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Spending Plan Boosts Cal Grants While Cutting Middle Class Scholarships

Relative to the May Revision, the budget agreement boosts funding for Cal Grants while cutting back the Middle Class Scholarship (MCS) Program. The MCS Program began providing scholarships to eligible California resident undergraduates in the current fiscal year, 2014-15. Based on the projected participation available in March 2015, there will be some MCS funds left unspent at the end of 2014-15. Full implementation is expected by 2017-18, at which point participating students will be eligible for awards that cover up to 40 percent of mandatory systemwide tuition and fees, when combined with other publicly funded student aid.

Specifically, the budget package:

  • Provides $39 million in Proposition 98 dollars to boost financial aid to community college students taking 12 or more units who are already receiving Cal Grant B Access Awards, which can be used for living expenses.
  • Provides $8 million to increase the number of competitive Cal Grant awards by 3,250. Starting in 2015-16, a total of 25,750 competitive Cal Grant A and B awards are required to be granted annually.
  • Provides $9.1 million to delay the scheduled reduction in maximum Cal Grant awards for students at accredited private nonprofit colleges. The maximum award will remain at $9,084 through 2016-17, before declining to $8,056 in 2017-18 if not further extended.
  • Provides $1.9 million to increase the Cal Grant B Access Award by $8 per student. This is on top of the base amount of $1,648 per student for the Access Award.
  • Cuts MCS funding by $70 million in 2015-16, leaving $82 million. Funding for the MCS is also reduced in 2016-17, from $228 million to $116 million (a $112 million cut), and in 2017-18, from $305 million to $159 million (a $146 million cut).
  • Allows MCS funding to be further reduced by up to 33 percent in 2016-17 and in future years if specific conditions are met.
  • Limits eligibility for the MCS to students with household asset levels at or below $150,000, beginning in 2015-16. This asset level excludes primary residences and retirement funds, and will be adjusted for inflation beginning in 2016-17. This new criterion is in addition to the prior rule requiring students’ annual household income not to exceed $150,000.
  • Limits MCS awards to the equivalent of four or five years of full-time attendance, depending on the recipient’s course of study, starting in 2016-17.

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