The California Assembly’s most powerful committee, which reviews spending for state programs, is considering legislation that would raise maximum Cal Grant aid to students at private universities and Cal Grant B recipients.
The bill, introduced by Assemblywoman Carol Liu (D-La Cañada Flintridge), would counter waning financial aid provided to private university students, according to Bruce Hamlett, chief consultant to the Assembly Higher Education Subcommittee who prepared an analysis of the proposal for lawmakers.
“Currently, whatever is put in the budget is given to private university students,” he said. “This policy didn’t work anymore when [the] economy was slashed, and — in turn — the budget was slashed. The maximum award to each student was cut by about $2,500 in the past year, and now students have to take on more loans to pay for their education.”
Liu’s legislation, AB 358, proposes a formula that would link the private university award maximum to the weighted average of Cal Grants allocated by the state to support CSU and UC students, according to California Student Aid Commission spokeswoman Carole Durante.
The bill’s formula would increase the maximum private university Cal Grant next year to $10,568, as opposed to Gov. Arnold Schwarzenegger’s proposed 10-percent reduction to $7,449. The increase would pull an extra $19 million from the state general fund in the 2005-06 budget to pay for the higher private awards.
While Schwarzenegger has not taken a stance on the bill, he stands by his previous cuts to Cal Grant recipients who attend private universities, according to state Department of Finance spokesman H.D. Palmer.
“The rationale was to achieve a pact with the UC and CSU presidents that we would continue in aiding their students at the level we always have,” Palmer said. “At the time, providing equal funding for private universities would have had an effect on public university students.”
The Department of Finance would not comment on whether the California budget could accommodate the costs if the bill was passed.
Additionally, Liu’s legislation seeks to target first-year students at all community colleges and universities through Cal Grant B, which provides living allowance and tuition and fee assistance for low-income students. If passed, the bill would eliminate a Cal Grant B restriction that allows no more than 2 percent of first-year students to receive funds for tuition and fee payments. Instead, the legislation would place this 2-percent restriction on fourth-year students beginning in 2010.
“The limit on first-year students places an extra burden on them,” Hamlett said. “More often than not, they can’t adjust in time because of the sudden higher financial costs that come with college. Moving the 2-percent limit to fourth-year students, who are more established and might have better opportunities at finding other financial resources, would stop the stress on freshman and sophomore students.”
Because there are more first-year students than fourth-year students, Liu’s proposal to increase Cal Grant aid to underclassmen rather than older students requires supplementary costs, according to the bill’s summary. While the exact cost will depend on the number of eligible students in 2010, CSAC estimated the change would require $82 million if implemented next year.
The bill would increase retention by “front-loading” Cal Grant B aid to students in their first years of college study, Appropriations Committee consultant Chuck Nicol stated in an analysis of the bill.
The Appropriations Committee is expected to act on the bill by May 26.
