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The 2020-21 Budget: California Student Aid Commission

The Legislative Analyst’s Office has just published the following report:

The 2020-21 Budget: California Student Aid Commission

Governor Proposes $2.7 Billion for the California Student Aid Commission (CSAC) in 2020-21. The Governor’s budget increases spending for Cal Grants—the state’s main student financial aid program—by $97 million (4 percent) over the revised 2019-20 level to account for a projected increase in the number of recipients. At this time, the administration proposes no policy changes to the Cal Grant program.

Beyond Cal Grants, the Governor’s budget includes $5 million one time for a student loan outreach initiative and $7.9 million ($6.2 million one time and $1.7 million ongoing) for various state operations proposals.

Proposed Student Loan Work Group Is Promising, but Rest of Proposal Is Premature. Of the $5 million the Governor proposes for student loan outreach activities, $500,000 is for CSAC to establish a work group tasked with finding ways to expand access to beneficial student loan and repayment programs, $375,000 is for CSAC to develop a loan-focused website and other materials, and the remaining $4.1 million is for grants to the public higher education segments to notify students of loan repayment options and direct them to the new CSAC website.

We are concerned with some elements of the Governor’s proposal because students already have access to many sources of information on student loans, and the administration has not clearly identified what barriers are preventing students from accessing beneficial loan and repayment programs.

We recommend the Legislature fund the proposed work group to identify these barriers and develop strategies to overcome them. We recommend using the work group findings (to be issued in September 2021) to guide any further spending in this area.

Other State Operations Proposals Are Warranted. We recommend approving the Governor’s proposal to fund a third year of the Grant Delivery System Modernization project as this project generally remains within its original scope, schedule, and budget. We also recommend approving the Governor’s proposal to provide 15 new positions for CSAC because these positions are directly linked to workload increases over the past year.

While we believe the Governor’s proposal to fund CSAC’s relocation to a larger space is reasonable given CSAC’s increased staffing needs, we recommend the Legislature withhold action on this proposal until receiving an updated time line, which will affect the associated relocation costs in 2020-21.

This report is available using the following link: https://lao.ca.gov/Publications/Report/4182

This article was released by the California Legislative Analyst’s Office.