California Student Aid Commission Releases 1st-In-Nation Graduation And Loan Default Rate Benchmarks Eliminating 154 Schools Eligible For Cal Grants

August 1, 2012 - Rancho Cordova, CA: The California Student Aid Commission Monday released the certified list of Institutions of Higher Learning that will be eligible to participate in the student aid Cal Grant Program for the 2012-2013 academic year. Under standards set by the Legislature and Governor in California’s new budget, institutions must have a student loan default rate of 15.5% or less and a graduation rate of 30% or greater.

The new standards eliminate 154 schools that participated in the program during the last academic year and are expected to impact the plans of more than 14,500 students who attend those schools with Cal Grants. The students can continue to receive their grants if they transfer to eligible institutions.

Students who are attending the 289 schools that are still eligible are now receiving their Cal Grant award letters based on changes the Governor and the Legislature made to funding levels. Under the 2012-13 budget, the Cal Grant program is offering 350,000 awards to new and renewal students at eligible California Institutions.

“California is the first state in the nation to set higher institutional standards than the benchmarks established by the federal government for its grants and loans,” said Barry Keene, chair of the California Student Aid Commission. “The Commission has argued for years that the best way to protect students, parents and taxpayers is to make sure Cal Grants help students get into solid programs that deliver proven educational and career value. Eliminating schools with high loan default rates and low graduation rates is a sensible way to do that.”

Noting that the timing is difficult for students who are already attending or committed to an ineligible institution, Student Aid Commission Executive Director Diana Fuentes-Michel said notifications are now being sent out to those affected by the new law.

 “Students should be aware that all California Community Colleges, CSUs and UCs, as well as most private, nonprofit schools such as Stanford and USC, remain eligible to participate in the Cal Grant program,” Fuentes-Michel said. “In addition, several for-profit schools are also still eligible. We encourage students to work closely with financial aid counselors to determine their options.”

At a time when California is prioritizing how limited taxpayer funds are spent, the Legislature and the Governor established the new standards to direct Cal Grants away from programs that leave students with massive amounts of student debt and little hope of graduating or finding employment. Historically, students at for-profit schools have had much greater difficulty making it  through an academic program to receive a degree. The average graduation rate for the nearly  348,000 students enrolled at the ten largest for-profit schools in the US is 20%, while the  national average for all schools is 55.5%.

 As in the past, Cal Grant A awards for students attending four-year public institutions will cover tuition and fees. However, other grants have been reduced. Those attending private non-profit and for-profit schools that are still eligible for Cal Grant participation will receive $9,223 compared to $9,708 last year. Cal Grant B awards for community college students are $1,473 compared to $1,551 last year. Cal Grant C awards for vocational and technical training tuition and fees are $2,462 compared to $2,592 last year, and the books and supplies awards are $547 compared to $576.

Click here to view school lists above in larger PDF file