Future Uncertain for Students Seeking Aid

For many California high school seniors and prospective transfer students, picking one of the state’s private colleges has turned into a riskier option.

The uncertainty stems from a provision in Gov. Arnold Schwarzenegger’s proposed budget to cut maximum Cal Grants by 10.5% for low- and moderate-income students entering private colleges. It would be the second reduction in two years for new private college students and is intended to save $7.5 million.

Given that high school seniors and transfer students typically have to choose their colleges in the spring, usually before the state budget is approved, many would be forced to select schools before learning how much Cal Grant money they can receive. The loss in aid could be significant.

“Nobody I know can afford to go to college without help,” said Naguine Bensimon-Tree, a senior at Eagle Rock Junior-Senior High in Los Angeles.

Bensimon-Tree, who has applied to two private colleges in California and three in other states, said her choice would depend partly on where she can receive the best financial aid package.

Higher education advocates said the situation would be similar for many other students. Consequently, they said, the proposed cut in grants probably would divert some lower-income students to the state’s already-crowded community colleges and universities, as well as to out-of-state schools that can provide more generous aid packages.

The proposed 10.5% Cal Grant cut at California’s private schools would amount to a reduction of $873 a year, making the maximum annual award $7,449. It would affect an estimated 12,100 freshmen and transfer students entering private colleges in California in the coming school year. Cal Grants for continuing students at those colleges would not be affected.

The Cal Grant reduction, if approved, would follow a cut of 14.3%, or $1,386, absorbed by new students this school year.

All told, “the risk we face is that the students most in need will be slighted,” said Jacqueline Powers Doud, president of Mount St. Mary’s College in Los Angeles.

Steve D. Boilard, director of the higher education unit of the state legislative analyst’s office, said a Cal Grant cut could pose a particular hardship for needy students who live with their parents in smaller cities or rural areas that don’t have a public university nearby. Many such students, he said, “are going to these smaller schools out of necessity.” As a result, he said, a Cal Grant could force them to go deeper into debt to pay for their education.

Thousands of low-income undergraduates in California also figure to lose assistance next year due to a recent decision by the U.S. Department of Education to tighten requirements for its federal Pell Grant college aid program. (The Bush administration, however, has proposed raising the maximum Pell Grant by $500 over the next five years, to $4,550 for those eligible.)

H.D. Palmer, deputy director for the Department of Finance and a spokesman for the Schwarzenegger administration, said the proposed cutback for private college students “was an effort to achieve savings, as part of an overall effort to close a budget gap of more than $8 billion.” He also said that the administration was “maintaining a commitment” that the governor made last year to increase funding for the University of California and California State University systems.

But many higher education advocates and analysts argue that the proposed Cal Grant cutback could backfire and cost the state extra money by pushing more needy students into public colleges and universities. According to the legislative analyst’s office, the state spends far more on subsidies for needy students at UC and Cal State campuses than it does on Cal Grants to similar students at private colleges.

For example, the office says, in the governor’s proposed budget plan, state subsidies would total $13,729 per each needy student at UC, and $8,790 at Cal State, compared with the proposed $7,449 in spending on Cal Grants for needy students at private colleges. When needy students who receive Cal Grants attend private colleges, “it’s actually a bargain for the state,” Boilard said.

Doud and other higher education leaders acknowledged that the impact of this year’s Cal Grant cut was muted because some private colleges provided extra student aid to offset the reduced state assistance.

For instance, Occidental College, a leader among highly regarded liberal arts colleges in recruiting low-income students, put an extra $100,000 this year into such scholarships. If another Cal Grant cut comes, the Los Angeles school plans to make up the difference again, said David M. Roth, an Occidental spokesman.

But Roth, who also is chairman of the California Student Aid Commission, said a second Cal Grant reduction would probably mean that some of California’s private colleges with less money for financial aid would recruit fewer low-income students.

For leaders of four-year colleges and universities, the envisioned Cal Grant cutback for private college students was the only major unanticipated setback in the governor’s proposed budget. The budget would uphold the compact Schwarzenegger signed last year with the University of California and California State University, providing funding for modest enrollment growth at the two systems.

Schwarzenegger’s plan also would provide an 8% increase in Cal Grant aid at the two public university systems, matching the fee increase already approved for undergraduates for the 2005-06 school year. Fees at community colleges would be unchanged.

Jonathan A. Brown, president of the Assn. of Independent California Colleges and Universities, said he has picked up mixed signals from state legislators on how hard they will fight to resist the governor’s proposed Cal Grant cut.

He said that lawmakers might concede a reduction in Cal Grants while they focus on contesting some of the bigger and higher-profile cutbacks in welfare and healthcare programs in the plan Schwarzenegger unveiled Jan. 10 to close California’s $8.6-billion budget gap.

Sen. Jack Scott (D-Altadena), who is chairman of the Senate Budget Subcommittee on Education, said he would strongly oppose the cut but added that “it would be difficult for me to judge the final budget negotiations.” Still, he said, reducing Cal Grants a second straight year would be “a real hardship because these students often come from families with $15,000 of annual income or less.”

Times staff writer Rebecca Trounson contributed to this report.