California Code, Education Code - EDC § 70048

(a) An institution of higher education shall not reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the student's gift aid exceeds the student's annual cost of attendance.

(b) The institution may reduce the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act by no more than the amount of the student's gift aid that is in excess of the student's annual cost of attendance.

(c) The institution shall not consider receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award, a Cal Grant award, or financial assistance under the California Dream Act for qualification for institutional gift aid.

(d) To ensure financial aid is maximized, an institution is encouraged to implement efforts to avoid scholarship displacement through consultation with scholarship providers and students to avoid situations where institutional gift aid and private scholarships can only be used for specific purposes.

(e) This article shall not be interpreted or implemented in a manner inconsistent with state or federal law. The provisions of this article are severable. If any provision of this article or its application is held invalid due to a conflict with federal requirements, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

(f) This section shall become operative on July 1, 2025.