A No-Risk Tuition Increase?

With a projected $700 million cut on the horizon, California's community colleges could increase tuition with no impact on most students, new report says.
June 15, 2009

California's community colleges could soften the projected blow to their budget by tripling tuition with no net impact on most students, says a new report by the nonpartisan Legislative Analyst's Office.

Released last Thursday, the report comes on the heels of Gov. Arnold Schwarzenegger's May revision to the state budget, which proposes to slash nearly $700 million from the community colleges' 2009-10 budget.

In-state residents currently pay $20 per course credit, making California the cheapest state in the nation in which to attend community college. A typical class is three or four credits, totaling $60 to $80. According to the report, state and federal financial aid would offset tuition increases of up to $60 per credit.

According to the report, 90 percent of the state's community college students would qualify for either a tuition waiver or a full or partial tax offset to their tuition (which in California is referred to as "fees"). For example, the Board of Governors' waiver program waives tuition for all California residents who demonstrate financial need. A single parent with one child could earn up to $80,000 annually and still qualify for a full waiver, the report states.
The majority of those who do not qualify for the waivers are eligible for federal tax benefits that cover all or part of their tuition, according to the report. The federal American Opportunity Credit, for instance, reimburses up to $2,500 in tuition payments and textbook costs.

Should community colleges charge $60 per course credit, they would generate an additional estimated $500 million, according to the report.

Terri Carbaugh, a spokeswoman for the California Community Colleges, said that in light of shrinking student incomes and course offerings, the colleges are considering a moderate increase of between $2 to $6 per credit, which would pull in an estimated $30 to $75 million.

However, a heightened cost of up to $60 would "undoubtedly have a harsh impact on student enrollment," Carbaugh said. She pointed to the 2002-03 and 2004-05 school years, during which tuition increased twice and community college enrollment dropped by about 300,000.

But other factors besides the tuition hikes explain those enrollment declines, says Paul Steenhausen, a senior fiscal and policy analyst at the Legislative Analyst's Office and the author of the report. For example, beginning in 2002 the legislature cracked down on concurrent enrollment, wherein some districts were illegally counting high school student-athletes as community college students.

Andrew Gillen, research director of the Center for College Affordability and Productivity, said raising tuition in California is "probably a reasonable response to a tough situation that they're facing." Yet, he said, the report's suggestion to offset increased tuition by filing for tax benefits may seem intimidating -- especially to inexperienced students.

"Even if they do a good job explaining that they're raising tuition, but (the students) get it back when they file taxes through the (American Opportunity Credit), some students are still going to be scared off by sticker shock," he said.

Bridgette Moody, a 19-year-old attending Pasadena City College in southern California, said she could not afford a per-course credit price tag of much higher than $20, much less $60. And even if she were to be reimbursed by tax credits in the spring, she says, she would still be unable to front the increased costs in the fall.

Moody, who is living with a friend and working part-time to pay for virtually all her college costs, says she has filed for financial aid, but has not received it for reasons unknown to her. To that end, she says the report's plan doesn't make sense for her or her classmates: "I know sometimes when they say, 'You can get it back in taxes,' they make it all super complicated and make you jump through all these hoops. Some people even give up and don't bother trying to get it back, or don't understand what they're asking."

"In this day and age," Moody said, "they make it almost impossible for almost anybody to get work without education -- but make it super difficult to get the education."

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