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Governor Signs Historic Financial Aid Reform Bill

For immediate release:

SACRAMENTO – Yesterday Governor Newsom signed AB 789, authored by Assemblymember Marc Berman (D-Menlo Park), which makes groundbreaking, student-centered reforms to financial aid in California. The bill enables students to continue their education by removing barriers to keeping their financial aid and creating uniformity and transparency for students to appeal adverse decisions.

“Too many California students are losing their financial aid and are having their higher education dreams dashed due to inflated and confusing restrictions,” said Assemblymember Marc Berman. “These unnecessarily onerous rules result in significant numbers of marginalized students facing financial aid disqualification. AB 789 will provide all higher education students in California with the financial aid flexibility, certainty, and clarity they deserve, keeping students in school so that they can accomplish their higher education and career goals. Thank you to Governor Newsom for your commitment to supporting students.”

AB 789 will ensure that postsecondary institutions across California do not impose Satisfactory Academic Progress (SAP) requirements stricter than those required by federal law. It will also ensure that institutions consider a broader range of extenuating circumstances as a basis for an appeal to reinstate financial aid. Lastly, the bill creates a pathway for students who have disenrolled while on SAP disqualification to regain aid upon re-enrollment.

"As the lead sponsor of AB 789, John Burton Advocates for Youth is delighted that the Legislature recognizes the critical impact this bill will have on college students across California. For far too long, overly stringent SAP policies have disadvantaged already marginalized students, resulting in significant numbers losing their financial aid and discontinuing their higher education. AB 789 will ensure that students, particularly those from low-income and minority populations, can keep their financial aid, stay enrolled, and achieve their higher education goals," said Sarah Pauter, John Burton Advocates for Youth.

"Another step has been taken to ensure the transparency and accessibility of our higher education system. AB 789 will ensure that students are alleviated of undue burdens and restrictions that cause them to lose access to their financial aid, and thus their higher education. We must make it a priority to continue advocating for financial aid accessibility in order to provide students with the tools needed to achieve academic success," said UC Student Association President Celene Aridin.

“In the face of an unprecedented enrollment crisis affecting all California public higher education institutions and looming tuition hikes, ensuring access to financial aid is essential for students’ success. AB 789 will not only help to keep current students enrolled, but it will also allow those who have had to disenroll due to prior SAP disqualification the ability to apply to regain access to critical financial aid upon reentry,” said Dominic Quan Treseler, Cal State Student Association President.

“As inflation and the total cost of attendance continue to increase, we must fight for equitable higher education, greater transparency, and better student support. AB 789 will help ensure existing students remain enrolled while providing reassurance to aspiring students,” said Chanelle Win, Student Senate of California Community Colleges VPLA.

“Access to financial aid is critical for students to get to and through their postsecondary experience, and today California took a positive step forward to ensure that those who rely the most on financial aid aren't at risk of losing it due to arbitrary rules. California students deserve satisfactory academic progress policies that are aligned with, not stricter than, federal requirements and an appeal process that acknowledges their lived experiences, so they have every chance to achieve their postsecondary dreams,” said Manny Rodriguez, The Institute for College Access & Success (TICAS).

In order to maintain a Cal Grant or federal financial aid, students must meet certain federally governed SAP standards, such as a minimum Grade Point Average, a maximum timeframe for completion, and a minimum course completion rate. A report released in July 2021, titled “The Overlooked Obstacle – How Satisfactory Academic Progress Policies Impede Student Success and Equity,” found that 24 percent of first-year California community college students receiving a federal Pell Grant did not meet SAP standards during their first two consecutive academic terms. Black and Native American students were twice as likely as white and Asian students to not meet those standards. Likewise, students not meeting SAP standards was also found to be a significant issue at four-year universities. Students who are deemed as not meeting their institution’s SAP standards during any two consecutive academic terms or one year of enrollment must have their Cal Grant and federal financial aid terminated unless they successfully appeal that determination.

Federal regulations allow students to appeal the loss of financial aid due to special circumstances as defined by each individual postsecondary educational institution. Some postsecondary educational institutions do not take full advantage of federal flexibility related to grounds for appeal, unnecessarily limiting students’ ability to keep their financial aid. As evidence of the gravity of the problem, “The Overlooked Obstacle” report revealed that 87 percent of the California community college students who did not make SAP standards during their first two consecutive academic terms either disenrolled or lost their financial aid.