In January, California Governor Jerry Brown proposed a state budget that included $300 million in cuts to the state Cal Grant program, including greatly increasing the high school grades students must have to receive grants and cutting the maximum awards at private colleges. His updated proposal released earlier today includes modest additional cuts, which we appreciate given the extent of the budget difficulties the state is facing. Should cuts to Cal Grants be necessary, his stated priorities for the program – protecting affordability at public colleges, focusing assistance on the neediest students, and directing dollars to colleges where students are better served – are admirable and appropriate. The limited new cuts he is proposing, to restrict Cal Grant awards to colleges where more students graduate (at least 30%) and fewer borrowers default (no more than 15%), are well aligned with these priorities, as are some but not all of the cuts originally proposed in January.
We are disappointed that the Governor retained his earlier proposal to cut student eligibility by substantially increasing the high school grades required for Cal Grants. Our analysis has found that this cut would disproportionately affect African-American and Latino students, leave multiple years of high school students high and dry by changing the rules mid-game, and pressure students to choose between taking challenging coursework and getting financial aid for college. The proposal’s effect on Cal Grant B awards in particular is so extreme that more than four in 10 currently eligible applicants would no longer get the grants they’ve been counting on for this fall. Even the Legislative Analyst’s Office, which has previously raised questions about appropriate GPA requirements for Cal Grants, believes the Governor’s proposal is too harsh and abrupt.
Importantly, the Governor also proposed other major changes to the way Cal Grant eligibility and award levels are determined, although details are still forthcoming. (UPDATE: Here is the quick analysis we did once details of the Governor’s proposal became available.) While not technically cuts for the 2012-13 year, these changes have the potential to dramatically alter the course of the Cal Grant program. Currently, Cal Grants are “all-or-nothing” grants, provided to students who fall below income and asset ceilings. To understand what this means, consider a student from a family of four attending the University of California. Whether her family income is $40,000 or $80,000, she gets a flat Cal Grant worth more than $13,000 – but nothing if her family income is $81,000. Whether or not this is the most efficient and equitable way to deliver Cal Grant dollars, and whether there are alternatives worth considering, are reasonable policy questions. However, these questions require more than a couple of weeks to address, as the answers could fundamentally change the structure of the program and how effectively it supports both access and success. Hasty decisions could lead to harsh and unintended consequences for the state’s students and families for many years to come.