The National Association of State Student Grant and Aid Programs released an annual report Monday showing that state financial aid increased in California between the 2009-10 and 2010-11 academic years.
According to the report, California awarded almost $1.3 billion in financial aid in 2010-11. The figure represents a 22 percent increase from the previous year — a significant rise when compared to the 2.5 percent average increase in state financial aid across the United States.
While the report seems to suggest that the rise in state aid occurred despite California’s ongoing fiscal crisis, increasing financial aid costs are actually a consequence of tuition hikes implemented in response to budget deficits, according to Judy Heiman, principal analyst for higher education at the state Legislative Analyst’s Office, who also said that need-based financial aid and tuition are linked legislatively.
“The way the statute reads, the maximum award is the systemwide fee,” Heiman said.
This means that as tuition goes up, so does the cost of Cal Grants — the state’s need-based financial aid program.
Monday’s survey arrives as legislators get ready to vote on a budget Wednesday that could cut funding for Cal Grants by a projected $55 million for the 2012-13 academic year, according to the Legislative Analyst’s Office. If passed, the budget will reduce the number of institutions eligible to receive Cal Grant funding.
Taking into account the cuts and offsetting the usual growth and any policy corrections, Heiman expects that Cal Grant costs may remain at levels similar to this year — $1.5 billion, according to the Legislative Analyst’s Office.
A tuition freeze secured for the pending budget plan by state Assembly Speaker John Perez, D-Los Angeles, might also help defray the growing costs of need-based aid. Although the university has yet to approve a proposed 6 percent tuition hike, CSU tuition is set to increase by 9 percent in the fall.
“(The tuition freeze) avoids a new cost that hasn’t been taken into consideration for the UC and reduces the cost that (was projected) for CSU,” Heiman said.
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