For the second consecutive year, a major overhaul to California’s main financial aid program is being proposed by lawmakers who say the current system is overly complex and excludes too many students from getting aid.

And for the second consecutive year, whether that proposal becomes state law is largely up to Gov. Gavin Newsom. Last fall, the governor vetoed Assembly Bill 1456 after it received unanimous support in the Legislature. Newsom said at the time that while he agreed changes were needed to the Cal Grant, the proposal was too costly and needed to be dealt with during the state’s annual budget process.

This year, the same lawmakers that were behind AB 1456 have introduced AB 1746, which would similarly expand access to the awards by eliminating GPA requirements for community college students and guaranteeing awards to students eligible for a federal Pell Grant. It would also simplify the Cal Grant program.

“Never before have we seen so many people applying to UC and CSU. And the reality is college is ever expensive, and it’s not just the tuition, it’s the nontuition costs. So that’s what our bill is getting at,” said Assemblymember Kevin McCarty, D-Sacramento, an author of the bill and chair of the Assembly’s subcommittee on education finance. “And we hope the governor has something in his May revise. If not, we’ll negotiate. This is a top priority for the Assembly.”

Should the bill become law, it’s estimated that an additional 150,000 students would become newly eligible for Cal Grants. That would include about 109,000 community college students who would be able to get awards to help pay for nontuition expenses like housing, food and transportation. The new bill would cost about $315 million in the first year and $374 million annually in subsequent years, according to the California Student Aid Commission.

The legislation has wide support among lawmakers, student leaders, college leaders and college access advocates, who see the bill as a move toward equity. They are hoping Newsom will signal his support for the bill when he introduces his May budget revision, which he plans to release Friday.

McCarty noted that lawmakers didn’t completely lose out last year, since the 2021-22 budget did change the Cal Grant program by eliminating age requirements for students seeking awards, an amendment that was expected to make about 133,000 students newly eligible.

Making sure as many students as possible are eligible for Cal Grants is especially crucial with student enrollment plummeting at California’s community colleges, said Jessie Ryan, executive vice president of the Campaign for College Opportunity, a group advocating for increased college access. The state’s 116 community colleges have suffered enrollment declines in the double-digit percentages since the onset of the pandemic in 2020.

“If we don’t find it in our political will to invest in our needy students across the state so that they can enroll in and complete college, then we will miss this opportunity to help provide a path to a living wage job and recovery for a generation of students,” Ryan said.

To simplify the Cal Grant program, AB 1746 would consolidate the existing Cal Grant awards into just two separate grants: the Cal Grant 2 and the Cal Grant 4. The Cal Grant 2 would be for community college students, while students attending four-year universities would be eligible for the Cal Grant 4.

Supporters of the bill say making Cal Grants easier to navigate is desperately needed. Currently, there are several grant types — Cal Grant A, B and C. Sometimes, awards are guaranteed, but other times they are lottery-based. The lottery system would no longer exist under AB 1746. Instead, awards would be guaranteed to eligible students.

The Cal Grant 4 would cover tuition and fees for eligible students attending a University of California or California State University campus. Students would be guaranteed the award as long as they have at least a 2.0 GPA and their household income qualifies them for a Pell Grant.

The award amount for the Cal Grant 2, covering nontuition expenses, would be at least $1,648 and would rise in future years based on inflation. Like the Cal Grant 4, it would be guaranteed to any community college students who have a household income low enough to qualify for a Pell Grant.

For the Cal Grant 2 award, there would be no GPA requirement. Currently, students need at least a 2.0 GPA to be eligible for a similar award, a requirement that supporters of the bill say is outdated and a significant barrier, especially to older students who often cannot track down their high school transcripts. Even for students who can access their transcripts but earned below a 2.0 GPA, that shouldn’t prevent them from getting aid, said Jasmine Prasad, a student at Folsom Lake College in Sacramento County and vice president of legislative affairs of the Student Senate for California Community Colleges.

“A lot of students who go into community college typically are underrepresented students and from minority population groups. And many of those students are at a disadvantage in the K-12 system and might not have the same access to resources as other students do,” Prasad said. “So it’s really important that even if they don’t have a high GPA, the fact that they’re still trying to pursue their education is important. And we should really be focusing on any student, no matter their background, to ensure that they can access college.”

Of the more than 150,000 students set to become newly eligible for awards under AB 1746, it is estimated that they would include 95,000 Latino students, 11,000 Black students and 18,000 Asian and Pacific Islander students.

Prasad added that she met recently with staff from the Department of Finance, the main policy adviser to Newsom, and said there “didn’t seem to be opposition” to AB 1746.

Newsom’s January budget proposal didn’t include the main components of AB 1746, but the bill also had not been introduced in the Legislature at that point. A spokesman for the Department of Finance didn’t respond to an interview request for this story.

The governor’s January budget proposal did, however, include a major expansion of the Middle Class Scholarship that was originally agreed to last year. Newsom proposed spending $515 million to begin revamping the program. Under the proposal, an additional 300,000 students at UC and CSU would become eligible for awards, including many low-income students, according to the Legislative Analyst’s Office. Community college students would not be eligible for the awards.

Ryan of the Campaign for College Opportunity said it would be “unconscionable” to expand the Middle-Class Scholarship for UC and CSU students without also investing in Cal Grant expansion to support community college students, who are often the neediest students in California.

While both the Middle Class Scholarship expansion and Cal Grant changes would be big investments, McCarty said the two proposals would complement each other, and it’s not an either-or situation.

“I’m very upbeat,” McCarty said. “We have a very robust budget, and we are going to work to get debt-free college for Californians. And we’re on our way.”

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