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Cal Grant rules disqualify many for-profit schools

LOS ANGELES — Cal Grant's tighter eligibility standards have disqualified 80 percent of California's for-profit colleges from the financial aid program, according to a state report released Monday.

The 20-page report from the state Legislative Analyst's Office served as an update to lawmakers on how the tougher rules they approved last year have affected higher education.

The Legislature adopted the new standards in a bid to steer students toward a better-quality education by avoiding institutions with high loan default rates and low graduation rates, and to ensure a better investment for taxpayer dollars.

Under the rules, schools now must show a graduation rate of at least 30 percent and a loan default rate of less than 15.5 percent to participate in the Cal Grant program.

The report found the new standards have worked largely as intended, disqualifying a total of 154 schools from the Cal Grant program, although it said the move has limited student access to postsecondary education in the short term. This year the new regulations will save the state an estimated $50 million.


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