California Code, Education Code - EDC § 70046

(a) As of 2020, California students who have financial need and receive private scholarships are unable to make full use of the awards provided to them by private scholarship providers because institutions of higher education reduce their gift aid, grants, scholarships, tuition waivers, and fellowship stipends that those students would otherwise be qualified to receive.  The reduction of an institution's financial aid due to private scholarships is referred to as “scholarship displacement.”

(b) This act is intended to ensure that private scholarships supplement, and do not supplant, gift aid, grants, scholarships, tuition waivers, and fellowship stipends provided by institutions of higher education to California students who have financial need.