SB 416 California Senate · 2025-2026 Regular Session

Student financial aid: Cal Grants: qualifying institutions: financial aid offer letter template.

Summary
Existing law establishes the University of California, under the administration of the Regents of the University of California, the California State University, under the administration of the Trustees of the California State University, the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in this state. Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education. Existing law, the Cal Grant Program, establishes the Cal Grant A Entitlement Awards, the Cal Grant B Entitlement Awards, the California Community College Expanded Entitlement Awards, the California Community College Transfer Entitlement Awards, the Competitive Cal Grant A and B Awards, the Cal Grant C Awards, and the Cal Grant T Awards under the administration of the commission. Existing law establishes eligibility requirements for awards under the Cal Grant Program for participating students attending qualifying postsecondary educational institutions, and prescribes requirements that postsecondary educational institutions must comply with in order to be a qualifying postsecondary educational institution for purposes of the Cal Grant Program, including, among others, certain disclosure requirements. This bill would require, on or before April 1, 2026, the commission to convene a workgroup. The bill would require the workgroup to include, but not be limited to, the commission, all segments of postsecondary education, student organizations, and experts. The bill would require the workgroup to identify the common terms, definitions, and structure of financial aid offer letters sent by postsecondary educational institutions, and would require, on or before July 1, 2027, the workgroup to create a financial aid offer letter template. The bill would also require, on or before July 1, 2027, the workgroup to submit a report to the Legislature that includes the financial aid offer letter template. The bill would require, as part of the criteria to be a qualifying institution under the Cal Grant Program, an institution, by the start of the 2028–29 academic year, to use the financial aid offer letter template for all conditional offers of attendance, as specified.
Bill status failed 1 of 4 stages cleared
Introduction
Feb 2025
Committee Review
Floor Vote
Governor
Introduced Feb 14, 2025 Last action Feb 2, 2026
Maddy AI version diff · 2 comparisons

What changed between versions

02/14/25 - Introduced 03/26/25 - Amended Senate · 7 edits · Mar 26, 2025
MODERATE
SB 416 was completely rewritten in the Senate amendment. The original bill made only nonsubstantive language changes to a student loan default provision (Section 69507.5). The amended version now primarily amends Section 69432.7, consolidating and expanding Cal Grant Program definitions and qualifying institution requirements, and adds a new requirement for the Student Aid Commission to create a standardized financial aid offer letter template that all qualifying institutions must use by the 2028-29 academic year.
Scope change
The bill expanded dramatically from a narrow nonsubstantive cleanup of one loan-default provision to a comprehensive overhaul of Cal Grant Program definitions, qualifying institution standards, student financial aid appeals protections, and a new mandate for standardized financial aid offer letters across all California postsecondary institutions.
SCOPE

The bill's primary target shifted from Section 69507.5 (a narrow loan-default eligibility provision) to Section 69432.7, which governs Cal Grant Program definitions and qualifying institution standards. The original nonsubstantive amendment to 69507.5 was demoted to a secondary section.

REQUIREMENT

New subsection (l)(5) requires the Student Aid Commission to convene a workgroup by April 1, 2026, including all segments of postsecondary education, student organizations, and experts. The workgroup must identify common terms in financial aid offer letters, create a standardized template by July 1, 2027, and submit a report to the Legislature by that same date.

All qualifying institutions under the Cal Grant Program must use the standardized financial aid offer letter template for all conditional offers of attendance by the start of the 2028-29 academic year. This is a condition of maintaining qualifying institution status.

Extensive satisfactory academic progress and financial aid appeals requirements are added for qualifying institutions, including mandatory notice to students, a 45-day review deadline, a second review process, acceptance of appeals without third-party documentation when reasonably unobtainable, and protection against disenrollment while an appeal is pending.

FISCAL

The fiscal committee designation changed from 'no' to 'yes,' indicating the amended bill now carries fiscal implications (likely due to the workgroup and template implementation costs).

DEFINITION

Section 69432.7 is fully rewritten with comprehensive definitions including specific income ceilings (ranging from $23,500 for independent students to $74,100 for families of six or more) and asset ceilings ($23,600-$49,600), along with annual cost-of-living adjustment mechanisms.

ENFORCEMENT

Detailed qualifying institution requirements are codified including three-year cohort default rate thresholds (15.5 percent), graduation rate floor (30 percent), an exemption for institutions where 40 percent or fewer students borrow federal loans, and a formal appeal process for institutions that fail to meet these standards.

Floor votes

How they voted

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Full legislative history

Actions timeline

Total actions
12
Key actions
3
Committee
4
Amendments
1
May 23, 2025
Upper · Passed
May 23 hearing: Held in committee and under submission.
upper
Apr 23, 2025
Upper · Passed
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0. Page 865.) (April 23). Re-referred to Com. on APPR.
upper
Apr 2, 2025
Committee
Re-referred to Com. on ED.
upper
Mar 26, 2025
Upper · Passed
From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
upper
Feb 26, 2025
Committee
Referred to Com. on RLS.
upper
Feb 14, 2025
Introduced
Introduced. Read first time. To Com. on RLS. for assignment. To print.
upper
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
SP
Sasha Pérez
DDemocratic
CA
25