Policy Brief: COVID-19 Emergency Funding and California’s Higher Education Systems

Just before the outbreak of the COVID-19 pandemic, things were going very well for California’s public colleges. In all three systems, government funding levels have been high and increasing, student outcomes have improved, and programs for needy students have been robust. Then, in March 2020, COVID-19 sent shocking changes through the means and workings of these educational institutions.

crisis hits

Almost overnight, campuses were closed and students, faculty and staff were sent home. Student and family incomes plummeted. The University of California (UC), California State University (CSU), and California Community College (CCC) systems faced a financial catastrophe akin to the Great Recession of 2008 while also facing a rampant global virus . Because of the complexities, disparities in size, and unique locations in each system, no one-size-fits-all solution could resolve the financial and health crisis affecting institutions.

California’s public institutions have faced potentially catastrophic financial dynamics: sharp falls in revenue from tuition, room and board, and ancillary services such as parking and bookstores, and rising costs related to COVID-19 campus safety measures and course relocations and Student Services on the Internet. To make matters worse, government funding has also fallen for the 2020/21 financial year.

The federal emergency aid was extensive and timely

The federal government quickly passed a series of emergency relief laws — known collectively as the Higher Education Emergency Relief Fund, of which $10.1 billion went to California. These funds were to be split equally between student grants and institutional deficits – originally just to cover the required shift to online courses, but later expanded to cover other associated costs.

study grant. California students received over $5 billion in emergency aid. The first round of funding had restrictive rules for disbursements to students. Based on the full-time students on campus rather than total headcount and on the number of Pell Grant recipients (as a measure of student needs), this round favored UCs and CSUs over CCCs. Although subsequent rounds attempted to address disparities in funding, community college students received less aid per student than their university counterparts during the pandemic.

Although guidelines were provided by the US Department of Education and California’s public systems, each campus had different challenges in getting the money to students in need. Because the student information stored was based on their families’ financial situation from previous tax years, and the students had moved off campus, payout was a trade-off between speed and accuracy. As the pandemic transformed student and family incomes, ensuring payout accuracy was also a challenge.

Especially in the first round of federal aid, the students most in need may have foregone additional aid, particularly at community colleges. Community college students often study part-time and work part-time, and Pell Grant uptake is low; Additionally, these students often rely on state rather than federal aid, so many had no federal aid applications on file. Those without a stable home address and/or internet connection were the most difficult to reach.

Institutional Issues. UC, CSU, and the community colleges received approximately $4.5 billion in institutional aid. In the first round, campus aid spending was limited to temporarily moving courses online, a key transition that had to happen quickly. In later rounds, the federal government eased restrictions to allow the aid to be used for additional pandemic-related institutional spending. Notably, most institutions used a portion of these funds to support the neediest students beyond the student assignment portion. Although every institution has published spending information publicly, about 13 percent of spending falls into an “other” category, making it difficult to understand how it was used.