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Speaker Pérez Discusses Middle Class Scholarship Act

Created: 11 May, 2012
Updated: 26 July, 2022
4 min read

In this Democratic weekly radio address, Speaker John A. Pérez (D-Los Angeles) testified before the Assembly Higher Education Committee regarding AB 1501, one of two bills that make up the Middle Class Scholarship Act, which slashes state college fees for middle class Californians by two-thirds. The Committee unanimously passed the bill on a bipartisan vote.

The Middle Class Scholarship Act will cover students whose family income is under $150,000, but over the amount allowed to qualify for financial aid. CSU students will save about $4,000 per year or $16,000 over a four-year period, UC students will save about $8,200 per year or nearly $33,000 over a four-year period, and Community Colleges would also receive $150 million to reduce costs for students.

This measure is part of a two bill package called the Middle Class Scholarship Act, and the companion measure—AB 1500—will be heard by the Committee on Revenue & Taxation at its next hearing next week.

AB 1501 establishes the Middle Class Scholarship, which seeks to make higher education accessible and affordable again for middle class families. And it does this two ways:

First, the bill allocates 150 million dollars to the Community College System to provide relief on textbooks and other costs for community college students;

Secondly, the measure creates the Middle Class Scholarship, which will provide a two-thirds reduction in student fees for any student in the UC or CSU whose family earns 150 thousand dollars a year or less.

Since 2003-04, state budget challenges, new corporate tax breaks, and the inability to find consensus to increase revenues, these have conspired to cause significant, and unsustainable, increases on student fees at our institutions of higher learning.

At the community colleges we’ve seen our fees triple. At CSU we’ve seen 191-percent increase. At UC, a 145-percent increase from the 2003-2004 academic year.

Despite enormous budget problems we’ve faced in the past couple of years, the Legislature has worked to safeguard state financial aid programs to ensure that low-income Californians still have a viable pathway to higher education.

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But for middle income families who earn too much to qualify for our traditional financial aid programs, the fee increases at CSU and UC and Community Colleges means that higher education is becoming, uh, the cost of higher education is becoming too great a burden to bear—a fact that was borne out by a recent study showing that in many cases Harvard University is actually less expensive in real terms than a CSU education.

As a result, middle class students, and their parents, are faced with very difficult tradeoffs.

Either the student takes on a level of debt that severely curtails their post-college opportunities, or their parents must make difficult sacrifices, like forgoing home repairs or paying down credit card debt, that takes money out of our economy.

This ultimately hurts our economic recovery, and is inconsistent with California’s historic commitment to an accessible and affordable college education for every student who is willing to work hard and succeed in school.

Now, how do we pay for this? We pay for this investment in California’s middle class by closing a tax loophole that exclusively benefits out-of-state corporations, and then using that money we save—approximately one billion dollars a year—to establish the Middle Class Scholarship Fund. That provision is contained in AB 1500, the companion measure to this, AB 1501.

Under this bill, the Middle Class Scholarship Fund will then pay out a scholarship to any student at UC or CSU whose family, as we’ve said earlier earns less than $150-thousand a year.

Under this proposal, students at the CSU will see their fees lowered by 4,000 dollars a year; and students at the UC will see their fees lowered by 8,200 dollars a year.

We also dedicate the first 150 million dollars that we save from closing the loophole for the Community College System, to provide assistance on college affordability, including textbooks, which we know to be the single greatest expense for community college students. Community college students will also benefit from the Middle Class Scholarship if they continue their education at a four-year public institution.

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This is a dramatic reinvestment in opportunity for every California student, and is in keeping with the vision set forth by the Master Plan for Higher Education.

And quite frankly, this measure is vital to ensuring that the next generation of Californians have the same kind of opportunities to make the most of their potential that our generation had.

The Middle Class Scholarship Act represents a smart investment in Middle Class Families; it significantly lowers student fees on families who have been hit hard by the Recession; and ensures that opportunities associated with higher education remain open to every single person in our state.

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