Governor’s May Revise Aims to Protect Higher Education Investments: Highlights of the 2023-24 May Revision

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On May 12th, the Governor released the 2023-24 May Revise, where he demonstrated a commitment to protecting past years’ investments in higher education by allocating $40.4 billion of the $306.5 billion state budget to postsecondary education initiatives. Despite facing a projected budget shortfall of $31.5 billion, an increase of $9.3 billion from January’s estimate, and uncertainties in the revenue landscape due to this year’s tax deadline extension to October, the Governor has chosen to safeguard funding outlined in the multi-year agreements with the state’s three higher education segments. The maintained investments underscores his recognition of the transformative advantages in empowering Californians through education, building a skilled workforce, and driving economic growth. Below, we highlight implications of this funding, focusing on three key areas: building affordable student housing, upskilling under- and unemployed Californians, and harnessing data for student success and economic inclusion.

Sustaining Momentum on Affordable Student Housing

During the presentation of the May Revise, Governor Newsom stated, “We want to address the issue of full cost of attendance and that includes bringing down the cost of housing.” This underscores the Governor’s understanding of the vital role that housing costs play in ensuring college affordability and accessibility for every student, and we applaud the emphasis on this.  

To navigate the economic constraints while continuing progress, the Governor proposed a change in the Higher Education Student Housing Grant Program, transitioning from grants to loans for the construction of student housing at University of California (UC) and California State University (CSU) institutions, with the state assuming responsibility for the ongoing debt service. While this change may reflect a shift in funding mechanisms, it is important to recognize that the underlying goal remains intact—to enhance access to affordable housing for students pursuing higher education. The CSU and UC have stated that this adjustment will not impede the progress of the housing projects but the shift from grants to loans will increase total project costs.  

For the California Community Colleges (CCC), the allocation for housing grants remains largely intact at the amount of $450 million (though $95.4 million of it will be delayed to the 2024-25 budget year). This decision to adhere to the original grant structure to CCC is crucial, given their limited capacity to finance such projects through loans. It is imperative to prioritize the construction of CCC student housing to bolster postsecondary enrollment and completion, particularly since many of the communities where these institutions are situated have severe housing shortages and other housing stabilization strategies, such as rapid rehousing, prove less effective due to the absence of a solid housing stock.

Intersegmental housing recognizes the benefits of stable, integrated housing, allowing for students to stay in the same housing  when they transfer from community college to a four-year institution or change between institutions, which is particularly critical for vulnerable student populations. And student parents face housing insecurity at greater rates than their non-parenting classmates, with few suitable campus housing options. To address the housing needs of today’s students, we urge the state to prioritize intersegmental and family-friendly housing projects as the Higher Education Student Housing Grant Program moves forward. By doing so, we can establish seamless pathways into and beyond college, ensuring that all students have the support they need to thrive.

Advancing Opportunities for Under- and Unemployed Californians

As highlighted in our previous budget analysis, the Golden State Education and Training Grant program (GSETG) was created to provide support to Californians who lost their jobs due to the pandemic, offering one-time grants to facilitate their participation in educational or training programs with the objective of reintegrating them into the workforce. This program, overseen by the California Student Aid Commission (CSAC), has vital importance in the context of pandemic recovery and expanding college access for populations beyond recent high school graduates. 

However, our state currently lacks the infrastructure and capacity to effectively implement the GSETG, given CSAC’s existing staffing and obligations to manage complex financial aid programs for more traditional students who complete the Free Application for Federal Student Aid or California Dream Act Application. To ensure GSETG’s success, the state needs more robust data on individuals who could benefit from this aid, and ideally, the management of this process should be handled by an entity that connects across sectors, which doesn’t currently exist.

Recognizing the state’s budgetary constraints and the existing gap between the program’s goals and its current ability to reach the desired beneficiaries, we understand the administration’s decision to reallocate the GSETG funds rather than wait for the state to build the connective tissue to effectively roll out this program. However, we urge the state to continue to explore strategies to broaden access to higher education, particularly for the working-age population who are under- and unemployed. It is imperative that these dollars are redirected in a manner that addresses their needs and supports their educational and career goals. 

Harnessing Data for Student Success and Economic Growth

We are pleased to see funding for the Cradle-to-Career Data System (C2C) remain supported. This funding will allow the C2C to meet its objectives of enabling the state, its local governments, and community partners to advance student success and economic growth through data-driven decision-making. The C2C’s immense value lies in its potential to provide insights into the factors that can enhance student outcomes, particularly as higher education leaders navigate the effective use of online and hybrid modalities and work to streamline student transitions from community colleges to four-year universities and on to good jobs. This continued progress will contribute to a more responsive and student-centered system of learning. Furthermore, the C2C empowers the state to make more informed decisions regarding resource allocation by providing robust data to assess the impact of policies and programs and gain a comprehensive understanding of the educational pathways that Californians take.  

Shaping California’s Final Budget to Create an Inclusive Path to Prosperity

As the legislature and Governor’s Office move toward a final budget, we look forward to working with them to ensure that our state’s investments align with state needs and improve California’s higher education and economic outcomes. By collaboratively addressing the needs of underrepresented communities, we can create a more inclusive and prosperous future for all.

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