Proposed Cal Grant Cuts Cause Distress

By Elizabeth Ambriz-Mendez

Governor Jerry Brown recently released his official budget proposal for the 2012-2013 fiscal year, in which he proposes cutting funds for the Cal Grant. For non-profit, independent institutions, the governor proposes cutting the Cal Grant by 44 percent. That's approximately $4,300 less per student according to Jeffrey Roush, associate director of Packaging and Customer Service with the Santa Clara Financial Aid office.

"This whole proposal reduces access to college," says Roush, "Most students on Cal Grant have already maximized their loans and will have to find some other source to cover that cost."

The financial aid office has mobilized to create awareness about the proposal, they have provided the following information: there are currently 580 Santa Clara University Cal Grant recipients. Seventy-seven percent are students of color, and 59 percent report they are first generation college students. 

If approved, the cut would go in effect after July 1, and would affect both current and incoming freshman. In addition to the decline in funds, the governor has proposed increasing the GPA requirement for Cal Grant recipients from a 3.0 to a 3.25. 

In September of last year, headlines reported federal student loan defaults were rising as the Department of Education released 2009 default rate data. At public institutions, the default rate went up by 1.2 percent, .6 percent at private institutions, and for-profit schools saw an increase of 3.4 percent. 

Last week the National Association of Consumer Bankruptcy Attorneys released a survey revealing that 4 out of 5 attorneys have seen a major climb in numbers of students with loans seeking help in the past year. 

Santa Clara University students received emails from President Michael Engh, S.J., in November linking them to a petition aimed at saving the federal Pell grant. A little over 139,000 signatures were collected nation-wide and the grant was saved from the chopping block. 

Instead of cutting the grant, legislators agreed to save funds by eliminating subsidies on interest during grace periods. Students will now begin accumulating interest on their loans immediately after completing their education. 

It used to be that students with a subsidized federal student loan would enter into what is called a "grace period" after graduation. During this grace period, no interest was charged on their loans.

Adriana Huerta, a junior Communications major has also struggled with recieving approval for student loans. "I have tried to take out a loan and was denied. Without the amount I receive from the Cal Grant I would have to question my stay at (Santa Clara)." Huerta also states that if her Cal Grant were reduced, her plans to study abroad would falter and she'd be forced to graduate early, a decision    that many students are already taking. 

The Cal Grant, formerly known as the California State Scholarship Program, was created in 1955 to encourage students to attend independent nonprofit colleges. State legislators saw private institutions as a way to save money by not having to build new public universities. 

According to Roush, Santa Clara has a very low default rate of .2 percent in comparison to the rest of wCalifornia, which suffers a 6.7 percent rate of student loan defaults. 

Although student loan default may not be a problem for Santa Clara, if the Cal Grant is so drastically cut, students may have to take out more loans to compensate for the loss of funds. Sophomore Accounting major Laura Whittaker says she'd have to consider transferring in order to avoid being "in a tremendous amount of debt once I'm out of school." 

The California Dream Act, which goes into effect on January 1, 2013, would increase the amount of students who will quailify for the Cal Grant by 2,500 students, according to the California Department of Finance. The Dream Act is a law that will give access to state aid to undocumented students in the process of applying to legalize their immigration status.

Santa Clara is a member of the Association of Independent California Colleges and Universities, and in the fall when the Pell Grant was at risk of elimination, the AICCU helped advocate for it survival. The AICCU is asking that students contact their legislators and voice their opinions. On March 7 AICCU are asking students to attend a rally at the capital. 

Contact EAmbriz-Mendez@scu.edu.