Cal Grant recipients may receive additional money in their annual awards after Gov. Jerry Brown signed two bills Tuesday to create a new way of generating financial aid revenue.
The first bill, SB 798, establishes the new College Access Tax Credit Fund, which offers a tax credit as an incentive to contribute to the fund. The second bill, SB 174, allows for money in the same fund to be added to financial aid given under the Cal Grant B Entitlement Program.
Currently, the Cal Grant B program awards low-income college students up to $1,551 in access costs such as living expenses, as well as aid for tuition and fees starting their second year. With the money from the new fund, SB 174 could bring students’ maximum annual award for access costs up to $5,000.
“These grants will help students not just pay for tuition but also the other costs of attendance that can be equally challenging for students to cover,” said Debbie Cochrane, research director of the Institute for College Access & Success.
According to Cochrane, the new bills are especially necessary because Cal Grant B awards have not kept up with inflation in recent years. According to a statement by the bill’s author, Senator Kevin de Leon, D-Los Angeles, the awards, had they kept up with inflation, would currently give students up to $5,900 per year.
“While we’re incredibly happy to see the improvements we’ve seen in this legislation and in the budget … there’s still a long way to go,” Cochrane said.
The bills are urgency statutes, meaning they can go into effect immediately after being signed into law. The credit will stay in effect until 2017. Tax credits given under SB 798 will be 60 percent of the amount donated in 2014, 55 percent in 2015 and 50 percent in 2016, with a cap of $500 million on the total amount of credit that can be allocated within a year.
Caitlin Quinn, ASUC external affairs vice president, said the bills would provide hope for struggling students, especially those “right on the edge” of being able to afford college. She noted, though, that the extra money might not be enough to convince a prospective UC student to enroll in a UC school instead of a more affordable community college or CSU.
“(The bills are) especially important, because it’s keeping the cost of college on legislative minds,” Quinn said. “But it’s not going to solve a lot of the other issues that we see with Cal Grants.”
Bills regarding financial aid that have not yet been signed include AB 1976, which aims to improve the way Cal Grants are awarded to students.