Financial aid for students takes a hit in Newsom’s new budget proposal 

Prospective college applicants and family members attend College Information Day at UC Berkeley in Berkeley on Oct. 14, 2023. Photo by Juliana Yamada for CalMatters
Prospective college applicants and family members attend College Information Day at UC Berkeley in Berkeley on Oct. 14, 2023. Photo by Juliana Yamada for CalMatters

By Adam Echelman 
CalMatters Writer 

For students struggling with the cost of college, Gov. Gavin Newsom has some bad news: There may be less financial aid this fall.  

In his state budget revision, which gets finalized in June, Newsom proposed significant cuts to one of the state’s largest financial aid programs, the Middle Class Scholarship. Since its creation in 2013, the governor has pumped increasing amounts of money into the scholarship — money that went directly into students’ hands. The program now serves more than 300,000 students, but with a proposed cut of $510 million, the program may return to more humble beginnings.  

For the Cal Grant, the state’s cornerstone financial aid program, Newsom signaled that he won’t fulfill a promise to expand it. That promise began in 2022, when he signed a law saying the state would allow more students to qualify and provide many of them with more money each year. But the promise came with a condition: He would only implement the reform if the 2024-25 budget year allowed for it.  

Faced with a budget deficit this year, advocates have spent months debating which financial aid program, if any, the governor should cut. Expanding Cal Grant would prioritize community college students. “Cal Grant is for our lowest-income, more under-resourced students. That’s been our priority,” said Manny Rodriguez, the California director of policy and advocacy at The Institute for College Access and Success.  

Currently, community college students are eligible to receive just over $1,600 a year from the Cal Grant, though it’s rarely enough to cover the cost of living. Had Newsom fulfilled his promise to expand it, these grants would get larger over time, around $2,000 per student by 2030, Rodriguez said. 

The Middle Class Scholarship focuses on wealthier students: those who attend a UC or CSU campus and whose household income is below $217,000 a year. The average UC or CSU student received between $2,500 and $3,000 during the 2023-24 academic year through the Middle Class Scholarship.  

In many cases, though, students can receive even more. David Ramirez is a senior at UCLA and the government relations chair for the UC Student Association. This year, he received $7,500 from the Middle Class Scholarship, he told CalMatters. “I wouldn’t be able to attend this university if I didn’t have that financial aid.” In addition to his classes, he works shifts as an Uber Eats delivery driver. 

Ramirez doesn’t receive a Cal Grant but has advocated on behalf of both programs. “It’s not about deciding which one is more important,” he said. “Those community college students will have to transfer, and they’ll need the resources when they get here, too.” 

Ultimately, by denying Cal Grant reform and cutting the Middle Class Scholarship, the governor disappointed advocates across the board. “We have a math problem,” the governor said, referring to the projected $27.6 billion deficit. “Is this what I want to do? No.”  

While they won’t see any of the promised reforms, students receiving a Cal Grant will see no changes in their annual financial aid if the governor’s budget is finalized.  

Meanwhile, students receiving a Middle Class Scholarship would have less financial aid starting this fall, said Jake Brymer, deputy director of policy and public affairs at the California Student Aid Commission. If the reduction in aid is proportional to the proposed budget cuts, students could see their awards cut by more than 80%.  

The Legislature still has another month to negotiate with the governor and finalize the state budget, and Brymer said the Legislature may find other ways to implement the budget cuts. For example, he said, the Legislature could propose reducing the number of students who receive Middle Class Scholarships, instead of reducing the award amount.  

Ramirez won’t be affected by the budget cuts, since he graduates from UCLA next month, but he knows that he’ll continue to struggle with the cost of college even after he graduates. He’s starting a public service fellowship this fall and has $10,000 in student loans. 

“I’m supposed to be celebrating my graduation,” he said, “But I’m also worried about paying for rent.”  

Reporter Mikhail Zinshteyn contributed to this story 

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