Report highlights financial aid gap

Alison Yin for EdSourceLow-income students are being especially squeezed by fee increases at the state’s public colleges and universities because financial aid packages haven’t kept pace with costs, according to a new report from the Public Policy Institute of California.
“California is doing a good job of targeting aid to low-income students, but that doesn’t necessarily mean they’re getting enough aid to make college affordable for them,” said report author Hans Johnson. “Low-income students still have more unmet need than other students.”
At community colleges and California State University campuses, which enroll the bulk of the low-income students in the state, the total cost of attendance rose 6 percent between 2008 and 2012, the report said, yet scholarship and grant aid did not increase at the same rate. For instance, total fees at CSU increased $3,119 between 2008-09 and 2011-12, but grant aid rose $2,693. At community colleges, costs increased by $1,109 but grant aid rose $687, according to figures provided by Johnson.
Despite grant awards targeted at the lowest income brackets, the state’s poorest families must dedicate a larger share of their income to college costs, the report said. At the University of California, low-income families contribute about one-third of their income to pay college costs, compared with about 20 percent for high-income families, according to the report, which was released Wednesday.
The gap is a concern when considering the affordability and accessibility of college for the large numbers of Californians and a statewide need to produce more college graduates to keep up with workforce demands. Fifty-nine percent of California’s K-12 students are considered socioeconomically disadvantaged and qualify for free and reduced-price meals, the report said.
Financial aid packages play a large role in student success in college, with research showing that an increase of $1,000 in Cal Grant aid translated to a 9 percentage point increase in college enrollment. The amount of award also influences students’ college choices, the report said, with more generous awards leading students to choose four-year universities rather than community colleges.
“If you are a highly successful student from a low-income family, you should be able to access UC or CSU and not bear an undue burden financially when compared to other students from families of more means,” Johnson said.
The report defines low-income as students with annual family incomes of less than $30,000. College cost figures are based on the “sticker price,” or total college costs, including annual student fees, or tuition, room and board, books and other expenses.
In looking to boost aid programs, California should focus the bulk of its efforts on programs for low-income students, Johnson said. He noted that California lawmakers have established the Middle Class Scholarship program, which offers scholarships to UC and CSU students with family incomes up to $150,000. California Dream Act applicants are also eligible for the awards.
However, “what we say in this report, going forward, if the state seeks to invest more in aid programs it should focus on low-income students,” Johnson said. “They still face a greater financial burden.”
The report also offers additional recommendations for keeping college accessible, including adopting polices to help more students complete the Free Application for Federal Student Aid, or FAFSA, financial aid application form so that more students can obtain aid.
CSU spokesman Mike Uhlenkamp said officials needed more time to review the report before commenting, but said that grants typically cover tuition and campus-based fees – not including room, board or other fees – for undergraduate students whose families earn up to $70,000. “More than half of CSU undergraduates – more than 195,000 – have their fees fully covered by grants and waivers,” Uhlenkamp said in an email. Base annual student fees at CSU have remained steady at $5,472 since 2011, he said.
At UC, the net cost of education for the lowest-income students has remained stable or declined since 2006-07, while the net cost has increased for higher-income families, university spokeswoman Shelly Meron said in an email. UC also covers tuition and fees for students whose family income is less than $80,000 a year.
One of the state’s largest aid programs for students, Cal Grants, offers up to $12,192 per year to help students pay for college, but the average award is about $4,650.
Patti Colston, a spokeswoman for the California Student Aid Commission, which administers Cal Grants, said she hadn’t seen the report and couldn’t comment on it. However, she said a newly created tax credit is expected to increase some awards.
Created this year under a bill authored by Sen. Kevin de León, D-Los Angeles, the College Access Tax Credit fund offers a tax credit to those who contribute to the fund. Money from the fund will be used to increase the Cal Grant B award – “for the lowest of the low-income students,” Colston said – to up to $5,000. The award currently offers up to $1,648 for books and living expenses. The increased awards are expected to begin in the 2015-16 academic year.
“That’s great news for us and for students,” Colston said.
The Public Policy Institute of California report, Making College Possible for Low-Income Students, will be discussed Friday at an event in Sacramento.
The report “documents an incredibly important problem” that aid has not kept pace with fee hikes, said Debbie Cochrane, research director at The Oakland-based Institute for College Access and Success, which advocates for college affordability and accessibility.
“We have huge gaps in educational attainments and who’s going to college,” Cochrane said. “If we want equitable access and equitable success in college, we need to make it possible for low-income students not just to go to college, but to succeed when they get there.”
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