Evaluation of Cal Grant C Program

Evaluation of Cal Grant C Program GABRIEL PETEK LEGISLATIVE ANALYST APRIL 2019 analysis full gutter AN LAO REPORT LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Executive Summary In this report, we evaluate the Cal Grant C program, as required by statute, and make a recommendation regarding whether the state should maintain it. Below, we share the highlights of the report. Background Cal Grants Are State’s Primary Form of Financial Aid. The state offers three types of Cal Grant awards (A, B, and C) that vary somewhat in their eligibility requirements and award amounts. Cal Grant A and B are the most common award types, together accounting for over 99 percent of annual Cal Grant spending. Students must be enrolled in education programs at least two years in length to qualify for Cal Grant A and at least one year in length to qualify for Cal Grant B. Recent high school graduates and relatively young transfer students are entitled to a Cal Grant A or B award if they meet certain financial and academic requirements. Older students interested in Cal Grant A or B must apply for a limited number of competitive awards (up to 25,750 each year). The smaller Cal Grant C program has different rules and requirements, as described below. Cal Grant C Program Provides Financial Aid Aimed at Career Technical Education (CTE) Students. Postsecondary CTE is generally designed to prepare students for specific occupations. While all Cal Grant award types are open to CTE students, the Cal Grant C award is specifically targeted for them. To qualify for a Cal Grant C award, students must be enrolled in CTE programs of four months to two years in length. State law authorizes up to 7,761 new Cal Grant C awards each year. At the California Community Colleges (CCC), Cal Grant C recipients receive up to $1,094 annually for nontuition costs, in addition to having all their tuition costs waived through a separate program (worth up to $1,380 for a full-time student). At private colleges, Cal Grant C recipients receive up to $3,009 annually for tuition and nontuition costs. Legislature Recently Enacted Changes to Better Align Cal Grant C Program With Workforce Needs. Chapter 627 of 2011 (SB 451, Price) and Chapter 692 of 2014 (SB 1028, Jackson) modified Cal Grant C eligibility criteria. Under the new rules, the California Student Aid Commission (CSAC) is to prioritize Cal Grant C awards for applicants pursuing occupations that meet strategic workforce needs, with greater consideration given to disadvantaged applicants. (The current list of prioritized occupations includes 30 jobs ranging from aircraft mechanics to website developers.) State law directs our office to prepare an interim and final report on the impact of these new rules. We released the interim report in 2015 (Review of Recent Changes to the Cal Grant C Program), and this report fulfills the final requirement. Assessment Recent Changes Have Not Significantly Improved Workforce Alignment. Few students apply for Cal Grant C awards. As a result, all eligible applicants are offered awards and CSAC has not needed to use the new prioritization criteria. Notably, nearly two-thirds of Cal Grant C award offers go to applicants who indicate they intend to pursue a non-prioritized occupation. Among Cal Grant C recipients at CCC, only two of the top ten programs of study completed by the most www.lao.ca.gov 1 analysis full gutter AN LAO REPORT recent cohorts align with a prioritized occupation. In addition, some Cal Grant C recipients are completing certificates or degrees in non-CTE fields (such as the humanities). The available data on Cal Grant C recipients’ employment outcomes suggests limited success. Three years after first receiving a Cal Grant C award, some recipients are employed in high-wage settings such as hospitals, but others continue to work in lower-wage settings such as restaurants and grocery stores. Cal Grant C Program Requirements Add Complexity to Financial Aid System. While applicants for all types of Cal Grant awards must submit a Free Application for Federal Student Aid (FAFSA) or California Dream Act Application, applicants for Cal Grant C awards must also submit a supplemental form. The supplemental form asks applicants to report their occupational goal, among other information CSAC may use in the selection process. This form likely decreases application rates, as students may not understand the importance of the form, may be deterred by the additional paperwork, or may be unsure how to answer certain questions on the form. The Cal Grant C program’s eligibility requirements also create administrative challenges for campus financial aid staff, who are required to verify that recipients are enrolled in a CTE program before disbursing their awards. These requirements run counter to the Legislature’s recent interest in simplifying Cal Grant rules to help both students and staff navigate the financial aid system more easily. Recommendation Recommend Phasing Out Cal Grant C Awards and Redirecting Funds Toward Cal Grant Competitive Awards. Given its shortcomings in meeting strategic workforce needs and the complexity it adds to the state’s financial aid system, we recommend phasing out the Cal Grant C program and redirecting the funds to a larger existing financial aid program that is also open to CTE students—the Cal Grant competitive program. We recommend beginning the phase out in 2020-21 and eventually redirecting all Cal Grant C funding (an estimated $10.6 million) into the competitive program. The redirection would allow the state to raise the cap on new competitive awards by roughly 2,000, bringing the total number of new competitive awards offered annually to 27,750. Relative to Cal Grant C awards, competitive awards have more unmet demand, a simpler application process, and a larger award amount per student. Consider Lowering the Cal Grant B Program Length Requirement. If the Legislature were to phase out the Cal Grant C program, it may wish to retain Cal Grant eligibility for students in shorter CTE programs by reducing the minimum program length for Cal Grant B awards from one year to four months. We recommend the Legislature weigh the associated trade-offs carefully, as some research suggests students completing shorter CTE programs tend to experience lower wage increases than students completing longer CTE programs. 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT INTRODUCTION The Cal Grant C program provides financial of the new rules, and Chapter 23 of 2017 (SB 85, aid to students pursuing postsecondary career Committee on Budget and Fiscal Review) directed technical education (CTE). Chapter 627 of 2011 our office to submit a final report this April. Our (SB 451, Price) and Chapter 692 of 2014 (SB 1028, office released the interim report in 2015, and this Jackson) modified Cal Grant C eligibility criteria. report is the final one. Specifically, these laws require the California We begin the report by providing background. Student Aid Commission (CSAC) to prioritize Next, we describe our key findings, including trends Cal Grant C awards for applicants pursuing related to Cal Grant C recipients’ demographics, occupations that meet strategic workforce needs, occupational goals, and employment outcomes. with greater consideration given to disadvantaged Then, we provide an overall assessment of the applicants. The authorizing legislation directed our program and make associated recommendations. office to prepare an interim report on the impact BACKGROUND In this section, we provide background on community colleges, and some community college CTE and the financial aid programs available for CTE programs lead to more advanced education students enrolled in CTE programs. programs at universities. For example, a high school senior might take health-related coursework that Career Technical Education is articulated with community college coursework CTE Provides Training in a Broad Range of culminating in an associate’s degree in licensed Occupations. CTE programs span a wide range of vocational nursing, which could in turn lead into a fields, including health care, information technology, university program that grants a bachelor’s degree in and manufacturing. (Other common terms for registered nursing. CTE include vocational training, occupational or State Funds CTE Through a Number of technical training, and workforce training and Programs. Figure 1 (see next page) shows the major education.) CTE programs generally are designed sources of state funding for postsecondary CTE in to train students in occupation-specific skills. 2018-19. Traditionally, the state has funded CTE Programs vary in length from a few months to primarily through community college apportionments. two years. Shorter programs tend to culminate The state supplements apportionments with in certificates, whereas longer programs typically categorical programs focused specifically on CTE. To culminate in associate degrees. Both shorter and improve the availability and quality of CTE, the state longer programs may lead to industry-recognized created several of the categorical programs shown certifications. (Bachelor’s and graduate degrees are in Figure 1 over the past ten years—the two largest generally not considered CTE.) new programs being the Adult Education Program California Community Colleges (CCC) and and the Strong Workforce Program. Most recently, Private Colleges Provide CTE. Community the state established a new online community college colleges, private for-profit colleges, and certain overseen by the CCC Board of Governors that will private nonprofit colleges offer postsecondary offer short-term CTE programs for working adults CTE programs. Importantly, other educational starting in late 2019. institutions offer instruction that can lead into or Financial Aid extend from a postsecondary CTE program. Many high schools in California offer CTE programs that Financial Aid Helps Students Pay College lead to more advanced CTE programs offered by Costs. The federal government, state government, www.lao.ca.gov 3 analysis full gutter AN LAO REPORT Figure 1 State Funds Several Postsecondary Career Technical Education (CTE) Programs 2018-19 (In Millions) Program Description Funding Apportionments for workforce Provides funds to community college districts for credit and noncredit $1,954a education and training courses in CTE, basic skills, and English as a second language. Adult Education Program Provides funds to 71 regional consortia of community colleges and 527 adult schools (operated by school districts) to support programs across a range of instructional areas, including CTE. Strong Workforce Program Requires community colleges to coordinate their CTE activities within 248b seven regional consortia and provides funds to expand programs aligned with regional priorities. Apprenticeship programs Supports the classroom instruction component of apprenticeships, 78 which provide paid on-the-job training for workers in various trades. Also provides seed money to expand pre-apprenticeships and apprenticeships in nontraditional fields. Economic and Workforce Funds positions for industry area experts within the community 23 Development Program college system, as well as other initiatives intended to strengthen alignment between CTE programs and industry needs. Online community college Provides short-term online programs for working adults. 20c Nursing program support Supports efforts to increase program capacity and student success 13 within community college nursing programs. Total $2,863 a Assumes community colleges spend 27 percent of apportionment funding on CTE, based on the share of full-time equivalent students considered CTE. b Reflects ongoing funding. The state also provided $2 million one time to expand certified nurse assistant programs. c Reflects ongoing funding. The state also provided $100 million one time for start-up costs. many higher education institutions, and some eligibility requirements. In 2018-19, the state private organizations offer financial aid to students. provided $2.2 billion to fund an estimated 392,000 Awards are based on students’ financial need Cal Grants. To be considered for an award, students and/or other student factors, such as academic must file a Free Application for Federal Student Aid merit, athletic talent, and military service. One (FAFSA) or a California Dream Act application. common type of financial aid is gift aid, which refers State Offers Several Types of Cal Grant to grants, scholarships, and tuition waivers that Awards. The state funds three types of Cal Grant students do not have to pay back. awards: Cal Grant A, B, and C. As Figure 2 Cal Grants Are State’s Primary Form of shows, these awards have somewhat different Financial Aid. Cal Grants provide gift aid to eligibility requirements related to family income, students who meet financial, academic, and other grade point average (GPA), and program length. Figure 2 Cal Grant Program Consists of Three Types of Awards Eligibility Requirements by Award Type, 2018-19 Award Type Income Level Minimum GPA Program of Study and Duration Cal Grant A Low or middle income 3.0 HS GPA Any program (including CTE) between 2.4 CCC GPA two and four years long Cal Grant B Low income 2.0 HS GPA Any program (including CTE) between 2.4 CCC GPA one and four years long Cal Grant C Low or middle income No minimum CTE programs between four months and two years long HS = high school; GPA = grade point average; and CTE = career technical education. 4 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Regarding program length, students qualify for Cal Grant C Cal Grant A awards if pursuing any educational Cal Grant C Is the Smallest of the Cal Grant program (including a CTE program) of at least two Programs. While CTE students are eligible for years in length, Cal Grant B awards if pursuing any several types of financial aid that are not specific to educational program at least one year in length, their education program, the Cal Grant C program and Cal Grant C awards if pursuing a CTE program is specifically targeted toward CTE students. at least four months in length. As Figure 3 shows, State law authorizes up to 7,761 new Cal Grant C Cal Grant award amounts vary based on award awards each year. In 2018-19, the state provided type and segment of attendance. $10 million for the program (with costs expected Students May Qualify for Either Cal Grant to grow to $10.6 million in 2019-20). This amount Entitlement or Competitive Program. The represents less than 0.5 percent of total Cal Grant entitlement program guarantees Cal Grant A or B funding. At CCC, Cal Grant C recipients receive a awards to recent high school graduates, as well as maximum award of $1,094 annually for nontuition students under age 28 who are transferring from a costs (in addition to having all their tuition costs two-year to a four-year institution. The competitive waived through another program, worth up to program is designed for those students ineligible for $1,380 for a full-time student). At private colleges, entitlement awards—typically older students who Cal Grant C recipients receive a smaller nontuition have been out of school for at a least a few years. award and partial tuition coverage, for a total Although roughly 300,000 applicants are eligible maximum award of $3,009 annually. Students for these awards annually, state law authorizes are eligible for the maximum award if they enroll only 25,750 new awards each year. CSAC uses full time throughout the academic year. Awards a scoring matrix to prioritize among eligible are prorated for students enrolling part time or in applicants. This matrix places greatest weight on programs shorter than one year in length. an applicant’s financial need, but it also considers CSAC Periodically Develops List of Allowable certain socioeconomic factors and GPA. Although Cal Grant C Programs. State law requires CSAC students may receive either Cal Grant A or B to consult with state and federal agencies— awards through the competitive program, the vast including the CCC Chancellor’s Office and the majority (99 percent) of competitive awards are Cal California Workforce Development Board—to Grant B. (Cal Grant C awards are offered through a develop a list of occupational areas approved for separate process detailed in the next section.) the Cal Grant C program. Students enrolled or CTE Students May Also Qualify for Other State and Federal Gift Aid. In addition to Cal Grants, various other financial Figure 3 aid programs provide fee waivers or Cal Grant Award Amount Varies Across Segments grants to CTE students. Students Maximum Annual Award for Full-Time Student, 2018-19 attending CCC and enrolled in Award Type UC CSU CCC Nonprofit For-Profit credit courses (including credit CTE courses) are eligible for a fee Cal Grant A waiver that fully covers their tuition. Tuition award $12,570 $5,742 —a $9,084 $4,000b Nontuition award — — — — — (Noncredit CTE courses are offered free of charge to students.) In Cal Grant B addition, Cal Grant recipients who Tuition award $12,570 $5,742 —a $9,084 $4,000b Nontuition award 1,672 1,672 $1,672 1,672 1,672 enroll full time at CCC are eligible for a Student Success Completion Cal Grant C Grant worth up to $4,000 annually. Tuition award — — —a $2,462 $2,462 Nontuition award — — $1,094 547 547 Finally, low-income students in all a segments may be eligible for a Pell Financially-needy CCC students have their tuition waived ($1,380 for a full-time student). b Reflects amount for schools that are not accredited by WASC. Students attending for-profit WASC-accredited schools Grant—a federal award worth up to may receive a Cal Grant of up to $8,056. $6,095 annually. WASC = Western Association of Schools and Colleges. www.lao.ca.gov 5 analysis full gutter AN LAO REPORT planning to enroll in education programs aligned educational expenses (as calculated by a with these occupational areas are eligible for federal need-based formula). Cal Grant C awards. CSAC must update the list of Students Must Submit Supplemental Form approved occupations at least every five years. The to Apply for Cal Grant C Awards. Students who current list includes 131 occupations ranging from want to be considered for Cal Grant C awards website development to welding. must complete a supplemental form in addition to Statute Prioritizes Applicants When a FAFSA. During the period covered in this report, Cal Grant C Demand Exceeds Supply. CSAC sent the supplemental form to students Chapter 627 introduced rules for prioritizing who indicated an intent to pursue CTE on their Cal Grant C applicants, and Chapter 692 modified FAFSA but were not selected for Cal Grant A or and added to these rules. These rules are intended to prioritize Figure 4 applicants based on two major Students Pursuing These 30 Occupations Are considerations: Prioritized for Cal Grant C Awards • Strategic Workforce Needs. 2016-17 Through 2020-21 CSAC consults with the Occupation Group Occupation Employment Development Department (EDD) to identify Health Care Cardiovascular Technologists and Technicians a subset of the eligible Dental Hygienists Diagnostic Medical Sonographers occupations that rank highly Occupational Therapy Assistants on at least two of four criteria: Physical Therapy Assistants (1) number of job openings, Radiologic Technologists (2) projected growth in Registered Nurses jobs, (3) projected wages, Respiratory Therapists and (4) alignment with a Surgical Technologists career pathway that leads to Installation, Maintenance, Aircraft Mechanics and Service Technicians economic security. Applicants and Repair Electrical Power-Line Installers and Repairers Industrial Machinery Mechanics who intend to pursue Telecommunications Equipment Installers and these occupations receive Repairers priority. CSAC released the Telecommunications Line Installers and most recent list of priority Repairers occupations in 2016-17. Construction Brickmasons and Blockmasons Figure 4 shows these priority Electricians occupations. Elevator Installers and Repairers Plumbers, Pipefitters, and Steamfitters • Socioeconomic Architecture and Architectural and Civil Drafters Disadvantages. Applicants Engineering Civil Engineering Technicians may also receive priority Electrical and Electronics Engineering based on socioeconomic Technicians factors. For example, CSAC Computer Computer Network Support Specialists gives priority points to Computer User Support Specialists Web Developers applicants who have been Protective Services Firefighters unemployed for six months Police and Sheriff’s Patrol Officers or longer, applicants who are Other Water and Wastewater Treatment Plant and single parents or dependents System Operators of single parents, and Claims Adjusters, Examiners, and applicants with no expected Investigators Insurance Sales Agents family contribution to their Paralegals and Legal Assistants 6 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT B awards. (In 2018-19, CSAC began sending Campuses Verify Student Eligibility Before the supplemental form to students who were not Disbursing Payments. After CSAC makes Cal selected for Cal Grant A or B awards, regardless Grant award offers, campus financial aid staff must of whether they indicated an intent to pursue CTE verify recipients’ eligibility. For Cal Grant C awards, on their FAFSA.) The form asks applicants to report this process requires staff to confirm that students their occupational goal, the length of the program are enrolled in a CTE program four months to two they intend to enroll in, and other information years in length. Campus financial aid staff are (including work history, education history, and not required to verify that students are pursuing length of unemployment) that CSAC may use in its the specific occupational goal indicated on their selection process. supplemental form. FINDINGS Statute requires our office to report on the public health sciences college operated by Los following aspects of the Cal Grant C program: Angeles County). Figure 6 (see next page) shows (1) the age, gender, and segment of attendance that the share of recipients at for-profit colleges of award recipients; (2) the occupations prioritized has ranged from 10 percent to 45 percent. This for awards; (3) the number of applicants prioritized fluctuation likely reflects changes in the colleges based on their occupational goals; and (4) the eligible for Cal Grants. State law deems colleges workforce outcomes of award recipients. Our ineligible for Cal Grants if they have particularly low first report, which was released in 2015, covered graduation rates or high rates of students defaulting Cal Grant C recipients who received their initial on loans. The years with fewer Cal Grant C award from 2010-11 through 2014-15. This report recipients enrolled at for-profit colleges correspond covers Cal Grant C recipients through 2017-18. to years in which many colleges in this segment lost Cal Grant eligibility. Profile of Award Recipients Demographics of Award Recipients Have All Eligible Applicants Are Approved for Changed Somewhat Over Time. As Figure 7 Cal Grant C Awards. As Figure 5 (see next (see page 9) shows, the percentage of recipients page) shows, the number of students receiving age 30 or older has decreased across the past Cal Grant C awards has consistently fallen short eight years, while the percentage in all three of the of the number of awards authorized in statute. In younger age spans has increased. The average 2013-14, CSAC expanded the number of offered age of recipients declined from 33 to 31 over the awards to increase the number of awards that are period. Regarding gender, about two-thirds of ultimately paid. (In most years, between one-third Cal Grant C recipients are female. The gender and half of applicants offered Cal Grant C awards distribution has remained relatively consistent over do not accept the awards.) Since that change, time. According to CSAC’s data, the percentage CSAC has not had to use prioritization criteria. of recipients who were unemployed at the time (Each year, some applicants are ineligible for of application peaked in 2013-14 at 41 percent awards, typically because they did not indicate and has steadily declined since that time. As of an occupational goal or because their education 2017-18, 30 percent of new Cal Grant C recipients program was not of an eligible length.) were unemployed. As Figure 8 (see page 9) shows, Share of Recipients Attending Private the percentage of recipients with a family income of Colleges Has Fluctuated. While many Cal Grant C less than $25,000 has also declined. These trends recipients attend CCC, a substantial share of likely reflect the economic recovery that occurred recipients attend for-profit colleges. A very small across this time period. share (less than 2 percent) attend nonprofit colleges No Perceptible Shift Toward Prioritized or public schools other than CCC (including a Occupations. Each year since 2013-14, slightly www.lao.ca.gov 7 analysis full gutter AN LAO REPORT Figure 5 Every Year, Some Cal Grant C Awards Go Unused Award Outcomes for Applicants 16,000 Denied Offered, Not Paid Paid 14,000 12,000 10,000 Authorized Awards 8,000 6,000 4,000 2,000 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Figure 6 In Recent Years, Almost Two-Thirds of Cal Grant C Recipients Have Attended Community Colleges 100% 80 60 40 Other Collegesa 20 For-Profit Colleges CCC 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 a Includes nonprofit colleges and public institutions other than CCC. 8 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Figure 7 Share of Cal Grant C Recipients Age 30 or Older Has Been Declining 100% 80 60 40 19 or Younger 20 to 24 20 25 to 29 30 or Older 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Figure 8 Share of Cal Grant C Recipients in Lowest Income Group Has Declined Income Reported on Financial Aid Application 100% 80 60 40 $50,000 or More 20 $25,000-$49,999 Less Than $25,000 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 www.lao.ca.gov 9 analysis full gutter AN LAO REPORT more than one-third of award offers have gone 2018, half of CCC students who first received to applicants who indicated that they intended Cal Grant C awards in 2014-15 or 2015-16 to pursue a prioritized occupation (Figure 9). had completed a certificate or degree. This is CSAC updated the priority list in 2016-17, and we comparable to CCC’s six-year completion rate considered whether this changed the occupational (48 percent), suggesting that Cal Grant C recipients mix of applicants offered awards. After the new are at least as likely to complete as CCC students priority list went into effect, no noticeable increase overall. (Though fewer students in the later occurred in the share of award offers going to Cal Grant C cohorts had completed certificates applicants pursuing occupations on the new list. or degrees by June 2018, some were likely still Moreover, some occupations removed from the working toward completion.) Among completers priority list, such as licensed vocational nurses and in the two earlier cohorts, more than two-thirds automotive mechanics, remained among the top earned an associate degree, with the remainder occupational goals of applicants offered awards. earning a certificate (Figure 10). In addition, Health Care Occupations Are Growing 85 percent of completers earned a degree or in Popularity. The percentage of recipients certificate of 30 or more units. This suggests that who indicated that they intended to pursue an most Cal Grant C recipients are likely pursuing occupation related to health care increased from programs that meet the length requirement for Cal 36 percent in 2012-13 to 51 percent in 2017-18. Grant B awards (at least one year). This trend is likely due to both student preferences Top Programs Completed Have Been and greater program availability. For-profit colleges Relatively Consistent Over Time. Although a account for the majority (almost 90 percent) of the new list of priority occupations went into effect growth in Cal Grant C recipients who intend to in 2016-17, the mix of education programs that pursue health care occupations. Cal Grant C recipients complete has not changed significantly since that time. CCC students who first Outcomes of CCC Award Recipients received Cal Grant C awards in 2016-17 or 2017-18 Outcome Data Are Limited to Cal Grant C have completed similar programs as the two Recipients From Community Colleges. The previous cohorts (Figure 11). Only two of the top following section covers the program completion ten programs completed by the more recent cohorts and employment outcomes of students who first correspond to occupations on the new priority list. received Cal Grant C awards from 2014-15 through Some Cal Grant C Recipients Complete 2017-18. The CCC Chancellor’s Office provided Programs in Non-CTE Fields. Of Cal Grant C these data for Cal Grant C recipients enrolled in recipients who completed an education program their colleges. We also requested similar data from at CCC, about 85 percent earned a CTE certificate several for-profit colleges that enroll a large share or degree. The remaining completers may have of Cal Grant C recipients. However, we generally intended to pursue a CTE program when they did not receive sufficient data to draw conclusions were first awarded Cal Grant C awards but about the outcomes of Cal Grant C recipients at switched to another program before completion. for-profit colleges. The most common non-CTE programs completed About Half of CCC Cal Grant C Recipients by Cal Grant C recipients were transfer studies, Complete a Certificate or Degree. As of June humanities, and the biological and physical sciences. Figure 9 About One-Third of Applicants Indicate Intent to Pursue Priority Occupations 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Total applicants offered award 9,293 10,374 11,036 8,296 7,330 10,056 Number pursuing priority occupations 5,240 3,772 3,853 3,033 2,562 3,453 Percent pursuing priority occupations 56% 36% 35% 37% 35% 34% 10 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Workforce Outcomes Are Available for Figure 10 Most CCC Students Receiving Cal Grant C Over Two-Thirds of Completers Awards. The CCC Chancellor’s Office tracks Earn Associate Degree workforce outcomes for all students through a Highest Award Completed by CCC Cal Grant C data-sharing partnership with EDD. The EDD Recipients, 2014-15 and 2015-16 Cohorts database includes wages and employment settings Certificate: for most California workers, except those who are 6 to 17 Units Certificate: self-employed, working for the federal government, 18 to 29 Units or serving in the military. We limit our discussion of workforce outcomes to students who first received Certificate: Cal Grant C awards in 2014-15 because many 30 or More Units students in later cohorts were likely still in college Associate Degree as of 2017 (the most recent year for which EDD data was available). Most Recipients Find Employment, but Many Earn Less Than $25,000 Per Year. Of CCC students who first received Cal Grant C awards in 2014-15, 73 percent appeared in the EDD database in 2017, indicating these recipients were employed approximately three years after their the most common employment settings for the initial award acceptance. The remaining 27 percent 2014-15 Cal Grant C cohort. Over one-third of were either unemployed or employed in a setting employed recipients in this cohort worked in one excluded from the EDD database. About half of the of these ten industries in 2017. Recipients who employed recipients in the EDD database earned earned less than $25,000 were most likely to less than $25,000 in 2017 (Figure 12, see next work in temporary help services, elderly services, page). We cannot estimate an hourly wage for schools, and restaurants. In contrast, recipients these recipients as some of them may have been who earned $75,000 or more were most likely to working part time or only part of the year. work in hospitals. Employment Settings Span Diverse Range of Industries. Figure 13 (see next page) shows Figure 11 Recent Cal Grant C Recipients Are Completing Similar Programs to Earlier Cohorts Most Common Programs of Study Completed by CCC Cal Grant C Recipientsa Rank for Recent Cohorts Rank for Earlier Cohorts Prioritized Program of Study (2016-17 and 2017-18) (2014-15 and 2015-16) Occupationb Registered Nursing 1 1 Yes Transfer Studies 2 2 Automotive Technology 3 3 Humanities 4 7 Biological and Physical Sciences 5 4 Child Development/Early Care and Education 6 6 Radiologic Technology 7 12 Yes Liberal Arts and Sciences 8 5 Licensed Vocational Nursing 9 14 Cosmetology and Barbering 10 16 a Based on Cal Grant C recipients who have completed certificates or degrees to date. Some recipients (particularly in recent cohorts) may still be enrolled. b Based on the updated priority list that went into effect in 2016-17. www.lao.ca.gov 11 analysis full gutter AN LAO REPORT Figure 12 Figure 13 Three Years Later, Over Half of Top Employment Settings Range Recipients Earn Less than $25,000 From Hospitals to Grocery Stores 2017 Earnings for CCC Cal Grant C Recipients, Industries Employing CCC Cal Grant C Recipients, 2014-15 Cohort 2014-15 Cohorta Rank Industry $75,000 or more 1 General Medical and Surgical Hospitals $50,000 to 2 Temporary Help Services $74,999 3 Elementary and Secondary Schools 4 Government Offices 5 Services for the Elderly and Persons with Disabilities 6 Limited-Service Restaurants 7 Full-Service Restaurants $25,000 to 8 Physician Offices $49,999 Less than 9 Supermarkets and Other Grocery Stores $25,000 10 Community Colleges a Based on employment data from 2017. Recipients working in multiple industries are counted under the industry in which they earned the most wages. ASSESSMENT Based on our findings and conversations with years, the state has undertaken several initiatives financial aid administrators, we have identified a that attempt to better align CTE programs with number of concerns with the Cal Grant C program, workforce needs. The creation of the Adult discussed throughout the remainder of this section. Education Program, Strong Workforce Program, Recent Changes to Cal Grant C Program and a new online community college are among the Have Not Had Significant Impact on State most notable of these efforts. Like the Cal Grant C Workforce. In creating new prioritization criteria, program, these programs are designed to benefit the Legislature intended to better align Cal Grant C students enrolling in CTE programs that are linked awards with strategic workforce needs. Given with gainful employment opportunities. Whereas the so few individuals apply for Cal Grant C awards, Cal Grant C program serves roughly 10,000 students CSAC has not needed to use the prioritization annually, these other programs by comparison criteria. Only about one-third of Cal Grant C awards are intended to support systemic improvements are offered to applicants who indicated on their impacting CTE students on a much larger scale. supplemental forms that they intend to pursue a Cal Grant C Program Requires Complicated prioritized occupation. Furthermore, only two of the Financial Aid Application Process. The top ten programs of study completed by the two supplemental form that Cal Grant C applicants most recent cohorts of Cal Grant C recipients at must submit in addition to a FAFSA likely CCC align with a prioritized occupation, while four decreases program participation. Students may of the top ten programs are not even considered not understand the importance of the supplemental CTE. Finally, while some Cal Grant C recipients find form, be deterred by the additional paperwork, employment in high-wage settings, other recipients or be unsure how to answer certain questions continue to work in lower-wage settings such as on the form. The program’s complex eligibility restaurants and grocery stores. requirements also create administrative challenges Many Recent CTE Initiatives Likely to Be for campus financial aid staff. Staff report that Reaching More Students. Over the past several they spend substantial time examining each Cal 12 LEGISLATIVE ANALYST’S OFFICE analysis full gutter AN LAO REPORT Grant C recipient’s course registration patterns to recipients are at least one year long and thus meet verify enrollment in a CTE program. These aspects the length requirement for the Cal Grant B program. of the Cal Grant C program run counter to the If these students had received a Cal Grant B Legislature’s recent interest in simplifying Cal Grant award, they would have received greater financial rules and requirements to help both students and assistance. The Cal Grant B nontuition award staff navigate the financial aid system more easily. ($1,672 annually) is worth about 150 percent of the Substantial Overlap Between Cal Grant C and Cal Grant C nontuition award ($1,094 annually). In Cal Grant B Eligibility. Many of the CTE students addition, students may receive a Cal Grant B award eligible for a Cal Grant C award also are eligible for the equivalent of four years of full-time study, for a Cal Grant B award. Data from CCC indicate whereas state law limits Cal Grant C awards to two that most programs completed by Cal Grant C calendar years. RECOMMENDATIONS Recommend Phasing Out Cal Grant C and to navigate because applicants are not required to Serving CTE Students Through Main Cal Grant submit a supplemental form and are not restricted Programs. Given its shortcomings in meeting to training in specific occupational areas. Second, strategic workforce needs and the complexity the competitive program offers greater financial it adds to the state’s financial aid system, we assistance by providing a larger annual award for a recommend phasing out the Cal Grant C program greater number of years. Redirecting funds from the and redirecting the associated funds to a much Cal Grant C program to the competitive program also larger existing financial aid program that is also increases the likelihood that all offered awards are open to CTE students—the Cal Grant competitive used. Whereas some Cal Grant C awards go unused program. CSAC has already initiated the 2019-20 each year, nearly all authorized competitive awards Cal Grant C award cycle, so we recommend are taken, with demand for them far exceeding the beginning the phase out in 2020-21. We estimate number of available competitive awards. the state could offer approximately 2,000 new Consider Lowering the Cal Grant B Program competitive awards in 2020-21, raising the total Length Requirement. Students pursuing CTE number of new competitive awards from the programs at least four months but less than existing statutory level of 25,750 to 27,750. (The one year long currently are not eligible for administration also has a 2019-20 budget proposal Cal Grant competitive awards. If the Legislature to increase the number of new competitive awards.) wishes to retain Cal Grant eligibility for these Our estimate of the number of new competitive students, it could consider reducing the minimum awards the state could fund takes into account program length for Cal Grant B awards from one associated renewal awards (such that competitive year to four months. We recommend the Legislature program costs would increase to an estimated weigh the associated trade-offs carefully. On the $10.6 million at full implementation). one hand, shortening the minimum program length Competitive Program Has Several Advantages would expand access to Cal Grant awards for for Students. In general, CTE students are eligible some CTE students. On the other hand, some for the competitive program and could thus research suggests students completing shorter CTE benefit from an increase in the number of available programs tend to experience lower wage increases competitive awards. (One notable exception is than students completing longer CTE programs. for students pursuing CTE programs of less than (Lowering the program length requirement for one year—an issue discussed below.) Compared Cal Grant B awards would also expand eligibility for to the Cal Grant C program, the competitive the entitlement program, thus increasing total Cal award program has several advantages for these Grant spending.) students. First, the competitive program is easier www.lao.ca.gov 13 analysis full gutter AN LAO REPORT CONCLUSION Several years ago, the Legislature made changes have the potential to both reach more CTE students to the Cal Grant C program with the intent of better and provide more financial aid coverage to Cal addressing both the state’s workforce needs and Grant recipients. In light of these more recent students’ financial needs. Since implementing efforts, we recommend the Legislature phase these changes, the Legislature has undertaken out the Cal Grant C program and instead provide several larger efforts to expand CTE offerings and more financial aid to CTE students through the restructure financial aid opportunities. Compared Cal Grant competitive program. to the Cal Grant C program, these broader efforts LAO PUBLICATIONS This report was prepared by Lisa Qing and reviewed by Paul Steenhausen and Jennifer Kuhn Pacella. 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. 14 LEGISLATIVE ANALYST’S OFFICE