Last week, members of the California State Assembly passed Assembly Bill 1314, the Cal Grant Reform Act. If fully funded, this historic bill will restructure and strengthen the Cal Grant, which serves 350,000 students per year and is the nation’s largest state-run financial aid program. These changes reflect key recommendations put forth last year by a Century Foundation report to link the award amount to the total cost of attendance, consolidate the program into one award, and eliminate age and GPA cutoffs, and they constitute the first state-level commitment to a debt-free college pathway.
These reforms have been long in coming, and hundreds of thousands of Californians depend on them. What’s more, they’ll create an exemplary model to be followed by other states and by federal policymakers. The State Senate and Governor Newsom should support the bill’s passage and provide the necessary funding to achieve its goals.
An Untenable Situation for Many Californians
Financial obstacles place college out of reach for millions in California. Since the last major reform to the Cal Grant in 2000, inflation-adjusted tuition and fees have tripled at the schools in both the University of California (UC) system and the California State University system, and have nearly doubled at the state’s community colleges (CCCs). And tuition is just part of the barrier. Non-tuition costs of living off-campus without family exceed $19,000, yet only 15 percent of Cal Grant dollars go to non-tuition purposes like housing and transportation. After all aid is received, in order to make ends meet and stay in school, low-income students have to work as much as forty-two hours per week, depending on the institution, to cover any remaining costs—or take on significant debt.
It’s clear that, absent more support, California’s students frequently must sacrifice their well-being in order to keep their college dreams alive: in a recent survey, more than half of respondents at California community colleges reported difficulty paying for food or housing, with many going hungry or homeless. For Californians who take out loans to pay for college, the average debt burden was $22,785 in 2017. Something must be done to make the financial support offered these students adequate for the realities that they face.
A Stronger—and Simpler—Cal Grant
If fully funded, the Cal Grant Reform Act would prepare the state’s financial aid system to deliver the support that California’s students need and deserve.
In the current version of the Cal Grant, aid awards support only specified tuition and fee amounts: while those amounts vary by award type, none add up to more than a fraction of total costs. Under the Cal Grant Reform Act, the reformed Cal Grant would instead cover unmet financial need for the full cost of attendance, or the costs leftover after other grant aid, a reasonable “expected financial contribution” from families, and, likely, a manageable work expectation on the part of students.
This change would enable students to reduce heavy workloads and burdensome debt, thereby making it possible for those otherwise unable to afford school to enroll and stay through to completion. Many students would receive critical non-tuition support, and the program would continue to cover tuition and fees for low- and moderate-income students. Assuming the legislature fully funds the proposal, community college students in particular would see a large increase in aid. Right now, the UCs and CSUs have some institutional aid to offer students, but community colleges have virtually none.
The current Cal Grant program also leaves out hundreds of thousands of low- and moderate-income students. Adults are ineligible for the guaranteed Cal Grant, or the “Entitlement” award, and the Cal Grant competitive awards are in short supply: last year, 290,000 adults applied for but did not receive a competitive grant. This is a critical population in need of aid, as more than half of eligible non-recipients have such low means that they cannot contribute anything to the cost of college, and many must support their families while learning.
The Cal Grant Reform Act would change that. The bill eliminates these age restrictions, which, along with other changes in the bill, will result in an influx of aid to community college students, who receive only 7 percent of Cal Grant dollars despite comprising two-thirds of undergraduates. The Cal Grant Reform Act would also eliminate GPA cutoffs, in keeping with research that finds lower-GPA Cal Grant recipients experience greater economic gains through the award than do higher-GPA recipients.
Several questions about the Cal Grant Reform Act remain for policymakers.
One set of these questions concerns how award amounts will be determined. The bill requires the California Student Aid Commission (CSAC) to determine the funding formula for calculating non-tuition costs, or the full “cost of attendance.” This is a significant new determination, and may require further legislative direction. It also requires CSAC to determine how institutions would systematically and accurately estimate their own costs of attendance. Furthermore, the bill leaves CSAC to determine the award amounts for private institutions, but further legislative action may be needed to adequately guide that determination.
Policymakers must also determine how institutional aid, which often supports non-tuition costs, should complement the reformed Cal Grant. The Cal Grant Reform Act would require institutions to maintain their levels of need-based aid; a recent Century Foundation brief recommends leveraging those existing institutional investments to help cover the non-tuition portion of the new Cal Grant.
These questions notwithstanding, passing (and fully funding) the Cal Grant Reform Act would make California the first state to provide such a wide-reaching affordability guarantee. The Cal Grant was founded to embody the state’s “historic commitment to provide educational opportunity,” but, as the text of the Cal Grant Reform Act notes, the program must be “completely reformed to better serve California’s low-income students.” Californians agree: in a recent survey, college affordability ranked as one of the two most pressing issues for the state. The state’s senators and governor should pass and fund this landmark bill, putting California and its 2.9 million students at public institutions on the path to debt-free college.