In January, California Governor Jerry Brown proposed a state budget that included $300 million in cuts to the state Cal Grant program, including greatly increasing the high school grades students must have to receive grants and cutting the maximum awards at private colleges.  His updated proposal released earlier today includes modest additional cuts, which we appreciate given the extent of the budget difficulties the state is facing.  Should cuts to Cal Grants be necessary, his stated priorities for the program – protecting affordability at public colleges, focusing assistance on the neediest students, and directing dollars to colleges where students are better served – are admirable and appropriate.  The limited new cuts he is proposing, to restrict Cal Grant awards to colleges where more students graduate (at least 30%) and fewer borrowers default (no more than 15%), are well aligned with these priorities, as are some but not all of the cuts originally proposed in January.

We are disappointed that the Governor retained his earlier proposal to cut student eligibility by substantially increasing the high school grades required for Cal Grants.  Our analysis has found that this cut would disproportionately affect African-American and Latino students, leave multiple years of high school students high and dry by changing the rules mid-game, and pressure students to choose between taking challenging coursework and getting financial aid for college.  The proposal’s effect on Cal Grant B awards in particular is so extreme that more than four in 10 currently eligible applicants would no longer get the grants they’ve been counting on for this fall.  Even the Legislative Analyst’s Office, which has previously raised questions about appropriate GPA requirements for Cal Grants, believes the Governor’s proposal is too harsh and abrupt.

Importantly, the Governor also proposed other major changes to the way Cal Grant eligibility and award levels are determined, although details are still forthcoming.  While not technically cuts for the 2012-13 year, these changes have the potential to dramatically alter the course of the Cal Grant program.  Currently, Cal Grants are “all-or-nothing” grants, provided to students who fall below income and asset ceilings.  To understand what this means, consider a student from a family of four attending the University of California.  Whether her family income is $40,000 or $80,000, she gets a flat Cal Grant worth more than $13,000 – but nothing if her family income is $81,000.  Whether or not this is the most efficient and equitable way to deliver Cal Grant dollars, and whether there are alternatives worth considering, are reasonable policy questions.  However, these questions require more than a couple of weeks to address, as the answers could fundamentally change the structure of the program and how effectively it supports both access and success.  Hasty decisions could lead to harsh and unintended consequences for the state’s students and families for many years to come.

Since Governor Brown released his proposed 2012-13 budget three weeks ago, we’ve delved further into what the proposed Cal Grant cuts would mean for California’s students and families. Our further analysis reveals just how damaging one of the cuts – which would raise the grade point averages needed to qualify for Cal Grants – would be.

The dramatic changes proposed by Governor Brown would lock out more than a third of applicants currently eligible for entitlement grants. These are students who have worked hard and earned the grades that the state has long promised entitled them to participate in California’s primary student aid program. These are also the students, research shows, for whom financial aid may make the biggest difference in terms of helping them persist and succeed in college. As they finally reach the point where they are ready to go to college, many will find their dreams shattered.

Three out of four applicants cut out would be prospective Cal Grant B students, who on average have family incomes well below the poverty line. And the majority of these students go to community colleges, where students receive too little aid and are already less likely to receive state grants.

At a time when the nation needs more college graduates, cutting financial aid for the students who most need it to succeed is penny-wise and pound-foolish. See more details on how this cut would affect California’s students and their families here.

Statement of Debbie Cochrane
Program Director, The Institute for College Access & Success
 

We are saddened to see more than $300 million in Cal Grant cuts in the 2012-13 budget proposal released by California Governor Jerry Brown earlier today. Cal Grants are a crucial lifeline for hundreds of thousands of California students who couldn’t afford to attend or complete college without them.

Some of these cuts take a common sense approach to increasing accountability for all types of schools and preserving affordability at the state’s public colleges. For instance, prohibiting state grant dollars from subsidizing students’ attendance at colleges where more than one in four student loan borrowers default on their loans is smart policy in any budget climate.  Also, the Governor’s proposal would maintain maximum award levels at all public colleges, where the vast majority of students in the state are enrolled.

However, some of the cuts would fundamentally transform the program from a true engine of opportunity for students who need a hand to a reward for those already much more likely to attend and complete college.  In particular, the Governor would dramatically increase the required grade point average for Cal Grant B awards from 2.0 to 2.75.  These grants go primarily to low-income students at community colleges.  This change would pull the rug out from under the underrepresented students whose college success is central to our state’s economic recovery.  This is a dramatic cut to student eligibility, and one that would happen so suddenly that students who have long counted on a Cal Grant would instead find themselves empty handed.

We will continue to analyze the effects of these and other Cal Grant proposals on students as budget negotiations continue in the coming months.