Arizona State University’s presence in California includes ASU FIDM in downtown Los Angeles, pictured on Jan. 14, 2026.

Michael Burke / EdSource

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California is a key market for Arizona State University’s cross-state ambitions.

The university argues that about 900 of its California students should be eligible for Cal Grants.

A former lawmaker called the university’s reading of state law in its favor “a stretch.”

Arizona State University has spent years expanding its footprint in California, with a presence in downtown Los Angeles and thousands taking online classes within the state.

But ASU faces an obstacle: access to state aid. The university’s latest bid for Cal Grants, a marquee financial aid program that awarded almost $2.5 billion to California students last year, was denied by the California Student Aid Commission in September. Officials say state law does not open the Cal Grant program to out-of-state public universities — and have firmly maintained that stance despite repeated pushback from ASU as recently as January.

The impasse shows the complexities of the behemoth public research university’s yearslong push into California. Its strategy is propelled by ASU leaders’ belief that their educational mission shouldn’t be limited by state boundaries — and that there are California students looking for options beyond the state’s many public and private alternatives.

Colleges often recruit students across state lines and sometimes plant flags in major cities to attract short-term visitors from a main campus. But Arizona State is somewhat unusual for pitching its California programs to California students, too. In 2018, the university announced a move into the former Los Angeles Herald Examiner building in downtown Los Angeles, and in 2023, added a second location a half mile away. As of this past summer, it had more than 200 students studying film, fashion and other fields in Los Angeles, almost 90% of them Californians.

Arizona State additionally enrolled more than 14,000 students physically located in California in online classes, according to university figures. Other California experiments include hybrid programs at Southern California community colleges, a tuition discount for community college-to-ASU transfers and a lobbying presence in Sacramento.

“ASU views itself as being different. They brand themselves as the ‘new American university,’ and they want to be this massive institution,” said Robert Kelchen, a professor studying higher education at the University of Tennessee, Knoxville. “So they’re looking at growth opportunities that not every public university is.”

Out-of-state expansion has also involved a series of deals that closely tied the university to two private California colleges navigating accreditation challenges: the for-profit Fashion Institute of Design and Merchandising, or FIDM, and the nonprofit film school Columbia College Hollywood. Both closed as independent institutions in 2025, with some students and overlapping academic areas effectively absorbed into ASU.

Meanwhile, accessing state aid in California has proven a hurdle. Although ASU first applied for Cal Grants in 2020, its campaign escalated this winter, when it pressed for the commission to discuss the Cal Grant issue at its next regular meeting in March. A successful bid would open Cal Grants to about 900 Arizona State students at current levels, according to the university.

“We’re trying to find whatever mechanism is necessary to secure Cal Grants for those students, unless someone can advance some rational basis that they would be denied that financial aid,” James O’Brien, the chief of staff to ASU President Michael M. Crow, said in an interview.

ASU argues that state law already clears a path for public institutions whose minimum graduation rate and maximum student loan default rate meet state standards to access Cal Grants. But former state Sen. Richard Roth, a lawmaker who sponsored legislation ASU cites to support its case, said granting Cal Grants to ASU was never the bill’s intent. California Student Aid Commission officials agree. 

“The California Education Code clearly defines what type of public institutions are eligible to receive California funds,” Daisy Gonzales, the executive director of the student aid commission, said in a written statement. “The state also has additional budget control language to ensure that the Commission does not increase costs for Cal Grant without authority from the Governor and Legislature.” 

As part of their appeals, ASU leaders also claim that the state’s position on the Cal Grant program is inconsistent. They note that non-public institutions with out-of-state ties, including the private nonprofit University of Massachusetts Global and the for-profit Alliant International University, are among those currently eligible for Cal Grants.

That reasoning resonated with Ozan Jaquette, an associate professor of higher education at UCLA. “I don’t see a compelling rationale to allow for-profit colleges to enroll students to receive Cal Grants and to exclude California students enrolled in an ASU program delivered in California from receiving those Cal Grants,” he said.

But Manny Rodriguez, the senior director of policy and advocacy for California at the Institute for College Access and Success, said policymakers should proceed cautiously as they weigh new petitions for Cal Grants. Lawmakers have backed Cal Grant expansion that would benefit mainly low-income community college students, but that effort has been stymied by a tight state budget.

“The Cal Grant program is the most generous financial aid program in the nation and California taxpayer dollars are finite,” Rodriguez said. “So before we open that up to out-of-state public (colleges) and out-of-state institutions, we need to figure out what are the rules, regulations, limitations and guardrails that have to be in place.”

A yearslong pursuit

Arizona State University’s pursuit of Cal Grants began in 2020, when the university applied as a private or independent institution, university spokesperson Nikki Ripley said. 

Arizona State and the California Student Aid Commission disagree about what happened next. The commission’s chief deputy director, Catalina Mistler, said the commission denied the application. Ripley said the application was “never fully considered.”

Soon, another door to Cal Grants opened.

In May 2022, Arizona State University signed a collaboration and services agreement with Columbia College Hollywood. The college at the time was ineligible for Cal Grants due to its student loan default rate, but a carve-out in California’s higher education budget trailer bill made it possible to regain them. 

Meanwhile, Columbia College Hollywood and Arizona State University’s relationship grew closer. In November 2022, an accreditor considered a Columbia College Hollywood proposal to transfer control to the Arizona Board of Regents, approving the affiliation in December.

In March 2023, Columbia College Hollywood appealed to the California Student Aid Commission, which restored its access to Cal Grants. Mistler said the college “did not disclose their intentions to affiliate with Arizona State University, nor were we aware.”

About two months later, in May 2023, ASU formally took control of the nonprofit college by becoming its sole member. The newly renamed California College of ASU appeared on a list of institutions eligible for Cal Grants in 2023-24. 

It again became ineligible for Cal Grants in 2024-25 and quietly closed in December following years of faltering enrollment and revenues.

Arizona State University has been expanding its presence in California, including with academic programs in the former Los Angeles Herald Examiner building in downtown Los Angeles, pictured on Jan. 14, 2026.Michael Burke / EdSource

A disputed pathway to Cal Grants

ASU again applied for Cal Grants last spring. The California Student Aid Commission rejected it in September. On Nov. 6, Crow wrote a letter, asking California officials to reconsider. The commission’s determination, he said, “creates a barrier to higher education for California students” and “runs contrary to the statutory mission of the Cal Grants program to guarantee access and affordability to every qualified student.”

When that did not change the commission’s thinking, attorneys for ASU from the law firm Olson Remcho addressed a seven-page brief to Gonzales. 

Again, the commission’s position was unchanged. Olson Remcho attorney Benjamin Gevercer sent another letter on Jan. 21. “ASU’s circumstances are no different from the many universities that participate in the Cal Grant Program that are incorporated or headquartered in other states but enroll California residents at California locations,” Gevercer wrote. 

Arizona State’s argument for Cal Grant eligibility rests partially on 2022’s Senate Bill 1433. That measure allowed California’s Bureau for Private Postsecondary Education to approve public universities based in other states, enabling ASU students in California to receive federal financial aid such as Pell Grants. 

ASU attorneys argue the bill also “creates a clear pathway” for the university’s California students to get Cal Grants.

But SB 1433’s primary sponsor, Roth, said ASU’s reading was “a stretch.” At the time, Roth recalled feeling that legislators should not open the Cal Grant to ASU without a debate and anticipated that some colleagues would have objections. Because no such hearing had taken place, he said, the bill instead noted that bureau approval “does not, in and of itself, qualify the institution” for Cal Grants.

“I don’t know that there could be anything clearer than that,” Roth said.

“There was no intent to provide Cal Grant eligibility for students attending Arizona State University on any ASU campus in the state of California,” he added.

California Student Aid Commission staff have reached a similar conclusion, though signaling that if the law changes, their stance will, too.

“Should the state Legislature or governor consider allowing out-of-state public institutions to participate in the Cal Grant program, we stand ready to comply with any subsequent change in law,” a spokesperson for the commission said.

Backers see benefits for Californians

Caught in the middle of the Cal Grant debate are ASU students in California. 

“I am from California. I currently live in California and I plan to pursue a public service career in California,” said ASU online student Brian Lizarraga, who lives in West Sacramento, during remarks to the commission at its December meeting. “Yet, unlike my peers who are attending other colleges in California, I am unable to use a Cal Grant for my degree.”

Recent ASU online graduate Jessica Lopez, who advocates for accessibility in higher education, said in an interview that if not for a scholarship, she would have likely had to borrow $70,000 for her last two years of college at ASU. 

ASU “ended up being the best option that I could have ever chosen,” said Lopez, who was born without hands and feet and also has an unrelated chronic illness that has made accessing education difficult. While some lawmakers may worry about “draining the money out of California,” she said, that logic doesn’t apply to students attending ASU from their home state. “I’m going to be earning more. I’m going to be working more. So you’re investing in me,” said Lopez, who lives in San Diego.

Balancing ‘unmet needs’

Tight state budgets have left more comprehensive Cal Grant reforms in limbo.

In a 2022 budget deal, policymakers agreed to expand Cal Grant eligibility, mainly to low-income community college students. But the expansion did not take effect as initially expected in 2024 because it was contingent on sufficient state funding. 

Samantha Seng, the legislative director for NextGen Policy, which advocated for Cal Grant reform, said the organization is generally “not supportive” of extending Cal Grants to out-of-state colleges, citing concerns about consumer protections. Lawmakers should instead “ask our current systems to meet our students’ needs, so that they don’t have a need to look for programs elsewhere in other states,” Seng said.

Melissa Villarin, a spokesperson for the California Community Colleges Chancellor’s Office, said the colleges would ask that any additional Cal Grant funding go to community college students. “If our students continue to have unmet needs, we cannot support other entities’ requests to participate in the program,” she wrote.

Roth, the former state senator, still thinks lawmakers should debate whether California residents studying in-state at ASU, or similar institutions, should access Cal Grants. “The question is, is there enough money to open up the Cal Grant program when there’s not enough money to provide sufficient financial assistance to those students who are in our California public institutions and our California-based, entirely, private nonprofits and for-profits?” Roth said.

In the current budget climate, he added, that policy debate may not lead to the answer ASU wants.