In Final Budget, Governor Newsom Maintains Legacy of Commitment to Higher Education

SACRAMENTO, C.A. – Last week, Governor Gavin Newsom and the California Legislature finalized the 2026-27 state budget. The final version incorporates key investments and policy changes that support low-income and underserved student populations and address ongoing challenges in California’s higher education landscape. These include:

• Providing one-time funding to support federal Workforce Pell implementation, including resources for the California Student Aid Commission to administer the program and for the Cradle-to-Career Data System to support data collection and reporting.
• $35 million ongoing for Dreamer Resource Liaisons at California Community Colleges (CCCs), who play an essential role in assisting undocumented students and students from mixed-status families in navigating the college system, tapping into support services, and providing safe spaces.
• $100 million one-time and $8 million ongoing for the CalFood Program to provide supplemental funding that helps food banks address food insecurity across California, including among college students.
• Awards to help cover college students’ unmet financial need through the Middle Class Scholarship program, which also supports low-income Californians.
• Repaying a $10 million loan to stabilize the Bureau for Private Postsecondary Education as it undergoes Sunset Review and evaluates long-term funding and fee restructuring to ensure continued oversight of private higher education institutions.
• Maintaining $1.5 million in ongoing funding for the California Education Interagency Council and $16.5 million for the Cradle-to-Career Data System to improve coordination across education, workforce, and economic development systems and strengthen statewide data sharing.
• Increasing the age cap from 28 to 30 for the Cal Grant Transfer Entitlement for five years, helping more Californians access financial aid while recognizing the various pathways students take to complete a college degree. This is an important step toward broader, long-term need-based financial aid eligibility reforms.

In response, Jessica Thompson, Executive Vice President for the Institute for College Access & Success (TICAS), released the following statement:

“TICAS commends Governor Gavin Newsom and the California Legislature for finalizing a 2026-27 budget that reinforces the state’s continued commitment to meaningful progress toward a more equitable, affordable higher education system for students. While the final budget does not include significant new investments in higher education, at a time of ongoing fiscal pressures and federal uncertainty, we are encouraged to see state leaders preserve core investments in higher education while advancing important affordability and workforce initiatives that strengthen pathways to college and career success.

“The $351.7 billion agreement maintains critical investments across California’s public higher education systems, supports student basic needs through expanded food assistance, and provides additional funding to our California community college (CCC) financial aid offices. Additionally, it advances implementation of the federal Workforce Pell program by establishing a statewide approval framework through the California Student Aid Commission. While we appreciate the inclusion of elements that stem from TICAS’ model legislation, we look forward to building on this foundation through AB 1534 (Irwin) to ensure California promotes high quality and affordable programs that can lead to strong student outcomes.

“The final agreement includes language to align the existing Cal Grant C program with federal Workforce Pell, opening this competitive grant for the first time to workforce programs of as little as eight weeks in length. We commend the intent to align existing financial aid programs to support shorter programs for high-priority jobs and credentials, but are concerned that, as written, the statute could open up Cal Grant C to short-term programs that are not Workforce Pell eligible and therefore lack the quality standards and student protections embedded in that program by the federal and state government. We urge the Legislature to amend that provision as soon as possible to make clear that only shorter programs that meet Workforce Pell criteria will be eligible for a newly expanded Cal Grant C.

“Looking ahead, policymakers should continue pursuing comprehensive reforms that make college more affordable for all Californians, starting with the least resourced. While we welcome the temporary increase in the age cap for the Cal Grant Transfer Entitlement and investment in the Middle Class Scholarship (MCS), further refinements are needed. We encourage the state to permanently remove financial aid eligibility barriers that affect older and non-traditional students attending universities and to explore alternatives that ensure more CCC students not only complete a FAFSA or CADAA but also receive and use an expanded entitlement Cal Grant, which has no age limitations, before transferring. We also encourage the Legislature to continue improving the Middle Class Scholarship by making equitable adjustments to the formula that expands access for CCC students and prioritizes affordability for students with the lowest incomes.

“TICAS is thankful for Governor Newsom’s eight years of strong support for California students and the higher education system. We look forward to working alongside the incoming Governor and administration, the Legislature, and education partners across California to build on Governor Newsom’s legacy to advance a higher education system that is more equitable, student-centered, and affordable, and that builds a strong workforce for tomorrow.”