Cal Grants to be reduced

In light of recent fee increases, students may find the Cal
Grant program, a traditional source of financial aid, not as
dependable in the future as it was in the past, say budget
analysts.

The governor’s recent budget proposal restored funding to
reflect the 14 percent increase in undergraduate fees at the
University of California, reverting back to what the Cal Grant
program has always done.

But a new clause in the budget proposal calls to reduce the Cal
Grant competitive awards funding by 25 percent, which translates to
about 5,625 fewer student recipients.

Though Gov. Arnold Schwarzenegger says the cuts are temporary
fixes to the state budget dilemma, analysts say they could have
more long-term effects that could damage the student aid
program’s future reliability.

“I think the governor intends it to be a temporary
reduction, but it sets a bad precedent,” said Steve Boilard,
a higher education analyst for the Legislative Analyst Office, a
nonpartisan group that examines the state budget and advises the
Legislature.

More structured than entitlement awards, competitive awards are
granted based on a composite score that considers personal factors
in addition to grade point average and financial need.

Boilard said there is already an increase of students applying
for the 22,500 awards available. The new proposal means students
will have to vie for the reduced total of 16,875 awards.

The budget revisions retained a clause from the January proposal
that tightens eligibility requirements by lowering the household
income ceiling by 10 percent.

The California Student Aid Commission projects a decrease of
about 4,450 students who would have received a Cal Grant award
under the current income ceilings.

UC Office of the President spokesman Hanan Eisenman said
providing financial assistance to qualified students remains a
priority.

Eisenman added that institutional aid awards at the UC help keep
student aid at each campus afloat.

“The key to maintaining California’s commitment to
all its students rests on its commitments to providing financial
aid support,” Eisenman said.

Likewise, many legislators are taking actions to keep the
state’s promise.

Both the state Senate and Assembly budget subcommittees have
proposed restoring full funding to the Cal Grant program.

“It’s one of the places where we are going to fight
for young people. This is a core priority with us,” said
Assemblyman Darrell Steinberg, D-Sacramento, chairman of the
Assembly Budget Committee.

Steinberg spoke of how the committee plans to fund its
proposals.

“Revenue is up in California; and specifically, the tax
amnesty bill alone would bring in $1.3 billion,” Steinberg
said.

The $1.3 billion is a new addition to state revenue this year
““ an amount not included in the governor’s budget
projections. While a large part of that will be allocated to
alleviate health care cuts, several hundred million dollars could
go toward higher education.

The Legislative Analyst Office estimates $100 million to come in
in the next fiscal year. The office also estimates revenues will be
$200 million higher than those made by the Department of
Finance.

Legislators are hopeful that proposed cuts to higher education
can be greatly mitigated with those funds.

“We could afford to restore these investments … we
can’t afford to cut enrollment to otherwise eligible
students,” Steinberg said.

Democratic legislators, many of whom were upset by the
governor’s proposed cuts to education, continued to work
against the cuts this week.

This Wednesday, Assembly Speaker Fabian Nuñez, D-Los
Angeles, discussed at a press conference with Democratic assembly
members the Democratic Caucus’ commitment to mitigate higher
education cuts.

With student representatives from the UC and California State
University systems in attendance, Nuñez reiterated that higher
education funding is his top priority as he goes into budget
deliberations next week.

“The money is there; it just needs to be reallocated and
the Democratic legislators have every intention to do so,”
said Nick Velasquez, a spokesman for Nuñez.

Likewise, the Senate’s budget subcommittee on education,
headed by Sen. Jack Scott, D-Pasadena, proposed last Wednesday to
also restore funding for enrollment for the thousands of UC- and
CSU-eligible students who were redirected to community
colleges.

Scott intends to use reserves from EdFund, California State Aid
Commission’s nonprofit student loan services subsidiary, to
help fund the items in his proposal.

“What we’ve done is to backfill the cost from
EdFund, (which) by virtue of its processing, has a large reserve
fund to help to backfill, or otherwise pay for, the rejection of
the governor’s plan,” said James Murphy, Scott’s higher
education aide.

What remains to be seen is what the governor will do when he
gets the bill. Gov. Arnold Schwarzenegger can either sign the bill
or blue pencil it, meaning he can take out provisions.

The Legislature is currently working toward the June 15 deadline
to turn in a joint budget to the governor, which he will then sign
by July 1. Budget negotiations in the Legislature are expected to
begin next week.