Since 1982-83, the CSU has discounted state university tuition through the State University Grant (SUG) program for students based on financial need, as determined by the federal financial aid methodology. This tuition discount diminishes the impact of increased charges for students with the greatest financial need. Until 1992-93, the state provided funding for this program.
The amount budgeted for SUG represents tuition that will not be collected from students who receive the grants. The cost of SUG tuition discounts has grown dramatically, based in large part on the tuition increases required to offset declining state support during the recession. For 2014-15, the program cost of over $646 million was almost double the amount in 2008-09. This rate of growth is a significant financial commitment that reduces revenue available to the university.
Annual reviews of campus-reported data on eligible financial aid applicants and recipients are used to determine the number of students who qualify for SUG awards and the total funding for which they are eligible based on enrollment status, tuition due, and the level of their expected family contribution. Preliminary 2015-16 estimates reflect 136,500 of the 289,200 eligible CSU students received SUG awards.
CSU Allocations for the SUG program represent allowances for foregone revenue the university would have received.