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Cal Grant and Middle Class Scholarship caseload increases create current‑year shortfalls, Student Aid Commission says
Summary
The California Student Aid Commission told lawmakers the May Revision reflects substantially higher Cal Grant and Middle Class Scholarship caseloads, creating combined current‑year shortfalls the administration proposes to augment so award obligations are met.
The Senate Budget Subcommittee heard that updated caseload and application data produced significantly higher projected costs for the state’s largest financial aid programs.
Aman (Amrit) Singh of the Department of Finance said the May Revision reflects updated caseloads provided by the California Student Aid Commission. The administration proposes increasing the current‑year appropriation to meet Cal Grant and Middle Class Scholarship award obligations after the commission reported sharply higher demand: Cal Grant had a $109,000,000 shortfall in the current year (an increase of $95,000,000 since the Governor’s Budget forecast) and is projected to have $229,000,000 more in budget‑year costs. The Middle Class Scholarship (MCS) also showed a current‑year shortfall $77,000,000 greater than previously forecast.
Catalina Missler of the Student Aid Commission said the growth reflects post‑pandemic changes and the Better FAFSA rollout; the commission extended the Middle Class Scholarship application deadline to July 2 in 2024 to accommodate delayed campus data and to ensure eligible students were included. The commission said the additional funding in the May Revision allows it to serve the newly identified eligible students.
The Legislative Analyst’s Office said Cal Grant spending estimates in the May Revision are more reasonable than January’s figures because they reflect higher growth experienced to date, but the LAO cautioned that the assumed growth rate (11% in 2024–25 and 9.5% in 2025–26) exceeds the historical 10‑year average of 3% and bears monitoring. The LAO also recommended against using limited budget resources to extend some Golden State Teacher Grant proposals and raised concerns about the design of that program.
The administration’s May Revision retains funding for the state’s three major aid programs and proposed some trailer‑bill clarifications to use a 2020 cohort default rate temporarily for Cal Grant institutional eligibility and to extend timelines for certain Golden State Teacher Grant awards.
