(a) Commencing with the 2023-24 academic year, an institution of higher education shall not reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student’s gift aid exceeds the student’s annual cost of attendance.

(b) The institution may reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act by no more than the amount of the student’s gift aid that is in excess of the student’s annual cost of attendance.

Terms Used In California Education Code 70048

  • Cost of attendance: means the student's tuition and fees, books and supplies, living expenses, transportation expenses, and any other student expenses used to calculate a student's financial need for purposes of student aid programs under Title IV of the federal Higher Education Act of 1965, as amended (20 U. See California Education Code 70047
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Gift aid: means all financial aid designated for the student's educational expenses, including a grant, scholarship, tuition waiver, fellowship stipend, or other third-party payment, that is not a loan or pursuant to a work-study program. See California Education Code 70047
  • institution: means any public or private postsecondary educational institution in the state that receives, or benefits from, state-funded financial assistance or enrolls students who receive state-funded student financial assistance. See California Education Code 70047
  • Institutional gift aid: means gift aid that is paid for by the institution of higher education from its funds and the recipient of the aid is selected by the institution. See California Education Code 70047
  • Private scholarship: means financial assistance awarded to students based on one or more factors, including, but not limited to, academic merit, talent, or a particular area of study, by a private company, foundation, or nonprofit organization, or a public charity or service group. See California Education Code 70047
  • Scholarship displacement: means the reduction of institutional gift aid due to private scholarship awards. See California Education Code 70047
  • Student: means any California resident that enrolls in any institution of higher education to obtain an undergraduate degree. See California Education Code 70047

(c) The institution shall not consider receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for qualification for institutional gift aid.

(d) To ensure financial aid is maximized, an institution is encouraged to implement efforts to avoid scholarship displacement through consultation with scholarship providers and students to avoid situations where institutional gift aid and private scholarships can only be used for specific purposes.

(e) This article shall not be interpreted or implemented in a manner inconsistent with state or federal law. The provisions of this article are severable. If any provision of this article or its application is held invalid due to a conflict with federal requirements, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

(Added by Stats. 2022, Ch. 925, Sec. 1. (AB 288) Effective January 1, 2023.)

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