Blog Post | January 7, 2019

California Students Need a Major Investment in Financial Aid

Affordability California California Budget

Author: Debbie Cochrane

After the pomp and pageantry of today’s inauguration, one of new California Governor Gavin Newsom’s first acts will be to release a proposed state budget for 2019-20. News accounts suggest that his first budget will embrace the fact that investing more in education – from preschool through adulthood – must be a priority for California to retain its economic strength and standing. Reclaiming the state’s mantle as a pioneer in affordable, quality higher education will require new investments in need-based financial aid to ensure that the cost of a degree is within reach for all Californians.

Currently, low-income students at the vast majority of public colleges in California would have to work more than 20 hours per week to afford college costs, after accounting for grants and scholarships. This is true even when tuition is free because other costs like living expenses, textbooks, and transportation make up the majority of students’ college costs.

While California has the largest state grant program in the country – the Cal Grant – most eligible grant applicants do not receive grants because too few are available. Many of those who do receive grants have seen their award amounts stagnate, though the 5 percent of community college students who receive Cal Grants can access supplemental programs that make up for some of the lost ground.

Yet while the extent of the problem is substantial, there is reason to be optimistic. More than ever before, there is agreement about the existence of a problem, how it manifests, and how to solve it.

  • There is a strong consensus in California that college is unaffordable. The majority of Californians – including more than six in ten Democrats and Republicans alike – believe college affordability is a big problem.
  • Experts generally agree that the state’s affordability challenges contribute to equity gaps in who gets to and through college, hold students back from completing degrees, and can leave graduates with burdensome levels of student loan debt to repay. The experts’ near universal recommendation: to provide more support to students who need help paying for nontuition costs of college.
  • Since 2016, there have been several proposals, including two at the request of the Legislature, to reform California’s financial aid. Each of the proposals envisioned a new approach: taking students’ total college costs into account and expecting that students and families would make financial contributions that were reasonable given their own financial circumstances. Federal, college, and state grant aid would cover the rest.
  • While student groups and student-focused advocates have long called for increased investments in Cal Grants, colleges have now joined the charge. The California Community Colleges Board of Governors recently requested an additional $1.5 billion in financial aid support their students, “given evidence that additional financial aid improves the likelihood of retention and completion.” University of California president Janet Napolitano and California State University president Tim White recently said that financial aid reform “can be a cornerstone of further student achievement,” and called upon the state to “expand the reach of Cal Grants” and increase “the availability and size of what is currently known as the Cal Grant B Access Award [which helps students cover nontuition college costs].” And at its last meeting of 2018, the California Student Aid Commission voted to recommend reducing Cal Grant eligibility barriers and to focus more on students’ total college costs than has been done historically.

The level of attention paid to financial aid reform in recent years is unprecedented, as is the level of consensus around where new investments need to be made. Governor Newsom has also demonstrated a keen understanding of these issues, and he committed to ensuring that state financial aid expands to serve more students and to a greater extent. We look forward to working with the governor and Legislature as they chart a new course for California that restores its role as a national leader in quality, affordable higher education.