Dive Brief: 

• California Gov. Gavin Newsom signed higher education legislation this week that expands student financial aid, creates new transfer pathways and provides grants for workers displaced by the coronavirus pandemic. 

• The legislation is part of the governor's plan to help rebuild California's economy after the health crisis, and it invests $47.1 billion for higher education. 

• Although the measure means to increase access to the state's public colleges, its university systems are contending with an ongoing capacity crisis. 

Dive Insight: 

Thanks to an unexpected surplus, California is injecting more money into higher ed.

For one, the legislation makes major investments in student grants. It grows the state's banner financial aid program, the Cal Grant, for community college students by removing eligibility requirements that bar older adults from participating. Lawmakers estimated that the change, which takes effect in the 2021-22 academic year, will result in an additional 133,000 community college students becoming eligible for the grants, EdSource reported in June. 

The bill also expands California's existing Middle Class Scholarship. Starting in the 2022-2023 academic year, the grants will pay for college costs that students can't cover through federal, state and institutional aid. The state's annual budget bill will determine how much the program receives. 

And it creates new transfer pathways starting in 2023-24. First-year applicants will be able to receive guaranteed admission to the University of California or California State campus of their choice if they complete an associate degree within two years at one of the state's community colleges. They will also have access to services including the library and counseling at the nearest public university to their home. 

However, the plan could further strain the state's public four-year colleges, which are expected to turn away roughly 144,000 qualified students each year by 2030, according to a 2019 report from the College Futures Foundation. 

Lawmakers are taking steps to address the issue. The legislation says it is the state's intent for the U of California to limit out-of-state students to 18% of the residential undergraduate population. A news release from the governor's office also says his recovery plan will set aside $2 billion to address housing and space needs within California's higher education systems, though it's "contingent on future legislation."