California wants more college students to graduate debt-free. How’s the Middle Class Scholarship going so far?
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California cemented its status among the most affordable states to earn a bachelor’s degree after lawmakers and Gov. Gavin Newsom fulfilled their promise to expand the state’s Middle Class Scholarship program by another $227 million in this year’s budget deal.
That overhauled scholarship, which debuted last year, is now a $859 million juggernaut. It’s also a growing slice of the state’s financial aid pie: Between 2016 and 2022, California lawmakers poured roughly $1.4 billion more into grants and scholarships, bringing the state’s total contribution to around $3.5 billion.
Using new data that examines how the Middle Class Scholarship helped students in its first year, a CalMatters analysis shows that the grant worked largely as intended, sending more money to students of higher-income families.
But the program has frustrated some advocacy groups, who want the state to spend more on lower-income students, especially those who are ineligible for existing state financial aid. For lawmakers grappling with a shaky state financial outlook while also attempting to rein in the cost of college, this is a tough needle to thread.
The scholarship itself had growing pains in its first year. Many students who expected aid at the start of the 2022-23 academic year received their money months later as campuses and the state agency running the program rushed to jump-start a complicated program in a short amount of time.
Here’s the latest information and what you need to know about financial aid in California.
Who got new Middle Class Scholarship money — and how much
Because of the Middle Class Scholarship, 302,000 students received an average of $1,970 more dollars toward their education in the 2022-23 academic year, according to data CalMatters obtained from the state’s financial aid agency, the California Student Aid Commission.Students from families with higher incomes received more money than those from lower incomes by design. That’s because students from wealthier families receive less financial aid from other sources. The scholarship uses a formula that takes the total cost of college and deducts how much a student receives in financial aid. It also assumes a student works enough to earn about $8,000 a year. For dependent students in households that earn more than $100,000 annually, an added formula is used to calculate how much their families can pay toward college. The assumption is that wealthier families have more money than poorer families to commit to college.
Students whose family incomes were between $150,000 and $200,000 received an average Middle Class Scholarship of roughly $2,800 — it was higher for UC students. For students whose families earned less than $50,000, their average scholarship was around $1,400.
Students will likely get more money going forward as the scholarship grows by another $227 million.
The scholarship complements the state’s marquee financial aid tool, the Cal Grant, which covers the in-state tuition for UC and CSU students and provides cash aid to community college students. Students generally are eligible for both aid programs for up to four years of full-time enrollment.
The middle class scholarship is available to a far larger swath of students: those whose families earn as much as $217,000. The income cut-off for the Cal Grant is lower. Students in a family of four will receive a Cal Grant in 2023 if their families earn no more than $125,600, depending on the type of grant.
Lawmakers intend to eventually grow the scholarship so that any student who gets the state aid won’t have to borrow to attend a UC or CSU, a public university debt-free promise. That would require around $2 billion more dedicated to the scholarship annually. Last year, the program was funded at about a quarter of its capacity, so students received about a quarter of the full amount they would have been awarded under the scholarship.
Different financial aid helps different students
But while the scholarship widens its reach to more students, it shuts out students who attend community colleges, as CalMatters previously reported.
Community college students are among the state’s poorest to pursue higher education. And though California posts the lowest community college tuition in the country, community college students still must find ways to afford rent, food and transportation.
Because students attending UC and Cal State campuses have access to more state, federal and institutional financial aid, often community college students end up paying more for their education than students enrolled at California’s public universities, according to a series of reports by the California-based Institute for College Access & Success.
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