California’s revamped debt-free college financial aid program could arrive in June – Monterey Herald

An anticipated 360,000 California students could receive the first dose of California’s revamped “debt-free” financial aid program as soon as this summer.

The state’s modified Middle Class Scholarship is slated to receive $ 632 million to provide financial aid to an anticipated 246,000 California State University students and 114,000 University of California students. Students from community colleges and other universities are not eligible for the program.

“This could be a great program to help our middle-income families,” said an official from California State University’s Monterey Bay’s financial aid office. “Unfortunately, these families do not receive much financial aid grants and therefore are having to take out student loan funds to finance their educations.”

The cost of attendance at CSU Monterey Bay for one academic year is $ 26,485 for a student living on-campus. According to an official from the financial aid office, the average financial award package to CSUMB middle-income students is approximately $ 8,815 and around 1,829 middle-income students receive financial aid.

The original Middle Class Scholarship program was created to help middle-income students who are ineligible for tuition coverage through the Cal Grant program receive partial tuition coverage. Under the new program rules, students will receive award amounts linked to their total cost of attendance, including living costs, rather than tuition costs only. The modified program will also add many more recipients, including low-income students receiving Cal Grants, California’s longstanding student financial aid program.

In 2022-2023, a dependent student from a family of four must have an annual household income no greater than $ 116,800 to qualify for any Cal Grant award and no greater than $ 61,400 to qualify for an access award. For 2022-2023, the maximum annual household income to qualify for a Middle Class Scholarship award will be $ 201,000 for dependent students.

Award amounts will be calculated by considering a student’s remaining costs after accounting for existing aid, parent contributions and other factors. Because of this, award amounts will generally be smaller for lower-income students, since they often receive aid through additional grants. According to the 2022-2023 estimated average award under Gov. Gavin Newsom’s budget, award amounts tend to increase with household income, peaking at around $ 3,000 for household incomes between $ 80,001 to $ 100,000.

Representatives from CSUMB said it’s still too early to hear feedback from students who would be eligible for this program. But not having to take out as many federal or private loans would only benefit students.

An official from the financial aid office explained that students taking out a large amount of student loan funds could impact the university default rate, which is the percentage of all outstanding loans that a lender has written off as unpaid after a prolonged period of missed payments. Schools can lose eligibility for financial aid if they have a large default rate.

There are a few potential issues that could arise from the revamped program. Because of the sheer amount of eligible students, the California Student Aid Commission has said that the soonest it could calculate each student’s award amount each year would be in the summer. This means that new students will not know their full financial aid package until after they have committed to a college.

And based on the California Student Aid Commission’s estimates, it would cost $ 2.6 billion to cover 100% of every student’s remaining costs. Given the significant cost, it might take several years or more to fully implement the Middle Class Scholarship program.

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