As the California legislature argues over how to cope with a $38 billion shortfall, the state budget deadlock claimed another casualty last week – a financial aid grant that is distributed to over 220,000 college and junior college students.
The Cal Grant, which helps needy students make payments on everything from student fees to car loans, will not be distributed on time for the second year in a row.
Usually, the California Student Aid Commission begins to make the Cal Grant payments to universities and junior colleges – who then distribute the money to students – during the last two weeks of July.
However, the state constitution dictates that there must be a state budget before the commission can even touch the Cal Grant money.
“Our hands are basically tied until the state budget passes,” said Carole Solov, spokeswoman for the Cal Grant program.
Once the state has a budget, it will take 10 business days for the commission, working in tandem with State Controller Steve Westly, to begin distributing the $670 million Gov. Gray Davis has appropriated for the Cal Grant this year.
The sudden cessation of a crucial part of the state’s financial aid program led the governor to participate in a conference call with members of the state government and representatives from the University of California and California State University.
“We have the best education system of public education. It will not remain the best for long if we starve it financially and slash the number of students who can afford school,” Davis said.
There are two types of Cal Grants available to students. Cal Grant A provides money to help students pay their fees, and varies in amount from campus to campus. UC students will receive about $4,629 to help pay their student fees.
Cal Grant B provides fee coverage and, after a student’s first year, provides an additional stipend of about $1,551 to help the student meet living expenses, such as buying textbooks or paying rent.
Projections for the 2003-2004 academic year indicate that about 2,129 UCLA students will receive Cal Grant A, and about 3,129 will receive Cal Grant B.
However, the UCLA Financial Aid Director Ronald Johnson said for UC students, the payment delay would be a virtual “non-issue.”
This is because the UC is advancing the Cal Grant payments to students as if they had been distributed on time. The UC will recoup the funding after a state budget passes, Johnson said.
The adverse effect of the delay will further be mitigated at campuses like UCLA, which do not begin instruction until late September. This gives the state legislature ample time to pass a budget without affecting students, as Cal Grant payments are usually not made until 10 days before instruction starts.
Junior colleges and community colleges will probably be the ones hardest hit, as their campuses do not have large cash reservoirs to advance payments, and typically start earlier than the majority of UC campuses, Solov said.
Even UC students may not remain completely impervious. Hanan Eisenman, a spokesman for the UC Office of the President, also said the UC may not be able to cut checks in advance to all its Cal Grant B students, meaning that some Cal Grant B stipends could be delayed.
However, Johnson said many students who receive Cal Grant B also receive financial aid from other sources, which should soften the impact.
“It should not be a situation except they’ll have a payment delayed,” he said.
Brandon Guzman, a student at the UCLA School of Law who received Cal Grant B as an undergraduate, said he used it to make payments on his car and his apartment.
“If I didn’t have the Cal B, I think it would have really hurt,” he said.
Student financial aid could take a second hit for the 2004-2005 academic year when the new federal formula for calculating financial aid goes into effect – a formula that will deprive 84,000 college students nationwide of $270 million in Pell grants.
The federal government, when determining a student’s need for financial aid, takes into account the family’s income and taxes.
Because the new formula uses estimates based on taxes from the year 2000 – taxes that have typically since risen – it tends to overestimate the amount of money a family has on hand.
Eisenman said the UC is prepared to backfill any of the payments for students who would normally receive the Pell grant in 2004. Currently, about 44,000 UC undergraduates receive over $120 million in Pell grants.
However, he cautioned that backfilling the Pell grant payments might mean the UC would be unable to make payments on some of its student grants. He said he did not know if any of those grants included grants that the UC has earmarked to help students pay a recently approved 25 percent fee increase.