StateCaliforniaIntroduced

AB 288: California Ban on Scholarship Displacement Act of 2021.

Unknown Sponsor

AB 288 status: Introduced — Chaptered by Secretary of State - Chapter 925, Statutes of 2022 (updated Sep 30, 2022).

01

What this bill does

Official summary alongside an AI-generated read on where it stands and why.

Overall Score

75OUT OF 100
Score:75/100 civic fit
Risk:Low Risk
Impact:Moderate Impact 65/100
Constitutionality95%
Bipartisan90%
Public opinion85%

Bill summary

What changes

The bill prohibits higher education institutions that receive state funding from reducing institutional gift aid for Pell Grant or CA Dream Act-eligible students solely because they received private scholarships, unless total aid exceeds the cost of attendance.

Who is affected

California public and private postsecondary institutions; low-income students eligible for federal Pell Grants or CA Dream Act assistance.

Requirements and enforcement

Institutions must ensure their financial aid packaging software and manual policies do not automatically reduce institutional aid when a student receives private scholarship money.

Costs and funding

Administrative costs associated with updating aid policies, staff training, and system modifications to ensure compliance.

When it takes effect

Provisions took effect commencing with the 2023–24 academic year.

Potential benefits

Ensures that private scholarships actually help students cover costs rather than allowing institutions to effectively 'capture' those scholarships by reducing the grants they provide.

Risks and tradeoffs

Institutions may adjust internal scholarship models to comply, which could affect the availability of aid for students not covered by the Act.

What is still unknown

Long-term institutional reactions regarding how they structure aid pools to remain compliant while managing shrinking institutional budgets.

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02

Impact analysis

✦ AI analysis

Modeled effects across six domains, estimated from bill text and comparable legislation.

Environment

No direct effect

Neutral — no direct effect identified.

Benefits

  • No material direct effect identified

Risks

  • No material direct effect identified

Economy

Positive outlook

75%

Benefits

  • Ensures private scholarship funds directly benefit students
  • Increases the effective value of philanthropic educational support
  • Reduces student reliance on loans by maximizing non-loan aid

Risks

  • May require institutions to reallocate institutional gift aid budgets
  • Increases administrative compliance requirements for financial aid offices
  • Potential reduction in institutional budget flexibility for aid distribution

Society

Positive outlook

85%

Benefits

  • Directly benefits low-income students eligible for Pell Grants
  • Expands financial access for undocumented students via CA Dream Act
  • Prevents 'scholarship displacement' from eroding private scholarship value

Risks

  • May lead to more competitive institutional aid allocation processes
  • Could inadvertently create new packaging complexities for some students
  • Limits institutional discretion in standardizing financial aid offers

Technology Industry

No direct effect

Neutral — no direct effect identified.

Benefits

  • No material direct effect identified

Risks

  • No material direct effect identified

Civic Accountability

Positive outlook

65%

Benefits

  • Establishes clear statutory requirements for institutional aid policy
  • Increases transparency in how financial aid is calculated
  • Formalizes legislative oversight of institutional financial aid practices

Risks

  • Creates new regulatory monitoring requirements for the state
  • Places burden on students to understand complex aid documentation
  • Requires consistent auditing of institutional compliance

Public Health & Safety

No direct effect

Neutral — no direct effect identified.

Benefits

  • No material direct effect identified

Risks

  • No material direct effect identified
03

How trustworthy & consequential it is

Sourcing already shown above, this is what the analysis found worth flagging.

  • Source

    LegiScan

    Official bill text or data from LegiScan.

  • Confidence

    High

    Information is complete and verified.

  • Analysis basis

    LegiScan full bill text

    Source used for this bill's analysis.

Source note

Compliance requires institutions to update financial aid management software.

Analysis scope

Does not account for non-California based institutional aid practices.

04

Where it stands

Official record
  1. IntroducedCurrent
  2. CommitteeUpcoming
  3. Chamber votesUpcoming
  4. Final agreementUpcoming
  5. GovernorUpcoming
  6. EnactedUpcoming
05

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06

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