Policy Snapshot: 2019-20 Budget Requests from California's Higher Education Segments

Topics: Affordability, Bachelor's Degrees, Community Colleges, Data Systems, Degree Attainment, Higher Ed Finance, State Coordination

With 2018 ending, the boards of the California Community Colleges, the California State University, and the University of California have approved budget requests to the state legislature for the 2019-20 academic year. This begins a six-month negotiation process between the segments, the California legislature, and Governor-elect Gavin Newsom. At all three institutions, budget proposals called for increased spending across ongoing programs and one-time initiatives. The requests highlight unique priorities at each segment, as well as similar themes: enrollment growth, students’ basic needs, and improving graduation rates.

Collectively, California’s public higher education systems are requesting an additional $1.6 billion in state funding. The California Community Colleges have additionally requested statute changes to the state’s Cal Grant system to increase financial aid availability for community college students. The California Community College Chancellor’s Office (CCCCO) estimates the costs of these financial aid reforms to be approximately $1.5 billion, to be paid from the state’s General Fund. The proposed budgets would continue a pattern of increasing per-student allocation for higher education over the last several years. While all segments saw declines in state general fund support from 2008-2010, expenditures have steadily risen since 2011 for community colleges and the CSU. Expenditure increases continue to lag at the UC where state investment remains well below pre-recession amounts. [1]

The following snapshots offer more insight into each segment’s budget proposal for 2019-20:

California Community Colleges (CCC)

The California Community Colleges Board of Directors approved a 2019-20 budget request for an additional $488 million over the current year’s budget. Increased funds would go to implementing the CCC’s Vision for Success namely by shoring up funds for the Student Centered Funding Formula, marketing the California College Promise program, increasing support for the Student Equity and Achievement Program, and linking work-based learning to Guided Pathways.

The proposal also includes an overhaul of the state’s Cal Grant system to expand financial aid for community college students (estimated at $1.5 billion to be paid from the state’s General Fund, not the system’s budget appropriation).

Snapshot: Financial Aid at the California Community Colleges

Nearly half of all Cal Grants—financial aid awarded to California college undergraduates—go to community college students, but given the size of the CCC student population only 9% of community college students receive state-awarded financial aid.[2]

Cal Grants Awarded by Segment, 2017-18*

Nearly half of the Cal Grants distributed at public institutions in 2017-18 went to community college students.

*Includes new and returning Cal Grants awarded / Source: California Student Aid Commission

Cal Grants Awarded as a Percent of Student Enrollment, 2017-18*

Only 9% of community college students received a Cal Grant in 2017-18.

*Enrollment measured as annual count of FTE / Source: California Community Colleges, The California State University, The University of California, California Student Aid Commission

Most low-income community college students receive a California College Promise Grant (formerly known as the BOG Fee Wavier) that covers course fees, and hence do not require a Cal Grant for tuition support. However, Cal Grants for low-income students typically come with an Access Award, money that can be used for expenses other than tuition. The new budget proposal from the CCCCO outlines three recommendations to reform Cal Grants for community college students:

  1. Link Cal Grant Award amounts to the total cost of attendance rather than tuition. (A growing body of evidence finds that housing, food, and transportation costs are larger barriers for low-income students that California’s relatively low tuition. [3])
  2. Remove qualifications for Cal Grants connected to student age, GPA, and time out of high school, and replace requirements with students’ income as measured by expected family contribution.
  3. Extend the Cal Grant program to all community college students in certificate and associate degree programs rather than specific student populations such as transfer or CTE students.

The California State University (CSU)

The California State University Board of Trustees approved an increase of $554 million in its 2019-20 budget request. A substantial share (37 percent) would go towards increasing resident enrollment by 5 percent across the segments’ 23 campuses. Other requests included compensation increases, infrastructure spending, and mandatory cost increases. About 13 percent of the proposed additional funds would go towards meeting the goals of the Graduation Initiative 2025.

Snapshot: Graduation Rates at the California State University

The CSU Graduation Initiative 2025 was launched in 2016 with an ambitious goal to raise graduation rates and reduce equity gaps across the system in 10 years. To date, the state has invested over $400 million in the initiative and graduation rates have moderately improved. The CSU claims that an additional $75 million requested in this year's budget is needed to sustain the momentum it has gained.

Four-year Cohort Graduation Rates at the CSU

Equity gaps in four-year graduation rates persist at the CSU.

Source: The California State University

Despite significant investment, equity gaps in four-year graduation rates persist. White students' graduation rates were about three times higher than those of Black students in 2017, although the latter has seen steady growth in the last two years. Graduation rates for Latino students are also rising but still remain well below those for Asian/Pacific Islander and White students. Seven years remain for the CSU to fulfill its promise to the state by improving graduation rates and eliminating equity gaps. To reach that goal, the university will need to prioritize increasing graduation rates for students of color; if current trends hold steady, most groups will not hit the 40 percent goal by 2025.[4] The CSU has prioritized six areas for financial investment to help them reach their targets:

  1. Academic preparation (the CSU passed landmark developmental education reform last year, eliminating non-credit remedial education.)
  2. Enrollment management
  3. Student engagement and well-being
  4. Financial aid
  5. Data-driven decision making
  6. Administrative barriers

The University of California (UC)

The University of California Board of Regents passed a budget request for an additional $558 million for the 2019-20 academic year. In addition to expenditures for improving student success, specific aid for student basic needs, and increases in mandatory costs and compensation, the university requested $100 million in one-time funds for deferred maintenance and high-priority capital needs.

Snapshot: Capital needs at the University of California

A new report estimates that an increase in A-G high school graduates in California coupled with long-term declines in state funding for capital expenditures could hamper the state’s higher education goals.[5] By 2022, facility costs could balloon to $50 billion across all segments. Recent changes to state law (see AB 94, Chaptered, 2013 ) have allowed institutions to allocate a portion of their state funds towards capital outlay but spending under the program is restricted. The new budget allocation would be the first time in almost a decade that dedicated state funds went to capital needs at the UC.

Steadfast goals and new opportunities

Governor-elect Newsom and state legislators have shown interest in making higher education a policy priority for the upcoming year. Senate Bill 2 (Introduced, Glazer, 2018) and Senate Bill 3 (Introduced, Allen, 2018) focus on large-scale structural improvements to the state’s higher education system including a dedicated coordinating body and a longitudinal student data system. The California Student Aid Commission has also demonstrated commitment to significantly expand financial aid for students. As appetite for higher education reform in California intensifies, the 2019-20 budgets proposed by each segment are strong statements that they cannot reach their committed goals without sustained investment in their students, their faculty and staff, and their infrastructure.

[1] Public Policy Institute of California. Investing in Public Higher Education. Issue brief. September 2017. https://www.ppic.org/wp-content/uploads/r_0917kcr.pdf.

[2] California Student Aid Commission. 2017-18 Cal Grant Offered Awardees. https://www.csac.ca.gov/sites/...

[3]The Institute for College Access and Success. What College Costs for Low-Income Californians. February 2017. https://ticas.org/sites/defaul...

[4] Based on author's calculations of projected graduation rates.

[5] Public Policy Institute of California. Financing Higher Education Capital Projects. December 2018. https://www.ppic.org/wp-conten...