The gravy train is running off the rails in California and it’s got some private colleges nervous.

Ry Rivard of Inside Higher Ed has the story.

Private Colleges’ Turn to Cry

In recent years, budget cuts forced California public colleges to turn away hundreds of thousands of students. This year, it’s the state’s private colleges that are now fretting about the public coffers.

Private college leaders and the head of the state’s financial aid agency are worried about the reduced buying power of the publicly-financed Cal Grant. The scholarship program provides about $1.6 billion a year in aid to 394,000 Californians, including 33,000 private college students.

While the Cal Grant has remained frozen for students going to California’s four-year public colleges, where tuition fees are frozen, the maximum payout to students attending privates is decreasing. This fall, the scholarship award will fall by $1,000 to about $8,100 a year for student at a California private college.

“We think it’s devastating,” said Kristen Soares, president of the Association of Independent California Colleges and Universities.

The Cal Grant was actually created in 1955 to provide scholarships only to students who attended private colleges. The Master Plan for Higher Education in California was being debated and officials wanted to build capacity because there wasn’t enough room in the California State University or University of California systems.

Diana Fuentes-Michel, the executive director of the California Student Aid Commission, which administers the Cal Grant, said she wants to restore the value of the scholarship for private college students – but that’s a decision for the state legislature.

“We’d like to see the halting of the reduction to the independents, because we think it’s a good investment,” Fuentes-Michel, who attended a private college using the Cal Grant, said.

It’s easy to see why lawmakers would be attempting to curb its cost. The Cal Grant program cost about $460 million in 2003. Following an explosion of fee increases at the publics that the grant is required to cover and an increase in the number of low-income Californians, the program is projected to cost $1.8 billion next year, Fuentes-Michel said.