Three years ago this spring, The Century Foundation published Expanding Opportunity, Reducing Debt, a framework for aligning the Cal Grant with the needs of today’s students across California. Ongoing conversations among advocates, policymakers, and postsecondary leaders culminated in a plan for Cal Grant modernization that would have made new annual investments of $1.1 billion and met many of the goals of TCF’s framework.

Those plans had to be reimagined in the aftermath of the COVID-19 pandemic and its devastating economic fallout: uncertainty about the state’s fiscal resources and federal relief loomed large. Yet the past year threw into sharp relief the deep disparities in students’ financial resources, in California and across the United States—and reiterated the need to center racial equity in all areas of policy, the Cal Grant program included.

Building on plans from the Assembly and the Senate to enact changes to the Cal Grant program this year, leaders in the state legislature earlier this month released a bicameral budget plan that would remove long-standing eligibility barriers for students and increase the Cal Grant B access award, a pivotal resource for students struggling to pay high non-tuition costs. These changes, combined with an expansion of the Middle Class Scholarship, would provide California students with $198 million in new, ongoing financial aid this coming fiscal year and $1.155 billion the following year.

Governor Gavin Newsom should lend his support to this plan and sign a budget deal that contains these provisions. State lawmakers must also remember that these changes are the beginning of a long road towards an equitable state financial aid system, and are by no means the end.

Building Towards a More Equitable Cal Grant Program

Though highly regarded among state financial aid programs, the Cal Grant program includes eligibility criteria that often act counter to California’s college access goals. Under current program rules, students who are otherwise eligible but take time off after high school lose the guarantee of a Cal Grant and instead must enter a competitive pool where they have just a 1 in 7 chance of being offered a grant.1 The legislature’s new budget plan does away with these criteria, answering calls to better support mid-career Californians returning to college.

The legislature’s budget plan would also boost the Middle Class Scholarship (MCS) to support University of California (UC) and California State University (CSU) students with non-tuition costs. By 2022–23, the “MCS 2.0” would contribute about one-third of the new funding needed to create a debt-free pathway for low- and middle-income UC and CSU students. In effect, this would satisfy TCF’s recommendation for an “affordability target” that makes college costs predictable and within reach for low- and middle-income families, insofar as UC and CSU students can benefit. However, the current plan does not include a commensurate guarantee for community college students.

The legislative budget plan modestly increases support for California community college (CCC) students by boosting the Cal Grant B access award for non-tuition costs, up from $1,646 to $2,000. While this is a welcome increase, it only brings the access award’s share of non-tuition costs back to where it was in 2015–16, around 10 percent. These low levels result in a small share of Cal Grant dollars reaching community college students—less than 20 percent, even in 2021–22, when the legislative budget delivers to CCC students the first wave of new funding.

Figure 1

Until they create a stronger access award, lawmakers will maintain the wide gulf between the non-tuition aid that low-income community college students receive and what they need to afford college without taking on heavy workloads that deter college success. Seven in ten Cal Grant B awardees at CCCs are Black, Latinx, Filipino, Pacific Islander, or Native American, making the size of the Cal Grant B access award a policy decision with a significant impact on large shares of California’s communities of color.2

The increase in the access award is an improvement, but it is not enough to fix a fundamental imbalance in California’s state financial aid framework.

The increase in the access award is an improvement, but it is not enough to fix a fundamental imbalance in California’s state financial aid framework: CCC students with low incomes face higher net costs than do comparable CSU or UC students. While community college students tend not to take on debt to cover the balance after aid, they often juggle their education with numerous competing demands, child care and other labor foremost among them. Insufficient help with living costs is likely a major reason why less than half of CCC students who intend to earn a credential, transfer, or earn sixty credits do so within six years of entry.

According to the budget plan, legislative leaders’ long-term strategy for college affordability in California is to eliminate debt for students attending the CSU and UC by transforming the Middle Class Scholarship into a “Debt Free College Grant.” This is a commendable goal, but it should come alongside sufficient support for CCC students: financially vulnerable students who start at a CCC should not need to wait until they transfer to experience an affordable California education.

Stepping Up for California Students

As the state now steers itself out of its most challenging year in memory, leaders in the legislature have planned a significant down payment towards a comprehensive aid system for California students, one worthy of passage in the budget act. At the same time, we cannot declare Cal Grant reform “over”: some of the students with the greatest outstanding needs will continue to be underserved. In the years to come, lawmakers must keep building momentum towards the all-important end goal—an affordability guarantee for all California students.


  1. CSAC reports that in fiscal year 2018–19 there were 295,226 applicants for the competitive Cal Grant pool. In the FY 2019–20 enacted budget, the number of new annual competitive grants was set at 41,000.
  2. Author’s analysis of data from California Community College Chancellor’s Office (CCCCO) Data Mart query of 2019–20 Cal Grant B awardees by ethnicity, accessed June 2, 2021.