Barry Keene, chairman of the California Student Aid Commission, was a state legislator for 20 years. The ideas expressed in this article are his own.

Viewpoints: State can cut costs without harming aid for students

Published: Sunday, Jun. 10, 2012 - 12:00 am | Page 5E
Last Modified: Sunday, Jun. 10, 2012 - 10:25 am

Putting together a state budget these days is an exercise in deciding who we are going to throw overboard. But in the rush to keep the state from sinking, policymakers seem on the verge of jettisoning tens of thousands of college students at a time when our economy can least afford to have an uneducated workforce.

The tragedy is that few in the Capitol have been listening to the California Student Aid Commission, which can identify ways to reduce state costs surgically with much less impact on students than the proposals being considered.

Take Gov. Jerry Brown's proposal to cut Cal Grants by piggybacking on the federal Pell Grant evaluation of need. Almost 30,000 students would lose $87 million in aid, based on a formula that California has no control over.

I want to focus on Pell Grants, too – but as a source of new revenue that can take the place of state funding.

We know the state waived fees for more than a million students at California's 112 community colleges in 2009-10. Those students have incomes that qualify them for Pell Grants – yet only 419,000 received this federal funding. Typically, students self-certify their eligibility for fee waivers rather than filling out the Free Application for Federal Student Aid form that would earn them a Pell Grant. As a result, the Institute for College Access and Success has estimated that $500 million in Pell funding was left on the table.

With 37 percent of community college students this year receiving waivers, and the anticipated cost rising to $855 million next year, it is imperative that we capture that $500 million so that students can use their Pell money to pay their community college fees. Here's how:

• Eliminate the multiple community college self-certification processes and make completing the FAFSA a must for a waiver.

• Provide support to the 600,000 students without Pell Grants to help them complete the FAFSA.

• Use CSAC's access to FAFSA and Dream Act income verification to centralize the fee-waiver process, reducing campus-by-campus administrative expenses.

More state savings could be generated by eliminating the "access costs" or non-fee portion of the Cal Grant B community college awards for students whose Pell Grants cover the same costs in addition to their fees. Savings: up to $72 million.

Another proposal from the governor is to reduce eligibility for Cal Grants by requiring students to earn a higher GPA in high school. This would eliminate the state's $95 million investment in the future of 25,000 students.

Raising standards might be necessary – but raise them for institutions instead. The essence of the governor's proposal does this by lowering the acceptable institutional loan default rate and setting a graduation rate where none now exists. Colleges that cannot meet reasonable standards, which are clearly linked to the quality of education provided and the employability of graduates, could not offer Cal Grants in their student aid packages. Savings: up to $50 million.

A third area for state savings is to accelerate the adoption of online learning and e-textbooks for college students. If done correctly, both have the potential to offer high-quality education to students while reducing costs by millions of dollars. CSAC plans to issue a report later this year that addresses this opportunity.

This is not just rhetoric. These are hard dollar figures – in two areas alone, $122 million in state savings, as well as a $500 million infusion of new federal support we could and already should be receiving.

These alternatives to the current budget proposals are not off-the-wall concepts that no one else has considered. However, they are shaped and sharpened by the California Student Aid Commission's expertise in overseeing the $1.5 billion Cal Grant program and our experience in working with students and colleges on a daily basis.

Each June, everyone who is on the state's chopping block issues the same plea: "Don't cut us." We are going beyond that, offering true alternatives with less damaging impact to students and taxpayers. It isn't surprising that we would know where to look and how to find savings. CSAC has been the guardian of the $1.5 billion Cal Grant program for almost 60 years and we are deeply committed to protecting college access and affordability for all California students.

At CSAC, we believe it is foolhardy to reduce opportunities for students to go to college when the state's future economy will be driven by how well our workforce can perform. If we have to reshape the Cal Grant program and shrink costs, let's do it in ways that make the most sense.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Barry Keene



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