The California Student Aid Commission (CSAC) is the principal agency responsible for administering financial aid programs for students attending public and private universities, colleges and vocational schools in the state. Money is disbursed to applying high school graduates primarily through the Cal Grants program, which is funded by the state and administered by the commission. 

The Student Aid Commission was created in 1955 and originally called the California State Scholarship Commission. Its primary purpose was to oversee the forerunner of the current Cal Grant program, which was then known as the California State Scholarship program.

For its first five years, the program was directed at providing assistance to academically qualified low- and middle-income Californians at in-state private universities. But in 1960, the state’s Master Plan for Education called for the state to ensure access to higher education for all qualified students. The result was a major expansion of tuition-free public colleges throughout the state.

Because fees and tuition in California schools of higher learning were low or non-existent, the need for Cal Grants was low. But that changed in the ‘90s when bad economic conditions and budget deficits caused sharp increases in student expenses and declines in enrollment.

Lower-income students were hit hardest.

Cal Grants was expanded in 1989-90 to provide aid to the equivalent of 25% of graduating high school students. The new grants provided stipends beyond tuition that facilitated lower-income students’ participation. Students of all ages were eligible. But the program did not guarantee financial aid to any of them.

Awards were limited by the availability of public funds and qualified applicants were ranked by their grade point averages. As a result, in 1999-2000, more than 70,000 applicants who met income requirements were denied grants.

This wreaked havoc among families planning for college and fell short of accomplishing the 1960 master plan goal of ensuring education to all qualified students.

The trend in education by 2000 was for an expansion of student aid that was primarily merit-based. But studies showed that income-blind programs primarily benefited affluent students and created racial and ethnic disparities in college. That year, Governor Gray Davis introduced California’s own Merit Scholars program, and the dismayed Legislature responded by proposing an expansion of Cal Grants to be a more inclusive entitlement, although older and non-traditional students were excluded.

Both programs were approved.

Response to the new Cal Grants was disappointingly low. New entitlement grants were expected to reach 72,000 graduating high school seniors the first year. But only 48,600 awards were made. About $35 million in available aid went unspent.

Not surprisingly, the problem was self-inflicted by the state. The shortfall was mostly attributed to a loss of older and non-traditional students, who made up 44% of all college students in California at the time.

Eventually, the state increased its outreach to high school students. But it continued to limit grants for older students to “competitive” awards.

As California’s economic status careened through the following decade, direct state support for higher education diminished. The financial burden relentlessly migrated from the taxpayers’ General Fund to individual students. As tuition and fees increased, student aid became even more critical to a large segment of college-age residents.

On March 24, 2011, Governor Jerry Brown signed state Senate Bill (SB) 70 into law. The commission estimated that 12,920 students would no longer be eligible to renew their Cal Grant awards because of stricter eligibility requirements.

Students wanting to renew their grant applications now need to meet maximum income and asset ceilings. These requirements formerly applied only to initial applicants.

As of 2011-12, new students are not able to use Cal Grants at schools where more than 40% of students have federal loans and default rates are higher than 24.6%. Students with grants already at those schools will see their awards cut 20%.

About the California Student Aid Commission: History (pdf)

The Cal Grant Entitlement: Increasing Access to Financial Aid (by Chris Furgiuele, Justin Louie and Debra Solomon, University of California, Berkeley) (pdf)

Senate Bill 70 (CSAC website)

The Student Aid Commission’s primary mission is to channel education money to students who face financial hardship in trying to continue education after high school. Its staff also works closely with high school counselors to ensure students are aware of financial aid and fill out the paperwork properly. The average Cal Grant recipient has a family income of $40,000 or less and a grade point average of 3.0 or above.

The commission distributed more than $1.3 billion to college students in 2010-11 through its Cal Grant, specialized and loan forgiveness programs, providing financial aid to more than 330,000 eligible California public and private higher education students. The commission also administers financial aid awareness and outreach programs, such as Cal-SOAP and Cash for College, in collaboration with community groups and private industry.

There are 15 members on the commission, including two students. The governor appoints 11 members, who must be confirmed by the state Senate; two members are appointed by the Senate Rules Committee; and the Assembly speaker appoints the final two commissioners. Members serve four-year terms, except for the two student commissioners who hold office for two years.

The commission administers, or partners with, various financial programs with application information found on its website including:

Cal Grants

Funded by the state, this is the largest student aid program the commission administers. As the program’s name states, students are applying for grants, which means they do not have to be repaid, unlike student loans. There are different levels of Cal Grants with varying amounts of money available up to about $12,000.

Potential applicants must be graduating from or be recent high school graduates (GED students are also accepted) and meet academic, financial and eligibility requirements. Applicants must fill out a FAFSA (Free Application for Federal Student Aid) form as well as submit a verified Cal Grant GPA form. They also must be a U.S. citizen or eligible non-citizen.

Law Enforcement Personnel Dependents Grant Program (LEPD)

The LEPD grant program offers higher education funding to dependents and spouses of California peace officers who have been killed or totally disabled in the line of duty. These grants are also available to permanent/full-time firefighters and California Youth Authority and Department of Corrections employees. These grants match the amount of a Cal Grant award and applications are accepted throughout the academic year.

California National Guard Education Assistance Award Program

Active members of the California National Guard, State Military Reserve or the Naval Militia might be eligible for this state-funded program. Applicants, who need to have been a California resident for at least one year, must be an active member who has served two years with one of these branches and agrees to remain a member during the program. The idea for this program is to enable participants to improve their skills and abilities by obtaining degrees or certificates they might currently lack, but could use to further their careers.

California Chafee Grant for Foster Youth

Potential higher education students who are or have been in foster care and need financial aid may qualify for up to $5,000 for college and technical or career training from this grant program. Money is not limited to paying tuition. The funds can also be used for child care, rent and transportation while in any eligible California school. Students applying must be a current or former foster youth and not have reached their 22^nd birthday as of July 1 of the award year.

CalGrants.org

2011-12 Cal Grant Program Income Ceilings (CSAC website) (pdf)

Free Application for Federal Student Aid (FAFSA)

Are You Eligible for a Cal Grant?

California Chafee Grant for Foster Youth (CSAC website)

California National Guard Education Assistance Award Program

Child Development Grant Program (pdf)

Law Enforcement Personnel Dependents Grant Program (CSAC website)

Cal Grants for Undergraduates Frequently Asked Questions (University of California, Berkeley)

The commission received nearly $1.5 billion for FY 2011-12 with the money coming from the state’s general fund. While some money is set aside for staffing, the vast majority of its resources go to funding its financial aid programs, with heavy emphasis on Cal Grants.

3-Year Budget (pdf)

State Budget Reductions Result in Changes to Cal Grant Program Eligibility and Cuts to Cal Grant Awards (CSAC website) (pdf)

Conflict with the Federal Government

In April 2010, federal legislation championed by President Barack Obama fundamentally changed the way colleges allocated student aid. Federal Pell Grants were beefed up and private lenders were scheduled to be replaced by the government’s Direct Lending Program.

In so doing, the federal government terminated a program that was intertwined with California student loan administration. EdFund, which had operated as a nonprofit arm of the Student Aid Commission since 1997, serviced federal student loans and managed a portfolio worth approximately $38 billion. EdFund insured the loans that private banks made to California students.

The federal government wanted to transfer EdFund’s activities to Minnesota-based Education Credit Management Corp.

One additional complication arose from a 2007 initiative by Governor Arnold Schwarzenegger to sell EdFund’s loan guaranty program assets for $1 billion to help cover a budgetary shortfall. It turned out no one wanted pay more than $500,000, but by mid-2010 the state was in negotiations to make the sale.

The feds said those assets contained federal money and that it was a no-go.

California felt that its Cal Grant system was jeopardized by the federal moves and contested them. The federal Department of Education responded by announcing in July 2010 it would revoke CSAC's status as a guarantor of federal student loans and terminate its loan guaranty contract with the state on Halloween, October 31.

The commission voted in September to contest the decision but the matter was settled in October and by November 1 the transition from EdFund was underway.

A Letter From the Executive Director (pdf)

Student Aid Commission to Challenge EdFund Decision (by Kevin Yamamura, Sacramento Bee)

A Message from Executive Director Diana Fuentes-Michel (CSAC’s FastBlast) (pdf)

California Student Aid Commission Announces $62.25 Million from ECMC for Cal Grants (CSAC website) (pdf)

Revenues

Revenue in California has declined dramatically during the current fiscal downturn with a devastating effect on higher education and the Student Aid Commission.

In April 2011, the commission responded to student protests over cuts to public higher education by unanimously passing a resolution urging the state to place a fall budget measure on the ballot. The measure would allow Californians to approve tax extensions to close the state’s budget gap.

Reacting to student and parent anger over higher tuition and budget cuts, commission Chairman Barry Keane said, “The student protests are a miniscule example of what will happen if you effectively destroy hard-won access to higher education.”

The budget debate echoes the funding wars between Republican Governor Arnold Schwarzenegger and the education establishment, including commission Executive Director Diana Fuentes-Michel.

In January 2009, the governor proposed major cuts in the Cal Grants program. The most significant change would have ended the state’s commitment to compensate for any rise in tuition for grant recipients.

Judy Heiman, with the state Legislative Analyst’s Office, said the student burden from “decoupling” fees and grant funding would quickly add up if fees continued to rise as they had in the previous decade. “It will be 4-5% this year, then maybe 10% or even 20-30%,” she said. “It could get to the point even students with full grants can't afford to pay fees.”

In June 2009, Fuentes-Michel said the governor’s plan to phase out Cal Grants could cost 200,000 students an opportunity to attend college. “If these students cannot afford to attend college, they will face the worst job market in decades,” she told a legislative committee considering the governor’s proposal.

Deep budget cuts then also forced limits in class enrollment and offerings throughout the state, including technical schools, community colleges, colleges and universities. Student fees also were increased. The University of California system raised fees 9.3%, which pushed average undergraduate tuition to $8,720 a year, elbowing aside many would-be students despite financial aid.

During this contentious time, California State University Chancellor Charles Reed warned that, “Open access (to higher education) in California appears to be over. The major cuts before you cannot be absorbed without major reductions in enrollment.”

Cal Grants and the commission dodged the bullet in 2009, but Governor Schwarzenegger was back in 2010, looking to balance the budget with the help of big cuts in Cal Grants. Those didn’t happen, but in 2011 legislation tightened up eligibility requirements that would pare an estimated $124 million a year from the program.

Schwarzenegger Proposes Major Cal Grant Cuts (by Gale Holland, Los Angeles Times)

Student Protests Trigger Call for Action from California Student Aid Commission (pdf)

Schwarzenegger Cuts Mean No College for Thousands (Associated Press)

Campuses Foresee Far Fewer Students (by James P. Sweeney, San Diego Union-Tribune)

U. California System, Cal Grants Escape Cuts in Governor’s Budget (by Javier Panzar, Uwire)

California Department of Education: Senate Bill 70 Program Summary

State Budget Panel OKs New Rules for Cal Grants (by Nanette Asimov, San Francisco Chronicle)

The state Legislative Analyst’s Office bluntly states that the Student Aid Commission should “modify financial aid programs to better target resources and create GF (General Fund) savings.” This includes eliminating non-need-based fee waivers and raising eligibility requirements.

The state’s independent Little Hoover Commission has also pointed out that “California, like many states during the last century, built a government that relied heavily on boards and commissions to improve government decision-making.” But Little Hoover also stated that “boards and commissions are frequently cited as examples of waste and abuse of government resources.”

A recommendation was made to create a California Office of Higher Education and Financial Aid that would consolidate higher education programs and give students a full range of services, without them having to bounce between different agencies. This recommendation would have eliminated the California Student Aid Commission among other education agencies. That has not happened.

Summary of LAO Findings and Recommendations on the 2011-12 Budget (Legislative Analyst’s Office)

Reforming California’s Boards and Commissions (Little Hoover Commission) (pdf)

The California Dream Act

On July 26, 2011, Governor Jerry Brown signed legislation making it easier for undocumented college students to receive privately funded financial aid.

In 2009-10, the University of California awarded 14,000 scholarships averaging about $3,500 from a $46 million fund supported by private gifts and endowments. Cal State gave $2,200 on average to 11,689 students from its $25.7 million private scholarship fund, while community colleges gave an average of $1,000 to 18,634 students from its $16.9 million fund.

Although the law was hotly contested as part of a much wider debate over illegal immigration, it may be just a warm-up to a larger fight over what is considered the more important second part of the California Dream Act.

In signing the law Brown indicated he was inclined to approve the more controversial measure that would allow those students access to state-funded tuition aid, like Cal Grants, should it come to his desk.

Is this legislative package good for the state, or is California Dreamin’?

Pass the Legislation

“The debate is very clear: shrivel public service, shrink back, retrench, retreat from higher education, from schools, from the investment in people; or make the investment,” according to Governor Brown. “This is one piece of a very important mosaic, which is a California that works for everyone.”

Supporters of the California Dream Act say these proposals are the logical extension of legislation signed by Governor Gray Davis in 2001 that allowed illegal immigrants to pay the resident tuition rate at public institutions of higher learning.

Many of these students were brought to this country illegally at a young age through no fault of their own. They have studied hard and earned a place in a college or university but, like many students, can’t afford it. Barring these students from seeking a better life is hard-hearted and economically foolish.

Society already has an investment in these kids. Most have gone to public schools, participated in the culture and probably are going to spend the rest of their lives here raising future citizens. It is in everyone’s interest that they be encouraged to be as educated and productive as possible.

Even if one feels the federal government has failed to properly police its borders or dealt with illegal immigration, wrecking California college students’ education is no remedy.

The legislation’s sponsor, Democratic Assemblyman Gil Cedillo, said, “There is no law in this state and nation that says we should punish the children for the acts of the parents.”

“The greatness of this nation is that you can come from very challenging circumstances, and within one generation you can transform your life through public education. It’s the great equalizer. . . . This is a nation of immigrants. That is the dream and why we are here today.”

Nancy Mesa, an undocumented student who graduated from UCLA in 2010, says passage of the Dream Act is simply facing up to reality. “Allowing undocumented students access to financial aid won't just benefit us, it will also help California since we're the workforce of the future.”

Dream On

“Bottom line is California doesn't have enough money to take care of its obligations to its citizens right now,” argues Republican Assemblyman Tim Donnelly.

Critics of the package say that any aid money given to people here illegally is assistance that won’t be available to citizens. It’s a finite pie and there already aren’t enough pieces to go around in these days of financial crises and big budget deficits.

“The people, who if they're lucky enough to have jobs, certainly would like those limited resources to go to their children or grandchildren,” Donnelly said. “They certainly wouldn't want that to go to people who come here illegally.”

Republican Assemblyman Jim Silva argued in the Orange County Register that the Dream Act is illogical because it is helping people prepare for an illegal life in the United States. “AB131 would give illegal immigrants access to that aid, even though they legally cannot obtain a job in the United States after graduation. It makes no sense.”

He thinks Democrats who support the California Dream Act are hypocrites because they bemoan tuition hikes but have no problem handing out taxpayer-subsidized benefits to people breaking the law.

Silva said if the second part of the act were passed, future fee increases would, in effect, subsidize illegal immigrants because the University of California and Cal State have typically directed one-third of revenue from student fee increases to institutional aid.

The issue is largely divided along political fault lines, which leads some critics to maintain that the quest for Latino votes lies behind the legislative push by Democrats.

“If [Brown] was looking at the balance sheet, understanding politically that he needed to sign one of these measures, it was not going to be competitive,” said Jaimie A. Regalado, director of the Pat Brown Institute of Public Affairs. “It's seen as a civil rights issue in the Latino community, especially for youth. The farmworkers' struggle is not necessarily seen as what it once was. This is an issue of the now, an issue of the moment, part of the Latino agenda and part of the future.”

Critics also are concerned about the welcoming message it sends to others considering illegally immigrating to the United States or migrating from another state. They contend it’s yet another social benefit of bad behavior.

Ira Mehlman, a spokesman for the Federation for American Immigration Reform, differentiates between the first part of the Dream Act already passes and the pending second bill that opens public assistance to illegal immigrants.

“Obviously it falls into a different realm when the money is coming out of private pockets than it does when it's coming out of taxpayers' pockets,” he said. “But nevertheless, foundations and other institutions that get tax exemptions should not be promoting policies that encourage people to remain illegally in the United States.”

Brown Signs California Dream Act (by Maeve Reston, Los Angeles Times)

Gov. Jerry Brown signs the Dream Act (by Judy Lin, Associated Press)

California's Dream Act Will Deepen Budget Crisis (Assemblyman Jim Silva)

California Dream Act: Opening College Doors (Los Angeles Times editorial)

California DREAM Act Is Right Policy (Ventura County Star editorial)

Financial Aid for Illegal Students OK’d (by Dave Roberts, CalWatchdog)

Gov. Brown Signs Calif. DREAM Act for Undocumented Students (by Amanda Winkler, The Christian Post)

California Dream Act Backers Look to the Next Step (by Teresa Watanabe, Los Angeles Times)

Wally Boeck, 1998 – 2002

Jon Shaver, 1995 – 1998

Samuel Kipp, 1986 – 1995

Arthur Marmaduke, 1960 – 1985. The first executive director of the Student Aid Commission is also the name on the Arthur Marmaduke High School Counselor Award, which honors excellence in high school counseling.