July 2026

Higher Education

Major Higher Education Budget Developments

Reflects Major Proposals and Actions From January Through July 2026

January Governor’s Budget
— For the California Community Colleges (CCC), proposes 2.41 percent cost-of-living adjustments (COLA) for apportionments and select categorical programs.
— For CCC, proposes 1.5 percent new systemwide enrollment growth across 2025-26 and 2026-27.
— Proposes $38 million ongoing augmentation for Calbright College.
— Proposes to retire 2025-26 CCC payment deferral ($408 million) and cover higher 2025-26 apportionments costs ($89 million).
— Proposes $326 million (mostly one time) for various other CCC initiatives, including a student support block grant, deferred maintenance, the Healthy School Food Pathways program, Common Cloud Data Platform, and credit for prior learning.
— Proposes 7 percent base increases for the California State University (CSU) and University of California (UC).
— Restores CSU and UC base funding by 3 percent but retains payment deferrals. Keeps option for CSU and UC to access no-interest General Fund loan in the meantime.
— Maintains CSU and UC enrollment growth expectations set forth in the 2025-26 Budget Act. CSU is expected to add 10,161 full-time equivalent (FTE) resident undergraduate students (2.9 percent) in 2026-27. UC is to add 2,968 FTE resident undergraduates (1.4 percent).
— Provides $61 million ongoing augmentation for UC nonresident replacement plan (reflecting funding for final two years of implementation).
— Proposes to reappropriate $32 million in unspent funds from four UC initiatives for the same purposes.
— Covers Cal Grant cost increases ($107 million in 2025-26 and $337 million in 2026-27).
— Provides $1.1 billion to cover 2025-26 Middle Class Scholarship (MCS) award costs. For 2026-27 MCS awards, proposes reducing award coverage from 35 percent to 17.5 percent of students' remaining financial need.
May Revision
— Revises CCC COLA rate up to 2.87 percent and adds an extra 1.44 percent apportionment increase. Links the extra increase in part to a new requirement that districts offer 14 weeks of paid pregnancy disability leave.
— Proposes $9.7 million one time for the CCC Adult Learner Demonstration Project.
— Proposes to reappropriate $9.1 million in unspent fund from two other UC initiatives for the same purposes.
— Proposes $1.5 million one time for UC First Star foster youth program.
— Revises Cal Grant cost estimates up by $4.8 million in 2025-26 and down by $31 million in 2026-27.
— Lowers estimate of 2025-26 MCS award costs by $95 million.
— Adds $16 million ongoing federal funds for Golden State Teacher Grants (GSTG) for those in special education teacher credential programs.
— Adds $1.6 million one-time federal funds for GSTG awards for those in high-need teacher credential areas.
— Adds one-time funding of $664,000 for the California Student Aid Commission and $1.3 million for the Cradle-to-Career Data System to support implementation of the new federal Workforce Pell Grant program.
Mid-June Legislative Package: Chapter 19
— Enacts all of the Governor's higher education proposals and adds various legislative augmentations.
— For CCC, enacts 3.55 percent new systemwide enrollment growth across 2025-26 and 2026-27. Adds $48 million to fund a district's credit enrollment based on the greater of its three-year average or current level.
— Adds $69 million ongoing and $343 million one time for various other CCC purposes, mainly relating to student support.
— Adds $36 million for 10 one-time UC initiatives, mainly relating to research and student support. Approves all of the UC reappropriations. 
— Adopts provisional language making all of the UC one-time funding available indefinitely.
— Adds $6 million one time for two new CSU initiatives related to workforce issues.
— Adds $9.8 million one time to raise the Cal Grant Transfer Entitlement age cap from 28 to 30 for five years.
— Adds $10 million one-time state General Fund for GSTG awards in high-need fields of study to be provided in 2027-28.
— Approves reducing 2026-27 MCS award coverage to 17.5 percent of students' remaining need.
Late-June/July Final Budget Agreement: Chapters 16, 21, and 79
— Brings new CCC enrollment growth down to 2.5 percent across 2025-26 and 2026-27. Retains proposal to fund a district's credit enrollment based on the greater of its three-year average or current level.
— Adds $13 million to extend the 1.44 percent CCC apportionments increase to hold harmless districts.
— Adjusts various other CCC spending proposals, reducing net new spending by $39 million ongoing and $41 million one time.
— Revises CSU's enrollment target down to 1.0 percent.
— Adds $73 million for 11 more one-time UC initiatives, mainly relating to research and student support. 
— Revises provisional language to make funding for all the new UC one-time initiatives also available indefinitely.
— Provides $111 million one time to raise the Cal Grant Transfer Entitlement age cap from 28 to 30 for five years.
— Revises 2026-27 MCS award coverage to 23 percent of students' remaining need.
— Places a housing bond on the November 2026 ballot that includes $350 million for new affordable student housing projects. (The funds would be split evenly among CSU and UC.)