California State Assembly speaker John Perez introduced legislation which would cut the rising price of attending public college in California by thousands of dollars per year, but not all are convinced it will pass and become law.
The Middle Class Scholarship Act would decrease the cost of California State University (CSU) tuition approximately $4,000 per year for families whom Perez said are too wealthy to receive financial aid, but still cannot afford to pay for college.
The CSU system expects the scholarship to have a significant effect on students, estimating 80 percent of students could be affected. CSU spokesperson Liz Chapin said though she cannot speculate on whether the legislation will pass, she said the university system recognizes it has the potential to have a very positive impact on students.
“(Perez’s) proposal will reduce the burden on the vast majority of students in the CSU, and that is a very good thing,” she said.
Though Cal Poly students pay more fees than other students in the CSU, the legislation would only reduce fees on the base CSU tuition rate, which is approximately $5,400 per year for undergraduate students.
If passed, only those students with family incomes of less than $150,000 would be eligible for the grant. Students that already have tuition paid for in financial aid would not receive the Middle Class Scholarship.
Civil engineering senior Gabriel Burnworth, who is paying for Cal Poly with student loans, said he does not even know how much he will owe when he graduates. He said if tuition were reduced by $4,000 annually it would, however, be much easier for him to pay off the loans.
“It’s obviously going to help,” Burnworth said. “I think that’s definitely good because right now, the state is helping us out with less than 50 percent of tuition. So technically, we’re a private university now.”
The Middle Class Scholarship Act would use $1 billion to fund this scholarship from closing a tax loophole that benefits out-of-state corporations. The loophole comes from allowing companies who distribute products but not operate in California to choose between two tax codes.
By allowing corporations outside of California to choose the lesser of the two tax formulas, companies in California are put at a disadvantage.
Cal Poly economics professor Mike Marlow said though the change in tax code would primarily affect businesses out of California, it would still have an impact on the Californian economy. He said in a situation such as this, there are always winners and losers and consumers will inevitably end up feeling the heavier tax burden on companies.
“The losers would be the owners of corporations and their consumers and their workers,” Marlow said. “All I know is there’s no free lunch.”
California Gov. Jerry Brown tried to change this same tax code in 2011 as part of an effort to jumpstart job growth in the state, but Brown was met with opposition from Republicans in the state legislature.
Republican assemblyman Katcho Achadjian, San Luis Obispo’s representative in the state assembly, expressed his opposition to the Middle Class Scholarship Act in a written statement Wednesday.
“Rather than raising taxes on the companies that create the jobs needed to employ students upon graduation, the Legislature should prioritize higher education funding and seek ways to increase revenue by incentivizing companies to do business in California,” Achadjian wrote.
The legislation comes in two separate assembly bills: AB 1500, which will change the tax code and create a fund for the scholarship, and AB 1501, which will create the Middle Class Scholarship program.
Perez launched a website dedicated to the Middle Class Scholarship Act, which encourages students to share their stories about paying for public education in the state of California.
According to the website, a family with one student at a CSU would save $16,000 over four years. A University of California student would see tuition reduced by approximately $8,100 each year, translating to more than $32,000 over four years.