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Cal Grant and Middle Class Scholarship caseloads rise; commission seeks additional current‑year funds
Summary
The Student Aid Commission and Department of Finance told the subcommittee that Cal Grant and Middle Class Scholarship (MCS) caseloads have grown substantially, creating current‑year shortfalls the May Revision proposes to address; the LAO cautioned that projected growth rates are above historical averages.
The Senate Budget Subcommittee heard updated caseload and cost estimates for California’s major state financial aid programs and discussed how the May Revision addresses unexpectedly high spending pressure.
Aman Singh of the Department of Finance told the committee that Cal Grant is experiencing a $109 million shortfall in the current year (2024–25), $95 million more than forecast in January, and that the May Revision proposes increasing current year appropriations to meet obligations. The May Revision also shows higher budget‑year costs for Cal Grant and a current‑year shortfall for the Middle Class Scholarship (MCS) of roughly $77 million above the January forecast.
“Cal Grant is experiencing a $109,000,000 shortfall in the current year,” Singh said. He added that the May Revision retains a $50 million ongoing augmentation for the Golden State Teacher Grant program and proposes trailer bill language to extend timelines and adjust cohort default calculations for Cal Grant eligibility.
Catalina Misler of the California Student Aid Commission said the increases partly reflect post‑pandemic enrollment patterns and effects from the federal Better FAFSA rollout. “Post pandemic and Better FAFSA, the growth is good news,” Misler said, adding the agency was surprised by the number of students eligible for MCS who did not complete FAFSA/CADAA before earlier deadlines and extended the MCS filing window to July 2. The commission requested added current‑year funding to cover the award obligations that emerged.
The LAO said the revised Cal Grant growth rates in the May Revision — an 11% increase in 2024–25 and 9.5% in 2025–26 — exceed the historical 10‑year average of roughly 3% and recommended caution. The LAO also recommended the state not extend Golden State Teacher Grant funding into the next year without stronger program design justification.
Ending: The subcommittee signaled willingness to address caseload shortfalls but questioned whether the growth assumptions are sustainable; members asked for additional data and urged options to make MCS and Cal Grant caseloads more predictable.
