The state created the Middle Class Scholarship program in 2014?15 to provide partial tuition coverage for certain California State University (CSU) and University of California (UC) students. Students qualify for the program if they have household income and assets under a specified ceiling ($191,000 in 2021?22). The maximum award under the original program is worth 40 percent of systemwide charges when combined with all other public financial aid. Awards are graduated downward as household income increases, with the minimum award set at 10 percent of systemwide charges. (Students do not receive an award if they already are receiving the same amount of tuition coverage through other financial aid programs, such as Cal Grants.) State law caps spending on the original Middle Class Scholarship program at $117 million annually and directs CSAC to prorate award amounts to remain under the cap, if needed. CSAC is prorating award amounts for the first time in 2021?22. (As described below, the program was recently revamped.)

Recap of 2021?22 Budget Actions

2021?22 Budget Expanded Cal Grant Eligibility for Community College Students. Until the 2021?22 award year, only recent high school graduates and transfer students under age 28 qualified for a Cal Grant entitlement award. The 2021?22 budget expanded entitlement awards to California Community College (CCC) students regardless of their age and time out of high school. CCC students who receive an award under this new provision will remain eligible for the award after transferring to CSU or UC, but not after transferring to a private institution. The 2021?22 budget also included various smaller Cal Grant augmentations, including a new supplemental access award for foster youth and an increase in the maximum tuition award for students attending private nonprofit institutions.

2021?22 Budget Included Plan to Revamp Middle Class Scholarship Program. The 2021?22 budget agreement included a $515 million p the Middle Class Scholarship program. Whereas award amounts under the original program are based on tuition charges, award amounts under the revamped program will be based on the total cost of attendance (tuition plus living costs). As Figure 2 illustrates, calculating a student’s Middle Class Scholarship award amount has become more complex. Under the revamped program, CSAC will first take into account other available gift aid, a student contribution from part?time work earnings, and a parent contribution for dependent students with a household income of over $100,000. It then will deduct these amounts from a student’s total cost of attendance to determine whether the student has remaining costs. CSAC will determine what percentage of each student’s remaining costs to cover each year based on the annual appropriation for the program. The revamped program is expected to serve significantly more students than the original program, primarily because students receiving tuition coverage through other programs (who do not currently receive Middle Class Scholarship awards) will begin receiving nontuition coverage.

a The maximum share of systemwide tuition and fees covered is set at 40 percent. In 2021?22, CSAC is prorating award amounts to stay within the program spending cap of $117 million. Students with a household income of more than $127,000 and up to $191,000 are eligible for an award amount that is graduated downward for each $1,000 increase in income.

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b Under the original program, students receiving tuition coverage through Cal Grants or other financial aid do not receive a Middle Class Scholarship award.

Students with a household income of up to $127,000 are eligible for the largest award

c The amount also includes any private scholarships in excess of the sum of the student contribution and parent contribution.