Blog Post | June 24, 2014

California Budget Includes Long Overdue Financial Aid Increase

The California state budget signed last week will make an important down payment towards college affordability for the state’s most financially strapped students.  The agreement includes a long-overdue increase to the Cal Grant B access award, which helps California’s lowest income students pay for books, supplies, transportation, and other non-tuition costs of attending college. Under the new budget agreement, the award would increase from $1,473 to $1,648 – a much-needed step in the right direction after decades of stagnation and a recent cut.

The students who receive Cal Grant B access awards typically have family incomes well below the federal poverty line and attend all types of colleges.  Yet the purchasing power of this award has declined dramatically even as college has become less affordable for all students and families. Had the award kept pace with inflation since it was created in 1969, the original $900 award would be worth about $6,000 today. In 2012-13, low-income California college students had to put three times as much of their discretionary income towards net college costs (total costs after subtracting grants and scholarships) than did higher income students.

The increase to the Cal Grant B access award is welcome news to a statewide coalition – including civil rights, college access, and business groups, and every statewide student association – that has recommended increasing the Cal Grant B access award so that our state financial aid policies do not leave low-income students even further behind. Importantly, the budget also enables Cal Grant recipients who lose eligibility for renewal grants because their financial situation temporarily improves to later regain eligibility if their finances worsen, fixing an unintended consequence of the 2012 Budget Act.

To be clear, these financial aid changes are not a silver bullet for solving the college completion crisis and equity gaps that plague our state, or even the affordability challenges facing low-income students.  Even at the new level of $1,648, the Cal Grant B access award will still be worth far less than it was a generation ago: it will not even cover the estimated cost of books and supplies ($1,746) let alone other educational expenses. Furthermore, far too many Cal Grant eligible students will continue to be turned away because there simply aren’t enough grants for those who don’t enroll in college right after high school or miss the application deadline.  Still, the Cal Grant B increase is a crucial step in the right direction, and we applaud the California Legislature, Assembly and Senate leadership, and the Governor for making a smart investment in California’s future.