In an effort to manage California’s budget deficit, projected to reach $42 billion by mid-2010, Gov. Arnold Schwarzenegger proposed an $87.5 million cut last week to Cal Grant, California’s principal, state-funded financial aid program. The cut would be made possible by limiting grants, decreasing aid to students attending private universities and terminating assistance to many students.
Currently, Cal Grant accounts for $880 million of the state budget, guaranteeing aid to all middle- and low-income students who meet specified financial and academic criteria. The grants also cover any tuition increases instituted by California State University or the University of California.
Under Schwarzenegger’s proposed 10 percent cut to Cal Grant, however, the state would no longer be committed to covering tuition increases, capping awarded funds at an undetermined amount, despite recent announcements by both public university systems of possible fee increases for the 2009-10 academic year ‘mdash; a potential loss of up to $2 million for UC students relying on Cal Grant.
‘Details about this are not clear, but we think the proposal is to increase UC Cal Grant awards by only two-thirds of whatever the proposed fee increase will be, rather than by the full amount,’ UCSD Director of Financial Aid Ann Klein said.
In addition, the proposal would limit financial aid for students attending private universities to $1,400 per student per year and discontinue the Competitive Cal Grant, which provides more than $100 million annually in grants to a total of 22,500 nontraditional students, those entering college after an extended period of non-education, and second-chance students, those whose education has been disrupted by criminal charges, including 57 UCSD students receiving the award this year.
According to UC spokesman Ricardo Vazquez, the university is concerned that the newly proposed cuts are just a starting point for further cuts to the Cal Grant program. Vazquez said the university plans to lessen the impact of these cuts ‘mdash; which will affect the roughly 46,000 UC students who currently receive aid from Cal Grant ‘mdash; with its own financial aid program funded by university grants, federal grants, private funding, endowments and 33 percent of the revenue from student fees. However, university funds would not make up the entirety of the Cal Grant cuts, leaving students to fund an average gap of $200 of each quarter’s’ tuition.
‘[The cuts] will definitely have an impact because the university continues to face budget cuts, and families and students continue to be affected by the national economic crisis,’ Vazquez said. ‘If they become a reality, the university would have to try to minimize their impact with its own UC grant aid so that financially needy students would see a modest increase in the amount they would need to work or borrow next year.’
Despite the university’s concerns, the governor deemed the proposed cuts a necessary solution to the’ growing state deficit. In his 2009-10 budget proposal, Schwarzenegger suggested overall spending cuts of $16.5 billion ‘mdash; with Cal Grant constituting one-half percent of those cuts ‘mdash; in order to reduce the current $42 billion deficit over the next 18 months.
‘The governor understands how difficult cuts will be but has a responsibility to lead the state through this economic crisis,’ said Camille Anderson, deputy press secretary for the Office of the Governor. ‘The governor has ensured the full funding of the Cal Grant program each year since taking office. He doesn’t want to cut programs and he doesn’t want to raise taxes, but in the face of a $42 billion budget deficit and with the Legislature’s inaction in passing a comprehensive solution,
[the governor is] simply running out of options.’
In response to various state budget cuts to education, the U.S. Congress has proposed a $500 (or 10.6 percent) increase in the federal Pell Grant per eligible student, raising the current grant maximum from $4,371 to $5,321.
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