July 2025

Higher Education

Major Higher Education Budget Developments

Reflects Major Proposals and Actions From January Through July 2025

January Governor’s Budget
  • For the California Community Colleges (CCC), proposes 2.43 percent cost-of-living adjustments (COLA) for apportionments and select categorical programs as well as 0.5 percent systemwide enrollment growth.
  • Proposes $395 million in CCC one-time initiatives focused on information technology (IT) and career technical education (CTE).
  • Reduces base funding by 7.95 percent at the California State University (CSU) and University of California (UC), consistent with previous budget agreement.
  • Sets resident undergraduate enrollment expectations at CSU (about 10,200 additional students) and at UC (about 2,900 additional students) in each 2025-26 and 2026-27. Defers funding for implementing the nonresident enrollment replacement plan at UC in 2025-26.
  • Recognizes higher Cal Grant costs. Provides $50 million to extend Golden State Teacher Grants by one year. Recognizes the expiration of $289 million one-time funding and removal of $110 million ongoing funding for Middle Class Scholarships (MCS)—reducing total state funding from $926 million to $527 million.
  • Proposes to provide notable augmentation to College Corps program and makes it ongoing. Also proposes state support for the nonprofit California College of the Arts (located in San Francisco).
May Revision
  • Shifts $492 million from community colleges to schools due to a change in how the split of Proposition 98 funding between the segments is calculated.
  • Makes slight downward adjustment to COLA rate (decreasing to 2.30 percent) for community college apportionments and select categorical programs. Increases CCC systemwide enrollment growth notably—to 2.35 percent.
  • Substantially revises CCC one-time spending proposals downward—rescinding an IT proposal and reducing amounts for the other proposals.
  • Defers $532 million in CCC apportionments payments from May and June 2026 to July 2026.
  • Reappropriates more than $300 million in unspent funds from various programs in previous years to support CCC apportionment costs.
  • Proposes to lessen the base reductions for CSU and UC to 3 percent.
  • Proposes $77 million augmentation for MCS in 2024-25 in response to a large increase in recipients.
Mid-June Legislative Package: Chapter 4
  • Shifts a smaller amount of funding ($233 million) from community colleges to schools than proposed at the May Revision.
  • Adopts the May Revision COLA proposals for CCC. Modifies enrollment growth funding to begin in 2024-25 and increase in 2025-26 (for combined growth of 2.35 percent).
  • Adopts a different mix of CCC one-time initiatives, with a greater focus on student support programs.
  • Defers a smaller amount of CCC apportionments payments ($378 million) from May and June 2026 to July 2026.
  • Adopts the May Revision reappropriations for CCC. Reappropriates an additional $135 million in unspent current-year funds from the Part-Time Faculty Health Insurance Program to support apportionment costs in 2025-26.
  • Rather than reducing base funding for CSU and UC, defers funding from May/June to July 2026.
  • Makes a major change to how the MCS program is funded by locking in award coverage, funding the program one year in arrears, and using a General Fund loan to pay for budget-year costs.
  • Rejects funding for College Corps and the California College of the Arts.
Late-June Final Budget Agreement: Chapters 5, 6, 9
  • Retains most aspects of the CCC Proposition 98 legislative package. Makes some changes to one-time funding, including reinstating funding for the Governor’s CTE proposals to May Revision levels. Adjusts the amount of the apportionments deferral upward to $408 million.
  • Retains most aspects of the UC and CSU package, but adds funding for more than a dozen one-time university initiatives, primarily relating to research, new academic programs, and student support.
  • Makes no further changes to Cal Grant or MCS funding but reinstates funding for College Corps and the California College of the Arts, while adding funding for the California Indian Nations College.