CSU to Defer Payments of Fees by Students Affected by Cal Grant IOUs

The California State University announced today that it will defer State University Fee payments for the summer and fall 2009 term for CSU students who experience delays receiving Cal Grants from the California Student Aid Commission. The State Controller and the CSAC have informed higher education institutions of delays in the payment of Cal Grant A and B awards. The state began issuing IOUs due to a cash shortage resulting from failure to adopt and sign a state 2009-10 budget that closes the projected $26.3 billion General Fund shortfall.

To provide for CSU's financially neediest students who rely on Cal Grant A and B awards, CSU campuses will delay student payment of the State University Fee until the CSAC is able to disburse Cal Grant funds to campuses. Cal Grant B recipients also receive a stipend from the state. However, due to the proposed system budget reductions of $584 million and state cash-flow problems, the CSU is not in a position to automatically cover these cash stipends to students until the CSAC actually distributes the funds.

While these students will receive their federal Pell Grant awards in addition to other forms of financial aid, some students may still face a financial hardship to enroll for the summer and fall semesters. In these cases, CSU campuses will — on a case-by-case basis — provide short-term emergency loans to the neediest students, provided students have exhausted all alternative funding sources.

“CSU is committed to ensuring that this situation with the Cal Grants does not hurt our students' academic progress,” said CSU Chancellor Charles B. Reed. “Many students and their families rely on Cal Grants to cover the cost of education. We will do what we can to provide for the neediest of students, many of whom are the first of their family to attend college.”

New Awards

Gov. Schwarzenegger has also proposed that the state of California not fund new awards in the 2009-10 budget. While a legislative conference committee rejected that proposal, budget negotiations within the state Capitol are ongoing. At this time, CSAC is warning all students that new awards are considered tentative pending a final budget.

More than 60,000 CSU students receive Cal Grant awards.