California state lawmakers are closely considering a bill that would force Christian colleges to give up their religious convictions or lose state funding.

The sponsors of Senate Bill 1146 say it will protect LGBTQ students from discrimination but Christian colleges believe it will ultimately deprive students of the ability to attend the school of their choice.

Margarita Ramirez grew up in a low-income family in California's Central Valley and graduated from Azusa Pacific University, an evangelical institution in suburban Los Angeles in 2012. Her excellent grades, a generous Azusa scholarship and state financial aid known as Cal Grants made it possible.

Now, she's concerned that SB 1146 will prevent future students from enjoying the same financial benefits that she did.

"It is precisely students like myself that are going to miss out," she said. "This bill isn't taking away money from schools. It's taking away money from students."

Prohibiting Religious Convictions

More than 64,000 students attend 16 Christian colleges in California and many utilize Cal Grants and other state and federal funding to pay their bills. At Azusa, one in four students use Cal Grants to attend, the majority of which are first-generation, non-Caucasian Americans.

At William Jessup University, just outside of Sacramento, one in three students use the grants, which pay as much as $10,000 a year.

"It's a substantial part of our budget," President John Jackson said. "If this bill becomes law, a student may not be able to bring that aid to William Jessup University unless we change our policies on sexual orientation and gender identity. It's not a mean-spirited thing. We just are convinced, biblically speaking, that gender matters, that sexuality matters, and that marriage matters."

State Sen. Ricardo Lara, the bill's sponsor, says SB 1146 will protect LGBTQ students. In an April 6 press release, Lara cited concern about faith-based schools that had requested a religious exemption from Title 9, which the federal government recently decided would include the prohibition of discrimination based on general identity and sexual orientation.

"California has established strong protections for the LGBTQ community," Lara said. "And private universities should not be able to use faith as an excuse to discriminate and avoid complying with state laws. No university should have a license to discriminate."

But Shirley Hoogstra, president of the Council for Christian Colleges & Universities, says the SB 1146 sponsors don't have a case.

"Never did they go to the Christian college campuses and actually ask for the facts," she told CBN News. "They presumed that people are either expelled or somehow denied admissions which is untrue."

Hoogstra said that Christian colleges are committed to working with students around complicated issues of sexuality and gender identity while at the same time retaining their religious convictions. She takes issue with parts of the bill that would prevent faith-based schools from using their religious beliefs as criteria in admissions or hiring decisions.

"If you can't hire the people who are going to teach and administrate according to your principles, what difference does it make if you called yourself a particular religious institution?" she asked.

Undoing Christian Higher Ed

Greg Baylor, an attorney with the conservative non-profit Alliance Defending Freedom, says the bill threatens to undo the very core and mission of Christian higher education.

"The California government is proposing this legislation that would at the end of the day force these schools to choose between participating in state student aid programs and maintaining their religious identity," he said.

The California state Senate has passed the bill and the state Assembly Appropriations Committee will now consider it. If lawmakers approve it this month, Gov. Jerry Brown could sign it in September and it could potentially go into effect as early as 2017.

If so, litigation is likely and the case could easily end up at the Supreme Court with constitutional principles like freedom of religion and freedom of association at stake.

The bill could mean a loss of choice for low-income students, unable to afford to attend a Christian college if Cal Grants are not available for the school they've selected.

Jackson and others are hoping, however, that lawmakers will recognize the need for Christian colleges to maintain their beliefs, despite accusations of discrimination. He says the inherent value that these faith-based schools bring to their communities and students should also be considered.

"Some in the state legislature have not understood the public good, the tens of thousands of students that we educate," Jackson said. "Many students are first-generation college students, many students of color, many who come from economically disadvantaged homes."

Creative Financing Needed

In California, a coalition of more than 100 faith leaders, including African-American, Hispanic and Asian pastors, are leading the charge to oppose SB 1146.

Rev. Samuel Rodriguez, president of the Sacramento-based National Hispanic Christian Leadership Conference, calls SB 1146 "constitutional overreach that would threaten religious liberty in California….and weaken the rich educational diversity of our state."

Across the country, other Christian colleges and state legislatures are watching the California battle.

"It is a homogenization of education, which is exactly opposite to diversity," Hoogstra said of the bill.

There's a real concern that eventually, state and federal officials will find a way to deny student loans, grants and other funding to faith-based schools. It's why Baylor says now is the time to start finding creative ways to finance Christian higher education.

"Christian colleges should be thinking of alternate funding given the threat that is posed," Baylor said, "not just by this particular bill in California but by the mindset that says that schools that hold traditional views of marriage and sexuality are somehow discriminating and are not worthy of receiving support, even indirect support, from the federal government."