2015-16 California Budget Update

From a financial aid perspective, California Governor Brown’s revised budget released earlier today looks a lot like his January proposal. That’s a shame, because it provides no new funding for state financial aid programs beyond an expected increase to the Middle Class Scholarship. While we are disappointed that need-based financial aid wasn’t prioritized, we appreciate that the budget formalizes a much needed albeit modest $1.9 million increase to raise low-income students’ grants for non-tuition costs (from $1,648 to $1,656), driven by legislation championed last year by Senator Kevin de León.

In spite of a growing economy, college affordability remains a substantial challenge for Californians, particularly the state’s lowest-income students. The majority of college students in the state – and the vast majority of those with low incomes – attend community college, where tuition and fees are low but total costs are quite high. Factoring in textbooks, transportation, and living expenses, total costs for community college students can exceed $18,000. But low-income students at community colleges get much less in grant aid than students elsewhere, leaving them with more costs to cover out of pocket.

As we have documented, even amongst students at the same type of college, college costs are most burdensome for the lowest income students. For instance, even after accounting for existing grant aid, college costs eat up far greater shares of family income for low-income students than for higher income students at both the California State University and the University of California.  Is it then a surprise that low-income students are more likely to graduate with debt than their higher income peers?

For students with limited resources, need-based financial aid can mean the difference between a high school diploma and a college credential. While the $1.8 billion Cal Grant program has done much to bring college within reach for many Californians, there’s clearly room for improvement. Because there aren’t nearly enough grants to go around, a growing number of eligible students are being turned away from the program – most of whom are living in poverty. Meanwhile, the grants for the lowest income students in particular hold just a fraction of their original purchasing power.

That’s why our Cal Grant recommendations – along with those of more than a dozen other groups representing students, civil rights, and business – have focused on increasing the number of competitive Cal Grants available, so eligible applicants have a fighting chance of getting a grant; and strengthening the Cal Grant B access award, which helps the lowest income students pay for non-tuition costs.

California cannot get ahead by leaving a growing number of low-income students behind. We look forward to working with the Governor and Legislature to shape a 2015-16 budget that begins to right these inequities.

- Debbie Cochrane and Matthew La Rocque

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