The California Legislature’s FY24 Budget Priorities

College Affordability Prioritize any future financial aid investments for Cal Grant Reform. The Governor’s January budget proposes a one-time increase of $227 million for the Middle Class Scholarship (MCS), per the 2022 Budget. The MCS program will be allocated $227M one-time in 2023-24 and $289M one-time in 2024-25. This will maintain current level of the program in that school year. The funding level for 2024-25 needs to be set in this budget, since the California Student Aid Commission needs to make award decisions for the 2024-25 school year during the 2023-24 budget year. TICAS appreciates that the modified MCS program is a step towards building a pathway to debt-free college in California, attempts to meet the total cost of attendance, establishes a reasonable self-help option, and accommodates more low-income students. We remain concerned with specific structural pieces that prevent the program from equitably prioritizing the needs of the most vulnerable students, many of whom attend CCCs and are not eligible for an award. If the Legislature feels fiscally comfortable today to invest financial aid dollars in 2024-25, we respectfully remind them that the original financial aid promise was to invest in Cal Grant Reform in 2024-25. We hope the Governor will keep all options on the table to ensure Cal Grant Reform can happen in 2024-25. Support long-term commitment to student housing through new funding mechanism at UC & CSU and continued grant funding for CCCs. The Governor’s 2023-24 January budget proposes to delay $250 million from the affordable housing grant projects to the next fiscal year, plus delaying funding for the loan program over the next two fiscal years. Per the May Revise, Governor Newsom instead proposed the grant program to solely fund CCC student housing projects by providing $450M in 2023-24 and $95.4M for 2024-25. Funding for the UC and CSU (about $1.1 billion) will be replaced with segment-issued bonds, coupled with ongoing state funding to cover the bond-related debt services. The California Student Housing Revolving Loan Fund, created in the 2022 Budget Act, will be allocated $300M General Funds per year for six years (each of 2023-24 through 2028-29). This will provide zero-interest loans to qualifying campuses of the UC, the CSU, and the CCC for construction of affordable housing projects.

Additionally, they are agreed to the May Revise proposal that solely funds CCC student housing projects by providing $450M in 2023-24 and $95.4M for 2024-25 and converts about $1.1 billion with UC and CSU segment-issued bonds, coupled with ongoing state funding to cover the bond-related debt services.

TICAS appreciates the long-term commitment to student housing through a new funding mechanism at UC & CSU and continued grant funding for the CCC system. Investing in building affordable student housing is a critical and necessary part of a long-term approach to meet students’ basic needs, lower college costs, make college accessible for our neediest students, and achieve California’s 70 percent postsecondary attainment goal. Moving forward, we ask that students with unique housing needs, such as those with dependents and those without safe, reliable housing be clearly prioritized as the segments build out their student housing projects. Support in concept the expansion of MCS to foster youth at UC and CSU along with SSCG access for foster youth at the CCCs. No Decision The Legislature will include $5.2 million General Fund in 2023-24 and ongoing to expand eligibility for the Middle Class Scholarship to foster youth. This will include changes in trailer bill language to cover the total cost of attendance for CSU and UC students who are current or former foster youth by providing these students with their full award amount.

Additionally, the Legislature will include $14 million ongoing to the Student Success Completion Grant so that students who are current or former foster youth receive $5,250 per semester, or quarterly equivalent, for 12-15 units of study to cover their unmet need.

TICAS believes that foster youth are a key student group that deserves to be prioritized for aid. Prioritizing this group can conceptually set a precedent on how MCS and the SSCG can be restructured to meet the TCOA for our lowest income and most vulnerable students first before moving up the income scale. If paired with Cal Grant Reform in 2024, foster youth would continue to be eligible for their supplemental $5,000 Chafee award while using MCS as a “fill the gap” program to meet their TCOA. We do have some concerns about keeping the full-time unit threshold at the CCC level for access to the SSCG since a majority of CCC students, and likely foster youth, do not attend full time. A more equitable alternative would be to create a sliding scale option that will allow part-time students to get this supplemental award, but overall, this is progress towards a path to debt-free college for foster youth. Institutional Supports Support base funding for UC & CSU Compacts and cost-of-living-adjustment for CCC Roadmap The January budget and May Revision reflect continued support for the multi-year compact that includes a sustained 5% funding increase for the UC and CSU, in exchange for clear commitments to expand student access, equity, and affordability, and to create pathways to high-demand career opportunities. For CCCs, the May Revise includes an increase of $25.4 million ongoing, in addition to the January allocation of $652.6 million, for an 8.22% COLA. The Legislature approved the 5% base increase for both the UC and CSU systems. Additionally, they approved the 8.22% COLA for the CCC system TICAS supports sustained and reliable funding for our postsecondary systems. Moving forward, policymakers should continue monitoring the segments’ progress towards their respective goals to ensure that increases in funding are directly benefiting students through academic and non-academic support. Support additional staffing capacity for the CA Student Aid Commission. The May Revise proposes an increase of $397,000 ongoing General Fund currently unallocated for four positions at the California Student Aid Commission to support financial aid programs. The Legislature approved a total of $638,000 for five positions beginning in 2023-24 to support financial aid workload. This funding is critical to ensure that CSAC has the necessary staffing capacity to help implement recent programs and their expanded role implementing Universal FAFSA/CADAA completion at the high school level. Accountability & High-Quality Education Support funding for the Cradle-to-Career Data System. Proposes to continue funding the establishment of the Cradle to Career Data System. The Legislature approved $15,260,000 for the Cradle-to-Career Data System. TICAS supports the continued commitment to and funding for C2C. Insights from the data system will be useful in identifying equity and performance gaps, directing resources where needed, and helping students make informed educational and career decisions.