News
Student financial aid can have a big impact on CA’s final budget
In short
Governor Newsom’s latest budget proposal reduces the middle class scholarship to $100 million. The Legislature wants to provide more than $900 million for this.
In the coming week and change, Democrats who control the Legislature and fellow Democratic Gov. Gavin Newsom will need to reconcile their competing budget plans for higher education in California, with huge implications for student financial aid and short-term fiscal health. of State. public universities.
At stake is the 2024-25 season State’s budget that begins July 1 and the projected multibillion-dollar deficits California faces. Legislators and the governor are in final and secret sprint of the annual process to prepare the state government’s spending plan.
The Legislature fulfilled its constitutional duty last Thursday by approving its budget plan. That started the clock for Newsom and lawmakers to reach an agreement on the final 2024-25 budget in late June.
And in higher education, they are far apart in fundamental ways — differences that first emerged in January, when the budget season began publicly with Newsom’s first proposal for 2024-25.
“As depressed as I was in January, and as severe as some of the cuts included in this budget still are, in education I think we can move forward with this budget,” said John Laird, a senator and Santa Cruz Democrat who chairs the House subcommittee. budget for education, at a hearing on the Legislative budget last week.
How much does a middle class scholarship cost?
Newsom’s latest public spending proposal, released in May, would permanently destroy the middle class bag for just $100 million annually – a serious blow to California dreams to supersize college financial aid so that no college student would need to take out student loans.
The Legislature responded last week with a flat “no,” instead upholding last year’s promise to expand the program to US$926 million in 2024-25 and the following year.
The differing proposals would reduce how much each of the roughly 300,000 student beneficiaries who attend the University of California and California State University would receive — or make debt-free college a closer reality.
- Become a CalMatters member today to stay informed, reinforce our nonpartisan news and expand knowledge across California.
Under the governor’s plan, average premiums would drop from $2,500 to $2,800 to just over $300. If the Legislature gets its way, average premiums would range from $3,100 for UC students to U.S. $3,600 for Cal State students.
The cuts would likely mean more college loans for students, an official in the governor’s Finance Department said. said at a hearing last month.
The Legislature’s plan “significantly brings back scholarships to the middle class, right at a time when parents and students are making decisions about which colleges to attend and whether they have the financial resources to attend certain public higher education institutions in California,” Laird said at last week’s budget hearing.
Will Cal Grants help more students?
The Legislature also seeks to partially expand Cal Grant, the state’s main financial aid program, for the 2025-26 budget year. If the plan is approved, another 21,000 students will receive the scholarship for the first time. Around 400,000 students currently receive.
Newsom in May formally rejected any expansion of Cal Grant, citing California’s colossal fiscal hole. But legislative budget leaders have been adamant about implementing the Cal Grant for more students, despite the state’s financial struggles to make up for years of aggressive defense of legislators.
The cost would be $47 million in one-time funding to ensure that current students receiving the Cal Grant under current rules remain in the program.
If the plan becomes law, about 11,000 more community college students would receive the scholarship in 2025-26, which would appear as a cash award of about $1,650 and cover tuition at UC or Cal State if the student was transferred. Cal Grants are valid for four years of full-time enrollment. The number of new beneficiaries would increase with each subsequent year.
This is a smaller number of new recipients and a lower price, than what is in the original Cal Grant expansion plan. This is because the partial implementation would maintain the current 2.0 GPA requirement for community college student eligibility, while the original would have removed it.
Still, under this new proposal, students could reestablish eligibility by attending fewer classes through a special program – 12 units instead of the current 16 – and earning a 2.0 GPA. The number of units a student would need to rehabilitate their GPA would drop to nine units in 2026-27 and six units in 2027-28. The plan does not require any GPA requirements until 2028-29.
These details were confirmed by the Assembly member’s office David Álvareza Chula Vista Democrat who is chairman of the Assembly education budget subcommittee.
The rule changes would mean 9,000 new recipients at Cal State in 2025-26, according to information the state’s financial aid agency, the California Student Aid Commission, shared with CalMatters.
Additionally, around 7,300 new students would receive an extra cash award for those with dependent children. Current beneficiaries receive $6,000, but new beneficiaries would receive $3,000 in the first year. The premium for new beneficiaries would increase by $1,000 each year until it reaches $6,000.
However, UC would see about 1,300 fewer students receiving the Cal Grant in 2025-26 than current projections show — the result of reducing the income ceiling for those who are eligible. UC’s share of low-income students has declined over the past decade – a source of concern for some lawmakers.
Advocates pushing for Cal Grant expansion, including student associations at UC, Cal State and community colleges, wrote to legislators who are satisfied with the proposal. “We respect that the cost may be too high during this budget cycle, so we agree that a phase-in as proposed is the right step,” the letter said.
If approved, these details will appear in a separate trailer bill sometime in late June or early July.
What is the end result of UC, CSU?
Newsom’s plan imposes cuts and delays funding for UC and CSU in 2024-25 and then restores funding in 2025-26 — but far less than what lawmakers and the governor promised last year.
Newsom’s funding plan has numerous moving parts, but it would essentially see Cal State receive $75 million less in 2024-25, then increase by $171 million the following year and jump another $265 million in 2026-27. This would increase Cal State’s main state support to $5.35 billion. But Cal State faces numerous budgetary challenges, including a deficit as reaching US$831 million in the next two years.
The legislative plan would change the order of fiscal damage by proposing to increase the UC and CSU budgets in 2024-25 and apply cuts – if the budget deficit still requires it – in 2025-26. The logic is that another year of additional state aid, even if it is less than what was promised to the systems last year, gives them a year to prepare for the budgetary scythe.
Newsom’s plan imposes cuts and delays funding for UC and CSU in 2024-25 and then restores funding in 2025-26 — but far less than what lawmakers and the governor promised last year.
Less financing for UC and Cal State would mean larger class sizes and more unfilled faculty and staff positions. This would limit student services and, for Cal State, would likely result in the elimination of more academic programs.
However, under both plans, the UC and Cal State systems would receive more funding in the third year. For Cal State, that represents a jump from $4.99 billion in 2023-24 to $5.35 billion in 2026-27. And for UC, that would mean state support would grow from $4.74 billion now to $5.18 billion in 2026-27.
And both plans aim to continue the recent trend of paying systems to enroll more California residents — a note of relief for the state’s students eager to get into some of the country’s most selective public universities.
Laird said that “inflation, deferred maintenance, salary contracts, it is a challenge, but this is a really great step forward in a difficult budget.”
“I am a sustaining member of CalMatters because I want unbiased journalism that allows me to make my own decisions.”
Susan, Palos Verdes
CalMatters Featured Member
Members make our mission possible.
div{flex-base: unset !important;flex-grow: 1 !important;}.single-post .cm-cta.cm-cta-testimonial h6{text-align: left;}.cm-cta.cm-cta -testimonial .cm-cta-center-col{align-items: center !important;gap: 12px;}.cm-cta.cm-cta-testimonial .primary-cols.wp-block-columns{gap: 40px;} .cm-cta.cm-cta-testimonial .btn-col{flex-base: fit-content;flex-grow: 0;}.cm-cta.cm-cta-testimonial .cm-cta-center-col > div {flexible base: auto;}.cm-cta.cm-cta-testimonial .wp-block-buttons{min-width: 98px;}@media screen and (max-width: 782px){.single .cm-cta .cm- cta-testimonial .cm-cta-center-col > div{flex-base: min-content;}.cm-cta.cm-cta-testimonial > .wp-block-group__inner-container{grid-template-columns: auto ;}.cm-cta.cm-cta-testimonial .wp-block-button.btn-light .wp-block-button__link{padding: 7px 24px;}div.cm-cta.cm-cta-testimonial{ padding: 16px ;}.cm-cta.cm-cta-testimonial h6{text-align: left;}.cm-cta.cm-cta-testimonial .primary-cols.wp-block-columns,.cm-cta. cm-cta-testimonial .cm-cta-center-col.is-not-stacked-on-mobile{gap: 16px;}.cm-cta.cm-cta-testimonial .btn-02-detail-05{font- size: 12px;line-height: 16px;}.cm-cta.cm-cta-testimonial .mob-p-12{padding: 12px;}}]]>