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California Lawmakers Announce Plan To Reduce Student Debt

Assemblyman Phil Ting, D-San Francisco, center, speaks in support of a plan to reduce student loan debt in California, Monday, March 13, 2017.
Associated Press
Assemblyman Phil Ting, D-San Francisco, center, speaks in support of a plan to reduce student loan debt in California, Monday, March 13, 2017.
California Lawmakers Announce Plan To Reduce Student Debt
California Lawmakers Announce Plan To Reduce Student Debt GUEST: Ben Adler, capitol bureau chief, Capital Public Radio

Our top story on midday edition making college that free it is an idea that gained traction on the campaign trail last year and now has landed as a proposal in the California state legislature. California Democrats have announced a plan that they called degrees not Debt. Well it doesn't make attending public college totally free it goes a long way to pick up the cost of tuition, books, student fees, housing, and other living expenses. Word from the governor's office is that the proposal is likely to expensive. Joining the is been Adler capital Bureau chief for capital public radio. Welcome to the program. It is good to be here. With this proposal take the place of existing student aid and grant programs in the state tax It would not take the place of existing student aid programs is intended to take the place of existing student loans. Unless your family earns enough money to entirely support you in college there are often a number of different sources of financial aid that you can get. You can get a Cal grant RFL grant which is federal. The state has is relatively new middle-class scholarship program which is intended to help build some of the gaps between if you make too much money to qualify for a very large Cal grant or you don't make enough to take care of things on your own so that helps there. The goal here is to take the portion of this financial aid package that is currently filled by students taking out student debt and replace it with money from the state. The degrees not Debt proposal picks up many of the cost as you say. It does not make public colleges in the state completely free that doesn't work You cannot really do that. It does not cover families were affluent so they would still have to pay and there would still be some expected family contribution depending on the family's ability even if there is state aid coming in and would just rescaled to the family's ability to pay similarly to the way that students aid financial packages are now. The goal here is to use state taxpayer dollars to replace the portion of the students financial aid package that is currently absorbed by student loans. Is How much is it projected to cost? It is projected to cost $1.6 billion. The proposal is to phase in over a five-year period started not in the upcoming state budget your that will begin in July but for fiscal year 2018 and 2019. Democrats know that it will be expensive and they are hoping to get the support of the governor and they will need support of state Democrats as well to face it in. Governor is always whining about a recession and a tighter budget not just this year but perhaps for several years to come. Has wanted to cut back on college scholarship funding in his budget proposal. What are the odds that he ends up supporting this month is -- ambitious plan. 's Department of finance said yesterday that they are just now reviewing the proposal but it generally takes a skeptical view as does the governor of new entitlement or new investing or spending depending on how you want to call it here is HD Palmer the spokesman for the governor's Department of finance. This proposal comes with a significant price tag at a time when we have seen recently declining revenues and we have to close a budget gap of $1.6 billion. You can see that there is the skepticism. This is all paving the way for negotiations and is spring where Democrats come in with their wants and the governor has his priorities and he tends to want to keep state spending at lower levels than legislative Democrats want. This is a democratic proposal and a some women Rocky Chavez was critical. It falls short because they are not dealing with the structural problems of the colleges and are focusing strictly on Monday. It is not just a money problem it is a leadership Robin. What does he mean by leadership problems? There are complaints from both parties in the governor's office as well that there are some administrative issues at the UC and CSU and that those are some barriers to reducing cost in the system. For example one that is often spoken about is the challenge of getting didn't graduate on time. One way to reduce the cost is a student only attended two years instead of five or six. I really decrease the cost so that is one point that Rocky Chavez -- Chavez made inserted HD Palmer with the Department of finance and there are efforts underway to get the time to degrees down a little bit and make it easier for students transferring to the colleges. That free -- Debt free college is a big idea that has developed in the legislative this season. It obviously came from the Bernie Sanders campaign and popularity among young people are Democrats across the country but why are they showing it now in the California legislature? Certainly Bernie Sanders got some traction in California among progressives and liberal Democrats. It was perhaps inevitable that his proposals would emerge in the state legislature. There is by far no guarantee that either of these proposals will become law. Certainly the single-payer proposals coming at a time of great uncertainty for healthcare given what is happening in Washington DC and I suspect that that bill will not move forward until we have some more clarity around Washington. Maybe it will move forward a little bit but it certainly will not become law because everyone will want to wait and see what happens in Washington and figure out the best way for California to respond. But California has always been a breeding ground in the legislature for some progressive policies to come through and it's not surprising that these ideas would emerge. Is a price would be ethical all the way and become law because they do come with price tags. We will see what happens. I have been speaking with been Adler he is capital Bureau chief for capital public radio. Thank you. Is like you are welcome.

Assembly Democrats on Monday proposed an extensive expansion of financial aid programs for students at California's public colleges and universities.

They're calling their plan the most ambitious proposal in the country to reduce student loan debt. In addition to expanding financial aid for community college students, it would create $1.6 billion per year in new scholarships for students in the University of California and California State University systems.

The Legislative Analyst's Office reported this year that more than half of California college students graduate with student loan debt, with debt for students from UCs and CSUs averaging nearly $20,000. The Democrats say their plan aims to make college more affordable so students do not need to take out loans.


"California is taking the boldest step in the nation toward making college debt-free," Assembly Speaker Anthony Rendon, a Democrat from Paramount, said during a Monday news conference. "We have the opportunity to assure California students that when they go to college, they'll leave with degrees, not debts."

The new scholarships would be paid for using money from the state's General Fund. The proposal would also maintain the Middle Class Scholarship program, another General Fund expense. Gov. Jerry Brown called for eliminating the Middle Class Scholarship in his budget proposal.

"We are rejecting... the governor's cut of the middle class scholarship," Democratic Assemblyman Phil Ting, of San Francisco, said. "We think the last thing we want to do is move those families backward."

The $1.6 billion scholarship program would be phased in over five years and would help cover non-tuition expenses for approximately 400,000 students each year when fully implemented. Students would begin receiving the scholarships in 2018, and they would eventually be awarded to all Cal Grant, University Grant and Middle Class Scholarship recipients.

The Democrats' plan would waive tuition for the first year of community college for full time in-state students whose families make less than $150,000 per year. It would also expand the state's financial aid program that helps cover living expenses for low-income community college students. Those expenses would be covered using money from Proposition 98, a measure that guarantees a portion of state revenue for public schools.


"I think it's well intentioned," Republican Assemblyman Rocky Chavez, of Oceanside, said of the Democrats' plan. "But I don't think it recognizes the economic reality or really addresses the challenges we have to address."

He pointed to the state's low four-year graduation rate -- it takes many students at UCs and CSUs longer to get their bachelor's degrees -- as a more pressing problem. He said the state should work to ensure students get their degrees on time, which will in turn lower their college expenses.

Neal McCluskey, who directs the Center for Educational Freedom at the libertarian think-tank the Cato Institute, said he generally opposes plans like the one California Democrats have proposed that aim to heavily subsidize education costs. The burden of student loan debt is typically offset by the higher earnings made by college graduates, he said, and the costs of a college education should be paid for by the people receiving the education, not taxpayers.

"The more you give it away for free, the less incentive you give people to think long and hard about what they're doing and -- once they know what they're doing -- to get it finished," McCluskey said.