California Governor’s 2015-16 Budget

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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Earlier today, California Governor Jerry Brown released his proposed budget for the 2015-16 fiscal year, and it includes some much-needed resources for higher education. For the state’s public universities it provides new funding, contingent upon UC and CSU keeping tuition flat, and it supplies community colleges with more funding, including $200 million to invest in student success. Within financial aid programs, the budget plan includes a boost to the Middle Class Scholarship program. Adding the Governor’s proposal to the State Senate Democrats’ and the State Assembly Speaker’s plans, it is certain that 2015 is going to be an important year for higher education. It is now clear that college affordability is a universal priority, and that the Governor, Assembly, and Senate all want to do more to help low-income students pay for college. That is great news. What is also clear is that those parties disagree on the best way to do this. Here is what we at TICAS see as the top two priorities for new financial aid investments:

1. Help more eligible students get Cal Grant awards. Less than one quarter of the lowest income students in California who apply for federal aid receive a Cal Grant. For students who don’t apply within a year of graduating high school, there are only 22,500 grants available, and there are hundreds of thousands of eligible applicants. This means that the odds of an eligible applicant getting a Cal Grant are lower than the odds of getting into an Ivy League school. The students turned away empty handed have an average family income less than $21,000 and a family size of three.

2. Increase the size of the Cal Grant B access award. Total college costs go beyond tuition and fees – textbooks, food, housing, and transportation are all necessary to be a successful student. The Cal Grant B access award provides needy students – many with family incomes several thousand dollars below the poverty level – with resources to pay for these crucial college costs. While important progress was made in 2014, the award still lags far behind where it should be. Adjusted for inflation, the original access award would today have a value of over $6,000, almost four times today’s maximum award of $1,648.

College isn’t easily affordable these days for many families, but for some, costs are an insurmountable barrier to getting to college and graduating. Research shows that college costs comprise the largest share of family income for the lowest income students, and low-income students are much more likely to graduate with debt than their higher income peers. Need-based financial aid – like the Cal Grant program – can help to bring higher education within reach for these families. Yet hundreds of thousands of the students least able to afford college do not receive state grants simply because there are not enough. And the stagnation of Cal Grant B access awards means that on average the lowest income Cal Grant recipients receive smaller grants than higher income recipients. These are critically important points that must remain front and center as the debate around higher education investments evolves. We look forward to working with the Governor and Legislature to shape a 2015-16 budget that strengthens college affordability for the students who need the help most. - Debbie Cochrane and Laura Szabo-Kubitz

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