Budget Impasse Stalls Students’ Receipt of Cal Grants
Approximately 65,000 California community college students who qualified for state financial aid are facing the problem of not having received Cal Grant funds that would normally have been paid to them by now, or of not receiving Cal Grant funds they expect to receive soon. The reason is that the State Controller cannot pay Cal Grant program funds until a State Budget has been signed. Thus, the Controller was unable to pay more than $1 million in July and $50 million in August for Cal Grant programs. If the State Budget impasse continues, in September, the Controller will be unable to pay an additional $71 million in Cal Grant financial aid. (Although University of California [UC] and California State University [CSU] students would be entitled to some of the withheld funds, we’ve heard that UC and CSU have been advancing the Cal Grant funds to their qualified students.) During the 2007-08 academic year, the California Student Aid Commission (CSAC) offered approximately $800 million in Cal Grants to more than 299,000 eligible higher education students.
Most of the affected community
college students qualified for a Cal Grant B award, which provides low-income
students with direct aid of $1,551 per year for “access” costs, which include
books, supplies, living expenses, and transportation. The Cal Grant B
entitlement award is guaranteed to every student who meets specified grade
point, financial need, and other eligibility requirements and who applies by the
March 2 deadline not more than one year after graduating from a California high
school. Though most of the affected students would have qualified for Cal Grant
B entitlement awards, some would have qualified for Cal Grant B competitive
awards. The Cal Grant B competitive awards are available to students who don’t
meet the eligibility requirements of the entitlement award, frequently because
they are older students who are not recent high school graduates. The number of
Cal Grant Competitive awards is capped, and many qualified applicants don’t
receive them even in good Budget times.
Normal Cal Grant payment dates vary by district. In normal years, most districts would cut a check at or by the census date (the date by which students must drop or add classes). Some districts plan Cal Grant disbursements at mid-term because Budget-related delays are not uncommon. Many colleges pay half of the award at the beginning of the year, and half mid-term when they’ve figured out the student’s enrollment status—the number of units the student is taking. This is because a student must be enrolled at least half time to be eligible for a Cal Grant award.
We’ve heard that 17 of the system’s 110 colleges will be loaning students the delayed Cal Grant funding. They are: American River College, Bakersfield College, Cerro Coso Community College, Chabot College, Consumnes River College, El Camino College, Folsom Lake College, Las Positas College, Los Angeles Trade Technical College, College of Marin, MiraCosta College, Oxnard College, Porterville College, Sacramento City College, San Diego City College, San Diego Mesa College, and San Diego Miramar College.
However, the districts that are fronting the Cal Grant funds aren’t doing so for new Cal Grant competitive awards. The Governor’s January and May Revision Budgets proposed to phase out the Competitive Program by eliminating new awards. Although CSAC has offered tentative awards to new students, CSAC will not know until the final State Budget has been enacted whether the Competitive Cal Grant awards program has been maintained as it is currently configured. Until the Budget is signed, it is still possible that the final State Budget could reduce the number of Competitive Cal Grant awards or the dollar amount of the maximum award provided to individual students.
Faced with the ongoing Budget impasse, most California community college students will have to do without Cal Grant funding, and some will undoubtedly decide to drop out as a result. If that occurs, it would hurt both the student and the college, which would lose the Full-Time Equivalent Student (FTES) funding for that student. According to CSAC, Cal Grant B recipients had a second-year reenrollment rate of 93%. It would be a shame to lose any of those returning students because they couldn’t afford to continue in the absence of a timely Cal Grant award.
The delay in Cal Grant payments comes at a time of tremendous student demand for financial aid. We understand that virtually all California community colleges have seen significant increases in applications in 2007-08 and 2008-09, with some districts reporting application increases in the 30%-40% range.
—Deborah Harmon