For the second straight year, students at Empire College will not be eligible for Cal Grants as the state tightens rules to qualify for the student aid program.
The Santa Rosa college, which provides career training in such fields as health care and information technology, was one of 154 private colleges and technical schools that were excluded from the Cal Grant program this week.
The state has been gradually tightening rules for private schools to qualify for free Cal Grant scholarships, raising standards for graduation rates and student loan defaults. The changes will save the state an estimated $55 million.
Last year, 70 schools, including Empire College, failed to qualify because more than 24.6 percent of their former students defaulted on their education loans.
This week, 84 schools were added to the list because they failed to meet even tougher standards. Under the new rules, schools are barred from the program if more than 15.5 percent of former students default on their loans or fewer than 30 percent of their students graduate.
Nearly 87 percent of Empire students in 2010-11 graduated, easily clearing the state's standards. But 26 percent defaulted on their loans, a number that disqualified the college from the Cal Grant program.
Empire President Roy Hurd said Wednesday the state standards were arbitrary and won't have much effect on the college or its students.
"It's a means by which the government can save money," he said.
Two years ago, about two dozen of Empire's 700 students received the free Cal Grants, he said. Last year about four or five continuing students received them. This coming year, Hurd expects no student will be eligible.
Even so, he maintained the state aid isn't a deciding factor for students. Also, the rules don't affect Empire's law school.
The college, which celebrated its 50th anniversary last year, has been working for the past year with a company that helps students develop repayment plans and avoid defaults on student loans.
The effort will help keep the college eligible for federal loan and aid programs, Hurd said. It also will help graduates avoid defaults and the accompanying stain on their credit histories.
No public schools were deemed ineligible, even though many exceed the 15.5 loan default rate. Schools are exempt from the rules when fewer than 40 percent of their students receive federal loans.
Ed Emerson, spokesman for the California Student Aid Commission, said state and federal officials contend that student loans became too easy to obtain. Now colleges must better help students understand the responsibility of taking on such debt.
"The default rates soared over the last five years," he said.
Under the program, students who attend four-year public institutions can receive Cal Grants that cover their tuition and fees. Students at qualifying private schools can receive grants of $9,223. Community college students can receive grants of $1,473, while students at qualifying vocational and technical training schools can receive $2,462 for tuition and fees and $547 for books and supplies.
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