figure 2 available for recent cohorts of grant recipients. shows which types of schools Cal Grant C We also highlight how a recent change made by recipients attended from 2010-11 to 2014-15. As Figure 2 Recent Eligibility Changes Have Affected Cal Grant C Recipient Enrollment Patterns Distribution of Recipients by Segmenta 2010-11 2011-12 2012-13 2013-14 2014-15 California Community College 53% 58% 88% 78% 58% Private career college 45 39 10 21 40 Independent college or university 2 2 2 1 1 a Not displayed in the figure are about 0.5 percent of Cal Grant C recipients who attended a public college or university other than a community college. www.lao.ca.gov Legislative Analyst’s Office 7 AN LAO REPORT shown, the share of students attending CCC is of students applying for grants declined notably notably higher in some years. This likely is due between 2010-11 and 2014-15 (18 percent). This in part to new eligibility standards for colleges likely is related to the disqualification of many participating in Cal Grant programs that the of the private for-profit colleges that students Legislature adopted in 2011-12 and 2012-13. These historically have preferred, such as Heald College. changes rendered colleges with low graduation rates That is, many Cal Grant C-eligible students likely or high rates of students defaulting on federal loans still opted to attend those schools and therefore ineligible to participate. (For more information were not eligible for the financial aid. Second, on Cal Grant eligibility changes, see our 2013 the total number of awards that CSAC offered report, An Analysis of New Cal Grant Eligibility each year increased notably across the five years Rules.) The new standards disqualified most private (17 percent). This reflects the commission’s decision for-profit colleges in the state in 2012-13, including to expand the number of offers, given that many several Heald College campuses that historically awardees ultimately opt not to accept the grants. have been popular destinations for Cal Grant C (As shown in the figure, offering more grants has Graphic Sign Off recipients. (No public colleges or universities were increased the number of grants paid out in recent Secretary disqualified.) Several Heald campuses regained years.) eligibility in 2013-14 and 2014-15, resulting in Analyst CSAC Identified Prioritized Occupations the notable resumption of Cal Grant C recipients MPA attending private career colleges in these years. CSAC Created a Priority List of Programs Deputy Subsequent to making the 2014-15 grant awards, Based on Statutory Criteria. As described above, however, CSAC again revoked eligibility for ten Chapter 627 directed CSAC to develop a list of Heald campuses (as described in the nearby box), occupational or technical training areas for which attended by 29 percent of the Cal Grant C recipients Figure 3 displayed in the figure for Grant Outcomes for Cal Grant C Applicants that year. As such, enrollment patterns in future years likely 16,000 Denied will revert to even larger shares 14,000 Offered, Not Taken of Cal Grant C recipients Paid attending community colleges. 12,000 Cap on New Awards Changes Have Led to 10,000 All Cal Grant C Applicants Being Offered Grants. Figure 3 8,000 displays the number and 6,000 award status of Cal Grant C applicants over the past five 4,000 years. Two factors combined such that essentially all 2,000 Cal Grant C applicants were offered grants in 2013-14 and 2010-11 2011-12 2012-13 2013-14 2014-15 2014-15. First, the number 8 Legislative Analyst’s Office www.lao.ca.gov ARTWORK #130653 Template_LAOReport_mid.ait AN LAO REPORT Cal Grant C applicants would receive priority of the selected occupations met at least two of these status. Figure 4 (see next page) describes how CSAC criteria (typically growth and need), and three defined which Cal Grant C-eligible occupations occupations (registered nurses, police and sheriff represent jobs that have high wages, growth, or patrol officers, and firefighters) met all three. As need—the three prioritization criteria established noted earlier, the list of prioritized occupations in the legislation. Figure 5 (see next page) displays likely will change notably when CSAC incorporates the 13 occupations CSAC selected to prioritize the Chapter 692 requirements that focus on jobs based on these criteria. As shown in the figure, all with high salaries or established career pathways. Cal Grant C Students Affected by Heald College Closure in 2015 Unexpected Closure of Heald College. In late April 2015, Corinthian Colleges, the parent company for Heald College, announced that all of its campus locations would immediately close. This move followed several months of federal and state sanctions resulting from evidence that the colleges had dramatically misrepresented job placement rates for their graduates. The immediate closure meant that currently enrolled students, including more than 1,000 Cal Grant C recipients attending Corinthian’s ten Heald campuses, could not complete their degree and certificate programs. Cal Grant C Awards Are Portable . . . Cal Grant C recipients may use their awards at any eligible institution, including all 112 community colleges and dozens of private for-profit and nonprofit trade schools. Upon Heald’s closure announcement, the U.S. Department of Education, the California Community College system, and other organizations began working with Corinthian Colleges to help Heald College students in California find other institutions with similar educational programs into which they could transfer. . . . But Students Face Challenges in Completing Programs. Although other Cal Grant-eligible institutions offer programs similar to those at Heald College, students seeking to transfer to other institutions face four major hurdles. First, some programs already have more applicants than available slots. As a result, students will have to compete for admission or register on waiting lists for programs. Second, each college campus determines to what extent it will award transfer credit for courses that students completed at Heald College. Most students likely will not receive full credit for their completed course work, and some will have to complete substantial additional work at their new colleges. Third, if students do transfer credits they earned at Heald, they also may carry forth all of the federal student loan debt they incurred. (Students who were unable to complete their courses of study at Heald typically are eligible for a full discharge of their federal student loans only if they do not transfer credits to continue their programs at another school.) Fourth, to the extent recipients have used some of their grant eligibility at Heald College, they will have less than two years remaining in their Cal Grant C awards. Consequently, some students—especially those transferring to private institutions—may find it difficult to pay for their educational programs. (At the time this report was published, the Legislature was considering legislation that would extend the Cal Grant eligibility period for former Heald students.) www.lao.ca.gov Legislative Analyst’s Office 9 AN LAO REPORT Policy Does Not Ensure Grantees Ultimately the enrolling institutions follow up to confirm the Pursue Prioritized Occupations. There is no types of programs in which grantees ultimately requirement that applicants who are prioritized enroll. Representatives from both CSAC and CCC for Cal Grant C based on the occupations they indicate such follow-up would be costly. indicate on their applications ultimately pursue Prioritization Criteria Have Had Limited those same occupations. Beyond ensuring that it Effect on Applicants Thus Far is a Cal Grant C-eligible course, neither CSAC nor No Need for Figure 4 Prioritization in Recent CSAC Definitions of Cal Grant C Prioritization Criteria Years. Figure 6 shows the number and proportion 9 High Wages. At least $55,701 annually, which is 150 percent of the of individuals offered a average income for Californians who have attained the level of education Cal Grant C award who covered by Cal Grant C. indicated intent to pursue 9 High Employment Growth. At least 5,180 jobs projected to be created one of the prioritized over ten years, which is among the top 10 percent of occupations with the most projected job creations. occupations over the past 9 three years. As shown, High Employer Need. At least 1,216 projected job openings annually the proportions drop off over ten years, which is among the top 10 percent of occupations with the most projected openings. in the most recent two CSAC = California Student Aid Commission. years, to around one-third of successful applicants Figure 5 (compared to more than Occupations for Which Cal Grant C Applicants half in 2012-13). This Receive Priority Consideration likely reflects the fact that, Shaded Cell Indicates Job Meets Criteria for High Wage, Growth, or Need as discussed, all applicants were offered grants in Number Projected Median Income Jobs Created Job Openings 2013-14 and 2014-15. As Occupation (Wage) (Growth) (Need) such, indicating intent Registered nurses $83,653 60,800 10,210 to pursue one of the Police and sheriff’s patrol officers 79,450 5,200 2,380 prioritized occupations Computer specialists 78,765 5,000 1,220 in these years did not Fire fighters 66,256 5,700 1,630 advantage certain Paralegals and legal assistants 57,737 5,500 870 Cal Grant C applicants Carpenters 52,383 10,200 2,750 over others or skew the Computer support specialists 50,214 7,400 2,520 recipient pool toward Licensed practical and vocational nurses 49,818 13,600 3,340 those occupations. The Auto technicians and mechanics 39,418 5,300 1,980 prioritization criteria Fitness trainers and aerobics instructors 39,166 8,700 1,450 did have some effect in Medical secretaries 31,594 21,100 3,300 the first year they were Preschool teachers 28,883 6,600 1,770 implemented, however. Restaurant cooks 24,337 14,200 3,990 CSAC indicates that for 10 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT the 2012-13 grant cohort, around 1,500 students since the prioritization criteria were implemented. qualified to receive a grant offer because of the Employment data, however, tend to lag several extra “priority points” they received for expressing years, and as such largely are not yet available for intent to pursue a prioritized occupation. recent grant cohorts. Additionally, many recent Recipient Pool Largely the Same as Before grantees still are pursuing certificates and degrees Prioritization Rule Changes. Implementing the supported by the grants, and therefore likely are not prioritization criteria does not appear to have had yet fully participating in the workforce. (Later, we a large effect on the age, gender, or employment discuss available employment data from previous status of Cal Grant C recipients, as shown in Cal Grant C cohorts.) Figure 7. While there has been a slight shift to Some Shifts in Program Choices. . . While recipients under the age of 25 (34 percent in 2014-15 employment data for the 2012-13 Cal Grant C compared to 25 percent in 2010-11), demographic cohort generally are not yet available, program characteristics have remained relatively comparable data for these students reveal some interesting across each year’s cohort. Both before and after trends. Figure 8 (see next page) shows the ten the prioritization changes, between 40 percent most common certificate programs for CCC and 50 percent of recipients were age 30 or over, students who received a Cal Grant C in 2012-13. with about one quarter each in the age 20 to (These data are limited to the roughly 40 percent 24 group and age 25 to 29 group. Similarly, about of this grant cohort who have already completed two-thirds of recipients in each year were female a certificate or degree.) As shown, most of these and about one-third were male, with no significant changes across the period. There has been a small Figure 6 decrease in the proportion of recipients who were Students Who Indicated Priority employed when they applied for the grant—from Occupations 65 percent to 60 percent—even though changes Of Students Offered Grantsa required by Chapter 692 to prioritize grants for 2012-13 2013-14 2014-15 long-term unemployed applicants have not yet been Number 5,240 3,772 3,669 put in place. Percent 56% 36% 35% a Data includes all applicants who were offered grants, whether or not they ultimately took them. Premature to Assess Whether Criteria Have Affected Participant Outcomes Figure 7 Cal Grant C Recipient Pool Largely Unchanged Too Early to Draw Conclusions About 2010-11 2011-12 2012-13 2013-14 2014-15 Recent Grantees. The Age 30 or over 50% 48% 49% 47% 42% Legislature asked us 25 to 29 25 26 24 22 24 to report on the extent 20 to 24 22 24 23 25 29 to which Cal Grant C 19 or under 3 2 3 5 5 recipients have been Gender Female 65% 67% 63% 64% 67% successfully placed in jobs Male 35 33 37 36 33 that meet local, regional, Applicant Employment Status or state workforce needs Employed 65% 64% 60% 57% 60% www.lao.ca.gov Legislative Analyst’s Office 11 AN LAO REPORT program areas relate to—and could help lead to need, growth, and/or wage occupations (as defined employment in—at least one of the occupations by CSAC). These program trends, however, also prioritized by CSAC. The figure also provides could be a reflection of the changing job market a comparison of how common these program and of students independently choosing to pursue areas were for students who received Cal Grant C more productive occupations. Additional data grants in 2008-09 and subsequently completed a would be necessary to determine what influence CCC certificate. While several programs were top the prioritization criteria are having on students’ choices across both cohorts (including registered program choices. nursing, licensed vocational nursing, and child No Notable Effects Resulting From development), certain programs saw a notable Change to Allowable Uses of Grants increase in popularity across the years (including auto technology, administration of justice, and Legislation May Have Intended to Increase culinary arts). Grants for CCC Students. . . One change contained . . . But Causes Still Unclear. There are a in Chapter 692 may not be having its intended effect. number of possible explanations for why 2012-13 As described earlier, Cal Grant C is allocated in two Cal Grant C recipients were more likely to pursue separate amounts—$2,462 for tuition and fees, and certificates or degrees in program areas that relate $547 for books and supplies—but because of fee to CSAC’s prioritized occupations, as compared waivers, students attending CCC are only eligible to the 2008-09 cohort. One possibility is that the to receive the smaller grant for books and supplies. prioritization criteria implemented in 2012-13 Also noted earlier, Chapter 692 included language resulted in a larger pool of students pursuing the that expanded the allowable uses of Cal Grant C to emphasized occupations. If true, this would suggest include living expenses. According to representatives the criteria led to the intended policy outcome from the author’s office and certain stakeholders of more support for students who pursue—and who were involved in developing the legislation, perhaps even steering more students into—high this change was intended to increase the amount of Figure 8 Increasing Share of Grantees Received Certificates Related to Prioritized Occupationsa Rank for Change 2012-13 Compared to Type of Program Certificate or Degree Cohort 2008-09 Cohort Related Prioritized Occupation Registered nursing 1 0 Registered nurses Auto technology 2 +6 Auto technicians and mechanics Licensed vocational nursing 3 0 Licensed practical and licensed vocational nurses Child development/early care and education 4 0 Preschool teachers Administration of justice 5 +8 Police and sheriff’s patrol officers Biological and physical sciences (and mathematics) 6 +1 None Culinary arts 7 +12 Restaurant cooks Transfer studies 8 +6 None Office technology/office computer applications 9 0 Computer and computer support specialists, medical secretaries Paralegal 10 +8 Paralegals and legal assistants a Based on data from California Community Colleges. Data from other institutions are not available. 12 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT Cal Grant C aid that CCC students could receive, Completing the Course of Study Quickly Is an potentially up to the full $3,009 combined grant. Indicator for Ultimate Completion. Data suggest . . . However, State Agencies Did Not Interpret that if Cal Grant C recipients do not complete their Language Change to Affect Grant Amounts. The certificate program within the first two years after Department of Finance and CSAC do not believe receiving their grant, they are much less likely to the language contained in Chapter 692 expands complete at all. Only about half of all CCC-going allowable grant amounts for CCC students, and Cal Grant C recipients ultimately earn a program therefore have not implemented associated changes. degree or certificate. (This is comparable to overall Three points support their interpretation. First, the completion rates for CCC students.) Typically, legislation is unclear as to which component of the about 20 percent of CCC Cal Grant C recipients grant (the tuition amount or the books amount) complete their program within the first year of can now also be used for living expenses. Second, receiving the grant, about 20 percent in the second Chapter 692 did not alter the budget bill language year, and 8 percent in the third year. Only a very Graphic Sign Off that designates the amounts and uses for the two small percentage end up completing awards in components of Cal Grant C. (Statute stipulates that subsequent years. Secretary the maximum grant amount shall be determined in Majority of CCC Program Completers Achieve Analyst the annual budget act.) Third, the legislative analyses Associate Degrees. While about half of Cal Grant C MPA summarizing the version of SB 1028 that was enacted recipients at CCC do not complete their course of Deputy did not highlight an increase to CCC student grant study, most of those who do achieve longer-term amounts as a significant effect of the bill. certificates and degrees, which generally lead to higher-paying jobs than shorter-term certificates. Completing Course of Study Is Important As shown in Figure 9, about 60 percent of Indicator of Success While meaningful Figure 9 outcome data for the most Types of Certificates and Degrees Completed by Cal Grant C Studentsa recent cohorts of Cal Grant C recipients are not yet available, 2008-09 to 2012-13 data from earlier cohorts Other Certificate: reveal certain trends that 6 to 17 semester units likely will continue even Associate of Science: after implementation of the Certificate: 60 or more 18 to 29 semester units semester units recent Cal Grant C changes. Below, we discuss outcome data from students who attended CCC programs and Certificate: received Cal Grant C grants in 30 to 59 semester units 2008-09, 2009-10 or 2010-11. (Comparable data are not Associate of Arts: available for students attending 60 or more semester units a programs other than CCC.) Reflects data from Cal Grant C recipients who complete programs at California Community Colleges. www.laoA.cRaT.gWovO RLeKg i#sl1a3tiv0e6 5A3nalyst’s Office 13 Template_LAOReport_mid.ait AN LAO REPORT Cal Grant C recipients who complete a course of the exact ranking of these sectors varies somewhat study at CCC achieve an associate degree, such as across different years of employment data and an Associate of Science in Nursing, which typically grant cohorts, they consistently are among the requires two years or more of coursework. An most common sectors in recent years.) Work additional 20 percent receive a certificate requiring in hospitals is by far the most prevalent (nearly between 30 and 59 semester units, such as a 15 percent of all employed program completers) in certificate preparing a student to become a licensed every year of data, with three other health-related vocational nurse, which requires between one and settings (doctors’ offices, services for the elderly two years of coursework. Relatively fewer students and disabled, and skilled nursing facilities) also receive short-term certificates, such as a 6-unit among the most common choices. These trends certificate preparing a student to take a nurse’s are unsurprising given the large share of grantees assistant license exam. who receive certificates in registered and licensed Completing the Course of Study Is an vocational nursing (as shown earlier in Figure 8). Indicator Both for Employment . . . Completing While data show that Cal Grant C recipients who a CCC certificate or degree program seems to do not complete their CCC programs of study make a positive difference in employment rates but are employed also work in many of the fields for Cal Grant C recipients. As displayed earlier, displayed in Figure 10, they are more likely to typically between 60 percent and 65 percent of be employed in the lower-skill sectors such as Cal Grant C recipients are employed when they first temporary help, as well as service sectors like hotels apply for the grant. Our analysis reveals that these and supermarkets. employment rates remain unchanged for grant Figure 10 recipients who do not complete their programs. Most Frequent Employment Sectors Specifically, about two-thirds of non-completers For Employed Cal Grant C Recipients were employed three years after receiving the 2011 Through 2013 grant. In contrast, three-quarters of Cal Grant C recipients who completed a CCC program were 9 Hospitals employed three years after receiving their grants. 9 . . . And for Employment in Higher Skilled Elementary and secondary schools Jobs. Employment data suggest that completing a 9 Government offices CCC certificate or degree program also can lead 9 to Cal Grant C recipients finding employment in Temporary help services higher skill, higher wage types of jobs. Figure 10 9 Doctors’ offices shows the top sectors for employed Cal Grant C 9 recipients who completed CCC programs within Services for the elderly and disabled the past five years. Generally, about four in ten of 9 Skilled nursing facilities this group works in one of these sectors. (While 14 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT RECOMMENDATIONS Focus Future Efforts on Improving Program clarification is needed should the Legislature Completion Rates for Students in Vocational wish to make CCC students eligible for larger Programs. We believe the next steps in targeting Cal Grant C grants. (As discussed earlier, differing the Cal Grant C program towards meeting state interpretations exist regarding whether Chapter 692 workforce needs should focus on helping grantees was meant to provide CCC students with access to complete their training programs. The compelling Cal Grant C grants worth up to $3,009.) Specifically, evidence that completing a training program leads we believe grant modifications would need to be to more successful employment outcomes highlights made in the budget act provisional language that the missed opportunities (and foregone state specifies the amounts and uses for Cal Grants. If resources) for the roughly one-half of Cal Grant C the Legislature opts to increase individual grant recipients who fail to complete their programs. The amounts, it also will need to determine whether it CCC currently has several initiatives underway to wants to (1) maintain existing spending levels and improve student outcomes (including increasing provide grants to fewer students, or (2) increase completion rates). We recommend the Legislature overall spending for Cal Grant C in order to provide ensure that these efforts include adequate focus on the larger grants to the same number of students. students enrolled in career technical programs as (A statutory amendment would be required to well as students preparing to transfer to a four-year change the maximum number of awards.) college. A forthcoming report from a CCC task Continue to Monitor Effects of Prioritization force on workforce preparation, expected this Criteria Before Making Further Refinements. fall, will include recommendations for improving We recommend the Legislature hold off on completion of workforce certificates. The Legislature making additional refinements to Cal Grant C could support implementation of recommended prioritization criteria until more data are available reforms through legislation, as it did for recent on the effects of the recent changes. How the Student Success Task Force recommendations prioritization criteria put in place by Chapter 627 and transfer reforms in 2010 and 2013. Another affected recipient outcomes still is unknown, and strategy the Legislature could consider is increasing CSAC has yet to fully implement the changes Cal Grant C amounts for CCC students (as included in Chapter 692. Additionally, as long discussed in the next paragraph). Research shows the number of Cal Grant C applicants remains that working more than 20 hours per week is so low that nearly all applicants receive grant associated with lower academic performance, offers, criteria to prioritize among applicants will longer time to degree, and lower persistence and have a limited effect on the recipient pool. In lieu completion rates. Helping cover living expenses of making additional refinements to selecting could allow students to work fewer hours while Cal Grant C recipients, we believe the state will get studying and therefore finish their courses of study a better return on its investment from ensuring more quickly and at higher rates. those recipients—whoever they are—complete their If Legislature Wants to Increase Grant courses of study. Amounts for CCC Students, Make Change Shift Ongoing Reporting Requirements Through the Budget. We believe additional Related to Cal Grant C to CSAC. After we provide www.lao.ca.gov Legislative Analyst’s Office 15 AN LAO REPORT a companion to this report in 2017, we recommend future reports will necessitate a comparable level of the Legislature shift responsibility to CSAC for legislative analysis from our office, but rather could any subsequent Cal Grant C updates it requires. consist of data updates to aid the Legislature in The effects of Chapter 627 are not yet apparent monitoring the Cal Grant C program. We believe and many of the changes included in Chapter 692 CSAC could provide such updates. Moreover, have not yet been put in place. As such, we view given CSAC compiled much of the information we this report as an initial summary, and believe used to prepare this report (and now is beginning providing an updated analysis—potentially with to compile additional employment outcome data additional recommendations drawn from our on Cal Grant C recipients as required by statute), findings—in two years could be helpful to the we believe the commission is well-positioned to Legislature. Statute, however, currently requires provide any summary data the Legislature requires that we report to the Legislature every two years. on Cal Grant C in the future. Absent future policy changes, we do not believe CONCLUSION Although it represents a relatively small their courses of study. Subsequent years of data may component of California’s suite of student aid reveal whether recent changes implemented by the programs—both in terms of spending and number Legislature will meet the intended goal of better of participants—Cal Grant C has the important focusing Cal Grant C on strategic and emerging objective of helping to develop the state’s workforce. workforce needs. In the meantime, we encourage While data suggest the program may contribute the Legislature to dedicate additional effort towards to better employment options for those recipients helping grant recipients complete their training who ultimately receive a certificate or degree, these programs so they can qualify for higher successes are offset by lesser outcomes among the skilled—and higher paying—jobs. high proportion of students who do not complete 16 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT APPENDIX Cal Grant C Statute as Amended by Chapter 627, Statutes of 2011 and Chapter 692, Statutes of 2014 Education Code Title 3, Division 5, Part 42, Chapter 1.7, Article 6 69439 (a) For the purposes of this section, the following terms have the following meanings: (1) “Career pathway” has the same meaning as set forth in Section 88620. (2) “Economic security” has the same meaning as set forth in Section 14005 of the Unemployment Insurance Code. (3) “Industry cluster” has the same meaning as set forth in Section 88620. (4) “Long-term unemployed” means, with respect to an award applicant, a person who has been unemployed for more than 26 weeks at the time of submission to the commission of his or her application. (5) “Occupational or technical training” means that phase of education coming after the completion of a secondary school program and leading toward recognized occupational goals approved by the commission. (b) A Cal Grant C award shall be utilized only for occupational or technical training in a course of not less than four months. There shall be the same number of Cal Grant C awards each year as were made in the 2000-01 fiscal year. The maximum award amount and the total amount of funding shall be determined each year in the annual Budget Act. (c) The commission may use criteria it deems appropriate in selecting students to receive grants for occupational or technical training and shall give special consideration to the social and economic situations of the students applying for these grants, giving additional weight to disadvantaged applicants, applicants who face economic hardship, and applicants who face particular barriers to employment. Criteria to be considered for these purposes shall include, but are not limited to, all of the following: (1) Family income and household size. (2) Student’s or the students’ parent’s household status, including whether the student is a single parent or child of a single parent. (3) The employment status of the applicant and whether the applicant is unemployed, giving greater weight to the long-term unemployed. (d) The Cal Grant C award recipients shall be eligible for renewal of their grants until they have completed their occupational or technical training in conformance with terms prescribed by the commission. A determination by the commission for a subsequent award year that the program under which a Cal Grant C award was initially awarded is no longer deemed to receive priority shall not affect an award recipient’s renewal. In no case shall the grants exceed two calendar years. (e) Cal Grant C awards may be used for institutional fees, charges, and other costs, including tuition, plus training-related costs, such as special clothing, local transportation, required tools, equipment, supplies, books, and living expenses. In determining the individual award amounts, the commission shall take into account the financial means available to the student to fund his or her course of study and costs of attendance as well as other state and federal programs available to the applicant. (f) (1) To ensure alignment with the state’s dynamic economic needs, the commission, in consultation with appropriate state and federal agencies, including the Economic and Workforce Development Division of the Office of the Chancellor of the California Community Colleges and the California Workforce Investment Board, shall identify areas of occupational and technical training for which students may www.lao.ca.gov Legislative Analyst’s Office 17 AN LAO REPORT utilize Cal Grant C awards. The commission, to the extent feasible, shall also consult with representatives of the state’s leading competitive and emerging industry clusters, workforce professionals, and career technical educators, to determine which occupational training programs and industry clusters should be prioritized. (2) (a) Except as provided in subparagraph (B), the areas of occupational and technical training developed pursuant to paragraph (1) shall be regularly reviewed and updated at least every five years, beginning in 2012. (b) By January 1, 2016, the commission shall update the priority areas of occupational and technical training. (3) (a) The commission shall give priority in granting Cal Grant C awards to students pursuing occupational or technical training in areas that meet two of the following criteria pertaining to job quality: (i) High employer need or demand for the specific skills offered in the program. (ii) High employment growth in the occupational field or industry cluster for which the student is being trained. (iii) High employment salary and wage projections for workers employed in the occupations for which they are being trained. (iv) The occupation or training program is part of a well-articulated career pathway to a job providing economic security. (b) To receive priority pursuant to subparagraph (A), at least one of the criteria met shall be specified in clause (iii) or (iv) of that subparagraph. (g) The commission shall determine areas of occupational or technical training that meet the criteria described in paragraph (3) of subdivision (f) in consultation with the Employment Development Department, the Economic and Workforce Development Division of the Office of the Chancellor of the California Community Colleges, and the California Workforce Investment Board using projections available through the Labor Market Information Data Library. The commission may supplement the analyses of the Employment Development Department’s Labor Market Information Data Library with the labor market analyses developed by the Economic and Workforce Development Division of the Office of the Chancellor of the California Community Colleges and the California Workforce Investment Board, as well as the projections of occupational shortages and skills gap developed by industry leaders. The commission shall publish, and retain, on its Internet Web site a current list of the areas of occupational or technical training that meet the criteria described in paragraph (3) of subdivision (f), and update this list as necessary. (h) Using the best available data, the commission shall examine the graduation rates and job placement data, or salary data, of eligible programs. Commencing with the 2014-15 academic year, the commission shall give priority to Cal Grant C award applicants seeking to enroll in programs that rate high in graduation rates and job placement data, or salary data. (i) (1) The commission shall consult with the Employment Development Department, the Office of the Chancellor of the California Community Colleges, the California Workforce Investment Board, and the local workforce investment boards to develop a plan to publicize the existence of the grant award program to California’s long-term unemployed to be used by those consulting agencies when they come in contact with members of the population who are likely to be experiencing long-term unemployment. The outreach plan shall use existing administrative and service delivery processes making use of existing points of contact with the long-term unemployed. The local workforce investment boards are required to participate only to the extent that the outreach efforts are a part of their existing responsibilities under the federal Workforce Investment Act of 1998 (Public Law 105-220). 18 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT (2) The commission shall consult with the Workforce Services Branch of the Employment Development Department, the Office of the Chancellor of the California Community Colleges, the California Workforce Investment Board, and the local workforce investment boards to develop a plan to make students receiving awards aware of job search and placement services available through the Employment Development Department and the local workforce investment boards. Outreach shall use existing administrative and service delivery processes making use of existing points of contact with the students. The local workforce investment boards are required to participate only to the extent that the outreach efforts are a part of their existing responsibilities under the federal Workforce Investment Act of 1998 (Public Law 105-220). (j) (1) Notwithstanding Section 10231.5 of the Government Code, the Legislative Analyst’s Office shall submit a report to the Legislature on the outcomes of the Cal Grant C program on or before April 1, 2015, and on or before April 1 of each odd-numbered year thereafter. This report shall include, but not necessarily be limited to, information on all of the following: (a) The age, gender, and segment of attendance for recipients in two prior award years. (b) The occupational and technical training program categories prioritized. (c) The number and percentage of students who received selection priority as defined in paragraph (3) of subdivision (f). (d) The extent to which recipients in these award years were successfully placed in jobs that meet local, regional, or state workforce needs. (2) For the report due on or before April 1, 2015, the Legislative Analyst’s Office shall include data for two additional prior award years and shall compare the mix of occupational and technical training programs and institutions in which Cal Grant C award recipients enrolled before and after implementation of subdivision (f). (3) A report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code. www.lao.ca.gov Legislative Analyst’s Office 19 AN LAO REPORT LAO Publications This report was prepared by Rachel Ehlers and reviewed by Judy Heiman. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 20 Legislative Analyst’s Office www.lao.ca.gov