Connecticut Gov. John G. Rowland proposed $3.7 million in financial aid cuts for Connecticut students in his budget Tuesday, creating an additional challenge for in-state students who face a souring economy.

Yale students who receive the grant will not likely be affected by the reduction.

The cuts to financial aid fall under the Connecticut Independent College Student Grant program, or CICS, which gives Connecticut residents who attend in-state colleges grants of up to $8,000 in financial aid. About 5,000 students in the state, including about 100 Yale students, receive the grants, which currently average $4,000 per student. But Rowland suggested reducing the average aid grant to $3,000, allowing for the same number of students to receive the grant as last year. The proposed cuts consist of 20 percent of the current funds for the program, which is equivalent to about 900 grants of $4,000.

Under Rowland’s general budget proposal, almost every state agency suffers cuts in an effort to compensate for the $650 million state deficit. The Educational Cost Sharing grant, which gives cities money to support public schools, would shrink by about 3 percent for each city under the proposal. In addition, Rowland proposed combining three agencies — the Department of Higher Education, the Community-Technical Colleges chancellor’s office, and the Connecticut State University chancellor’s office — into a new Board of Regents for Higher Education. But the University of Connecticut’s 21st Century UConn Program, which gives the university $1.3 billion for renovation and expansion, would continue as previously planned.

Yale Director of University Financial Aid Myra Smith said the CICS grant cuts would have a negative impact on Connecticut students, but would not directly affect Yale students.

“We are committed to meeting their need,” she said. “[The CICS cuts] obviously reduce the resources we have to meet need, but we’ll still meet that commitment.”

In 2002, the state cut CICS funds by 15 percent, forcing Connecticut schools such as Yale to compensate for the difference by drawing on other parts of their budgets. But some schools were unable to completely make up the difference and ultimately resorted to cutting undergraduate financial aid.

President of the Connecticut Conference of Independent Colleges Judith Greiman said she was disappointed by the proposed cuts.

“They’re taking the program back to the 1980s. In 1989 the program was funding at a higher level than what [Rowland] is recommending right now,” she said. “I think it was a bad recommendation both for individual students and their families, but also for the state’s economic welfare, because these students are the future work force of Connecticut, and they’re making it a lot harder to get their degree.”

Greiman said the CCIC plans to encourage the state to maintain CICS funding. The CCIC will convene a legislative action task force next week, encourage students and parents to write letters in support of the program, and make plans to stage events in support of CICS at the bill’s public hearing in March. In addition, Greiman said she will go with some college presidents to visit editorial boards across the state in hopes of convincing newspapers to write editorials in favor of the CICS program.

State Senator Andrew Roraback ’83 said while he hoped the state would continue supporting Connecticut college students, the difficult budget climate requires everyone to make some sacrifices.

“I know a number of us strenuously support the CICS program and I think if we can prevent it from taking a disproportionate hit, that will be a responsible resolution,” he said. “Tuitions are increasing at public universities, so if we’re asking students at public university to sacrifice in the form of higher tuition payments, it’s not unreasonable that similar adjustments take place in the amount of our support to the CICS program, which thereby asks students of private universities and private institutions to share in the sacrifice.”

–The Associated Press contributed

to this report.