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, The Chronicle has learned.
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.
"I thought it was a mistake, that someone messed up at the financial aid office," said Hayley Leventhal, who is in the first year of a two-year master's program in counseling at San Francisco State University.
It was no mistake.
CSU Chancellor Charles Reed recently told all campuses not to allocate about $90 million in financial aid that would have paid the 2012-13 tuition for qualified grad students - about half of the roughly 40,000 graduates enrolled.