Senate Budget and Fiscal Review Subcommittee No. 1 on Education

I'll call Senate Budget Subcommittee number one to order. And good morning. This is our second hearing of a long string that will happen most Thursdays between now and the time that the governor's May revised budget comes out. And I feel obligated to note.

What I noted last week is we are experiencing a shortfall in the state that is somewhere between 38 and 73 billion, and the revenue estimates the last month or two have not been heading in the right direction.

And so it really means that we're going to have to face up to this in any of a number of ways. The Governor's Budget in I'm repeating myself from last week, but I know some of you have real lives and we're not paying attention. The Governor's Budget recognized 38 billion, and there's arguing about whether or not the deficit is higher. And even since then, and only 8 billion of the 38 billion were really in reductions, the rest were other things.

To me, it means that it's going to get worse and much more real as we head to May. And I have been advising individuals because I've had groups in the last couple of weeks from hospitals, children's hospitals, childcare centers, different environmental groups, different environmental groups talking about a bond, constituent groups, and I tell them all that just saying don't cut us is not a viable position right now.

It is really, in my view, everybody's going to have to take some sort of haircut along the way, and that there should be conversations privately about what your absolute top priorities are, and you don't have to disclose them. You shouldn't be negotiating against yourself, but you should be ready because it'll move really quickly in May or June, and the top priority will be what causes the great grief, and can people not live without. And so with that, that is the backdrop for these hearings.

And we are having hearings in which we are not making decisions. We are airing out every issue clearly. Last week was Proposition 98 and the overview of Education Funding. Next week is the California State University System and the University of California system.

And this week we have three discussion items. So one is on state student financial aid programs and what's in the budget and what is the background for it. We also have the University of California, College of the Law, San Francisco.

I always feel like I should say formally known as Hastings so people know what we're talking about and we'll have representatives there. And the final issue will be the Governor's proposal for the state library. And so this is an informational hearing. But we will be taking public comment after the three items on any of the three items, and I'll assess how many people want to speak to understand how long that will go.

And because we are sort of emerging from our pandemic procedures, the testimony will only be in person in this room. So if any of you were watching, thinking you were going to call in, you better rush over, because when we're done, that will be the time for testimony. With that, we're going to move on to the very first item, which is student aid and financial aid.

And it is noticed as the University of California, California State University, California community colleges and California Student Aid Commission because the different financial aid streams apply to all of them. And it confused some people. Some people thought this week was the UCCSU hearing, but it is really how financial aid focuses on those.

And today we have an extensive panel, although I know that the Department of Finance and Legislative Analyst Office will absolutely speak at the beginning, and then we will ask if anybody has anything to add or they really want to speak from the Student Aid Commission, from the University of California, from the California State University system or the community college system.

And with that, we'll move to the representative from the Department of Finance, and the following will be the representative from the Legislative Analyst Office. So welcome to the Committee.

Thank you. Good morning, Chair and members. I'm Amanpreet Singh with the Department of Finance.

You might have to speak up or pull the microphone closer to you, one or the other.

Good morning, Chair and Members. I'm Amanpreet Singh with the Department of Finance, and I'll be providing an overview of the financial aid portion of the Governor's Budget. The budget assumes total financial aid expenditures of $3.3 billion in the budget year. Of the 3.3 billion 2.5 billion in combined General Fund and temporary assistance for needy families funding will be spent on Cal Grant, the state's largest financial aid program.

Over 337,000 students will receive a Cal Grant award in the 24-25 academic year, and the majority of these awards will offer a stipend to cover living expenses such as housing, food and transportation, in addition to tuition costs. Compared to the 2023 Budget Act, the Governor's Budget reflects increased spending of $148 million on the Cal Grant program based on revised caseload estimates for 24-25.

Despite the state's current fiscal condition, the Administration remains committed to meeting the Cal Grant entitlement in full and to keeping college affordable and accessible. The budget allocates $637 million in onetime General Fund to the Middle Class Scholarship program.

Which will reach 332,000 students in the upcoming academic year, which is 18 million more participants than in the current year. As a budgetary solution, the Governor's Budget foregoes a planned $289 million one time General Fund investment in the Middle Class Scholarship.

The Middle Class Scholarship will continue to be provided to students in the upcoming year, but the additional investment will not be occurring. The Governor's Budget also provides nearly 7500 Golden State teacher grant awards to students enrolled in teacher preparatory programs in the 24-25 academic year.

The 21-22 Budget act provided 500 million in onetime General Fund to the Golden State Teacher grant program, which is intended to be spent over the course of five years and will reach its expected expiration in 25-26. That includes my summary of the financial aid package. I'll be happy to take any questions.

Thank you very much. Now we'll move on to the Legislative Analyst Office.

Good morning. Chair Lisa Qing with the LAO regarding Cal Grants, we've reviewed the caseload estimates under the Governor's Budget and believe they're reasonable based on the data available at that time.

There is an upward revision to Cal Grant spending in the current year, which is primarily due to costs in the recently created community college entitlement awards coming out somewhat higher than budgeted last June. There is also an additional spending increase in the budget year, as the Department of Finance noted, of 148 million ongoing.

This reflects a projected increase in recipients as well as a projected increase in award amounts, primarily due to university tuition increases. As in all years, the Commission will be updating their caseload estimates for Cal Grants in the spring, and so you'll receive more recent data at the May Revision.

Turning next to middle class scholarships this program, as you know, covers students' remaining cost of attendance after accounting for their available resources. Each year, the state determines upfront how much funding to put towards middle class scholarships, and then state law directs the Commission to determine what percentage of each student's remaining costs it can cover based on the state funding level.

As you may recall from last year, the state is currently adding onetime funds on top of the ongoing funding level for middle class scholarships in order to temporarily increase students award amounts under this program, the Governor's proposal would, in effect, remove the planned onetime funds for 2024-25 bringing funding back down to the ongoing level. In light of the large budget deficit referenced in your opening comments, we think that the Governor's proposed approach is reasonable.

We would note, however, that it will result in students receiving somewhat smaller awards in 2024-25 than in the current year. Specifically, we estimate that under the Governor's Budget, the Middle Class Scholarship funding would cover about 24% of students remaining cost of attendance, which is down from 36% in the current year.

This issue covers a few other items that go beyond what's in the Governor's Budget, including Cal Grant reform and some recent changes to the free application for federal student aid, or FAFSA, form. While we don't have direct recommendations on these topics, we'd be happy to take questions at the appropriate time. Thank you.

Thank you. And I'm going to see if anybody has anything to add from the other four. And I'll start just going my left to right. Welcome.

Well, good morning, Chair Laird, and thank you for having this conversation today at the Committee hearing. I would just like to, on behalf of the Student Aid Commission, and I'm Jake Bremner, Deputy Director for policy and public affairs at the Student Aid Commission, express our deep gratitude to the Governor and the Administration for their continued support and investment toward college affordability, particularly in light of the significant fiscal challenges that you spoke to in your opening comments, Chair Laird.

And I have a number of comments that I would like to share about several of the other key issues that the staff analysis and the hearing agenda has gotten to. And when appropriate, I'm happy to share more about the issues that we're all navigating in higher education around the rollout of the new free application for federal student aid, the FAFSA, and, of course, also Cal Grant reform and Middle Class Scholarship, as Lisa alluded to.

Great. Thank you. I'm confident that among all the Committee Members, there will be a question about that. Welcome.

Thank you. Good morning, Chair Laird and Members of the Senate Budget Subcommittee. I'm Shawn Brick from the University of California office of the President, and I'm thankful for the time to share some of our thoughts from our perspective. I wanted to thank the Senate in particular for the incredible support over the last few years. As I'm sure you know, the last four years have been very challenging for our students for a number of reasons.

But the investments that the state has made in Cal Grants and in the Middle Class Scholarship, as well as some of the new programs, has been transformative for our students. So on behalf of President Drake and our students, I want to thank you. I also want to thank my colleagues at the California Student Aid Commission for working so hard to make these programs a reality. As you know, this year presents some enormous challenges.

The FAFSA delay means that we'll be issuing financial aid offers to newly admitted students in mid-April instead of the normal mid-March. And furthermore, we're very concerned about the ability of our mixed status students. These are students who themselves are citizens, but their parents may not have a Social Security number to complete the FAFSA at all, which is necessary if they're going to receive the federal financial aid that they're entitled to.

We're eagerly awaiting the fixes that the Federal Department of Education has said will be coming in the next two weeks. We also know that inflation has really hit our students hard and so the costs that they'll be facing this fall are going to be higher than ever before.

On the positive side, we also expect our students to qualify for more federal Pell grant than ever before, and the University is setting aside more of our own tuition revenue for financial aid than ever before.

I'll close by saying that despite these challenges, we do stand prepared to help California students and parents. My campus financial aid colleagues are dedicated professionals whose mission is to help guide low and middle income families not only to college but to graduation. Thank you.

Thank you very much. Do you have any comments?

I do. Thank you. My name is Gina Brown, assistant vice chancellor of our equitable student learning experience and impact office with the California Community College Chancellor's office. Thank you for the opportunity to share the views on behalf of the community college chancellor's office and the 1.9 million community college students regarding financial aid.

I would like to thank the California State Legislature for passing several financial aid bills and budget appropriations that continue to support community college students to help them meet the total cost of attendance.

I'm referring specifically to the adoption of Cal Grant reform in the 2223 budget as outlined in AB 1746. The community college chancellor's office remains in complete support of including the funding needed for Calgary reform in the 2425 budget. Today's California community college students transfer to four year universities.

They earn baccalaureate degrees. They graduate into the workforce at livable wages. Now more than ever before, community college has evolved significantly over at least the past 20 years and will continue to evolve.

Today's community college students should not have to continue to wait for Cal Grant to also evolve. It goes without saying that the past few years have presented unprecedented challenges for all of us, and especially our students. And those challenges persist with the delays of FAFSA processing. But even more troubling than the delays in FAFSA processing is the inability for students from mixed status families to submit a completed FAFSA.

This means that some U. S. Citizens are currently unable to access the largest source of grant aid in our country. There have been stories of workarounds, but they have been proven to be unreliable and inconsistent.

The Department of Education has announced that we can expect fixes to both the processing delays and the inability of our U. S. Citizens to submit a completed FAFSA in the next two weeks. So we remain cautiously optimistic.

Regardless of how or when the better FAFSA is fixed or whether or not the required Cal Grant forming is included in the budget, the California Community colleges remain committed to our vision 2030 goal of ensuring equity and support for all students by maximizing receipt of all available financial aid for which they are eligible.

We will continue to better support our students on their academic journeys, and we look forward to continued collaboration and thought partnership with our CSU, UC and CSAC partners. So thank you to all.

Thank you and to welcome to the Committee.

Hi, good morning, Chair Laird and esteemed Members of the Senate Budget Subcommittee. I extend my gratitude for the opportunity to address you today and provide insights on the crucial matter of financial assistance for students enrolled in the California State University system.

My name is Noelia Gonzalez and I serve as a systemwide director for financial aid programs. I wish to express appreciation for the unwavering support demonstrated by the Senate towards California students.

The significant investments made by the state in initiatives such as the Cal Grant and the Middle Class Scholarship have had a profound impact on the lives of CSU students. On behalf of the entire CSU community, I extend sincere thanks for this invaluable support. The current year has presented us with many unique challenges.

The delay in processing the FAFSA applications poses a notable concern, particularly regarding the issuance of financial aid offers to newly admitted freshmen and transfer students.

Additionally, we remain deeply attentive to the challenges faced by mixed status families whose ability to complete the FAFSA process is hindered by bureaucratic barriers. We eagerly anticipate the imminent remedies promised by the Federal Department of Education within the next couple of weeks. In closing, I wish to affirm our steadfast commitment to supporting California students in navigating these challenging times.

The dedicated professional within our campus financial aid offices are focused on guiding our students and families towards academic success, ensuring not only access to higher education, but also equitable opportunities for graduation and beyond. Thank you for your attention to these critical matters. I'm happy to any questions you may have at the appropriate time.

Thank you very much. We're going to move to questions on this, and let me begin with the Federal Student Aid Simplification Act, affectionately known as FAFSA and let me begin with the Student Aid Commission and ask what's the update on filings and just where we are in general?

Well, thank you, Chair Laird. I appreciate the opportunity to have this conversation at this Committee. This is, as our colleagues spoke to in their opening comments, really one of the most central issues we're navigating right now within higher education and certainly within financial aid.

So we appreciate the concern and focus. You already heard from my fellow panelists that there are two really central issues here with the rollout of the better FAFSA, as the initiative is referred to, one being -

As opposed to the worse FAFSA, I didn't understand why it's called that.

Yeah. And there are benefits to the simplification. Longer term, there'll be the use of this IRS data to prepopulate the application. Many students are benefiting from that. However, we know as, again, as my fellow panelists spoke to, our mixed status families are currently unable to submit an application for aid despite being legally eligible for federal aid.

Based on data from 22-23 we at the Student Aid Commission have identified as many as 108,000 students who had at least one parental contributor to their application who did not have a Social Security number listed.

So this is a very significant population for us in California. We at the Student Aid Commission have been working very closely with our segmental partners, with the Administration and many others in the community to determine the best path forward to serve these students.

Again, as you heard, recent announcements indicate that there should be a fix for these students later this month. However, we're also planning for further disruption to the timelines that have been communicated. So if there's not a complete fix for these students, we've been preparing technical adjustments to the California Dream Act application, which is our state based application for state aid for those who are unable to apply for federal aid.

We're preparing that as a contingency so that if these students can't submit a FAFSA, they can submit a California Dream Act application to learn about their financial aid status before the key upcoming enrollment deadlines. These students would still be able to later submit a FAFSA to receive their federal aid. Of course, we're hoping to avoid having to ask students to submit multiple forms.

There are other glitches in the FAFSA process that can complicate the application experience for students, but we know that many are having this simplified experience. Again, as you already heard, the other really significant issue is what this impacted timeline has meant for getting information to students.

The Student Aid Commission and our campus partners are not receiving data on the timeline, which we typically receive what's referred to as the institutional student information record, the ISIRS, that's what the FAFSA generates.

That's what allows the Commission, our campus partners, segment partners, to determine a student's eligibility for aid. The delay in transmitting these records not only complicates how we are able to inform students about their eligibility for aid, it also impacts our ability to understand our progress in helping students apply for financial aid. Last year, we had achieved historic levels of financial aid completion.

As we were in the first year of implementing AB 469, our universal financial aid completion law that was enacted back in 21, we led the nation and growth of high school senior applications. We had more than 24,000 additional financial aid applications from the graduating class of 2023 compared to the graduating class of 2022. We're really eager to continue that momentum. However, the headwinds that we're navigating with our students are, of course, a drag on how we're able to help them apply.

So while we're not receiving any student level information yet, we hope that in the next week we will start to receive some initial data from the Department of Education. The National College attainment Network has been receiving aggregate state level data that they use to depict high school senior completion based on age proxies, so it's not quite a one for one match with how we would depict data, which is based on California Department of Education data and the financial aid applications we receive.

But this is really the best thing that we have to work from right now. Based on that data from the National College Attainment Network for applications received through February 23, there have been approximately 117,000 California high school seniors who have completed a FAFSA so far that represents approximately 23% of the high school senior class, and that's a 50% drop from where we were at this point last year. The most significant volume of applications is received immediately prior to state financial aid deadlines.

So in a normal year, the state financial aid deadlines March 2. We receive the most applications on March 1 and February 28th we've been working to disseminate. So we do hope that we will, as we approach the deadlines, that we will start to see an increase in applications, that we will start to have the ability for our mixed status families to apply. But we're really eager to see what these fixes rolled out by the department look like.

We've been disseminating information widely to our local partners to ensure that they have all the resources available and that we're getting out information. It's really changing by the day that we're getting out information as aggressively as we can through our online presence, social media, and regular updates to the fields. And in close coordination with our segment partners, we've already hosted over 900 cash for college workshops. We have another 200 scheduled.

We're training community partners, and we've also implemented enhancements to our California Dream Act application to try to provide a greater or improved user experience for those students who will not in the future benefit from this FAFSA simplification that's been underway. So happy to take further questions here, but we know we have more work to do to help all of our students apply and to receive information about their financial aid status to make an informed decision with their families.

I want to ask everybody about this in a moment, but I want to ask a follow up question first, and that is you sort of had a backup plan for if a fix or adjustment is not there for FAFSA and what your backup plan is. But are you also planning, do you have some inkling of what the fix might be?

And you're already moving to situate yourself with the recipients in a way that you have what you need and you're not startled on the day it's done and have to start from scratch? I know that's a wonky question, but it could well happen.

It's a wonky question, but a very important question. Chair Laird. And part of the challenge that I think we have is that we know that the Department of Education is really working to create this fix for mixed status families. We don't know exactly what this will look like. Our hope is that it will look just like it does for other students who apply for federal aid through the FAFSA. But that is still not clear.

We've been in close communication with the Department of Education and with senior officials there to try to get further insight into what this might look like. They, of course, as you're hearing in terms of just transmitting student records for the applications already submitted, they have a lot on their plate and many deliverables that they've committed to getting out to the field in March. So we're very eagerly awaiting further information.

I think I read in the materials that the target date for getting the fix is in the first half of March, and yet I'm familiar with federal institutions. It's like a target date isn't usually written in stone. So it's your hope that that happens. And then if in fact it's similar, you're not having to reinvent the wheel. You're just getting people to submit applications as they were normally.

That's right. That is the happy path. That's the path that we would like to go on so that students --

Boy, we're on better and worse. We're unhappy and sad. We're really doing well here.

Very emotional time in financial aid. Chair Laird. But we really want our students to be considered for all of the financial aid for which they can qualify.

However, if there are any glitches or there's an issue with the timeline, we still, of course, want these students to have the benefit of knowing about their eligibility, at a minimum, for state based aid and to let our campus partners have access to information that might assist them in the process of determining if there's also campus based aid that could be available to them. And that's where having this contingency plan with our state based application comes in.

We've implemented the technical components, so we have the switch ready to flip if we need it, but we're really hoping it's not going to come to that and that we'll be able to just utilize the FAFSA form, because these are students who are citizens. They qualify for federal aid, and there's many resources that we can't give them through the California Dream act.

And you see, my follow up question has sort of been addressed, although the different segments wish to speak, is if there's anything for the Legislature to do in this, or secondarily, if there's anything, I mean, what is it that would solve this problem, or are there other avenues or other problems as part of this that need to be solved in a way that we can be having those conversations now.

And it sounds like you're asking the segments to, on their own, have some fallback plans for different options if certain things happen.

I think it would be. I don't want to speak for my fellow panelists. I think we're all planning for contingencies and that there have been disruptions to the timeline. So we're working together to try to navigate that.

And any decisions we make in this space, we want to do in close coordination with everyone, because it's not just about students being eligible for aid. It's also about them receiving information from our campuses so that they can make that enrollment choice.

Okay. Well, let me ask if the segments have comments they'd like to make on this.

In regards to the.

And just for the record, again.

My name is Gina Brown with the California Community College chancellor's office. In regards to the mixed status families the Legislature can highlight double down on how unacceptable it is that certain U. S. Citizens cannot submit a FAFSA. I am personally offended by it. So I think that is one thing the Legislature can do.

Although it's dangerous if we start talking about what we personally feel about things in these hearings.

Trust me, I understand. The FAFSA processing delays while the majority of California community college students are subject to the September 2 Cal Grant community college entitlement deadline, extending the Cal Grant deadline to at least May 2 will benefit California community colleges students transferring to four year universities. So extending that deadline is probably one of the biggest impacts you could have.

Okay. I appreciate it. Do either of the other segments have things to add?

Noelia Gonzalez from the CSU yes, we would agree with the extension of the Cal Grant deadline from April 2 to May 2. I think that would be a great benefit because it would give our students more time to submit those applications and more time for us to help them submit those applications. And then again, the other piece would be support for advocacy in Washington to get those fixes in place for the State of California students.

Okay.

And I would just say, Shawn Brick from the University of California. We also would support shifting the Cal Grant deadline from April 2 to May 2 and would follow suit with our own financial aid deadlines in terms of sort of preparing for alternatives. If the California Student Aid Commission does open the California Dream act application to these families, we would use that to estimate their aid.

We do continue to feel like that should be a last resort option because it would either be asking these families to submit two forms, the California Dream act now and a FAFSA later, or forego all of that federal assistance, which at UC would be $60 million in Pell Grant alone for our mixed status families.

And community college representative brought up the delay. In essence of register, you have a statement of intent to register. Is that something you would consider delaying if this isn't resolved or is resolved in a way that doesn't allow for resolution by the time of your current deadline?

Yes. The CSU has already extended from May 1 to no earlier than May 15, and we have some campuses that have extended it further.

Okay.

And we similarly extended from May 1 to May 15. And we're committed to being flexible if things continue to slip and have already committed that. If individual families need additional time, we certainly will also consider that.

Before I move to a question on another subject, I was focused on the Student Aid Commission in the three segments, and at least once I felt some nodding coming over from either Finance or the Legislative Analyst. Do you have any comments before we move on to another subject on this?

Lisa King with the LAO we think that extending the state financial aid deadline is worth considering because it allows the US Department of Education more time to resolve these technical difficulties we've been discussing, and particularly for those students in mixed status families who are currently unable to submit an application.

As the panelists have pointed out, these are students who are us citizens and eligible for federal financial aid, and so it really is preferable for them to submit a FAFSA rather than a Dream act application, if at all possible.

The FAFSA qualifies them for the maximum amount of aid. Allowing these students to submit the FAFSA also avoids unnecessary cost pressures in state and institutional aid programs. We've been discussing the Middle Class Scholarship program a little bit earlier in this issue. As you know, this is a last dollar program, so it's intended to cover costs that are not covered by other financial aid programs.

If students who are eligible for Pell Grants are not submitting the FAFSA, then that increases the cost pressure on middle class scholarship, the amount of costs that would need to be covered by that program.

I understand that UC has a similar program that covers costs that are not covered by other aid, and so their program as well may experience these kinds of pressures. So that's just a consideration for extending the financial aid deadline.

We would point out that there is some practical limitation as to how far you can extend that deadline because of that point you just raised about the deadline for students to submit their statement of intent to register.

While we want to allow students as much time as possible to complete the FAFSA, the preferable form for them to fill out, we also don't want to extend the deadline so far that they have very little time to receive a financial aid offer and weigh that as they're making their college enrollment decision. So there is a bit of a challenging balancing act there. Thank you.

Thank you, Student Aid Commission.

Thank you, Chair Laird. I just want to offer one other point to consider. There's enough that we're navigating in the short term around these issues for our mixed status families, but I would be remiss if I didn't just share one other note of caution for us as we look to next year's financial aid application cycle.

Part of the challenge that we're facing with our mixed status families is that there's been a new process for parental contributors to confirm their identity. And if you can't have your identity confirmed by connecting with IRS data or through a process with transunion in which they're asking identity based questions.

There's additional documentation that individuals without a Social Security number are being asked to provide to a Federal Government agency. As we think about next year's financial aid cycle, which I believe we all hope will start in October rather than in January next year, depending on the national political environment.

Those 108,000 students that I mentioned who had a parent without a Social Security number may have some additional concern about sharing a family member's information with a federal agency as they try to seek financial aid.

Don't have a ready made solution for you today, but I just want to note that because there, of course, won't be a budget hearing process at that point for us to navigate these issues together.

Okay, thank you very much. And I didn't see finance moving forward. Well, actually, somebody from finance is moving forward.

I will. Chris Ferguson with finance. To the extent the Legislature were interested in extending that deadline, certainly the Administration is likely in a position to support such an extension.

I really appreciate your comment. Before I moved on to another subject, I was going to make a closing comment that that is totally in sync with. And that is, this is our hearing, but it sounds like these things will move fast and in different ways outside the hearing.

And I would encourage everybody to be in touch to let us know what some of these decisions are so that we can be supportive of the right thing, to sort of protect the students and do this all in the right process way. So I would just ask, as we close out this particular issue, that we remain in touch about it, because we'll want to do and be supportive of things like that to make sure that the students are best protected.

And you teed up the next subject in different ways because I wanted to ask about the Middle Class Scholarship. And I thought I would start with the Administration in asking about the rationale for eliminating the planned augmentation for the Middle Class Scholarship. And while I get that that's a fiscal decision, what's the impact on sort of the program and people in the program by that decision?

Amanpreet Singh from the Department of Finance. Due to the uncertain economic picture we're facing, the Governor's Budget is foregoing a planned one time investment in the Middle Class Scholarship in the amount of $289 million. The Governor's Budget still provides the Middle Class Scholarship to students, but it will be, as you pointed out, in a slightly lesser amount than what is in the current year.

The Middle Class Scholarship will actually be reaching a greater number of participants in the upcoming academic year than it does in the current year. And that's in the amount of about 18 million students. The Administration remains committed to helping students with the greatest financial need via the Cal Grant program.

We understand that all student aid is meaningful to the students who receive it, but just due to the economic limitations at this time, we're not able to augment the Middle Class Scholarship package.

And I appreciate that. The second part of the question was sort of the impact, and I got a kick out of the fact that we would cut a one time augmentation and more people would receive it. And by that standard, we should be cutting it dramatically, so we cover everybody.

And I know that isn't the real net impact. So by not having that, what do we see on the outcome side for people either receiving less in dollar amounts or less number of people? I mean, what's the actual impact of that? Not doing that? 259 million. And Chris Ferguson has miraculously moved to the mic.

Certainly I can help a little bit here. So I think the net impact from our perspective is you'd likely see students taking additional loans. One of the core tenets when we put forward the Middle Class Scholarship program and we all agreed to include it in the budget, was that it would help offset students need to take loans. So likely with that reduction, that would be the more practical impact you would likely see for students.

Okay, thank you. Which, just for the record, we wouldn't like to have happen. But the Student Aid Commission looks poised to make a comment.

Just for further context. Chair Laird, the impact for students, and Chris just spoke to this, it means a reduction in the per student award amount that they would receive compared to whether this ongoing, appropriate, or one time appropriation were maintained. So, just for reference, in this past or this current year for 23-24 we estimate Middle Class Scholarship awards will average at around $5,300.

In 24-25 based on the funding level presented in the Governor's Budget, we'd estimate that the per student award amount would average to be $3,700.

And when the finance Department said the number of people receiving it is going to increase, but this reduction or non funding piece will happen, that really means that there are more people receiving it at lesser amount than would happen if this were in the budget, is that correct?

That's correct. I typically describe Middle Class Scholarship as a quasi-entitlement. If you're eligible, you'll be in the program. It's based on the funding level, the total number of students in the program, and those other sources of aid that they receive that inform the unmet need calculation where we then identify for each individual student their specific award amount. And this may be a segue into any questions about implementation of the program. Since --

Well, the thing, just to drill down a little more, if the real difference is that there'll be a few more people, everybody getting less, it doesn't change your administrative costs because you will still have to administer actually more people. And so there's not a reduction in administrative costs. Any reduction would be taken totally through the grant amount. Is that correct?

That's correct.

Okay. And it is disconcerting that people would have to move to loans because that's what we're trying not to do with our student aid system. I don't know if any of the segments have any comments on this. I'll just say UC.

Yeah, from UC. We really appreciate the idea around Middle Class Scholarship, addressing the total cost of attendance. When you do have a program that does, which is our own institutional aid program does as well, that means if you're not constantly increasing the size of the program, you're falling behind, because our students are going to be facing inflation every year regardless.

So I do think, as the Department of Finance said, that probably means that we're going to lose ground in trying to achieve our debt free packages for all of our students.

And I know the original author of the Middle Class Scholarship happens to be a Member of the Board of Regents now, so I imagine there's some vigilance at that level about this program.

Yes, there is.

Yes. Great. Thank you. And I think that sort of covered where I wanted to go on that subject. And then. Let's go. The last subject I wanted to ask about was the Cal Grant equity framework, and it was scheduled to really kick in in a lot of ways in the budget year. And so maybe I would start with the Student Aid Committee. And I have to say, despite my wore in acronyms, CSAC is also the county supervisors or County Association.

And occasionally I see CSAC in this agenda. And I think, why do the counties care about student aid? So what's the update on the implementation, from your perspective? Yeah.

Thank you, Chair Laird. And I'll provide an update on the current fiscal projections and estimates that we have on student impact. Implementing Cal Grant reform requires one time costs over the course of four years due to the grandfathering of any students that are currently receiving a Cal Grant under the existing model for the program, alongside the implementation of Cal Grant reform in those initial years. Implementation of the Cal Grant reform model as it ramps up.

There are these costs that are both one time in nature and ongoing in nature. Based in our most recent estimates, this would require an additional ongoing appropriation of $195 million annually, with those one time costs varying by year over a four year period.

But at projected $51 million for the 24-25 year, these numbers are lower than the last available numbers provided when the May Revision was being considered in 2022.

Because our modeling at the Student Aid Commission is based on the latest actual data in students applying for aid, and we've seen some changes in the nature of financial aid applications and who's actually being paid a Cal Grant award. The drop that we've seen in financial aid applicants has come from a specific student population that's referred to our competitive Cal Grant program, which you might recall is the program that's impacted.

It's a limited number of awards for students who don't meet the criteria of our other Cal Grant entitlements. So since the creation of the community college Cal Grant entitlement, this program has only served students from our four year institutions where there's a higher per student award amount.

So that's where you're seeing the cost change, is that there are fewer of these students in the competitive Cal Grant program who would be funded under Cal Grant reform, but who are currently often what we would refer to as eligible but unfunded due to the limited nature of the competitive Cal Grant awards.

These estimates, I have to thank our colleagues at Department of Finance and the Legislative Analyst Office for helping support us in the process of refining these numbers.

They include, of course, the planned tuition increases at the universities as well as reasonable enrollment growth assumptions that we've applied consistently for both the existing Cal Grant model and Cal Grant reform, so that over this five year period that we've forecasted or budget year plus five.

You're comparing apples to apples in terms of student impact. The trends are very consistent with what we discussed in prior years.

By implementing and funding Cal Grant reform, we'd open the doors to financial aid for over 137,000 newly eligible students who are currently left out of the existing Cal Grant program. And these are students who are currently left out of Cal Grant not due to their financial status, but due to other restrictions based on GPA at community college, time since high school graduation or their age.

And then a follow up to the Department of Finance, which is that the original agreement on the equity framework said that it would be triggered if there were certain. I don't know what you call it. The money's there in the future years and it appears that the money isn't there.

Could you comment on sort of what the nature of the trigger is and how far we might be from it and just how you make that assessment at this point?

Amanpreet Singh. From the Department of Finance. The Governor's Budget does not propose any changes to that original Cal Grant equity framework. As for whether that trigger has been reached, the Administration remains attentive to the issue of Cal Grant reform. But given the current economic situation and the cost to implement that program, it does not appear that that trigger has been reached at this time. But we will continue to have those conversations throughout this spring process.

I can see your colleagues standing up, and the thing about it is I'm interested in the wonky question about are we anywhere near the trigger? Are we now way far away from the trigger? I don't know if that's what you were standing up to talk about.

It was. I think from our perspective, that's a May decision. I don't think we can speak to whether resources are there or not there at this point. The agreement was in law. It says the decision would be made in May, and we continue to reaffirm that that decision would be in May without comment on whether resources are there now or not.

But I guess it just goes without saying it's hard to imagine the resources are going to be there. I don't know how you were just distinctly not trying to address that question, but it's pretty hard to see that they're going to be there.

Yeah, I think you're correct in that we're honoring the agreement, but certainly based on the Governor's Budget, there were certain fiscal challenges that we had to work through.

Thank you. And then let me ask the Student Aid Commission and the different segments, are there any pieces of this that you think you could start to move on absent sort of triggering. Just that's a very generic question. I'll start with the Student Aid Commission and see if there's any response from the segments.

Sure. Chair Laird, it is a generic but deep question and one that we appreciate the opportunity to respond to. As you know, for many years, students equity advocates, policymakers have envisioned financial aid that's simpler, more transparent, that serves students in a way that the current Cal Grant program does not.

That vision remains central to efforts to rebuild enrollment, provide access to higher education, despite the budgetary context.

And we also recognize the current fiscal climate and that achieving the full vision for Cal Grant reform as adopted in 2022 may require a multistep process. Though, as I spoke to in my earlier comments about the cost estimate, really, one time investments will be necessary, really, regardless of the path chosen, if you want to move toward restructuring the program. So we're prepared to advise the Legislature and Administration in finding a path that achieves goals within those fiscal constraints.

Initial steps to implement Cal Grant reform can take multiple shapes. Policymakers have options to increase or decrease the number of students eligible through existing restrictions, as I spoke to on income, GPA, age, time since high school, or increasing decreasing award amounts.

Each of these options, of course, has its own costs and benefits. Any increase in eligibility or in award size to the current Cal Grant program, of course, requires additional ongoing funding.

One option in that category is to look at an increase or an annual cost of living adjustment for non-tuition awards for community college students under Cal Grant reform, there's a provision for e COLA on Cal Grant, two awards for community college students, and that's to ensure that its purchasing power doesn't erode over time as we see those non tuition costs increase.

Unlike Cal Grant awards at public universities, where there's a component tied to tuition increases, Cal Grant awards for non-tuition costs currently require budget action to increase.

That contributes to gaps in Cal Grant funding between segments relative to the number and the financial need of students. That option, of course, doesn't achieve simplification through restructuring of the Cal Grant program that we know policymakers have envisioned and that we understand is so beneficial to students.

With that transparency and predictability and an award increase now further increases the future costs of Cal Grant reform and requires new ongoing funding upfront.

Other options could be achieved through one time investments and that would set up future years for investments of ongoing funding, and that would be done by restructuring the Cal Grant program along the lines adopted in 2022 and in statute, while maintaining some of the existing eligibility restrictions that would limit the ongoing costs.

This restructuring, as speaks to in your agenda, streamlines the current eight different iterations of Cal Grant into two. Cal Grant 2 for community college students and a Cal Grant 4 for our students at four year institutions and aligns those with the income eligibility with that for the federal Pell Grant.

So under the current Cal Grant program, there is a limitation for GPA for our community college students, the 2.0 minimum that doesn't really track with the open access nature of those institutions. And one option that the Governor could consider would be to implement a Cal Grant 2 enforced system while maintaining a 2.0 GPA requirement of some kind for community college students.

That limits how many students you bring in, particularly older, nontraditional quote unquote students who in many instances qualify for the larger $6,000 Students with Dependent Children Grant. And the piece I would note here that you could also consider in maintaining some kind of GPA requirement. Current law requires that students complete 16 units to reestablish their GPA.

If they don't come in with a high school transcript with a 2.0 GPA, you could look at an option to try to soften that requirement and perhaps lower the number of units that a community college student would need to complete in order to establish that 2.0 GPA. Another option, as I just spoke to many of the students who become eligible under Cal Grant reform are student parents.

Current statute requires that if there's not sufficient funding to sustain the Student with Dependent Children Grants maximum award, the $6,000 that we provide to eligible student parents for their additional costs, it prorates the awards down. So you could think of it in a way like Middle Class Scholarship. Over 45,000 students of the 137,000 students that we make eligible through Cal Grant reform are student parents.

So another option you can consider would be instituting Cal grant 2 and 4, fully eliminating the GPA requirement, but allowing those awards to fall for student parents. It would probably be somewhere in the range of 3 to 4000 dollars per recipient. Right now, those 45,000 student parents who are out of the program, they receive $0 in state aid through the Cal Grant program.

So this would mean that there's a reduction in the per student award amount, but there would be a broader base of access for student parents into the Cal Grant program. Both of these options achieve the Cal Grant 2 and 4 structure and set up future investment in a clear way.

The last option that I'll note here would be utilizing lower income ceilings. This was considered previously back in 2021. Cal Grant legislation at that time featured slightly lower income ceilings for the Cal Grant 4 program.

And of course, since then, we've seen more investment toward the Middle Class Scholarship program that supports our UC and CSU students. And, of course, the trade off that you weigh there is that we would then see fewer of our four year students receiving a Cal Grant than they would under the current statutory framework that was adopted back in 2022. So there are trade offs with all of these options. As you can hear, we don't have the data prepared yet.

We've been responding to the request from the Committee and from the Assembly as well to refine that and are happy to continue working with the Legislature and Administration to not only assess the broader fiscal landscape, but if any of these options should be entertained for adoption in this year or in the future.

Thank you for your comments. Are there any comments from any of the segments on this?

Gina Browne, California Community College Chancellor's office. California Community College has not wavered in our support to have funding for Cal Grant reform included in the 24-25 budget. However, we are supportive, we would be supportive of a phase in approach that incorporated the Cal Grant 2 components, or many of the suggestions that Jake or the options that he outlined that he could far better articulate than I could. That is how we support the implementation process. A phased in implementation.

Okay. I don't see people reaching for the mic.

This is Shawn Brick from the University of California. So I think we would have to review some of these alternative phase in proposals to understand the impact on our students. So it's a little hard to comment on these proposals specifically, given all of the churn and chaos this year. Our preference would be to talk about what we could do in 25-26 with a full Cal Grant reform.

The Cal Grant reform would benefit UC students, and we do appreciate definitely the simplification given all of the chaos this year. Right now, a change in policy after we've tried to estimate who is qualifying for Cal Grants would be very challenging, I think, for our campuses and for our students.

And I think CSU is reaching for the mic.

Noelia Gonzalez, again, for the CSU, agree with the UC that with all the chaos and all the challenges that we've had this year, I think it would not simplify the process for 24-25 but to look for it for in the 25-26 year.

If we do a phase in for this current year, I would hate to see a reduction to the income ceilings because that, coupled with a reduction in Middle Class Scholarship, would greatly affect our low middle income and middle income students, where they would now see a significant reduction of their aid available to them for the 242-5 year.

Okay, any last comments on this subject? Then let me make an overall comment on this item, because I think that completes the questions that I have.

And when we worked hard on the issue of reform and to some extent expansion in the 2021 and then 2022 budget processes, the idea was that in many ways, the system up until that time had just been limited in money and used all these different things in the system to limit who got it, just based on the fact that there was a limited amount of money.

And it was our goal to try to reverse this and get to the point that we were trying to look at the need and address it with funding. And it really moved past for the first time in a long time where we had been with the student aid system and we made great progress and then also had the equity framework scheduled to kick in. And we are now facing all these different realities, some of them are process realities that we talked to about FAFSA.

Some is the reduction or the not funding, the one time thing for the middle class scholarship. And we're facing this horrible situation, which puts us back to where we were prior to 2021 and 2022, which is trying to figure out different ways that might limit what goes out to match the resources that were available. And I recognize that we may have to do something like that given the real budget shortfall.

But I don't want to lose sight of the fact that we made all that progress and we tried to reverse what our ethic was to sort of fund the need.To be honest, we made great progress.

But there were still lots of things besides the equity framework that we weren't able to do. We weren't able to do some things into the community college realm that existed for the other segments.

And so I would just sort of note where we are because of the budget shortfall, but where we want to be policy wise and where we want to be with regard to the money that we put into it. The last thing I want to hear is some action we're taking is going to cause people to have to take student loans and that we will delay the equity framework because we just don't have the money to trigger it.

And so I just thought in some, I would offer those comments, and then we will work with you on the short term things that might happen, such as what Mr. Ferguson said when he was at the mic about a previous subject, and then try to do our best to triage as best as possible in whatever happens with the budget, given wherever the deficit is at that point.

So I appreciate the fact that we could have a thoughtful conversation here today, and we will just move forward within those realities. And thank you for all of you for being here. Thank you for all of you, for being prepared.

It was clear you anticipated some of the questions, and so that was great. And we will just move forward as I outlined and try to do our best in the budget year. So thank you for being here today.

And I am confident when we get to the public comment, at the end of the third item, there will be people addressing this issue. We are going to move to issue number two, which is UC College of the Law. We have the Department of Finance, the Legislative Analyst Office, and the Chancellor and Dean, I believe, here to present to us and have a discussion about that. So welcome to the Committee.

And we will begin with the Department of Finance and then go to the Legislative Analyst who's moving to give balance to how we face the panelists here. And then we'll go to the Chancellor and Dean, and I know that we have the chief financial officer here from the school as well to do backup questions in case there's any really wonky budget stuff that needs to be answered. So welcome to the Committee.

Good morning. Chair Gabrielle Chavez with the Department of Finance. The College of the Law, San Francisco, is affiliated with the University of California system, but is governed by its independent board of directors.

The college primarily enrolls students seeking a jury's doctor JD, but it also offers three law related master's program, including a joint health policy and law program with UC San Francisco. College of the Law San Francisco expects to enroll approximately 1053 resident students in 2024-25. 988 will be JD students.

The total residence fees for the JD program in 202425 is 5625. The governance budget includes an increase of 2.2 million in ongoing General Fund to support operating costs. This represents a 3% increase in base documentation. Happy to answer any questions.

Thank you very much. And then we'll move to the Legislative Analyst Office.

Thank you very much, Mr. Chair. Ian Klein with the LAO. As mentioned by the Department of Finance, the Governor's Budget includes a $2.2 million General Fund based augmentation. Given the budget situation facing this state, we recommend that the Legislature reject this proposal.

Now, unlike UC and CSU, which had their proposed base augmentations deferred in the Governor's Budget, it was explained to us that the College of the Law was provided with a base augmentation, as that college is a smaller agency with less access to borrowing and smaller reserves.

However, even without a base augmentation, the school would still be able to cover some components of their 24-25 spending plan from other revenue generated from other sources, primarily from tuition fee revenue. With that, I conclude, and I'm happy to answer additional questions.

Thank you very much. And now we'll move to the College of the Law. Welcome.

Thank you. Good morning, Members of the Committee. There we go. I'm David Faigman, the Chancellor and Dean of the University of California College of the Law, San Francisco. Is it not on?

It was on.

The state has been an extraordinary supporter, indeed partner of our institution, throughout my time at the school, and I hope that the state has appreciated what we've accomplished with that support.

For over 50 years, we have had a robust admissions policy of ensuring access to underrepresented groups, including those who have overcome systemic disadvantages and those that are first generation college students.

That work has been led by our Legal Education Opportunity Program, begun in 1970, through which approximately 20% of our class is dedicated to students who have successfully overcome severe disadvantages.

Over the last five years, we have expanded that commitment to our FirstGen program, and now about 24% of our class were the first in their families to go to college.

In addition, since I became Dean in 2016, we have initiated an expansion of our footprint in the heart of San Francisco, which has primarily involved the building of student housing. In August of 2023, we opened our new 14 story building with 656 units of housing.

That housing is not just for UC law students, but is open to graduate students from Bay Area programs, including a third dedicated to UCSF learners and additional units occupied by graduate students from other institutions of higher education in the Bay Area.

In short, we are thankful for the state's support throughout our 146 year history and fully endorse the Governor's Budget recommendation for the college this year.

We well understand the budget challenges faced by the State of California and appreciate the LAO's recommendation seeking avenues to reduce spending, including identifying the governor's plan for UC law this year. However, the LAO itself explains why its recommendation isn't viable for UC law.

Quote the Governor does not propose to defer this base augmentation as he does with the UC and CSU based augmentations. The Administration indicates it took a different approach for UC Law because it is a small agency with less access to borrowing.

I want to also note that we do not expect declining JD enrollments this year. Last year was an unusual year because of another school's belated decision to admit a larger class, which negatively affected our yield late in the year. Our target this year is the same as it was last year, and we have no reason to expect a repeat of what occurred last August.

Finally, as noted by the LAO, our tuition is lower than our sister UC Law schools, which is, of course a positive factor for a school that seeks to serve the public interest. We likely will need to continue to increase tuition over time, but the provision of an affordable legal education represents a core institutional value.

In summary, we run a first rate law school, leanly, in terms of staffing and compensation in a way that specifically advances the state's interest in diversifying the legal profession. But we depend on state support to achieve our public mission. Thank you for your time, and I look forward to answering any questions.

Thank you very much, all three of you. Well, all four of you, for being here. I have just a couple of questions, and a lot of it got covered. But first, let me ask the dean. I was going to ask you about the status of your housing projects, but you answered that in your statement.

Does implementing the housing in any way depend? Is it related to the augmentation that's in your budget, or is that independent and anything with it can move ahead unrelated to the.

Yes, it's independent. Chair Laird The augmentation would be covering operating costs, in particular inflationary costs, and we are going into negotiations with our unions. AFSCME and AFT. And so we expect to need to increase compensation as much as 3% over the next several years.

And then when I read the materials, you have a security cost, or there's security because of your location. How much is that, and how does that work?

I'll talk about the substance, but I'll defer to my CFO on the actual details. We contract with Urban Alchemy, which is a nonprofit organization that employs formerly incarcerated individuals who have been trained to be street ambassadors.

And they do truly a fantastic job of keeping the frontage of our campus secure. They've been very involved and integrated into our community. They've gotten to know our students, our staff, and our faculty. And so they've really made quite a difference in a very challenging and difficult neighborhood.

The tenderloin, in particular, as of late, has had some unfortunate instances, including some of our students. There's open air drug dealing. We have had continuous efforts with the City and County of San Francisco to meet and achieve true systemic reform in that neighborhood. But it's very expensive, and I'll read to David Stewart to talk about those details.

The Chancellor and Dean is being very diplomatic in his description of the city's challenges and their inability to rectify some of the problems on the street with the open air drug markets and the violence. So currently it answers your question, Senator.

We spend 2.5 million exclusively for urban alchemy. That is on top of the 1.3-1.4 we spend with UCSF to sort of man fixed post stations at the building entrances.

So UCSF, under contract, covers the fixed posts and urban alchemy, sort of, for lack of a better word, protects the perimeter with their sidewalk safety services. That is a significant cost. It is one that is essential for our operations.

And it has the collateral benefit of providing employment opportunities for a really first rate group of fellows and men and women who have been previously incarcerated.

Okay, thank you. Just sorry to hear that that's necessary at that level. And then last question. In the last couple of years, we've discussed the implementation of the name change. Is there anything that's outstanding with that, either operationally or budgetarily?

Yes, operationally. And again, I'll leave the budget to my CFO. We continue to be adding names and replacing the old name. So we had very large seals with the University of California, Hastings College of the Law that have now had to be replaced at considerable cost.

As the Senator knows, we did not receive an augmentation to cover those costs out of pocket costs, and so we are continuing to absorb them.

And then also there are inherent costs, which are more in terms of emails and branding to get it to be known for prospective students as well as faculty at other schools. Our name, so that they associate our great law school with the University of California, College of the Law at San Francisco.

Okay, thank you.

Yes, that unfunded state mandate, or largely unfunded state mandate has been a budget pressure. We have spent to date $2.4 million. The State of California has provided $885,000 in the Budget act of the prior year.

So you would actually correct yourself and call that a partially funded statement?

Partially funded, yes.

Okay. Just checking. Department of Finance looks poised to make a comment.

No comments.

Okay.

But it has been a budgetary pressure point for us.

Yes. Okay. Well, that completes the questions I had. Are there any final comments on this before we move on? I would make the global comment that I appreciate the exchange on the augmentation or the increase, and I appreciate the reasons for it.

You should appreciate how unique you are compared to every other segment and what is happening with augmentation. There's also a uniqueness in that. Yours is, I don't know, 348 million less than the UC's deferred increase.

So the matter of scale is a relevant thing, but if the deficit is $73 billion, I wouldn't bank it at this point. Of course, we won't be looking at everything when it gets to that point, but thank you. This was a very civilized discussion and I appreciate the fact that you're here today.

Thank you, Senator.

Thank you. And we are going to move to our third and final item before public comment, which is the California State Library. And we have the Department of Finance, the Legislative Analyst Office, and the deputy state librarian that are here to make some comments.

And I think that I would like to go once they're ready, in the order of the Department of Finance, the Legislative Analyst, and the state librarian. So welcome to all of you and welcome to the Committee. Look forward to your comments. Begin with the Department of Finance.

Is this on?

Yes. Well, for now it is.

Good morning, Mr. Chair. Devin Mitchell with the Department of Finance. The Governor's Budget proposes pulling back 131.31 million one time General Fund of the 439 million in one time General Fund support provided for the Local Library Infrastructure Grant Program in the 2021 Budget Act.

The budget also foregoes planned one time General Fund investments to support the program of 33 million in 2024-25, 33 million in 2025-26 and 34 million in 2026-27.

Additionally, due to low participation in the program, the budget also withdraws 34 million of the 35 million appropriated in the 2021 Budget Act to expand broadband access to isolated and underserved communities through the California Collaborative Connectivity Grant, a partnership of local education agencies and regional libraries. 29 million is being reverted to savings and 5 million will be redirected to the California Department of Education for the Broadbrand Infrastructure Grant, also known as the BIG program.

Additionally, the Department is receiving position authority for a tribal and rural libraries focused library programs consultant that would be supported by federal funds from the US Institute of Museum and Library Services. Thank you. And with that, I'll yield to others on the panel and I'm ready to answer any questions at the appropriate time.

Thank you. We'll move to the Legislative Analyst.

Thank you very much, Mr. Chair. Ian Klein with the LAO. Our first comments are that we've reviewed the Governor's proposals and agree with scooping what is available to be pulled back. However, the Governor's Budget identifies roughly 131 million in infrastructure grant funding that could be reverted.

However, the state library reports that only 4.8 million remains unencumbered at this time. We also have no major concerns with the redirection of federal monies for the tribal consultant position.

This position will, among other tasks, be responsible for assisting existing tribal staff in submitting federal grant applications, which has the potential to generate additional federal money for these populations that could potentially be into the millions of dollars.

Beyond the Governor's Budget, the LAO also looked through previous budgets, beginning with the 21-22 Budget Act, to identify additional onetime funding that had been provided.

The state library has been provided with an additional 200 million in onetime funding for various initiatives, of which roughly 68 million remains unencumbered as of January 1 of this year. We recommend that this funding also be pulled back, given the projected budget deficit. With that, I'm happy to answer additional questions.

Thank you very much. Now we'll move to the state library. Welcome to the Committee.

Thank you so much. Good morning. And thank you, Chair Laird, and it's a pleasure to be with you here this morning. I just want to speak about the importance of public libraries as we know they serve as.

And you should identify yourself.

I'm sorry.

Yeah.

Rebecca went, deputy state librarian. I guess I just assume people know who I am, which is ridiculous.

I think there's one person back here that's here for student aid that didn't know. Keep going.

So I'd like to speak to the importance of the work that the state library does with both public libraries and other programs that we are involved with. As we know, public libraries serve as a social safety net in some respects, and as also as a connector to information for people and a lifelong learning opportunity.

And we have been very pleased and happy to be participating in the Infrastructure Grant Program that the Legislature has been supportive of in the past.

They have been able to assist with 278 local libraries fulfilling critical maintenance needs and having the opportunity to replace up to seven libraries. And these are projects that have been deferred. And as we know, so many people use libraries, it's important that they walk into safe buildings, both for the community and for staff members.

So projects have included roof replacements, window replacements, and safety and security measures, as well as other projects. Moving on to the broadband.

Yes, indeed, it has been difficult to have the projects come to the application stage, as these are indeed, many partners must be filling out paperwork, and the federal cycle is only annually. So that is indeed true. There have not been any large applications that have gone forward.

And then for the tribal consultant, we agree that it would be bringing in lots of opportunities for tribal and rural libraries, and we are eager to continue that work. And I'm happy to answer any questions.

I have one significant question and then a random comment. And the question is, people were talking about money coming back and pulling it back. Has any of the money actually been awarded? So explain that to me.

Sure. We have had two rounds of awards. There has been monies from a couple of different fiscal years. The first round was well over a year ago. And then the rest of the money that we are talking about having been awarded was indeed in October of 2023, we announced the remaining grants of 172 million to be going out to the field.

At that point, the libraries finished their paperwork and all of the funds were encumbered. So they have received the first round of money. None of the projects that are still in progress have received all of the money because we ask for project reports along the way so that they don't get the lump sum, but they are making sure that they have progress.

Let me understand the practicality of that because I'd administered billions of bond dollars in my previous incarnation. If somebody is awarded a grant and it's encumbered and it comes to them in phases, are they doing some kind of construction project where they've actually committed it and we're pulling the rug out from under them for a back part of the construction?

In many cases, that would be the case if we asked to return some of the funds. Yes.

I would just say, and believe me, I'm the one that's given the speech in the entire hearing about our budget deficit. But that's very concerning. If somebody relied on us and entered into a project and has constructed part of it, and we're saying, sorry, that just is very concerning. I think that would be very difficult, if you are at that level, to absorb that.

And once again, I have the caveat that if the budget's deficit is 73 billion, everything is on the table, but it would be good to statistically have in front of the Committee where that's the case, and not just have this global, here's the money that's being swept. It's like, here's where it is. In the second part of a grant award that was made, encumbrance has happened, construction has begun.

Be really good to know that, because right now it's just sort of this antiseptic global number with none of that information underneath it. And I would find it really hard to do that, particularly because a lot of the people we're making grants to are hanging by a thread economically, and it really puts them out there for that remaining part. Mr. Ferguson, do you have a comment?

Yeah, I just say as we get to the mayor vision, we'll certainly look at what is or is not available to be pulled back. I think we share some of those same concerns. Our estimate was point in time, and I believe it was just before that second round of awards had been made. So certainly when we get to May we may be proposing certainly a different amount.

Our intent in pulling back funds was to pull back unawarded, unallocated funds so that we would not run into those issues that you speak to.

Which doesn't seem like that's the case here.

Yeah. So you would certainly see us potentially make an adjustment come to May revision.

Okay. I really appreciate that. And then my random comment is my own district, and that is that I visited a year ago the City of Parkfield. I say city, it's not incorporated. It's the earthquake capital.

It's where earthquakes happen every 22 years. And so I visited it as the Education Budget Sub Chair, and there's 18 people. And I visited the K-8th school, which has nine students. And the teacher lives there because there's what's known as the teacherage, which is the equivalent of a parsonage. They have a house at the side of the school playground that allows.

And I met the school board president, and the school board president is the librarian, and there is a bus driver that drives the five high school students into San Luis Obispo County, picks up the lunches, brings them back, and then goes back and gets the high school students.

And the bus driver is the daughter of the school board president. And then I went across the street to the earthquake cafe, and the waitress was the daughter of the teacher.

That is what happens when you have a library, which is the community center in the middle of a place with 18 people, and maybe it gets up to 50 with the ranches around it. And they rely on these because they do not have the financial ability to connect to the outside world totally on their own. And grants and different support to the library system makes a fundamental difference to communities like that.

I'm sure they're aware there's a $73 billion deficit there, but nevertheless, I just call attention to the fact that there are real people behind these programs and real places that make a difference. Okay. The big thing was the reductions in getting to the heart of it.

Do any of you have a comment about anything? We didn't talk about that. You want to make sure we consider before we move from this item?

Very quickly, just for the record, it was Chris Ferguson with the Department of Finance.

Cool. I'm very glad for that clarification. Yeah. And I had the assuredness that it was not a random person sitting at the table testifying in front of us. Well, thank you. We really appreciate this and we understand what is in front of us and look forward to seeing how some of these issues are addressed. And it May Revise thank you for being with us today. That completes our three items and we're going to move to public comment.

And I'm going to take an informal survey show of hands to see how many people wish to speak in public comment. Okay, I'm sure some people might be moved, but if there's 12, then we'll do up to two minutes each so you can line up and we'll just go in sequence of whoever lines up and take you at the microphone, please state your name and any organization you're with.

And you have up to two minutes to address the issues we've been talking about today. Welcome to the Subcommitee.

Thank you. Good morning Mr. Chair. I'm Christina Ducaro. I'm the lobbyist for the California Library Association. And CLA would like to express our strong concerns which were just discussed here regarding the governor's proposal to pull back the library construction grants under the state library, $131million in General Fund dollars.

These projects, as you've heard, are already committed in local communities. And as you know, this Subcommittee in particular was a strong supporter of those dollars, as was Chair Skinner and Senator Atkins, of course.

These are health and safety construction projects, these are ADA compliance projects, and these are expansions of children's spaces and creating nursing rooms in libraries. We're very sympathetic to the state's fiscal challenges, of course, but we'd like to continue to work with you and come up with that document that you're talking about of where these projects fall in line in terms of their expenditures right now because we'd be very concerned. Thank you so much.

Thank you. We appreciate your comments. Welcome to the Committee.

Hi, Kimberly Sanchez with NextGen California. Also as a member of the Cal Grant Reform Coalition, which advocates for our most vulnerable Low income students and families to access higher education. We thank the Legislature and the Governor for including the Cal Grant Reform act in the 2022 budget.

Once implemented, Cal Grant Reform will open the doors to higher education to more than 13. This is a big number. Low income Californians. As discussed in today's hearings, we too recognize the tough budget landscape facing the state year.

As such, we respectfully urge the Legislature to advance Cal Grant Reform in the 2024 2025 state budget by making a meaningful first step towards full implementation.

And thank you Chair Laird, for your comments on where we've been and the progress made in financial aid and your reminder not to lose sight of where we want to be, including reducing the need for student loans and the Cal Grant Reform.

We understand we're operating in a constrained budget landscape and are currently exploring other policy options and look forward to working closely with the Legislator, on how to move Cal Grant reform forward in this year's budget. Thank you.

Thank you very much for your comments. Appreciate you being here. Welcome to the Committee.

Thank you Tiffany Mock, representing CFT, a union of educators and classified professionals, including those who serve students at UCs and community colleges. Thank you for this robust discussion and focus specifically on the FAFSA issues that our state and others are facing. As the Legislature works on solutions to support students and protect mixed status families.

We want to highlight that the UC compact does support goals to increase debt free financial aid packages, that the proposed deferral is a haircut in our mind, and that any further shaving of the hair would amount to a cut, which we would oppose.

It's really a dangerous analogy with the Chair, so you might pick another one.

Well, to be frank, we would oppose any cuts to the $500 million regardless of any UCs in the compact funding. Further, we wanted to echo support for the 2.2 million augmentation for the UC College of Law. Finally, we support the elimination of tax credits, if anyone's looking at those, and new sources for increasing revenues through taxation. Thank you so much.

Thank you very much for your comments. Welcome to the Committee.

Good morning Chair and Committee. My name is Chanelle Win with the Student Senate of California Community Colleges, representing over 2 million community colleges students. We are a proud member of the Cal Grant Coalition and we are very supportive of the current grant equity framework.

We strongly support the current Grant Reform Act and its transformative impact on low income, bipart and parent students to make college a reality. We recognize the tough budget landscape facing the state this year.

However, we want to emphasize on the commitment towards equitable higher education and reaffirm the Legislature's promise to us. Our goal is to ensure that none of my peers and the students I left behind who come from different walks of life and in the state aid programs due to GPA and age requirements. This will prompt social and economic mobility, which will solve the budget issue as well.

Therefore, we respectfully ask the Committee Advance Health Grant Reform in the 2024 to 2025 budget and make a meaningful first step towards implementation. Thank you.

Thank you very much. Welcome.

Good Morning Chair Laird. Anna Alvarado on behalf of the California Edge Coalition and also a member of the Cal Grant Reform Coalition, and here to really support student financial aid access, we see Cal Grant as a key lever to economic mobility for students.

Also want to uplift that GPA verification. Huge, huge barrier for opportunity youth adult learners who have been disconnected from our education and workforce system. So definitely appreciated CSAC's comments on some of the alternatives that they're taking a look at.

So we really urge the Committee to prioritize Cal Grant Reform as budget discussions continue and look forward to working with you. Thank you.

Thank you very much. Welcome to the Committee.

Thank you. Good morning. Alex Graves with AICCU, representing 90 private nonprofit colleges in the state. First, on behalf of the financial aid administrators in our sector, I would just say ditto to basically everything that was shared by the panel earlier.

I think all Financial AidAadministrators deserve a medal when they get through this year. Second, would like to note that we as a sector are also supportive of Cal Grant Reform and thank the Legislature and advocates for all their work on that.

And as we talk about incremental progress in a phased in approach, we are very interested and supportive of what is noted, I believe, on page three of your analysis regarding funding, the expansion of portability for those nontraditional students who are now eligible for entitlement awards at community college.

The policy change to ensure they have that remaining eligibility available to them if they transfer to one of our institutions was made last year, but it is contingent on funding.

We believe that that largely agrees with the framework and philosophy of Cal Grant Reform. And then lastly, we would also just note, as we think about how to increase the purchasing power of these awards for students, we would note that even with several minor augmentations in recent years, the Cal Grant Award is not statutory, guaranteed at any amount for students attending our institutions. And we're still running about $350 below what it was in 2001. And certainly the cost of going to college has increased since then.

So we look forward to continuing those conversations as well to keep those top of mind.

Thank you very much for your comments. Welcome to the Committee.

Thank you. Chair Laird Mark Mcdonald, on behalf of the Los Angeles Community College District, San Diego Community College District, Southwestern Community College District, San Bernardino Community College District and National University.

And I would just urge the full implementation of the Cal Grant equity framework. As you know, it would help community college students the most, the most that are older students out of high school the longest, have the GPA issues.

I would also, on behalf of National University, echo the comments of AICU on the agreement that's already been made and needs to be funded for independent institutions and transfer students coming from community colleges. Thank you.

Thank you very much for your comments. Welcome to the Committee.

Mr. Chair, Members, staff. Kathy Van Austin, representing John Burton Advocates for Youth. As you may know, one of the areas we focus on are students who are foster youth, former foster youth, and those experiencing homelessness. And our message today is we just urge the Committee to take the steps towards the Cal Grant Reform.

These populations are the ones that will really, truly benefit from that. And so we applaud the efforts to advance that and certainly encourage you to take those steps. Thank you.

Thank you very much. Welcome to the Committee.

Hi Alia sky, speaking on behalf of the UC Student Association, which is the official representative body for over 230,000 UC undergrads students. Number one priority this year is funding for Cal Grant Reform.

As my colleagues in the coalition noted, CGR would expand Cal grant to 130,000 additional Californians that are currently ineligible. But this framework also focuses on our most needy and vulnerable students, expanding access to 13,000 additional black students, 98,000 additional Latino students, and 93,000 first generation students.

Students also continually testify to this body, as well as others in the Legislature, to the importance of receiving a Cal Grant and how they would likely would not have been able to go to or complete college without this vital financial aid.

This investment not only benefits students, but benefits California as a whole, as the state would see a 4.50 cent return in investment for every $1 that they invest in students financial aid.

And we also know that the proven top reason students choose not to pursue higher education is due to the financial cost. And the Legislature has voiced their concerns over the growing number of Californians choosing not to pursue higher education. So this would address that, too. Thank you very much.

Thank you very much. Welcome.

Thank you, Chair Laird and Members. My name is Meredith Curry Nunez, and I'm with the Northern California College Promise Coalition. It's a network of over 60 organizations supporting over 250,000 students from Sacramento to the Central Valley.

We're also a member of the Cal Grant Reform Coalition. We thank the Legislature and the Governor for including the Cal Grant Reform Act in the 2022 budget because, as shared by my colleagues, once implemented, it will open the doors to higher education for more than 130,000 low income Californians.

We respectfully urge the Legislator and the Senate Budget Subcommittee to advance Cal Grant Reform in the 2024-25 state budget by making a meaningful first step towards full implementation. Students from families making less than 30,000 per year spend more than half of their annual income on college expenses.

Even after accounting for available federal, state and institutional grant aid, the data clearly shows that a college degree or credential promotes economic and social mobility.

College graduates across our 13 county footprint in Northern California earn an average of $36,000 more per year when they go to college. We strongly support the Cal Grant Reform Act and its transformative impact on low income and BIPOC students to make college a reality. Every college student, regardless of their income status, deserves access to a higher education if they so choose. Thank you.

Thank you very much. Welcome to the Committee.

Good afternoon, Chair Laird and Members. My name is Denise Luna speaking on behalf of the Education Trust West, a research and advocacy organization committed to advancing policies to dismantle the racial and economic barriers embedded in California's educational system.

And we are also members of Cal Grant Reform Coalition and NCCP Coalition and Financial Aid for College Students has not kept pace with the cost of attendance, with high inflation at the high sky and in consequences once again continue to hit students living in poverty the hardest.

Education Trust West is proud to support the Cal Grant Reform Program and appreciate the legislatures for enacting this historical reform through the 2022 Budget Act. But without a plan for full implementation and implementing this reform, this is going to be an amount to a promise yet fulfilled. Cal Grant Reform continues to be one of the most compelling strategies to help students enroll and succeed in college.

Cal Grant Reform will make college more affordable and accessible for over 130,000 low income students, many of whom are student parents and students of color. While we recognize the challenges that this budget year landscape the state is facing this year, we respectfully asked the Legislature to prioritize Cal Grant Reform and make meaningful first step towards implementation.

Additionally, given our focus on financial aid access and currently the challenges facing many of our mixed status families and undocumented students, the experience experiencing with the better FAFSA rollout.

We need to ensure that students have sufficient time to apply for FAFSA and we respectfully ask the Legislature to further delay the FAFSA in the California Dream Act submission priority deadline to May 2nd as discussed today, and we appreciate the higher education institution's flexibility on delaying the acceptance deadline, we respectfully ask this to be moved as well. Thank you.

Thank you very much. Welcome to the Committee.

Hi, my name is Trinicia Jones and I am a former foster youth and I attend Sacramento State. The Cal Grant has made a significant difference in my situation due to me being in foster care since I was nine and always having the plan to continue my education.

Also, speaking on the Middle Class Scholarship, it has not only been helpful to me just because of risk of loans, but having the basic necessities of living and just continuing to further my education. I am a first generation college student in my family, and I do it all by myself without support.

So I urge the Committee to take an important step towards the Cal Grant Reform this year so that other former foster youth, myself, and other college students have an opportunity to continue their education with the support of this reform.

Have you ever testified in front of a legislative Committee before?

I have.

Well, you did very well. Thank you. Wanted to say thank you. We appreciate your comments. Welcome to the Committee.

Thank you. Good morning, Chair and Members. My name is Cody Van Felden. I am here to ask the Committee to take a meaningful step towards implementing the Cal Grant Reform. I reentered care when I was 16 years old. When I entered college, I was fortunate enough to be eligible for the Cal Grant, but I know many of my peers are not.

The Cal Grant could not save me from housing or food instability, but it was able to help me in some ways, which is why I understand the importance of the access to the Cal Grant for my peers and myself.

It wasn't until I entered community college when my GPA began to suffer and put me at risk for being ineligible for the Cal Grant. I had gone through financial aid appeals process twice when I was in community college.

I was experiencing homelessness, mental health challenges, and abuse while in my first few semesters of college. I am now on track to graduate, and I want to see this possible for more of my peers.

Every youth in California should have the opportunity to pursue higher education. Without the Cal Grant, I would not have made it as far as I have today. I respectfully urge the Committee to advance the Cal Grant reform in this year's budget.

Thank you very much. We appreciate your comments. Welcome to the Committee.

Good morning. My name is Chris Hernandez and I am here as both a former foster youth and a student to respectfully urge the Committee in reforming the Cal Grant. I spent my later childhood in foster care, opening more opportunities in education accessible with the Cal Grant.

I am able to attend UC Davis to study biology, finding myself in a scholar's program for research. But as I entered college, my existing health disabilities took a turn for the worse.

I struggled to balance my educational duties while maintaining my health, trying to keep my GPA above the Cal Grant requirement. My disabilities can prevent me from functioning some days hindering my ability to work.

The grant helps me with housing and tuition, making college an option for my future. Without it, I would not be able to put as much time into schoolwork and doctors appointments. I support this reform as it could help other students like me. Thank you.

Thank you very much. Appreciate your comments. Welcome to the Committee.

Thank you. Good morning. Parshan with uAspire as well as here as a part of the Northern California College Promise Coalition and the Financial Aid for All Coalition, here to speak echo the comment that many of my colleagues and students today share in support of prioritizing funding for Cal Grant this year.

This is a very tough year, budget year. We get it. But the Cal grand reform will single handedly change people's lives proven method. And so we would love to have that be prioritized.

and secondarily, I want to also thank the Committee as well as the panel of experts earlier for the discussion, the robust discussion that was there around the financial aid deadlines and what's going on there. We appreciated the institutions for moving back their decide day to May 15 and expressing willingness to push it even further back.

But we can't wait for those, for advocates and community based organizations to properly spread the message and communicate that with families and students. We need to make decisions now.

So we want to speak in support of the Committee's discussion around moving back the FAFSA cater priority deadline to May 2. As well as echoing that, our institutions really need to make that decision now to also push back the decide date.

And we're calling for that decision date to be pushed back to June 15. So to the extent that we can do that, we appreciate that and thank you for your time.

Thank you very much. Welcome. You were fanning yourself earlier. Did you run over here?

Yes, I ran over from Senator hotel because I needed to get here as quickly as possible.

Well, we're very happy you made it. Welcome to the Committee. We're anxious for your comments.

Manny Rodriguez, on behalf of Tegus as well as a member of the Cal Grant Reform Coalition, also want to say that our partners at the Cal State Student Association couldn't make it today, so they asked me to do a plus one for them. We strongly support and believe in the transformative nature of the Cal Grant Reform.

As Tegus laid out in our most recent report that was published yesterday, this is a critical lever when it comes to equity, affordability, access for not only BIPOC communities, but also low income communities.

So we asked the Committee to take a meaningful first step towards implementation, as CSAC laid out in that first panel with numerous options. On behalf of Tegus, we also support the idea of California extending the Cal Grant deadline to May 2.

We do hope that this is made in tandem with moving that registration deadline based on the flexibility our institutions talked about in that first panel we think this is critical for our students to know how much aid they have and where they can go. Lastly, we appreciate CSAC exploring an alternative if a federal fix is not ready for mixed status families by mid-March, we want students to access federal entitlements.

But if a plan b is needed, let's make sure that students can at least get state and institutional aid. That is a last option, as I believe Shawn Bricks mentioned. So let's make sure that this situation could be exacerbated depending on what happens with the federal election as well. So want to keep that on the table. Thank you.

Thank you very much. Appreciate your comments. Welcome to the Committee.

Good afternoon. Chair Aj Johnson with California Competes Higher Education for a Strong Economy. We are part of the Cal Grant Reform Coalition and we'll echo those comments. We're also part of the Coalition for Affordable Student Housing, and we believe both of these efforts are necessary to make a college affordable, particularly for California student parents. There are 400,000 student parents in college today in California.

Their costs are much higher than their non parenting peers, and on average they take out 75% more debt or loans to complete their bachelor's degree. So we do need to advance meaningful steps towards reform and financing, particularly for that population, to make the California dream available to them. Thank you so much.

Thank you very much. Welcome. I was going to say you're our last speaker, but you appear to be our next last speaker. So welcome to the Committee.

Molly Mcguire with the Campaign for College Opportunity. I echo Manny and Aj's comments about the importance of Cal Grant equity. We would just say that we understand the budget constraints and we hope that the Legislature prioritizes a phased in approach and making a meaningful kind of first step towards Cal Grant funding. Thank you.

Thank you very much. This is our last speaker. Welcome to the Committee.

Hi, my name is Amelia Duly and I'm representing the associated students of Glendale Community College. As my fellow students and I drove 6 hours to be here today, I would like to support the Cal Grant Reform as it will help our nontraditional students find more success at different avenues in their life. Thank you.

And are you going to have to drive 6 hours back?

Yes.

You underrepresented yourself. You were on a 12 hour round trip.

12 hour round trip.

So thank you very much for making the effort. We really appreciate your comments.

Thank you.

That completes our public comment and completes our hearing. And let me just say, in summary, at the end, I sort of summarized each of the issues as we did it.

But we have very difficult choices facing us and I really appreciated the opportunity to get into them in depth in front of you all, so you would understand the difficult things that we are facing and understand what we think are the priorities, and try to do our best in a limited budget time to address those priorities.

And as I said at the end of this issue one, things are changing so rapidly that we won't be having another hearing on this we don't expect before the revised budget in May.

But there'll be so many changes that we will try to stay on them and do whatever is appropriate in relation to what those changes are, as we find out about them. So next week at this time and place, we'll do the University of California and the Cal State University system. And with that, we've completed our business and Budget Subcommittee number one on education stands adjourned.