California’s Revamped Debt-Free College Financial Aid Program May Arrive in June – Monterey Herald

It is expected that 360,000 California students could receive the first dose of California’s revamped “debt-free” financial aid program as early as this summer.

The State’s Modified Middle Class Scholarship is expected to receive $632 million to provide financial assistance to 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 with the financial aid office at California State University Monterey Bay. “Unfortunately, these families do not receive much financial aid and therefore have to take out student loans to finance their studies.”

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

The Original Middle Class Scholarship Program was created to help middle-income students who are not eligible for tuition coverage through the Cal Grant program to qualify for partial fee coverage. of schooling. Under the new program rules, students will receive scholarship amounts tied to their total cost of attendance, including living expenses, rather than just tuition. The modified program will also add many other beneficiaries, including low-income students receiving Cal Grants, California’s longstanding student financial aid program.

In 2022-23, a student dependent from a family of four must have an annual family income of no more than $116,800 to be eligible for a Cal Grant and no more than $61,400 to be eligible for a scholarship of access. For 2022-2023, the maximum annual household income to qualify for a middle class scholarship will be $201,000 for dependent students.

Scholarship amounts will be calculated considering a student’s remaining costs after considering existing aid, parental contributions, and other factors. For this reason, scholarship amounts will generally be lower for low-income students, as they often receive support in the form of additional scholarships. According to the estimated average award for 2022-23 as part of Governor Gavin Newsom’s budget, award amounts tend to increase with household income, peaking at around $3,000 for household incomes between $80,001 and $100,000.

CSUMB representatives said it was still too early to hear feedback from students who would be eligible for this program. But not having to take out so many federal or private loans would not just benefit students.

A financial aid office official explained that students who take out a large amount of student loan funds could impact the university’s default rate, which is the percentage of all outstanding loans that ‘a lender wrote off as unpaid after an extended period of missed payments. Schools can lose eligibility for financial aid if they have a high default rate.

A few potential issues could arise from the redesign of the program. Due to the large number of eligible students, the California Student Aid Commission said the earliest it could calculate each student’s scholarship amount each year would be in the summer. This means that new students will not know their entire financial aid package until after committing to a college.

And based on estimates from the California Student Aid Commission, it would cost $2.6 billion to cover 100% of each student’s remaining costs. Given the significant cost, full implementation of the Middle Class Scholarship Program could take several years or more.

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