SACRAMENTO (CN) —To alleviate student loan debt for California’s 2.8 million undergraduates, lawmakers on Monday announced a financial aid package that would cover tuition, housing and textbooks.
Assembly Democrats’ “Degrees Not Debt” budget package would divert $1.5 billion per year from state coffers to create new scholarships for University of California, California State University and community college students.
Beginning in 2018, the plan would waive first-year tuition for in-state community college students whose families make less than $150,000 per year and introduce new nontuition grants to an estimated 390,000 lower-income students.
“California is taking the boldest step in the nation toward making college debt-free,” Assembly Speaker Anthony Rendon, D-Paramount, said news a press conference.
Funding for the education subsidy would largely come from the state’s General Fund and students would still have access to state and federal grants.
The package’s authors said recent legislative efforts, such as the Middle Class Scholarship, which covers up to 40 percent of tuition for qualifying students, have not gone far enough in making college affordable for Californians. They said increasing access to scholarships will encourage more students to enroll and graduate from the state’s 33 public universities.
“Getting into college is challenging. Figuring out how to pay for it should not be more difficult,” said Assemblyman Phil Ting, D-San Francisco, chairman of the Assembly Budget Committee.
The proposal comes as officials are mulling controversial tuition hikes to the nation’s largest public university system for the first time since the Great Recession. Cal State trustees are scheduled to vote on a 5 percent tuition increase this month, and UC Regents recently voted to end a six-year tuition freeze.
Average annual college costs are $21,000 at Cal State campuses and $33,000 at UC facilities.
According to a recent Public Policy Institute of California survey, most respondents opposed tuition increases and 82 percent supported new college scholarships and grants.
California spends 12 percent of its General Fund on its three public higher education arms and has increased per student funding by 15 percent since 2010. While California has ramped up higher education funding since the recession, states such as Pennsylvania and Texas cut spending by nearly 20 percent over the same stretch.
The spending plan could reach a roadblock in Gov. Jerry Brown, who has routinely nixed new spending during his fourth and final term. In his latest budget proposal, Brown called for phasing out the Middle Class Scholarship program that the Assembly Democrats hope to extend, and he predicted a looming budget deficit.
The February state revenue report backed up Brown’s fiscal warnings, as tax revenue fell by $772 million, 10 percent short of projections, according to the state controller’s monthly cash update.
Assembly Democrats said Monday that Brown’s proposed budget is overly cautious and contains a $1.8 billion accounting error. They said the tuition plan would contain “pauses” to ensure that the budget can withstand each new phase of the plan.
“California is once again leading the nation in making debt-free college a reality, and I am proud of our critical work to help all of our state’s students achieve their academic goals,” said Assemblyman Kevin McCarty, D-Sacramento.