CAL POLY - Grants to thousands of California college students -- including 2,500 at Cal Poly -- will be delayed if a state budget is not adopted soon, state and education leaders said Monday.

The Cal Grant program, which is expected to pay some college fees for 220,000 students this year, depends on an adopted budget, Gov. Gray Davis said. The budget was due July 1, but the Legislature has not been able to agree on one.

"We not only are running out of cash, but we are also lacking legislative approval to make payments," Davis said during a conference call Monday.

Students who meet the grants' basic requirements receive money for either community colleges or four-year schools. Administrators warned that many low-income students may decide not to attend college if their state checks are not ready when school starts.

Cal Poly awarded $3.6 million in Cal Grants last school year, said the school's financial aid director, John Anderson.

He said his office sent notices to students with Cal Grants that they'd receive $524 per quarter to cover state university fees this fall. And now that CSU trustees raised the system's tuition to $682 last week, Anderson said he's prepared to increase Cal Grant checks to that amount.

"But until we hear from the California Student Aid Commission that a budget has been passed, we're not absolutely sure how we can dispense the money," Anderson said.

A "silent group of students" could be lost if the grants are not provided on time, said Allison Jones, assistant vice chancellor for academic affairs for the California State University system.

"Without that grant, students simply will not be able to enroll," he said. "This is an emergency situation, from our perspective."

If colleges are not able temporarily to pay for students who don't receive their grants, a generation of pupils could be devastated, Davis said.

About 39,000 CSU students are expected to receive Cal Grants this year, and 45,000 University of California students could be affected, officials said.

The delay could affect smaller universities and community colleges. More than 275 students at Diablo Valley College in Pleasant Hill used Cal Grants last year, and administrators at many California schools have scrambled to alert students to the possibility of late payments.

Other schools have adapted to California's chronically late budgets. At Las Positas College in Livermore, administrators don't disburse grants until October, about two months after most colleges.

"Part of that reason, unfortunately, is that we know the budget is in a bad situation," said Andi Schreibman, financial-aid director at Las Positas.

"Hopefully, that's not going to affect our students as much as at other schools."