Federal and California government offers relief for college students

President Biden released a $1.8 trillion spending proposal, called the “American Families Plan,” to spend more on higher education.

The proposal includes $109 billion for free community college, according to the plan. It would ensure students can enroll in a community college to earn a degree or credential for free, without incurring any student loan debt. Free community college under Biden’s proposal would be available to DREAMers.

An expansion of Pell Grants, financial aid awards for low-income students that do not have to be repaid, will be expanded. The current maximum Pell Grant award is $6,495; President Biden’s plan would increase the maximum award amount by $1,400. The larger award would be available to DREAMers.

A new $39 billion program will be provided too. It offers two years of subsidized tuition for students from families earning less than $125,000 enrolled in four-year Historically Black Colleges and Universities, Tribal Colleges and Universities and Minority Serving Institutions.

One of his first actions in office, President Biden extended freezes on federal student-loan payments with 0% interest through September 30. Although he has temporarily frozen the interest monthly payments, students getting jobs can save money and repay federal student loans without worrying about being in debt.

Under Gov. Gavin Newsom’s 2021-22 budget proposal, California’s public colleges and universities would receive additional investment. It includes $30 million for emergency financial assistance grants for full-time, low-income students and other students who worked full-time prior to the pandemic.

Gov. Newsom’s state budget plan would also give schools and community colleges $93.7 billion in state funding over the next several years to set up college savings accounts for low-income kids. Under the plan, each low-income public school kid would get a $500 deposit, and foster youth and homeless students would get an additional $500 deposit.

Low income families can already start a college savings account through ScholarShare 529. The plan currently provides a dollar-for-dollar matched contribution of $200, with an extra $25 provided for setting up an automatic contribution plan. Newsom’s administration expects these savings accounts to provide financial incentives to go to college for marginalized students who are often excluded from such opportunities.

Two California assembly members — Jose Medina of Riverside County and Kevin McCarty of Sacramento — have proposed changes to simplify the Cal Grant program. By doing so, it would make high school students eligible for these financial aid awards for low-income high school students that do not have to be repaid.

The bill also guarantees tuition and fee awards to students who are eligible for the federal Pell Grant and who attend a public four-year college. The Cal Grant would require a GPA of 2.0 or higher, and the award is also available to older students who are more than a year out of high school.

Currently, it is being proposed and will need to be approved by the state legislature and signed by Gov. Newsom before any of the proposed changes are implemented.