California's budget dilemma has the potential of giving incoming college freshmen and their parents an abrupt and costly lesson in obtaining a higher education. It is no secret that the expense of a bachelor's degree is going up at all institutions, and academically qualified students from low- and middle-income families risk being squeezed out. It is ironic, however, that the proposed reduction in state-funded grants to private colleges and independent universities may actually exacerbate the problem and make the admissions picture at public universities and community colleges even worse.

Today, low- and middle-income students who attend independent universities in California can qualify for up to $9,708 through the Cal Grant program to help pay for tuition and fees. The governor's budget for the next fiscal year proposes to cut the maximum grant to new students starting college this fall by 44 percent (or $4,200 per student). At the same time, the income ceiling for qualified families would be lowered by 10 percent. In a state where, according to the Association of Independent California Colleges and Universities, the average annual cost for tuition at a four-year private college is $21,465 (not including room and board, which can average $9,000 a year), the effect this financial aid cut would have on economically disadvantaged students would be devastating.

The National Association of Independent Colleges and Universities reports that students who attend independent universities nationwide pay 62 percent of what it costs an institution to provide an education, which can be offset by grants, scholarships and work-study programs. In comparison, the state's system, which consists of the University of California, California State Universities and California Community Colleges, is heavily subsidized. UC students pay only 30 percent of the cost of their education and CSU students pay just 20 percent -- regardless of their economic background or ability to pay.

Historically, private universities have struggled to enroll as many academically qualified students who apply, regardless of their economic background or ability to pay. To achieve this goal, an extraordinary number of scholarships have been awarded to students at private universities. However, a financial void that would be created by the loss of the Cal Grant funds would be impossible to fill. As a result, California students from low- and middle- income families who are academically qualified to apply for admission to a private college or university may be denied that opportunity.

A case in point is the University of San Diego, where about 15 percent of the undergraduate student body receives support through Cal Grants. The proposed cut in this program would affect about 375 of our incoming freshmen. Multiply this example by 69 independent universities throughout the state who enroll approximately 118,000 total undergraduate students and the effects of the proposed cuts in Cal Grants become painfully clear.

Reducing Cal Grants to independent universities will have long-term economic consequences to the state. If California's academically gifted students cannot afford to attend private institutions of their choice, where are they to go? They will turn to the state's UC or CSU system, which is already overcrowded, struggling with budget cutbacks and faced with mounting tuition increases.

Independent colleges and universities produce 23 percent of the bachelor's degrees awarded in California, according to the AICCU, along with 49 percent of master's degrees and 46 percent of doctoral degrees. Class sizes are smaller at private colleges and courses are more available. According to a survey by the NAICU, 65 percent of private college students graduate with a bachelor's degree in four years compared to 34 percent of students at public institutions during the same period of time -- regardless of their background. This means students at private colleges can graduate and enter the workforce more rapidly than their counterparts at state universities, and also avoid additional years and continued costs to attain their bachelor's degrees.

Nonpublic universities must operate under state and federal regulations in order to receive taxpayers' funded grants, loans, research awards and other types of financial support. However, as private (nonprofit) corporations, independent universities are under tremendous demands to operate more efficiently. As a result, the performance of faculty is under greater scrutiny and more attention is focused on student achievement. In other words, you often get what you pay for, whether it is financed through daddy's stock portfolio, family savings, loans -- or Cal Grants.

The public's investment in students through Cal Grants at private colleges is a good deal -- for the state, one might even call it a bargain. Academically able and financially disadvantaged students can get an education, the state's job base is broadened, and government coffers are replenished by more young people with college degrees entering the marketplace with higher earning potential. This week, as both the California Assembly and the Senate consider the governor's budget revisions, lawmakers should review the disproportionate impact of cuts in the Cal Grant program on students and families who choose to attend private colleges and universities, and dismiss the myth that the private, independent sector of higher education in California serves only the privileged.

Tom Cleary is director of community and government relations at the University of San Diego (www.sandiego.edu). Judith Lewis Logue is USD's director of financial aid services.