State Edu-Welfare Expansion Plans

by Katy Grimes | February 21, 2012 4:15 pm

FEB. 21, 2012

More than 50 percent of California college students do not pay for school[1] at the state’s public colleges and universities. Unfortunately, the dropout rate is also about 50 percent. This is because, along with all of the free money for school, there are very dew academic requirements.

Low and middle-low income students receive state-funded grants and fee waivers to cover education fees.


And now Democratic Assembly Speaker John Perez of Los Angeles is looking to expanding California’s escalating higher education cost with AB 1501[3], the Middle-Class Scholarship Plan[4], in what amounts to a billion-dollar tax increase on business.

“The Middle Class Scholarship will be paid for entirely by closing a wasteful out-of-state corporate loophole. This win-win opportunity for middle class families and California’s future economy needs your help to make it a reality,” the website states[5].

But someone has to pay for it. California doesn’t print money… yet.

Free Money = No Results

The community college system has the worst record. With escalating costs thanks to fee waivers, and very low student graduation and success rates, Gov. Jerry Brown’s higher education budget proposal [6]does nothing to change the community college fee waiver program.

Brown’s “long-term plan for higher education is rooted in the belief that higher education should be affordable and student success can be improved.”

News flash to Gov. Brown: There won’t be any improvement if we continue to give education away. It’s been cheapened and downgraded, thanks to the state.


The State Education Flim-Flam

A recent report[8] found from the Chancellor’s Task Force on Student Success[9] found that over a five-year period, California spent nearly half a billion dollars to educate all first-year college students, who dropped out before their sophomore year.

The report found that California ranked first in the nation in the amount of taxpayer funds spent on students at four-year colleges who did not return for a second year. First-year dropouts accounted for about $466 million in state funding in the five years studied. Federal grants to those students totaled almost $61 million.

But even with these horrendous costs and worse results, state lawmakers and leaders say that college should be “more affordable.” But then the lawmakers turn around and raise fees. Could it be part of a calculated plan?

Most students will continue to get state-paid fee waivers, grants, and students loans, even if the school costs increase. The flim-flam is in the loan and grant system.  Regardless of education cost increases, low-income students are attending college in record numbers — because they don’t have to pay for it. Or, payback will be an eventual, long-term payment process.

So the fee increases actually get passed on to middle class students, middle class parents and middle class taxpayers, because lawmakers know that middle class students and families will scrimp, save or borrow to pay for college, even with their state taxes on the increase.

What a great scam.

“My impression is that we need to make a greater investment in higher education,” California Superintendent of Public Instruction Jack O’Connell has repeatedly said. “Too many students are being forced to take on a second or third job. The lack of adequate college funding has led to fewer classes being offered, which extends the number of years it takes to finish.”

Lack of adequate college funding? Is O’Connell kidding? What needs to be limited is the number of “students” taking up space and then dropping out.

Look at most students’ resumes as they begin applying for jobs upon graduation. Fewer and fewer are working while in college.  Apparently having to work while attending college doesn’t fit the entitlement mentality for which California is famous.

Stories from our Depression-era grandparents who worked five jobs while attending college are now just as much folklore as how many miles our parents had to walk shoeless in the snow, to school.

How College Is Funded

Eight-eight percent of Community College funding in California comes from property taxes[10]. With the housing crisis, foreclosure epidemic and business downturn, community college funding has taken a hit.

But student loans and Cal Grants are up.

Community College used to be solely funded out-of-pocket by students and families. It was used as as a transitional school for students who needed to clean up grades in order to enter a four-year university, an affordable way to get general education requirements out of the way, and by full-time workers looking to earn a degree while working.[11]

But somewhere along the way the student loan industry got into the public community college business and began selling students and low-income families on the idea that they could borrow tuition and living expenses, and pay it all back… someday.

But there aren’t high-paying jobs for students coming out of a community college. In fact, most four-year college graduates enter the workforce making far less than they had imagined — or were told they would. And today, they are saddled with more than $25,000 in school loan debt nationally, on average. In California, the amount for school debt is lower, but that is because there are far more students attending public schools, and receiving fee waivers and state-funded grants.

The $25,000 figure doesn’t include data from for-profit colleges, which is much higher. Ask any new dental hygienist what her student loans amount to, and you’ll get an eye-popping answer of anywhere between $40,000 and $60,000.

There are several problems with California’s Community College model. “But instead of primarily delivering lower division requirements to students as junior colleges did (with a nod to remediation and trades), the community college concept offers an irresistible economic temptation:  turn everything into college and rake in the dough,” writes[12] David Clemens, author of “California Dreamin’.”

“Tiny tot swim club members and geriatric flamenco dancers: college students!  Fourth grade level readers and doodad ceramicists: college students!  Ellipticals, Yoga, Weaving Practicum, Volleyball Practicum, fitness, fitness, fitness: count ’em all and hear that cash register ring!  Cheap golf, cheap tennis, cheap swimming pool, cheap fitness center, cheap kilns and studios, all subsidized by tax payers.  And with dozens of financial aid options available under a blizzard of acronyms, often these ‘students’ pay nothing at all.  Too many are not students at all either, but attend classes only to collect edu-welfare, to prevent deportation, or to maintain athletic eligibility,” Clemens explained[13].

While the Legislature has been busily claiming to be making cuts to higher education, Pérez’s plan is supposedly to help the middle class. Perez’s plan is supposed to provide massive breaks on tuition and fees at the state’s colleges and universities for students from middle-income families.

With middle class students and families receiving tuition and fee waivers, who will pay for the multi-billion public higher education system?

According to Perez, the program would cost the state about $1 billion per year, which would be raised by eliminating a corporate tax break, approved in 2009 as part of budget negotiations. That tax break allows out-of-state “corporations” to choose the cheaper of two formulas for calculating the taxes they owe.

So, the middle class will still pay for college, but it will be more businesses making the additional $1 billion tax contribution.

According[14] to former senator and current Board of Equalization Member George Runner, “’The California Middle Class Scholarship,’ would impose a $1 billion dollar tax hike on ‘out-of-state’ businesses to provide financial aid for college students. The plan targets a 2009 tax formula change that only became effective last year — after California voters rejected a November 2010 ballot measure that aimed to repeal it.”

“Taxpayers are footing the bill,” Runner said[15], “but California’s hostile business climate increasingly means college graduates must leave California in order to find jobs. The speaker’s “middle class scholarship” won’t create middle-class jobs in California; instead, the tax hike will educate the future workforce of Arizona, Oregon and Texas, to name a few,” Runner wrote today in an op ed[16].

Under the Perez plan, undergraduate students from families with annual household income less than $150,000 would have their tuition and fees cut by two-thirds; families whose income is too high to qualify for other financial aid programs.

Watch his sleight of hand, while the other picks your pocket. The Perez plan is estimated to save $4,000 annually for students attending California State University, more than $8,000 University of California students, and community colleges would receive approximately $150 million to reduce the cost of education for students. But their parents would pay for it if they own a business, work for a business or are a vendor of a business.

Community Colleges Non-Reform

In a kind of “if you build it, they will come” model, community colleges will still be required to accept every applicant, regardless of high school grades, testing scores, or aptitude levels. There are no reforms in the works — just more students headed to California’s nearly free colleges.

Community colleges offer  limited necessary academic courses to graduate or transfer to four-year schools. But the same colleges offer several dozen remedial Math and English classes through the English as a Second Language department, and hundreds of fun courses in Photography, Interior and Graphic Design, Art, Physical Education and Physical Fitness, Tennis and Yoga classes, and Theatre classes, for certificates of completion, instead of a letter grade.

Middle Class Plan

The numbers of students eligible for the plan are staggering. More than 150,000 CSU students would be eligible, and 42,000 students from the UC system would be eligible, according to recent stories.

But as California is losing private sector jobs to other states, many more are more concerned that California’s college graduates won’t have jobs in the future. We may just be educating our kids so they can leave the Golden State in search of jobs.

“For California to succeed, our politicians need an education, too,” said Runner. “Even a basic understanding of economics would help them understand that rising college fees are a symptom, not the source of California’s problems.”

Katy Grimes

  1. do not pay for school:
  2. [Image]:
  3. AB 1501:
  4. the Middle-Class Scholarship Plan:
  5. the website states: http://The%20Middle%20Class%20Scholarship%20will%20be%20paid%20for%20entirely%20by%20closing%20a%20wasteful%20out-of-state%20corporate%20loophole.%20This%20win-win%20opportunity%20for%20middle%20class%20families%20and%20California
  6. Gov. Jerry Brown’s higher education budget proposal :
  7. [Image]:
  8. recent report:
  9. Chancellor’s Task Force on Student Success:
  10. percent of Community College funding in California comes from property taxes:
  11. [Image]:
  12. writes:
  13. explained:
  14. According:
  15. Runner said:
  16. today in an op ed:

Source URL: