The California budget has been signed and includes several changes to the Cal Grant program. The changes impact Californians attending private and for-profit colleges and universities. However, the proposed increase in qualifying grade point averages was not adopted. The emphasis has been placed, rather, on the ability of the various educational instituions to produce graduates.
The average American takes 6 years to complete a bachelor's degree. The graduation rates cited for colleges are six year rates, unless otherwise noted. In order for colleges to be eligible to award Cal Grants, the colleges must have a six-year graduation rate of at least 30 percent. Additionally they must have a maximum
three-year cohort default rate on students loans of 15.5 percent.
If the alumni don't repay their loans, their alma mater can lose its ability to award Cal Grants. These new standards apply only
to institutions where more than 40 percent of students take out federal
loans. Consequently, community colleges are excluded since they are so inexpensive that very few students take federal student loans to attend them.
Beyond the new eligibility rules, the budget imposes across-the-board cuts on maximum Cal Grant awards at private colleges and universities. Students at private, nonprofit colleges will see an immediate 5 percent cut, which will lower the maximum award to $9,223.
Further cuts loom, and the Cal Grant for private colleges are set to be limited to $8,056 in 2014. At this time, Cal Grants to public colleges, both the UC and CSU system, as well as the community colleges remain unchanged.
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