Middle-class students land an elegant win-win

The Cal States could gain enrollment, if a deal to tighten middle-class scholarships is approved in the Legislature.
The Cal States could gain enrollment, if a deal to tighten middle-class scholarships is approved in the Legislature. Sacramento Bee file

As he prepared to run for state controller in 2014, then-Assembly Speaker John A. Pérez championed the “middle-class scholarship.”

Pérez’s concept wasn’t terrible. Middle-class Californians are squeezed in many ways and need help putting their kids through ever-more expensive college.

Unfortunately, the criteria for the grants were sloppily written, and the crowd-pleasing idea, like Pérez’s candidacy for statewide office, didn’t work entirely as intended.

Now, though much of the scholarship money is, in fact, going to University of California or California State University students who need it, thousands of other recipients are – not to put too fine a point on it – rich kids.

More than 7,200 students come from families with assets of more than $500,000, above and beyond the value of homes, cars, businesses and retirement savings, according to an analysis done in April by the California Student Aid Commission. Think stocks, vacation homes and rental property income.

Indeed, the commission found, more than 1,000 recipients of California’s “middle-class scholarship” are the children of millionaires.

Even without this budget year’s bruising debate over UC and CSU funding, that’s galling.

Add in the fact that the workhorse Cal States had to turn away some 30,000 qualified new students and transfers last year due to a lack of money, and it’s hard not to wonder if some of that scholarship money could be put to a better use.

That’s what Senate President Pro Tem Kevin de León has been asking, and not just because he and Pérez are known rivals.

OK, so perhaps it didn’t help that Pérez, who is now a UC regent, beat de León out for that speakership in a 2009 battle. But whether or not it’s payback, the scrutiny serves a useful purpose.

The middle-class scholarship, as currently written, is an expensive gimmick that was always aimed less at uplifting kids of moderate means than at boosting Pérez’s political prospects. De León initially wanted to get rid of it altogether.

We weren’t crazy about it, either. But more than 80,000 students received grants averaging nearly $900 last school year, $72 million. As originally written, the program was to have grown to $152 million in the coming year.

But last week, legislative leaders in the Assembly and Senate agreed on an elegant proposal: Keep it; means test it; limit the aid to four years and only give it to families with $150,000 or less in assets other than their homes, businesses, cars and retirement accounts; and use the savings – more than $70 million – to pay for 10,000 more enrollment slots in the Cal State system.

Presto! A compromise that rehabs a worthwhile but expensively flawed program, and shores up higher education in a way that takes not a penny more from the general fund budget. And the only losers in the equation are families who can afford the loss.

We approve. The Legislature is expected to vote on it Monday, as part of its budget plan, and the governor still has to sign off on it. But in the meantime, political junkies can savor a priceless line item: The New, Improved John A. Pérez Middle-Class Scholarship, brought to you by – wait for it – Kevin de León.