Assembly Bill 288 (AB 288) enacts the California Ban on Scholarship Displacement Act of 2021, which is intended to ensure that private scholarships for students supplement, and do not supplant, gift aid, grants, scholarships, tuition waivers, and fellowship stipends provided by institutions of higher education to California students who have financial need.
AB 288 applies to private institutions of higher (postsecondary) education in California that receive, or benefit from, state-funded financial assistance or enroll students who receive state-funded student financial assistance, as well as students who are California residents who enroll in any institution of higher education to obtain an undergraduate degree.
Commencing with the 2023–2024 academic year, AB 288 prohibits covered institutions of higher education from reducing the institutional gift aid offer of a student who is eligible to receive a Federal Pell Grant award or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student’s gift aid exceeds the student’s annual cost of attendance. A student’s institutional gift aid offer may be reduced, however, by no more than the amount of the student’s gift aid that is in excess of the student’s annual cost of attendance.
An institution of higher education is further prohibited from considering receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a Federal Pell Grant award or financial assistance under the California Dream Act for qualification for institutional gift aid.
AB 288 encourages institutions of higher education to implement efforts to avoid scholarship displacement through consultation with scholarship providers and students to avoid situations where institutional gift aid and private scholarships can only be used for specific purposes.
The provisions of AB 288 are severable, which means that if any provision of AB 288 or its application is held invalid due to a conflict with federal requirements, the other valid provisions or applications remain in effect.
AB 288 takes effect on January 1, 2023.
(AB 288 adds Sections 70045 through 70048 to the Education Code.)