SACRAMENTO -- California's
move to tighten eligibility requirements for its Cal Grant program will
eliminate or reduce awards to 14,500 students, most of them enrolled in
for-profit colleges such as the University of Phoenix, the California
Student Aid Commission announced Tuesday.
The commission released
a list of colleges that are no longer eligible to receive Cal Grants
under tougher standards passed by the Legislature and signed by
Democratic Gov. Jerry Brown in June. The rules were adopted to save an
estimated $55 million and address the state's budget deficit.
California's
public universities and most nonprofit, private colleges met the new
standards for graduation rates and student loan defaults.
Of the
170 for-profit schools that participate in the state financial aid
program, 137, or 80 percent, could not meet them. They include the
University of Phoenix, ITT Technical Institute, Kaplan College, Heald
College and others.
More than a dozen private colleges, including Christian colleges, also could not meet the higher standards.
Overall,
about 4 percent of the 354,500 students eligible for Cal Grants will be
affected. According to the commission, the change will eliminate aid to
7,800 new students and reduce 20 percent of the awards to 6,700
returning students this fall.
California is the first state to
set such high benchmarks, which are tougher than federal requirements,
said Diana Fuentes-Michel, executive director of the commission.
"In
a tight budget situation, the Legislature was prudent in terms of
looking at how we fund not only students but institutions," she said.
The
state now requires a graduation rate of at least 30 percent and a
federal student loan default rate of less than 15.5 percent for one
year. By comparison, Fuentes-Michel said the federal government requires
a higher education institution to have a student default rate of less
than 30 percent for three years.
University of Phoenix spokesman
Ryan Rauzon said the change disproportionately hurts working adults,
many of whom attend for-profit schools because they better accommodate
their work schedules. He said between 2,000 and 3,000 of the
university's students will see their Cal Grants eliminated or cut.
"It's a really unfortunate policy choice," Rauzon said.
Brenda
Bautsch, who tracks higher education policy at the National Conference
of State Legislatures, said states are becoming more aware of where
their limited financial aid dollars are going, particularly money that
can be funneled to for-profit schools.
"States are now looking
and saying, 'We don't want our students using their financial aid at
institutions where they're going to end up not getting a quality degree
and ending up in huge loan debt,'" Bautsch said.
Maryland and
Oregon passed laws last year excluding for-profit schools from state
financial aid, and Washington adopted a bill directing a council to
tighten eligibility requirements, according to the state legislatures
group.
The average eligible school in California had a 10 percent
student default rate compared to 26 percent for the average ineligible
school, according to the commission's data.
University of Phoenix had a 21 percent student default rate and a graduation rate of 18 percent.
"There's
no question that students at University of Phoenix and we as an
institution need to do better to manage borrowing and to help students
make good choices so they don't default on their loans," Rauzon said.
"But to have that conversation in a vacuum without acknowledging what
the economy has been doing to adult students who go back to college is
unhelpful."
A message left with the Association of Private Sector Colleges and Universities wasn't immediately returned Tuesday.
California
community colleges, California State University, the University of
California and most nonprofit, private colleges such as Stanford and the
University of Southern California met the tougher state requirements.
Nevertheless,
all Cal Grant recipients will feel the pinch because of a 5 percent,
across-the-board cut to financial aid this fall. The top Cal Grant award
will be reduced from $9,708 to $9,223.
The commission's
announcement of ineligible schools comes on the heels of a report
requested by Democrats in the U.S. Senate that criticizes for-profit
colleges for putting revenue above education.
Starting in the
2013-14 academic year, students who attend eligible for-profit colleges
will see their Cal Grants cut dramatically to $4,000. The move is
expected to save the state $12 million.
A full list of ineligible schools is posted on the commission's website, www.csac.ca.gov .
Via http://www.mercurynews.com/education/ci_21208286/most-california-profit-colleges-lose-state-grants
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