CSUN University News Clippings

Aid panel attacks proposal to have colleges dole out Cal Grants

(August 17, 2009)

By Laurel Rosenhall
Published: 08/15/09

Gov. Arnold Schwarzenegger didn’t take a single dollar from the 300,000 needy college students who rely on Cal Grants to make their way through school when he signed the state budget last month.

But he used his line-item veto to cut funding to the agency that administers Cal Grants, and to urge a major change in the way the scholarships are handed out to students. Schwarzenegger wants to move most of the work away from the California Student Aid Commission and have colleges handle it instead.

Leaders of the Student Aid Commission held a news conference Friday to rail against the proposals. Executive Director Diana Fuentes-Michel said the budget cut would force her to lay off most of her 105-person staff and be “immediate and devastating in its impact on schools.”

“What’s at risk for students is a system that is working, that isn’t broken,” she said.

“The process and the ability to offer the awards is in jeopardy.”

Schwarzenegger’s veto cut the agency’s $12.6 million budget in half. But the veto message says the Student Aid Commission will get $4.3 million back once the Legislature passes a law that shifts most administration of Cal Grants to the colleges.

“The $2 million difference represents savings that would be achieved through efficiencies resulting from the decentralization,” the veto message says.

The state’s current process for awarding financial aid has redundancies that waste money and confuse students, said Judith Heiman, an analyst in the Legislative Analyst’s Office.

Students receive one financial aid package from their college that includes aid from various sources – private loans, federal grants, campus-level scholarships and an estimation of how much they’ll qualify for in Cal Grants. Separately, students receive a letter from the Student Aid Commission telling them how much Cal Grant money they will get.

Students frequently wind up with two documents describing two financial aid scenarios, Heiman said. Then financial aid officers at the colleges are left to reconcile the differences.

That’s why California colleges support decentralizing the Cal Grant process, Heiman said.

“They’re saying this will save them money in the long run because they spend a lot of time and energy correcting discrepancies,” she said.

Schwarzenegger’s Department of Finance Director Michael Genest said leaders of the University of California system, California State University system and community colleges would like to run the Cal Grant program.

“They think they can do it for less cost then the Student Aid Commission,” Genest said.

“Since the governor was forced to reduce spending, that seemed like a reasonable way to do it,” he added.

Lynne de Bie, a member of the Student Aid Commission and a high school counselor in Dixon, said the commission’s workshops, Web sites and counseling are crucial in getting low-income teens to apply to college. If budget cuts reduce those outreach efforts, she said, students “will not apply because they will not know what to do.”

But Heiman, of the Legislative Analyst’s Office, said that even if the law is changed to allow colleges to administer Cal Grants, outreach efforts would still be handled by the Student Aid Commission.

Whether Schwarzenegger’s cuts to the Student Aid Commission will go through is now a question for the courts. They are part of the $489 million in line-item vetoes over which state Senate President Pro Tem Darrell Steinberg has sued the governor.

Publication: Sacramento Bee