Students from middle-class families arguably feel the impact of escalating tuition at California public universities most noticeably. While wealthier individuals can continue to afford the cost of their children’s education, and financial aid, for the most part, can support lower-income students, more and more middle-income families cannot afford the cost of a UC or CSU education.
The California State Senate failed to assist these students and their families this past weekend. Legislation known as the Middle Class Scholarship Act, authored and championed by state Assembly Speaker John Perez, D-Los Angeles, stalled after the funding portion of the act did not garner the two-thirds majority vote necessary to pass. Had it passed, UC and CSU students with family incomes of less than $150,000 per year would have seen their fees slashed by 60 percent, effective this academic year.
The act would fund middle-class scholarships by requiring multistate businesses in California to calculate their taxes based on sales in the state, as opposed to choosing the more favorable of two tax methods. Because of this, opponents voiced concern that job creation would be stifled. That argument is flawed.
For one, the nonpartisan Legislative Analyst’s Office recommended in 2010 that the state use the formula based on sales. The office also found that allowing corporations to choose between two formulas for calculating tax rates arbitrarily favors some businesses more than others. Legislators should prioritize supporting the middle class and in-state business instead of a tax policy that favors out-of-state companies.
Gov. Jerry Brown quickly assured the public that tuition relief for the middle class is not dead yet and that it will be considered in the future. But by the time that happens, it could be too late for many families. Fees at both the UC and CSU may rise significantly if Brown’s Proposition 30 does not pass on Election Day. The proposition’s failure would deal a debilitating funding cut to both university systems and make it even more difficult for middle-class students to attend public universities in California.
At the campus level, UC Berkeley is already ahead of the game in providing aid to middle-income families. In December of last year, the campus announced its Middle Class Action Plan, which caps parent contribution toward undergraduate education at no more than 15 percent of family income for the middle class. That plan would be bolstered by passage of the state act.
However, Berkeley’s middle-class plan is jeopardized by the possibility of steep funding cuts hinging on the passage of Prop. 30, making aid at the statewide level all the more important. Still, campuses should do as much as they can to help middle-income families on their own.
Even if the UC avoids more cuts this year, the current socioeconomic makeup of the university warrants immediate attention. Middle-class students deserve access to public education in California — lawmakers must ensure they are not shut out.
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I must have missed where the article explained how it was flawed to think that job creation was being hurt. What is the flaw?
“Middle-class students deserve access to public education in California”
This phrase caught my attention. Why is the middle class in danger of being shut out of UC and CSU when the lower class is in no such danger? Obviously something is very wrong with the way the federal and state governments dole out financial aid without controlling public university costs. If the middle class is the “new poor” then everyone in the middle class should get the same access to financial aid as the lower class. This way only one government bureaucracy is needed.
A smaller (and much less comfortable) middle class is the consequence, primarily, of public policy (wars, wasteful government spending, trade agreements, open borders, welfare policy, reduction in state funding of tertiary education, federal involvement in school funding, etc.), and secondarily, of societal trends (assortative mating, birth rates, age at marriage, automation, business efficiency, CEO self interest, Identity Politics, etc.). Public policy is the consequence of elected government and the elite who control it. Public policy affects societal trends – open borders leading to identity politics, for example. Although not much can be done directly about societal trends, much could be done – theoretically – about public policy, if people became informed and energized. But they won’t until things become much, much worse, and by then many of the most astute will have moved on to saner places.
The immediate major factors in the decline of the middle class include cost of housing, cost of college, cost of health care, disappearance of defined benefit pensions, and failures in financial regulation, monetary policy, and fiscal policy. The costs just listed impoverish those middle class people who have children, and discourage them from having more children. The poor, on the contrary, are encouraged by government welfare policies to have more children. The cost of housing is increased by overpopulation resulting from a federal open borders policy, the federal use of taxpayer dollars to encourage the selling of houses to poor financial risks, and federal encouragement of fraud in lending. The cost of college is increased by diversion of state funding to other welfare programs, by federal insurance of loans and direct subsidies, enabling colleges to avoid reducing costs (and impoverishing many students unable to repay their loans). Costs of Health Care have become exorbitant as a result of federal subsidization of providers. The disappearance of defined benefit pensions, a consequence of increased CEO self-interest, forces the middle class to direct more of their (reduced by tax) income to savings, and then those savings are decimated by failures in financial regulation (losses in 401Ks), failures in monetary policy (near zero return on safe investments), and fiscal policy (inflation that results from unsustainable government debt).
To borrow from Elting Morison, we seem to have created a political, social, moral and administrative mess that is beyond solution.
The Big Lie…..
See page S-5
http://budget.universityofcalifornia.edu/files/2011/11/2012-13_budget.pdf
2011-2012 UC Budget (Total 22.5 Billion)
Sources of Funds
11% State General Funds(2.475 Billion)
13% Tuition and Fees(2.925 Billion)
Use of Funds:
UC Student Financial Aid: 14% = (.14) 22.5 Billion = 3.15 Billion
[UC Student Financial Aid does not mean Cal Grant, Pell Grants or any other state or federal financial aid. This is the money UC grants to students on Cal Grant to pay their Room and Board.]
Approximately 55% of UC students have their UC Tuition and Fees fully paid by Cal Grant.
Component of Tuition and Fees paid by Private sources: (.45) 2.92 Billion = 1.32 Billion
Component of Tuition and Fees paid by State Funding through Cal Grant: (.55)2.92 Billion = 1.6 Billion
Actual State Funding: 2.475 Billion + 1.6 Billion = 4.075 Billion
Each time UC Tuition and Fees have increased over the past three decades, Cal Grant has kept pace with the increase yet, regardless, UC has told the Big Lie that UC Tuition and Fees must increase more than required so that those on Cal Grant are not required to pay anything more out of pocket. The increase is calculated without regard to the increase in Cal Grant that the state will provide. This is the financial scheme known as Return to Aid that allows UC to generate enough revenue to pay for the room and board of students receiving Cal Grant. An average UC Grant of $14,514 per year.
http://www.universityofcalifornia.edu/admissions/paying-for-uc/financial-aid/grants/blue-gold/index.html
This is why UC is no longer affordable to the middle class. UC is now using money provided by the state to pay for the education of UC students to also pay for the living expenses of UC students who are having their tuition paid by the state and charging the middle class even more in the process. Thirty years ago when UC fees were approximately $800.00 per year and UC room and board fees were around $2,400 per year, UC was not involved in making grants to pay the room and board of students receiving Cal Grant from state revenue provided to UC for educational purposes not for financial aid purposes, and then in addition, charging students even more than required to meet UC’s budget to generate even more revenue to pay for the room and board of students receiving Cal Grant. If a student could not afford UC room and board and did not want to take out loans or work his way through school which was entirely possible at the prior costs, he simply attended a local state college or university while living at home. There was not an entitlement to a UC education for the lower class and a pricing out of UC education for the middle class. This is a decision for California citizens not UC administrators. If more middle class than lower class students attended UC, so be it. That is the will of California residents and that is as it should be in a Capitalist society. In the next generation, those who attended a local state college could then afford to send their children to a UC. There is no reason that lower class first generation students, whose extended families’ members have sacrificed next to nothing for this great country and state in comparison to those who have been here for generations and had numerous family members who have served as veterans, should now have much greater access to a UC education. To believe so or to celebrate the high percentage of first generation currently attending UC and the low percentage of middle class students currently attending UC indicates a fundamentally flawed world view. Since this is not a positive sum game as there are limited admission slots, to celebrate the one is also to celebrate the other even if tacit.
Return to Aid has serious legality problems as Cal Grant money is only to be used for tuition and fees not for living expenses yet, due to UC increasing the amount of UC fees far more than required for thirty years, even though Cal Grant was simultaneously increasing to cover the increase in UC Fees means that Cal Grant is now being used as major source of funds for UC Grants to pay room and board of students on Cal Grant. In other words, a student on Cal Grant receives a Cal Grant that pays full UC tuition and educational fees and pays full fees to UC but only part of that amount is actually used to pay UC tuition and fees. Due to the “Return to Aid” component of UC fees that do not represent funds paid for educational fees, the rest is being granted back to the student to pay his room and board in the form of a UC Grant. This is not legal. Of the average $14,514 UC Grant to students receiving Cal Grant we know that approximately $4,000 is being paid by a return of the student’s own Cal Grant. Another approximately $4,000 is being paid by the one third overcharge of fees for the 45% of students not receiving Cal Grant. So, $8,000 of the $14,514 average UC Grant for Room and Board is being paid by “Return to Aid.” It is not exactly clear where the other $6,514 is coming from. We can assume that part of this is due to tremendous overcharges in room and board fees as UC’s have some of the highest Room and Board fees in the country while hardly having accommodations commensurate with those charges. Regardless of wherever the transfer is being obfuscated by means of creative Fund Accounting it is not difficult to realize that there is more than enough state and other funding so that UC can be affordable to any student from a lower or middle class family if there is no UC administrator stipulated entitlement to a debt free UC education for students from lower class families.
At this point, it is time to start over and get back to the basic UC Master Plan Model. UC as a public university should be low cost to everyone. It is not the role of UC administrators to decide that students from lower income families have a greater entitlement to a UC education than students from middle income families or to students from upper middle or upper income families who will not finance their childrens’ higher education. That is the role of California voters. If a student cannot afford a UC education at a UC that is not near his home and does not want to take out student loans or work his way through a UC, which would again be possible with greatly reduced fees that will ensue upon scrapping the lower income student UC Grant entitlement programs, then he goes to the nearest public university he can afford while living at home.
So, if UC stops redistributing tuition income paid by students from families making over 80K per year to students from families making less than 80K per year, the current level of tuition could be cut in half with exactly the same level of state funding as at the present time. Take off the 35% premium that is being paid by all and the tuition goes from 12K per year to 8K per year. Then, apply the premium that is being paid by the state by means of Cal Grant (about $4000 per year per Cal Grant recipient) to everyone’s tuition and that reduces the tuition by 2K per year to 6K per year. Since half the students are on Cal Grant and Cal Grant is only available to state residents and 20 percent of the students are from out of state or international, then there would be a larger than 2k reduction, since only 30 percent of students are state residents without Cal Grants. The reduction in tuition would then be an additional $2500 instead of a reduction of an additional $2000 if the Cal Grant money that goes for “Return to Aid” were spread equally to fund the education of all students who are California residents, it would lower the state resident tuition from 12K per year to 5.5 K per year, making UC far more affordable to the middle class with exactly the same level of state funding.
Adding insult to injury, the middle class tuition supports those who are receiving aid.
The Middle Class Scholarship Act failed because of the cruel, callous Republicans. Vote out all the Republican Assembly members in November!
Get your facts straight. One of the toughest opponents of the Middle Class Scholarship Act is General Motors. The one Obama bailed out. The one that is mostly owned by the U.S. government. So you could say the federal government, under Obama, opposed California’s Middle Class Scholarship Act.
Are you saying that GM shouldn’t have been bailed out? Yet, the Republicans blame Obama for plant closings. In essence – your statement is frivolous.
If you had followed this thread from the beginning you ought to remember that someone blamed Republicans for opposing the Middle Class Scholarship Act, when in reality one of the most active opponents is a car company owned by the Democratic administration, in conjunction with the UAW union.
It failed because some people actually recognized that we have to stop treating businesses doing business in California worse than other states. Among the country’s CEOs, California is ranked last as a place to do business. If not for the Democrat dominated and led legislature, then we wouldn’t even need a Middle Class Scholarship Act. If we just cleaned up our state budget and prioritized education, then the UC would be fully funded. Your Democrat legislators over the last several decades have made education in California a hated step child.