October 2018 | By Amy Rose
Download Full PresentationFor The Institute for College Access & Success’ (TICAS) event, “Financial Aid for California’s Future,” Policy Analyst Amy Rose presented to policymakers and higher education stakeholders her preliminary findings from a new analysis on how much having a debt-free system of higher education would cost California.
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Cal Grants are the foundation of California’s financial aid program for low- and middle-income students pursuing higher education in the state. Cal Grants provide aid for tuition and living expenses that does not have to be paid back. There are two main types of Cal Grants: Entitlement grants and Competitive grants.
Entitlement grants are guaranteed to all California students who meet certain income and GPA requirements and apply to college no later than one year after high school graduation and to community college students who are transferring to a four-year college. Nontraditional students who meet the income and GPA requirements and apply for the award by the deadline more than a year after high school graduation are eligible for Competitive Cal Grants. Competitive grant amounts are equivalent to the Entitlement grants, providing tuition assistance up to $12,630 at University of California, $5,742 at California State University, and $9,084 at most private colleges.[1] The main difference between Competitive grants and Entitlement grants is that Entitlement grants are guaranteed to all eligible students, whereas Competitive grants are currently limited to 25,750 students.
The number of qualified student applicants for Competitive Cal Grants far exceeds available awards. In 2017-18, more than 340,000 students qualified for an award, but only 25,750 grants were available — meaning 92% of eligible students were not served. In the past decade, the number of students who are eligible for Competitive Cal Grants has more than doubled (103%), while the number of awards available has increased by less than 15%.[2] In 2008-09, an eligible student had a 13% chance of receiving a Competitive Cal Grant; in 2017-18, it was 8%. California students have a better chance of getting into the University of California, Berkeley than of receiving a Competitive Cal Grant.[3]
Nontraditional students, such as those who spend significant time in the workforce before enrolling in college, face significant barriers in their academic pursuits. Many of these students rely on financial aid to be able to afford the rising costs associated with a college degree, yet the probability that they will receive the aid they need to succeed is low — and declining over time. Competitive Cal Grants are one of the most effective financial aid investments the state can make to promote access and affordability because they support the lowest-income and least represented students. Increasing the number of Competitive Cal Grant awards available would help ensure college is affordable for a larger share of nontraditional students.
[1] Figures reflect award amounts for the 2018-19 academic year.
[2] The increase in eligible students is likely due to improvements in the California Student Aid Commission’s application system and process, an increase in the number of older students seeking to upgrade their skills to improve their job prospects and meet changing labor market demands, and greater financial aid awareness.
[3] University of California, Berkeley’s incoming freshman acceptance rate for 2017-18 was 18.3%.
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In 2017, Governor Brown signed AB 19 (Santiago), establishing the California College Promise, which provides state funding to community colleges to improve college readiness, increase completion rates, and close achievement gaps. The 2018-19 state budget funded the Promise, allocating $46 million to the program.
Promise programs are place-based programs that seek to increase college graduation rates by incentivizing college attainment and rewarding students who satisfy specified criteria. These programs vary in eligibility requirements, funding, and overall structure. Some Promise programs offer guaranteed admission to a university, while others provide financial support based on need or merit.
The California College Promise is a voluntary program administered by the California Community Colleges Chancellor’s Office. The program provides funding to community colleges that advance the program’s goals and implement the following program strategies:
The Promise program allocates funding to districts using a formula based on factors such as number of units taken in the past by first-time, full-time students, and number of Pell grant recipients. The $46 million allocated in the state budget reflects the estimated cost for districts to cover the fees of first-time, full-time students based off 2016-17 data; however, colleges have discretion in how to use the funding they receive. While some colleges may elect to waive tuition for all or some first-time, full-time students (including undocumented students), others may choose to provide child care resources, or help financially needy students cover their non-tuition costs of college (such as textbooks and transportation).
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College attainment is associated with higher incomes for individuals, greater revenue for the state and local governments, and improved outcomes for communities such as lower crime rates and better health.[1] The 21st-century economy requires more individuals with at least a college degree. Research suggests that California will experience a deficit of 1 million college-educated workers by the year 2030.[2] Students in California — and economically disadvantaged students in particular — face many obstacles to obtaining a college degree. This Brief is the first in a series highlighting some of these barriers and addressing policy solutions that help make college affordable and accessible for more low- and middle-income Californians.
Many college students across the state experience food and housing insecurity. State and federal public supports have not kept pace with rising costs of living, leaving many students unable to meet their basic needs such as food and housing. Students facing housing and food insecurity are more likely to experience poor academic, health, and mental health outcomes. Policymakers can better support students by increasing Cal Grant student aid, improving on-campus awareness of and access to available food assistance, providing campuses with funding to help students who are experiencing homelessness and/or food insecurity, and boosting access to affordable housing.
Students pursuing a college degree face two main costs: tuition and fees charged by the institution and student-related living expenses such as housing, food, transportation, and books and supplies (referred to as “nontuition and fees”). Of these living expenses, housing and food are two of the most “basic needs” that some students struggle to afford. Many low-income students qualify for grant aid that covers the cost of their tuition and fees. There are also a number of federal, state, and campus-based programs that are intended to help students pay for basic living expenses, such as housing and food. In California, these include:
The existing web of federal, state, and campus-based support programs for students has not kept pace with rising living expenses, leaving many low-income students struggling to pay the rent and put food on the table. For example, since 2006, the median rent in California has increased by 44%, whereas the maximum Cal Grant B award has gone up by only 8% (Figure 1). This means that rent accounts for a greater share of students’ budgets, reducing their ability to cover other basic necessities. In fact, more than 1 in 10 CSU students (11%) and 1 in 20 UC students (5%) reported experiencing homelessness over the past year.[8] While the state has made efforts to assist homeless students through AB 801, there has been no funding attached to this legislation, making implementation difficult for some schools.
Available food assistance also fails to meet students’ needs. While more than 4 in 10 students at both institutions reported experiencing food insecurity (42% at CSU; 44% at UC), few receive CalFresh benefits.[9] Recent studies at the CSU and UC indicate that African American and first-generation students experience the highest rates of food insecurity and homelessness.[10] Many low-income students are denied CalFresh assistance because the federal SNAP law requires students to work at least 20 hours a week or qualify for an exemption.[11] The federal eligibility guidelines and exemptions for SNAP are complicated and difficult for administrators and students to understand, resulting in the underutilization of CalFresh.[12] In addition, many students are unaware of CalFresh and other on-campus services such as food pantries.[13]
While housing costs vary, state aid to support students’ basic needs remains constant (and low) across the state.[14] The maximum Cal Grant B access award of $139 per month, combined with the maximum monthly CalFresh assistance of $192, covers less than one-quarter of basic housing and food costs in two of California’s highest-cost regions; Los Angeles/South Coast and the San Francisco Bay Area (Figure 2).[15] For instance, a low-income student at UCLA is eligible for a maximum $331 in aid, but could face monthly food and housing costs of $1,414.
Unmet basic needs threaten student’s health, well-being, and academic achievements. Food and housing insecurity among college students are associated with poor health and mental health symptoms such as depression and anxiety. Food insecurity also coincides with lower academic achievement and higher rates of “inactive days,” where usual activities are stymied by poor physical or mental health.[16] Students who are concerned about their unmet basic needs often take on additional paid work to cover expenses. These students may enroll part-time, drop courses, or skip semesters — resulting in longer time to graduate and higher costs.[17]
Efforts to reduce the gap between students’ basic needs and available support have progressed, as noted earlier, through state support and programs offered by the CSU and UC systems, but there is still considerable room for improvement. California policymakers should:
The costs associated with a college degree have risen significantly in recent years. Available state and federal aid have not kept pace with these increases, leaving many students unable to afford basic living expenses. Students who have unmet basic needs have lower health and academic outcomes and take longer to complete college and enter the workforce. In order to meet the need for more college-educated workers, state leaders should invest in programs that ensure all students have their basic needs met while striving for a college degree.
[1] Noah Berger and Peter Fisher, A Well-Educated Workforce Is Key to State Prosperity (Economic Analysis and Research Network: August 22, 2013).
[2] Hans Johnson, Marisol Cuellar Mejia, and Sarah Bohn, Will California Run Out of College Graduates? (Public Policy Institute of California: October 2015).
[3] California Student Aid Commission (CSAC) 2018-19 Cal Grant Programs accessed from https://www.csac.ca.gov/sites/main/files/file-attachments/g-30_2018_cal_grant_comparison.pdf on May 9, 2018.
[4] Maximum monthly CalFresh benefits are annually established by the federal government. Current benefit levels are for federal fiscal year 2018, which ends on September 30, 2018. Earnings from work and other types of income reduce the amount of CalFresh benefits that an individual may receive.
[5] The Basic Needs Initiative was created by the CSU in 2016.
[6] The UC Global Food Initiative was created in 2014 to address the issue of food insecurity on UC campuses and throughout the world. For a discussion of strategies to address students’ basic needs, see University of California, Global Food Initiative: Food and Housing Security at the University of California (December 2017).
[7] “Meal sharing” programs encourage college students to donate unused meal credits to students who need them and any remaining credits to the on-campus food pantry.
[8] University of California, Global Food Initiative: Food and Housing Security at the University of California (December 2017), and Rashida Crutchfield and Jennifer Maguire, Study of Student Basic Needs (California State University: January 2018).
[9] University of California, Global Food Initiative: Food and Housing Security at the University of California (December 2017), and Rashida Crutchfield and Jennifer Maguire, Study of Student Basic Needs (California State University: January 2018).
[10] University of California, Global Food Initiative: Food and Housing Security at the University of California (December 2017), and Rashida Crutchfield and Jennifer Maguire, Study of Student Basic Needs (California State University: January 2018).
[11] For a more detailed discussion, see Responding to the College Hunger Crisis (Western Center on Law and Poverty: February 2018).
[12] AB 214 (Weber), signed in 2017, clarified student eligibility for CalFresh; however, conversations with key stakeholders reveal that limited campus staff and education for students result in continued confusion. California’s Department of Social Services does not collect statewide data on student enrollment in CalFresh. One report estimates that 78% of college students in California are eligible for CalFresh and do not receive assistance. See Young Invincibles, Rethinking SNAP Benefits for College Students (February 2018).
[13] More than half (52%) of CSU students surveyed were unaware of a food pantry located on their campus and 40% had never heard of CalFresh. Rashida Crutchfield and Jennifer Maguire, Study of Student Basic Needs (California State University: January 2018).
[14] This analysis focuses on state support only. Many low-income students are eligible for federal Pell Grants, which can be used to pay for living expenses. The average Pell Grant award was $3,740 in 2016-17.
[15] Figure 2 reflects the regional “Fair Market Rent” (FMR) for a studio apartment, which includes utilities, combined with the US Department of Agriculture’s Low-Cost Food Plan for a single adult – This food plan currently costs $268 per month. Regional FMRs are weighted by county population. Current FMRs will remain in effect through September 30, 2018.
[16] Rashida Crutchfield and Jennifer Maguire, Study of Student Basic Needs (California State University: January 2018).
[17] California Community Colleges Student Mental Health Program, Meeting Basic Needs to Support Students’ Mental Health and Success (September 2017) accessed from http://www.cccstudentmentalhealth.org/docs/CCCSMHP-Students-Basic-Needs-Fact-Sheet.pdf on May 9, 2018.
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Last month, the University of California (UC) and the California Community Colleges (CCC) announced a new partnership that guarantees admission to the UC for qualified community college students. This agreement follows in the footsteps of a similar admission guarantee between the CCC and the California State University (CSU) and marks a step in the right direction in terms of system-wide alignment that sets up successful pathways for all degree-seeking California students.
However, anyone who has looked at state spending on higher education may not be so optimistic. As we highlighted in a recent analysis, per student spending at the CSU and UC are well below pre-recession levels and are significantly below the funding request from each institution. Governor Brown’s 2018-19 budget proposal continues this trend, allocating a mere 3% General Fund base increase for both institutions. While state leaders deliberate over these marginal increases and whether the universities have been spending wisely the pennies they have been given, the future of California’s students and of our state’s economy hangs in uncertainty.
One of the greatest consequences of underfunding our public institutions of higher education is that thousands of students who are qualified for admittance to the CSU and UC do not attend because of capacity limitations. And while most of these students enroll elsewhere, thousands skip college completely. This state disinvestment in higher education landslides into an underdeveloped workforce that undercuts California’s economic competitiveness, weakens tax revenues, and diminishes the educational, career, and life outcomes for students.
The good news is that California’s high school graduation rate is on the rise. Overall it has gone from 75% in 2009–10 to 83% in 2015–16, with annual increases in six straight years. Minority students have shared in these gains, with African American, Latino, and American Indian students experiencing the largest high school graduation rate improvements. Graduate rates among English language learners and low-income students have also increased. More good news: The percentage of high school students meeting the course requirements needed for admission to the CSU and the UC has increased from 35% in 2006 to 45% in 2016. Freshman and transfer applications to the CSU and the UC are also up. Applications for the CSU have increased 22% since 2011. The UC has seen application increases for thirteen consecutive years, with a 6% increase in the past year alone.
The bad news is that between the CSU and UC, around 40,000 qualified students are turned away from our public universities each year due to capacity limitations. This past fall the CSU denied admission to over 32,000 qualified students — approximately 21,000 freshman and 11,000 transfer students — due to a lack of capacity. In 2012, this “qualified-but-denied” CSU population was 22,000, which means there was an increase of over 10,000 denied students in just five years. While the UC does not technically “deny” any eligible student, qualified students who do not receive admission to their campus of choice are referred to the only campus with available space, UC Merced. In the fall of 2016, 8,153 UC-eligible freshman students were referred to UC Merced under this referral policy. Of those referred, only 106 submitted an intention to register at Merced. This means that over 8,000 eligible students applied to the UC, were accepted, and did not attend after being referred to Merced.
While most of the students who run into capacity limitations do attend a public or private university elsewhere, a significant number do not attend any college. For instance, CSU research indicates that, of the qualified-but-denied CSU students, between 7,000 and 8,000 — nearly 1 in 4 — were not found in national college databases. There are several reasons California should be concerned about this population of students.
The positive life outcomes for college graduates are well documented and include higher incomes, better health, and improved social and economic mobility. The Public Policy Institute of California found that Californians with a bachelor’s degree earn $87,000 a year on average, more than double the $41,000 for those with only a high school diploma. One study from UC Berkeley suggests that for every $1 California invests in higher education, it will receive a net return on investment of $4.80 in terms of increased revenues (on taxed earnings of these graduates) and savings in social services spending and incarceration costs for students who graduate. The working-lifetime return to the state per student who completes a BA is estimated to be over $200,000. Based on these estimates, if 7,000 of the degree-seeking CSU qualified-but-denied applicants who didn’t attend college were to attend and graduate from the CSU, California would gain over $1.4 billion during their working-lifetime.*
For years, the Legislature has debated how much to fund the CSU and UC, whether the institutions are spending funds efficiently, and what share of college costs the state should cover. Governor Brown’s 2018-19 budget proposal would provide a $92 million funding increase for each sector — with no designated funding for enrollment growth. Meanwhile, the CSU is requesting $191 million in additional funding, $40 million of which would support a 1% enrollment increase (about 3,600 full-time students), and the UC is requesting $140 million above the Governor’s proposal, with $5 million to support 500 new undergraduates. The relatively small disparities between what’s in Governor Brown’s proposed budget and the institution’s budget requests, which continues recent years’ trends, underscores that our state’s leaders have yet to come close to closing the gap between demand and capacity at the CSU and UC and for addressing the negative economic implications of those decisions.
Recent improvements in high school graduation rates and college-readiness demonstrate progress strengthening school-to-career pathways and closing the opportunity gap. However, many students are still not benefiting from this progress. Every year thousands of qualified students are turned away from our public universities as a result of state leaders failing to invest in the CSU and UC — major engines of economic growth and opportunity for California students, communities, and the state. Current budget and policy conversations around higher education funding are often short-sighted and tend to overlook the reality that chronically underfunding our public universities leaves deserving students behind and also impedes our state’s economic growth. Instead, state leaders should turn their attention to crafting multi-year plans for investing in increased access and affordability in order to meet growing demand, and identifying the funding sources to make those investments possible. If California wants to be prepared to meet the workforce demands of the 21st century, create pathways for upward social mobility, and retain the economic gains that stem from a highly educated workforce, it must significantly boost investments in the CSU and the UC.
* These estimates are based upon average historical state General Fund support per full-time-equivalent student using a 0% discount rate. Using a 2% discount rate, the return on investment is $2.80 for students who complete college. For details, see UC Berkeley, Institute for the Study of Societal Issues, California’s Economic Payoff (April 2012).
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