Under new regulations approved by a legislative committee, California students won’t be eligible to receive annual state education grants of up to $9,703 to enroll at certain colleges. That’s because the new rules would disqualify colleges with high loan default and dropout rates from the grants.

According to an article by Nanette Asimov in the San Francisco Chronicle:

If approved by the full Legislature and signed by Gov. Jerry Brown, the changes together could save the state $124 million a year, said state lawmakers who worked out the new Cal Grant rules as part of an effort to close the state’s $26.6 billion budget gap.

Besides saving the state money, the plan is also intended to end state support of colleges with unscrupulous practices.

According to the article, the legislators originally considered limiting the financial help, called Cal Grants, to students attending for-profit colleges such that students would only get grants equal to grants for students attending California State University and the state’s community colleges. But then some lawmakers thought that perhaps the tuition cost wasn’t specifically the problem so much as what that tuition bought.

As California State Senator Mark Leno pointed out, some for-profit colleges are pretty good: “There are some good actors,” Leno said. “One I can point out is the Fashion Institute in Los Angeles. It has a high graduation rate, and the diploma actually means something. Students are employed by the fashion industry.”

Under proposed new rules, it’s the quality of the programs, and its outcomes, that will determine eligibility for the grants.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer