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Tuition Relief Bill for Middle Class Students Passes California Assembly

Scholarship Application

August 16, 2012

As college tuition continues to rise and education funding continues to decline, college affordability has become a greater issue for not only low-income students, but also for the middle class. However, a recently passed bill aims to change that.

As EdSource reports, the California Assembly passed the Middle Class Scholarship Act, a measure that would provide tuition relief to CSU and UC students with a family income of under $150,000. The bill has two parts, AB 1500 and AB 1501. AB 1501, which passed in May, creates the Scholarship Act. AB 1500 funds the act by eliminating the ability of out-of-state corporations to pay less in taxes than California corporations and reverting back to the Single Sales Factor, which taxes businesses solely based on sales. That money would then go towards the Scholarship Act.

The Los Angeles Times notes concerns of the bill's opponents. Democratic Assemblyman Tony Mendoza, who voted for the bill, still has reservations regarding where the money will go. Republican Assemblyman Tim Donnelly claims the measure will hurt businesses during an economic downturn.

In contrast, Assembly Speaker John Perez, who authored the bill, explains the advantages and intended goal of the bill in the California State Assembly Democratic Caucus: "This is fundamentally an issue of tax fairness for California's businesses, and restoring opportunity for middle class families across California, who have seen the price of college skyrocket over the past ten years."

As college tuition continues to rise, many middle income families resort to student loans to cover the extra fees. Some students can no longer afford college at all and consequently forego their pursuit of higher education. As the Democratic Caucus asserts, this not only affects the student, but it also harms the long-term health of the economy.

The Democratic Caucus goes on to mention that with the Scholarship Act, CSU and UC students who have a family income less than $150,000 and are not already receiving tuition assistance will experience a two-thirds reduction in fees. About 150,000 CSU students are estimated to receive funding and save over $4,000 per year through the act. About 42,000 UC students are estimated to save up to $8,169 per year. The bill will grant $150 million to community colleges to increase affordability efforts and help cover the costs of books, transportation, fee waivers, and other educational expenses.

As EdSource reports, Perez pushed for the importance of passing the bill by stating, "...the prosperity of the state has been tied to the success of our public university systems, our great research institutions. When you look at that which has made innovation so successful in California, it's the co-location of business and great centers of education." The bill aims to continue that success.


Compiled by Aneesha Jhingan

Sources:

"Assembly OKs corporate tax change to raise $1 billion for scholarships," latimesblogs.latimes.com, August 13, 2012, Patrick McGreevy

"Middle Class Scholarship Act Approved by Key Senate Committees," asmdc.org, August 16, 2012

"Narrow win for middle class scholarship in Assembly," edsource.org, August 14, 2012, Kathryn Baron

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