Bill Text: CA AR49 | 2013-2014 | Regular Session | Introduced
Bill Title: Relative to higher education.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-08-27 - Read. Adopted. (Ayes 60. Noes 16. Page 6538.). [AR49 Detail]
Download: California-2013-AR49-Introduced.html
BILL NUMBER: HR 49 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Jones-Sawyer
AUGUST 4, 2014
Relative to higher education.
LEGISLATIVE COUNSEL'S DIGEST
HOUSE OR SENATE RESOLUTIONS DO NOT CONTAIN A DIGEST
WHEREAS, The Legislature recognizes that postsecondary education
has expanded opportunities for Californians to qualify for
high-quality jobs and entry into the middle class, providing clear
benefits to this state's economy; and
WHEREAS, In response to decreased state support, costs at the
University of California (UC) and the California State University
(CSU) have grown significantly over the past decade. In 2000, the
total cost of a year of education at UC was $15,000. By 2013, this
figure had more than doubled to $32,400. Costs at CSU are lower, but
still increased by nearly 70 percent in this period. These increases
far outpace inflation; and
WHEREAS, Tuition at California's public institutions of higher
education has been rising far more rapidly than family incomes. In
2000, the cost of attendance for a UC student living on campus was 25
percent of California's median family income. In 2009, this cost had
grown to 39 percent of median family income. Costs at CSU also grew
relative to incomes, increasing from 19 percent of median family
income in 2000 to 29 percent of median family income in 2009; and
WHEREAS, The increasing unaffordability of a college education has
forced students to borrow more money to pay for higher education,
causing 51 percent of students graduating from four-year institutions
of higher education in California to borrow an average of $18,879;
and
WHEREAS, In the 1970s, the General Fund provided $12 for every
dollar that students paid in fees. By 2009, this amount had fallen to
$1.40 for every dollar in student fees; and
WHEREAS, High levels of student debt are damaging not only to an
individual student's ability to succeed financially but also will
have grave consequences for the future economy of this state; and
WHEREAS, As of spring 2011, only 83 percent of UC students and
51.4 percent of CSU students entering as freshmen had graduated
within six years. For transfer students, only 79.6 percent of UC
students and 64.6 percent of CSU students had graduated within four
years; and
WHEREAS, By 2025, California is projected to have a shortage of
2.3 million college graduates in the state's workforce if the number
of young and older adults who go to college and complete a higher
education is not significantly increased; and
WHEREAS, The Legislature finds that it must halt the decrease in
the state's support for public education and, over time, must
increase its contribution to the funding of higher education; and
WHEREAS, The Legislature finds that it must immediately seek
another approach to financing a student's share of the cost of higher
education in the state that will not result in students graduating
from California colleges and universities burdened with debt; and
WHEREAS, There is growing interest in a new financing strategy;
and
WHEREAS, The Legislature recognizes that it is in this state's
interest to study and recommend a potential pilot program; and
WHEREAS, It is the intent of the Legislature that revenue received
from a Pay it Forward, Pay it Back pilot program would be managed by
the state; and
WHEREAS, It is further the intent of the Legislature that a Pay it
Forward, Pay it Back pilot program would not replace existing forms
of financial aid, including grants, scholarships, and loans, but
would instead serve as an additional option for students to finance
their education; now, therefore, be it
Resolved by the Assembly of the State of California, That the
Student Aid Commission and the Legislative Analyst are encouraged to
conduct a study of the effects of enacting, in future legislation, a
Pay it Forward, Pay it Back Pilot Program, with the Legislative
Analyst encouraged to be the lead agency in charge of preparing the
study. The study should evaluate a pilot program designed to provide
an additional option for students to finance the costs of their
education, including the costs of upfront tuition, fees, and room and
board, for enrollment at institutions of higher education; and be it
further
Resolved, That the pilot program should allow a student who is a
state resident, as determined by the respective institution, and who
otherwise qualifies for admission to that institution, to enroll at
the institution without paying upfront tuition, fees, or room and
board and provide that, in lieu of paying upfront tuition, fees, or
room and board, a student may sign a binding contract to, upon
graduation, pay 2 to 4 percent, inclusive, of his or her annual
adjusted gross income to the state or the institution for a specified
number of years; and be it further
Resolved, That the pilot program could vary by institution, in
regard to the total cost of attendance at the institution required to
be reimbursed, the portion of the total cost of attendance to be
paid by the state, the number of years that a student would be
required to make payments, as specified in the contract, and the
percentage of annual adjusted gross income to be paid by a student,
as specified in the contract; and be it further
Resolved, That the study of the pilot program should identify at
least one campus of the University of California, one campus of the
California State University, one campus of the California Community
Colleges, and one campus of a nonprofit private postsecondary
educational institution that would participate in the pilot program.
The campuses identified pursuant to this paragraph should be
regionally diverse. The study of the pilot program should also, based
on current research and projections of state subsidies, specify the
number of years and percentage of annual adjusted gross income for a
contract at each participating institution that would reimburse the
cost of a student's attendance, suggest an immediate source of
funding for the first 15 to 20 years, inclusive, of the pilot
program, which would include the establishment of a revolving fund
for the deposit of payments made under the pilot program, and
consider the possibility of using social impact bonds, meaning an
agreement between a nongovernmental entity and an institution of
higher education under which a student's cost of attendance is paid
for by the nongovernmental entity in exchange for a security interest
in the payments made by the student, as an immediate funding source;
and be it further
Resolved, That the study of the pilot program should be presented
for consideration by the Legislature. The Legislative Analyst is
encouraged to submit a report on the study of the pilot program to
the Assembly Committee on Higher Education and the Senate Committee
on Education on or before September 30, 2015; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of
this resolution to the author for appropriate distribution.
