The CSU understands the impact financial aid has on social mobility–a student’s ability to attend college, earn a baccalaureate degree, and enter the California workforce in a position to attain greater lifetime earnings. The CSU strives to keep costs to a minimum by offering institutional aid in addition to federal and state grant and loan programs. Financial aid allows CSU students to better focus on their academics by easing the pressure of educational and personal costs. Although CSU tuition is among the lowest in the nation for a resident undergraduate student, and will remain so even with the tuition increase, 82% of all CSU students receive financial aid and 60% of all undergraduate students receive non-loan aid to cover the full cost of tuition.
The State University Grant (SUG) program is the CSU’s institutional grant-aid program and provides need-based awards to eligible students. Aligned with the commitment to increase SUG by an amount equal to one-third of the additional tuition revenue, the plan dedicates an additional $49 million due to the rate increase and $8 million due to enrollment growth. The additional funding provides larger grant awards so that our students with the greatest financial need are not affected by the tuition increase. The SUG program has grown considerably since its inception, from $4 million in 1982-83 to a projected $759 million in 2024-25. Currently, 9% of the CSU’s total operating budget is dedicated to financial aid for students with the greatest need. The SUG program remains one of the largest commitments in the CSU operating budget.
In 2021-22, the CSU provided nearly $965 million in institutional aid, which includes $701 million for SUG. An additional $788 million from the state Cal Grant program, over $73 million in the Middle Class Scholarship Program, and over $1 billion from the federal Pell Grant program help CSU undergraduate students cover tuition, fees and some personal expenses. These CSU, state and federal financial aid programs help defray the cost of attendance for the lowest-income students and keep CSU student debt well below the national average. In 2021-22, CSU baccalaureate degree recipients have lower average debt ($17,682) than the 2019-20 non-CSU California student average ($21,125) and well below the 2019-20 national average ($28,950).
To accommodate more students at the CSU, the governor and the CSU committed in the compact to grow enrollment by approximately 3,484 resident, undergraduate, full-time equivalent students in 2024-25. Using the marginal cost rate, which is the cost of education per FTES, the funding required to support these new students is approximately $55 million and would be equivalent to a 1% increase in resident undergraduate enrollment. As it did in 2023-24, the CSU intends to strategically place new enrollment at campuses experiencing significant prospective student demand that can expand more seats in academic programs that support high-demand career fields in California.
Due to the multi-year compact, it could be possible to increase undergraduate resident students over the next three years so that by 2026-27, CSU’s enrollment will grow by approximately 10,500 full-time equivalent students. For decades, California has encouraged generations of young Californians to pursue higher education, and during that time, the CSU has been a beacon of access to that opportunity.
Higher education enrollment declined across the country during the pandemic, but overall CSU campuses fared better than other institutions. For the first time in 13 years, the 2022-23 academic year ended with actual resident enrollment below the resident enrollment target. One contributing factor is change in continuing student enrollment behaviors, including average units enrolled. Additionally, as CSU campuses have returned to in-person outreach and recruitment efforts, challenges persist including those related to the national sentiment about the value of a college degree and decreasing enrollment in California K-12 and community colleges. With 95% of the CSU undergraduate student population enrolling from California schools, the system and universities are actively and collaboratively engaged in robust strategic and enrollment planning initiatives.
As the year 2025 approaches, and after a decade of focused systemwide work and lessons learned, the CSU finds itself at an inflection point. Increasing retention and graduation rates while eliminating equity gaps remains the CSU’s imperative, and it is a consequential and opportune moment to remake, rebrand and reshape the Graduation Initiative. Additional resources of $30 million would advance this effort through a variety of priorities directly focused on student learning and success.
Reports from the interim chancellor’s strategic work groups were recently released and include several recommendations to strategically deploy a variety of datainformed best practices, policies and innovations that have the potential to drive student success and equity to new heights. Additional investments would ensure implementation is strategically integrated, particularly the Black Student Success, Strategic Enrollment Management, and Sustainable Financial Model workgroup recommendations.
The CSU remains focused on meeting Graduation Initiative goals–especially closing equity gaps. The CSU adopted and began implementing an equity action plan that is re-engaging underserved students who have disenrolled, expanding the use of digital degree planners, reviewing and restructuring courses with inequitable low-pass rates, bolstering student opportunities to earn credits during summer and winter sessions and eliminating administrative barriers. The multi-year compact contains shared goals designed to close equity gaps and promote student success, expand student access, increase affordability for students, increase intersegmental collaboration to benefit students, support workforce preparedness, and provide access to online course offerings. Instruction is the core function at the CSU, and it receives the largest share of funding. Costs associated with high-demand degrees are often higher than with other disciplines. Additional resources will be focused on these areas to achieve the shared goals of the CSU and the governor’s administration.
Students have expressed a desire for increased support services that meet their diverse individual needs. This approach necessitates a high level of support and engagement with students. The additional resources will help to close the already existing funding gap in student services and enhance the educational experience for students. Continued investment in these efforts may include but are not limited to the following:
TABLE 4: CSU SYSTEMWIDE GRADUATION INITIATIVE PROGRESS
Student basic needs remain a priority investment as the CSU takes a holistic approach to students’ well-being both inside and outside the classroom. While the primary mission of the CSU is educational in nature, students cannot be fully engaged in or out of the classroom if they do not receive appropriate support services. The CSU plans $7 million to sustain and expand its Basic Needs Initiative in support of the Graduation Initiative. Critical to student success at the CSU, the Basic Needs effort supports CSU students on their path to graduation.