State May Cut Grants to Students at Private Colleges

State May Cut Grants to Students at Private Colleges


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Governor Jerry Brown’s 2017-18 budget proposal called for an 11 percent reduction in the maximum amount of Cal Grants awarded to students who attend private colleges—a cut that could really impact low and moderate income families in San Bernardino and Riverside Counties. 

The proposed cut would take effect this fall for incoming freshmen—the reduction would be equivalent to a loss of more than a thousand dollars per student—an amount certain to impact students and families in the inland region. 

The proposal is rooted in an ongoing debate in the state over how much taxpayer-funded financial aid should be expended at independent colleges and universities. This is a debate that cuts across both political and financial boundaries. It is also a subject that receives very little public notice but causes some heartburn to taxpayers in states around the nation that provide similar tax payer funding via students to private colleges and universities. 

This is not the first time the state has considered and implemented cuts to grant funding for California students who choose to attend private institutes of higher learning. During the Great Recession, California made similar cuts. For example, in 2012, the maximum Cal Grant for students who attended private colleges or universities was decreased from $9,708 to $9,223. The following year, it was decreased again from $9,223 to $9,084. 

For almost four years, the Legislature has postponed another scheduled reduction. Now, as part of what the budget staff has defined as “cautionary belt-tightening in the face of a projected deficit,” the Governor has proposed another 11 percent reduction. This would reduce the maximum grant amount for students who attend private schools to $8,056 

It is estimated Cal Grants to students who attend private schools currently cost taxpayers about $240 million per year. The California Student Aid Commission estimated Brown’s proposal should save taxpayers about $7.4 million the first year. 

A coalition of private colleges and universities expressed concern the cuts will have a major negative impact on low income students. On average these colleges provide students who are eligible for Cal Grants an average award of about $18,000 in their own additional grant funding. 

One member of the state assembly has introduced legislation, AB 1166, to not only avoid the cuts but also increase those Cal Grants over the next five years under a formula that links any increase to a percentage of state general revenue funding for students at UC and CSU and tuition rates there. This approach is similar to a formula used by the state before 2000. 

The California state Legislative Analyst has also recommended the state revive this formula.

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