California lawmakers unveil sweeping financial aid plan to help students avoid debt

SACRAMENTO, Calif. _ Seizing on growing concerns over college affordability, California lawmakers proposed what would be the most generous college aid plan in the nation Monday, covering not just tuition but also living expenses that have led to spiraling student debt.

The plan would supplement California’s existing aid programs with the aim of eradicating the need for student loans for nearly 400,000 students in the California State University and University of California systems. It also would boost grants to community college students and give those attending them full time a tuition-free first year.

“Lower-income students … are able to many times, through our great programs in California, get help to pay for tuition. But they’re still graduating with a tremendous amount of debt,” said Assemblyman Kevin McCarty, D-Sacramento, who is spearheading the plan. “The cost of living, the books, the transportation _ that’s (what) we really need to tackle.”

At a Capitol news conference, Assembly Speaker Anthony Rendon, D-Paramount, said that with the introduction of the proposal, “California is taking the boldest step in the nation for making college debt-free.”

The plan’s high price tag means success is hardly guaranteed. But it comes at a time when college costs are facing increased scrutiny. Nearly 60 percent of Californians in a recent survey said affordability was a big problem for the state’s higher education system. Bernie Sanders’ presidential bid last year catapulted his call for tuition-free college into the national spotlight.

Under the new plan, students still would have access to existing financial aid, including federal Pell Grants, state programs such as Cal Grants, university grants and Middle Class Scholarships (if they are not eliminated as Gov. Jerry Brown has proposed). Parents making more than $60,000 would be expected to make a contribution, and students also would be expected to chip in by holding part-time jobs year-round.

A new scholarship would cover the rest of the average annual cost of college, which is around $21,000 at Cal State and $33,000 at UC.
“It’s by far the most comprehensive and wide-reaching proposal in the country,” said Lupita Cortez Alcala, executive director of the California Student Aid Commission.

Already the $2.1 billion in annual state financial aid that her commission administers is the most generous in the nation, she said. The Assembly proposal would make it more so by expanding coverage of living expenses _ which accounts for 60 percent of the total cost of attendance at UC. Other “free college” programs in Oregon and Tennessee and a proposal in New York cover only tuition and fees.

Fully implemented, the new aid program would cost around $1.6 billion a year, although proponents expect that figure would come down as the state minimum wage increased and students earned more in their jobs. Assembly Democrats are proposing phasing in the new scholarships over five years, with an initial cost of $320 million and an additional $100 million for the community college provisions.

The bulk of the money would come out of the state’s general fund. McCarty said lawmakers expect tax revenues to come in higher than the governor’s projections, giving legislators more money to spend.

The total cost is far less than the $3.3 billion price tag the Legislative Analyst’s Office estimated for fully debt-free college. That report, released in February, included covering the living expenses for community college students, which this latest proposal would not do.

The lawmakers’ proposal faces steep odds in making it into the state’s final budget plan, which is due in June. Brown, who has been reluctant to approve new spending even in cash-flush years, forecast a slight budget deficit next year. His initial spending plan would phase out the Middle Class Scholarships, a program championed by former Assembly Speaker John A. Perez, D-Los Angeles.

And lawmakers have other issues on their plates.

“We have transportation to do. We have housing to do,” said Assemblyman Jose Medina, D-Riverside, who chairs the Assembly higher education committee. “But maybe, finally, college and higher education is rising to the top.”

The proposal is backed by Rendon, the top Democrat in the Assembly, whose support may help its prospects in budget negotiations with Brown and Senate leader Kevin de Leon, D-Los Angeles, who has proposed his own bill to boost aid at community colleges.

But Rendon stopped short of calling the package the top Assembly priority in the budget this year and took pains to temper expectations of its place in the final plan.
“It’s going to follow the normal budget process,” he said. “Am I going to guarantee we’re going to get this across the finish line? No, I’m not. But it’s a hugely important issue to a lot of our caucus members.”

H.D. Palmer, spokesman for the state Department of Finance, noted Brown’s administration has worked to limit college costs by keeping tuition and fees flat for the last five years “while continuing to work with both systems to make improvements such as time to graduation that have a direct effect on cost to students as well as their parents.”

The Assembly proposal “is certainly a noble goal, but one that clearly has to be paid for,” Palmer said.
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(Staff writer Rosanna Xia contributed to this report.)
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