California State University has apparently taken financial aid away from about half of its graduate students. According to an article by Nanette Asimov in the San Francisco Chronicle:

California State University is withholding financial aid for about 20,000 needy graduate students – money that pays their tuition – pending a decision that could permanently end the cash grants.

Graduate students across the 23-campus system began receiving financial aid notices this week and were astonished to see that the State University Grant that takes care of tuition for low-income students was missing. In its place was the offer of a federal loan at 6.8 percent interest.

Cal State may lose $200 million in state funding next year. The institution lost $750 million this year.

Mostly likely reacting to this change, Cal State Chancellor Charles Reed instructed all Cal State schools not to disperse the $90 million in financial aid for low-income students.

This, needless to say, leaves students with few options. Students enrolled in graduate programs based on the longstanding tuition policy for poor students. In order to stay enrolled in their programs they have to either take out the 6.8 percent interest loan or find the money elsewhere. Since they were getting the grants because they were low-income, however, they’re unlikely to have other sources to turn to.

The quick notice of this dramatic policy change is also very odd. Asimov:

Asked why San Francisco State had sprung the news on students without explanation, Jo Volkert, associate vice president for enrollment management, told The Chronicle that the campus would e-mail an apology.

Ah yes, the all-campuses email from central administration. How charitable of Cal State.

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