Cal Grants May Not Cover Fee Increases

Photo: Source: California Student Aid Commission
Source: California Student Aid Commission

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Analysis: Cal Grant cuts

Assistant University News Editor Mihir Zaveri talks to reporter Javier Panzar about cuts to Cal Grants.

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Though the Cal Grant program avoided the wrath of state budget cuts last summer, incoming fall 2010 freshmen may not be so lucky as the state budget process unfolds.

Under Gov. Arnold Schwarzenegger's proposed 2010-11 state budget, the state would cease funding the competitive Cal Grant for the fall 2010 entering freshman class. The move would save $45.5 million for the state and may be followed by an additional $79 million cut to the program, which would be triggered if $6.9 billion in requested federal funding to the state does not materialize by July 15, according to H.D. Palmer, a spokesperson for the California Department of Finance.

The additional cuts would mean that Cal Grant awards would no longer increase in conjunction with fee increases, including a 15 percent fee increase slated to take effect next fall, according to the California Student Aid Commission, which oversees the grants.

"In every year we have fee increases the state won't cover them," said Diana Fuentes-Michel, executive director of the commission, of the possible second round of budget cuts. "(Schwarzenegger) is recommending that we not be able to cover fee increases and as you know in the past two or three years both UC and CSU have had to significantly increase their fees."

But Palmer said in an e-mail that the extent of the potential second round of cuts may change should some of the requested federal funding be allocated to California.

"By the time we get to the May Revision, we will have a better sense of where we stand with our federal efforts and we will adjust this language accordingly-perhaps in a tiered sense as we discussed or possibly in another manner," Palmer said in the e-mail.

The state Legislative Analyst's Office criticized the "all-or-nothing" nature of the trigger in a Jan. 12 report which stated that the chances of getting the full amount of federal funding is "almost nonexistent".

"Rather than have these cuts all go into effect, we recommend to go ahead and start setting some priorities for what we can preserve in order to not have (the trigger) be an all-or-nothing sort of thing," said Judy Heiman, a principal fiscal and policy analyst for the office.

Because of all the uncertainty regarding the governor's budget, Debbie Cochrane, the program director for the Institute for College Access and Success, said that the best option is to wait and see what happens.

"The likelihood of the federal funds is so low and the likelihood of making serious revisions to the governor's budget is so high that I think we actually can't put much thought in the (his) budget," she said.

Should the proposed cuts not be revised, serious damage would occur to low income students trying to enter California's public universities, according to Fuentes-Michel.

"It will take away one of the features that allows students to attend the state's top universities and penalize the students who don't have the economic means but who have the skills and abilities to go to these institutions," she said.

Heiman said a main area of concern for the office is that once Cal Grants and university fee increases are decoupled, future awards would only cover a fraction of student fees.

"If this goes into effect it would cover 85 or 90 percent next year but then as fees go up again and this precedent gets set ... the year after that, it's 30 or 40 percent," Heiman said. "This could potentially lead to a bigger financial burden for the student that could least afford it."

The possibility that Cal Grants will not cover systemwide fees for future students worries UC Berkeley Junior Diana Ramirez, who relies on a Cal Grant and a part-time job in order to afford school. She said her cousins may want to attend the university someday but it may not be affordable.

"They would ask me how I was able to get here but it would be different for them," Ramirez said. "I didn't really have to face that."


Javier Panzar covers higher education. Contact him at [email protected]

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