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Subcommittee reviews Cal Grant and middle‑class scholarship numbers; members raise concerns about proposed reductions
Summary
LAO and CSAC presented updated projections for Cal Grant and the Middle Class Scholarship. The governor's budget would reduce Middle Class Scholarship funding as one‑time funds expire, a move legislators warned could materially cut award amounts for recipients.
The subcommittee reviewed updated spending and participation projections for Cal Grant and the Middle Class Scholarship program.
Natalie Gonzales of the Legislative Analyst's Office summarized administration estimates that Cal Grant spending would rise in the 2025‑26 budget year due to a projected increase in recipients and average award size; LAO noted CSAC projects a 1.3% increase in recipients and a 3.2% increase in average awards (largely driven by UC and CSU tuition increases). Gonzales said the LAO will revise those estimates at the May revise.
On the Middle Class Scholarship (MCS), Amin Singh (Department of Finance) explained the governor’s budget reduces the program's ongoing funding by $110 million and lets a $289 million one‑time appropriation from 2024 expire. CSAC and UC witnesses warned that, counting the expiring one‑time funds, the administration’s plan amounts to a roughly 43% reduction relative to the prior year and would lower average awards per UC recipient by about $1,360 unless the Legislature replaces the money.
CSAC staff described operational challenges that complicated projections for the Middle Class Scholarship this year: delayed FAFSA data, extended deadlines and a surge in late records meant CSAC received many additional eligible student records after initial estimates. CSAC told the subcommittee that late records after the usual reporting windows were a significant factor in 2024‑25 program costs and urged statutory and regulatory fixes — such as a statutorily set phase‑in factor and reporting deadlines — so CSAC can provide earlier award estimates to students.
Senators and witnesses said decisions about the Middle Class Scholarship will be a priority as the Legislature considers May revise proposals and the final budget; the subcommittee did not adopt funding changes at the hearing.
