California State Legislature: Cal Grants to Go

SAN FRANCISCO, CA. – Some of California’s most well-known for-profit colleges may well soon lose the ability to offer Cal Grants to needy students, according to The San Francisco Chronicle.

If a motion passes in the state legislature, DeVry University, Heald University and the University of Phoenix will not be able to offer the same financial aid to students as in years’ past.

State legislators claim that a $27 billion budget shortfall leads them to consider eliminating such financial aid as Cal Grants, efforts that would save the state $24 billion. The loss of financial aid would accrue to students with recurring and high default rates in particular.

The California Student Aid Commission reported that, of the companies that run for-profit schools, the hardest hit would include:

• Apollo Group, Inc, which received over $15 million in Cal Grants in 2010
• DeVry Inc., which received $8 million in Cal Grants as well as $1.8 million, which it earmarks for Carrington Career Colleges
• Corinthian Colleges, Inc., which counts $9 million in Cal Grants
• ITT Educational Services, Inc., which received $6.6 million in Cal Grants
• Kaplan Colleges, which received $797,032 for Cal Grants

As a group, the for-profit companies and their colleges and campuses received over $42 million for Cal Grants last year.

Lawmakers complained that these companies maintained excessively high student loan default rates as calculated under a Student Default Rate Index, a formula that state legislators will continue to use if a budget compromise formulated by 10 state assembly and senate members passes next week.

The San Francisco Chronicle reports that representatives of the colleges continue to lobby against the state formula and budget compromise.

Despite increased scrutiny over their admissions processes, these for-profit companies remain popular in California as well as other states across the country because of their relative flexibility for non-traditional students with day jobs and families.

Related Posts

1. The Difference Between College Scholarships and College Grants

2. Why doesn’t California offer scholarships for college like Missouri

3. Georgia Cuts Grants for Public University Students

4. An Increase in Government Grants for College Students

5. While College Tuition Goes Up, College Grants Go Down

Tags: cal grants, college budget cuts, college grants, College Scholarships And Grants, for-profit institutions, grants, grants for college