Universities can’t yank monetary help from college students who get personal scholarships, new legislation says

As Dixie Samaniego ready for her first semester at California State College Fullerton, she had one focus: discovering a technique to pay.  

“I knew that my household wasn’t going to have the ability to pay, or assist in any means financially,” mentioned Samaniego, now a senior, “so I began making use of to scholarships in every single place.” 

As a low-income scholar, she certified for a federal Pell Grant and a state Cal Grant, however nonetheless had a considerable stability to cowl. After hours of making use of, writing essays, and interviewing, she acquired a $5,000 award for her first yr from a non-public basis that aimed to assist college students who confronted obstacles to school.  

However then, Samaniego mentioned, she obtained some unwelcome information from Cal State Fullerton’s monetary help workplace: Including the scholarship to her monetary help bundle would cut back the quantity of help she was getting from the college.

Confused and disenchanted, Samaniego determined to not settle for the scholarship she’d labored exhausting to earn.

“I didn’t know a single factor about greater schooling. I didn’t know a single factor about monetary help,” mentioned Samaniego, who’s the primary in her household to attend faculty. “I obtained all this cash, after which I needed to make some actually troublesome selections.” 

What Samaniego says she skilled has a reputation: scholarship displacement. The apply happens when a scholar receives a scholarship after their preliminary monetary help award and their faculty or college reorganizes their institutional help bundle, usually resulting in a web zero achieve for the scholar. And beginning subsequent fall, it is going to be banned in California for low-income college students who qualify for a Pell Grant or for state monetary help beneath the California Dream Act.

California is one among 5 states within the U.S. with such legal guidelines, and solely the second within the nation to bar scholarship displacement at each private and non-private schools and universities. 

It’s troublesome to quantify what number of college students scholarship displacement impacts, or how a lot cash they lose. However a 2013 examine by the Nationwide Scholarship Suppliers Affiliation discovered that 20% of schools nationwide scale back institutional grants when a scholar earns a non-public scholarship, even when a scholar nonetheless has demonstrated want. Advocates for low-income college students say the apply is usually a important barrier to school affordability.

A spokesperson for Cal State Fullerton mentioned federal privateness legislation prevented the college from commenting on a selected scholar’s monetary help bundle. However the Federal Scholar Support workplace’s tips instruct universities and schools to re-negotiate monetary help awards if there’s a risk of funds exceeding both the price of attendance or the scholar’s want as demonstrated on their Free Utility for Federal Scholar Support. The principles additionally give monetary help officers some discretion in working with college students to bundle their awards, nevertheless, and schools have their very own insurance policies that they comply with along with federal legislation.

“Contained in the monetary help workplace, the small print are extra advanced,” mentioned Christina Tangalakis, president of the California Affiliation of Scholar Monetary Support Directors. “Some college students are very profitable of their faculty funding searches and are supplied extra help than they’ve prices to assist” beneath the federal authorities’s methodology, Tangalakis mentioned. However colleges differ of their response to so-called “overawards,” she mentioned.

Complicating the difficulty is the talk over whether or not schools are precisely calculating the price of attendance in California, the place dwelling bills have skyrocketed lately. Schools and universities are required by the federal government to supply “affordable” estimates for prices accrued throughout a faculty yr, in keeping with the Federal Scholar Support Handbook. Most faculties use averages of bills in a area when calculating estimated prices for housing, transportation and provides, which might skew the outcomes. 

But it’s precisely these non-tuition bills that place the heaviest burden on college students. A 2021 examine on faculty affordability by the Public Coverage Institute of California concluded that “for a majority of scholars attending public postsecondary establishments in California, the mixed price of housing, charges, books, and transportation is larger than tuition.” 

“We imagine that California leads the nation in offering monetary help to college students… however the whole price of schooling, and particularly the non-tuition prices, are being unmet by monetary help applications. So college students must depend on exterior sources,” mentioned Marcos Montes, coverage director for the Southern California Faculty Attainment Community. 

With the brand new legislation, Montes mentioned, college students will be capable to maximize using scholarships. ”A scholar can use that cash to pay for his or her housing, their books, their meals, transportation, a brand new system, a brand new laptop.” 

Montes, himself, handled the stress of scholarship displacement whereas an undergraduate at California State College Los Angeles. Colleges usually calculate totally different prices of attendance for college students based mostly on their dwelling conditions. As a commuter scholar dwelling at dwelling, Montes was in  the bottom class for price of attendance. However he nonetheless wanted cash for textbooks and automotive upkeep.

“I used to be receiving a scholarship as a scholar authorities consultant,” mentioned Montes. “And when that scholarship hit, I used to be anticipating a examine of cash to come back to me in order that I can use it to cowl some non-tuition bills, and that examine was not coming.” 

The college’s monetary help workplace instructed him he had maxed out on the quantity of help the varsity was keen to supply, Montes mentioned. To entry the funds, Montes was pressured to maneuver out of his dad and mom’ dwelling and alter his residency standing. He was in a position to make use of the scholarship – although not in the way in which he’d meant.

“I discovered, , a bit one-bedroom place the place I might reside, and I used that cash to pay for hire,” he mentioned.

Earlier than the legislation’s passage, Southern California Faculty Attainment Community and different advocacy organizations had been already working one-on-one with college students who confronted scholarship displacement.

Counseling these college students can take hours and requires finding out the monetary help award letter, understanding which {dollars} have been displaced, and dealing with counselors to seek out methods to get better the funds. And never all college students even understand what has occurred to their monetary help bundle, or know the place to go for assist, mentioned Mer Curry, govt director of the Northern California Faculty Promise Coalition.

“It’s inefficient to be (advocating) scholar by scholar, but it surely’s additionally inequitable,” Curry mentioned. “What we had been discovering from college students is that they felt fortunate, privileged, they had been in a program, or had somebody that defined to them what the difficulty was in order that they may even undergo a means of advocating or asking for assist.” 

Cal State Scholar Affiliation president Krishan Malhotra mentioned he didn’t obtain any clarification from his college’s monetary help workplace when he misplaced $5,500 in help after getting a stipend for his work in scholar authorities – cash he was relying on to pay for digital textbooks.

“I maintain observe of my cash fairly nicely,” mentioned Malhotra, “However when you will have one million issues occurring, when you will have a full-time job, once you’re taking 18, 15 models, some college students have households or dependents, and there’s a lot occurring, you may positively miss it.”

Malhotra known as the dialog about scholarship displacement “lengthy overdue.”

The brand new legislation, handed by the Legislature in August and signed by Gov. Gavin Newsom, will permit probably the most weak college students who’re capable of safe extra funds for post-secondary schooling to have extra freedom in how they use their funds. 

The Cal State Scholar Affiliation labored with advocacy teams to go the legislation, and the California group faculty system signed on in assist. Scholarship suppliers, annoyed that their funds weren’t at all times reaching the scholars who wanted them, additionally weighed in.

“Scholarships play an integral position, not solely with growing entry, however lowering scholar mortgage debt,” mentioned Mike Nylund, president and CEO of Scholarship America, a Minneapolis-based nonprofit that helps college students discover and handle scholarship funds. “This new legislation will make sure that these college students most in want is not going to lose their vital personal scholarship funds.” 

Tangalakis mentioned the brand new guidelines may trigger confusion at first, however would finally trigger some colleges to reprioritize help insurance policies to accommodate scholarships.

“College students will profit from extra constant remedy of scholarship funds, and fewer changes to their institutional funding,” she mentioned. 

The scholarship displacement ban does pass over some college students, nevertheless: those that aren’t low-income sufficient to qualify for Pell Grants or the California Dream Act, however nonetheless might need monetary want. 

“The invoice has limitations. It doesn’t apply to everybody,” mentioned Sbeydeh Viveros-Walton, director of upper schooling for Public Advocates, a nonprofit legislation agency that backed the invoice. And college students will nonetheless must be knowledgeable in regards to the concern to allow them to monitor their monetary help packages and guarantee schools are complying, she mentioned. “It nonetheless places the burden of fixing this on college students.”

With the invoice set to begin defending low-income college students in the course of the 2023-24 tutorial yr, its sponsors are keen to make sure these college students are educated and ready. 

“I believe subsequent is specializing in the implementation,” mentioned Samaniego. “Determining if these payments, and these efforts, are literally reaching the scholars that they had been meant to succeed in.”

Story is a fellow with the CalMatters Faculty Journalism Community, a collaboration between CalMatters and scholar journalists from throughout California. This story and different greater schooling protection are supported by the Faculty Futures Basis.