SACRAMENTO, CA – The California Student Aid Commission (CSAC) has announced that expenditures for the Middle Class Scholarship (MCS) program are expected to exceed the program’s $926.2 million budget for the 2024-25 fiscal year, based on initial data from UC, CSU, and CCC campuses. While campuses continue reconciling fall and winter MCS disbursements, CSAC has temporarily paused spring term disbursements to assess whether the budgeted funds can cover 35 percent of eligible MCS recipients’ remaining costs. Traditionally, if funding is insufficient, state law stipulates that award percentages must be reduced proportionally for all recipients except current and former foster youth. This time around, it is possible that an additional $103 million in savings from the Cal Grant program, likely due to declined application and participation rates, will be allocated to prevent an estimated cut of $330 on average for MCS recipients.
Sameer Gadkaree, President & CEO of The Institute for College Access & Success (TICAS), Jessie Ryan, President of The Campaign for College Opportunity, and Dr. Christopher J. Nellum, Executive Director of The Education Trust—West issued the following statement in response:
“While California’s policymakers are rightly concerned about providing all MCS-eligible students – particularly those who are the least resourced – with the awards that they were promised, it is critical that the consequences of this overspending do not negatively impact funding for other financial aid resources and programs from which students currently benefit. Particularly concerning to our organizations is that policymakers are considering using savings from the Cal Grant program to address this overspending issue – savings that stem from the negative impacts of the ‘Better FAFSA’ rollout on some of our most marginalized communities. Funding shifts of this magnitude should be transparent and include opportunities for public forums that provide clarity on where this aid is being awarded, how funding is allocated, and data on which students benefit.
“Under MCS’ current complex program structure, which operates as a last-dollar scholarship and depends on varying levels of annual appropriations, it is susceptible to producing under- and over-payments. Without changes to streamline the program and updates to make it more equitably designed, it is likely this won’t be the last time the program miscalculates payments. Moving forward, we recommend policymakers seek transparency and accountability regarding how this MCS miscalculation happened, how these funds were distributed among eligible students by income, and propose concrete solutions to improve the efficiency of MCS disbursement for students and campuses. Furthermore, the Legislature should also assess options to better bridge MCS with the state’s signature Cal Grant program to more effectively support working class families to attend our public colleges without needing to take on debt. Since its redesign in 2022, the MCS program has expanded to serve many more low-income students and created a framework to address students’ total college costs, but income inequities persist as average MCS awards are notably smaller for lower-income students than for their higher-income peers.
“Finally, given the current federal administration’s volatility and the state budget’s rigidity, we urge policymakers to find innovative solutions to the critical college affordability issues within the forthcoming 2025-26 budget negotiations. Financial aid stability is essential, especially as the state faces pressing challenges such as increasing Free Application for Federal Student Aid (FAFSA) and California Dream Act Application (CADAA) completion rates – both of which are currently down when compared to the 2023-24 cycle – and backfilling aid for students unable to access federal financial aid due to privacy concerns or technical difficulties. We call on California policymakers to build towards a future that ensures all California students, particularly those with the greatest financial need, have a clear and affordable path towards a college education.”
