The California Community Colleges Board of Governors voted to require that students maintain a minimum 2.0 GPA for two consecutive terms and complete at least half of their units with a D grade or better to receive a fee waiver.
Community college fees are currently $46 per unit, among the lowest in the nation. Of the state's 2.6 million community college students, about 40% have their fees waived.
The new policy will take effect in fall 2016. It is the latest in a series of reforms intended to help students graduate and transfer more quickly.
Other changes will give priority enrollment to students who attend orientation sessions and develop education plans. California's 112 community colleges also are planning to increase counseling and support services to help students achieve their goals.
"We will do everything in our power to help students on financial aid succeed," said community colleges Chancellor Brice W. Harris, "but students need to know that they have a responsibility to keep up their end of the bargain."
Students must receive notice of their probationary status within 30 days of the end of the term and can appeal decisions if they have extenuating circumstances.
Students in foster care are exempt, and the board agreed to consider other exceptions.
As many as 41,791 students could lose fee waivers under the policy, although there is likely to be little effect on revenue, officials said.
The fee waiver policy remains controversial, with some critics arguing that it will harm poor students who are most in need of financial aid.
"Many poor students who receive the Board of Governor's fee waiver are often in not very good neighborhoods, they have families to support as well as going to college and may be around violence a lot," said Rich Copenhagen, a College of Alameda student and past president of the Student Senate for California Community Colleges. "If you cut our fee waivers, they're probably going to be gone from community colleges forever."