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In Wake of New State Budget, CSU Quickly Hikes Tuition 12 Percent, UC Ponders 9.6 Percent Increase

July 14, 2011

Last week, EdBrief reported on a new study that found the rising cost of community college is putting that option out of reach for many of California’s lower-income students.

This week, more doors closed for some prospective college students from lower-income backgrounds. On Tuesday, the California State University board of trustees responded to the recently-adopted state budget by raising tuition by 12 percent.  And the University of California Board of Regents is expected to approve a 9.6 percent tuition increase on Thursday.

These tuition increases will doubtless impact the plans of thousands of California high school students who are nearing graduation in the coming school year.

The new state budget cut state funding for the CSU system by $650 million for 2011-12. The 12 percent tuition increase approved this week is the latest in a series of fee hikes. Previously, CSU officials had indicated if the system was cut beyond the initial $500 million reduction adopted by the legislature in March, it would be necessary to return to the board in July for tuition action. In addition, a 10 percent or $222 per semester tuition increase for fall had already been approved by trustees last November.

“The enormous reduction to our state funding has left us with no other choice if we are to maintain quality and access to the CSU,” said CSU Chancellor Charles B. Reed. “We will focus on serving our current students by offering as many classes and course sections as possible. We will also be able to open enrollment for the spring 2012 term, which is critical for our community college transfer students.”

The 12 percent additional increase at CSU takes effect with the fall term and will raise tuition by $294 per semester for full-time undergraduate students, $339 for credential program participants and $360 for graduate students. For a full academic year, the added amount would be $588, bringing the annual tuition fee for full-time undergraduates to $5,472. With campus-based fees averaging $950, total fees would average $6,422.

One-third of the revenue from the tuition increase will be allocated for financial aid, and an estimated 170,000 CSU students – almost half of all CSU undergraduates - will be fully covered for the tuition increase thanks to this provision and other grants and fee waivers. In addition, many students and families not fully covered by financial aid will benefit from federal tax credits available for family incomes of up to $180,000. Since 2007, total yearly financial aid to CSU students has increased by almost $800 million.

Measures the CSU has already taken to address the initial $500 million cut include reducing enrollment by approximately 10,000 students, and applying an estimated $146 million from tuition increases already approved for fall 2011 to help offset the budget reduction. In addition, campus budgets were reduced by a combined $281 million, and the Chancellor's office was cut by $10.8 million or 14 percent. Since the state's fiscal crisis began in 2008, CSU has reduced the number of employees by 4,125 or 8.8 percent.

The CSU faces an additional mid-year cut of $100 million if state revenue forecasts are not met, reducing CSU state funding to $2 billion. That would represent a 27 percent year-to-year reduction in state support. University officials said they would have to review options further should the CSU's budget be reduced mid-year.

The $2.1 billion in state funding allocated to the CSU in the 2011-12 budget will be the lowest level of state support the system has received since the 1998-99 fiscal year, but the university currently serves an additional 72,000 students. If the system is cut by an additional $100 million, state support would be at its lowest level since 1997-98, with the system serving an additional 90,000 students compared to that year.

The Regents of the University of California are scheduled to meet in San Francisco on Thursday, and they are expected to follow the example of CSU, and approve a 9.6 percent tuition increase, also prompted by the recently-adopted state budget.

UC Vice President Patrick Lenz said it had been determined that an annualized tuition increase of 9.6 percent beyond the 8 percent previously approved by the regents for the 2011-12 school year would cover nearly $150 million of the $650 million funding reduction in the state budget approved by the state Legislature and signed by Gov. Jerry Brown in late June.

Because of these cuts and more than $350 million in unfunded mandatory cost increases largely consisting of unsupported students and rising contributions to the employee retirement plan and health benefits, UC is facing a budget shortfall of $1 billion.

Gov. Brown had proposed a funding reduction of $500 million in January, but the budget plan he signed June 30 cut UC's funding by $650 million for 2011-12, decreasing state support for the university from a high of $3.25 billion in 2007-08 to $2.37 billion. The total reduction could rise to $750 million if projected state revenues do not materialize.

“We reported to the regents in May that if we were to receive additional cuts beyond $500 million, we would have to offset those cuts with a dollar-for-dollar tuition increase,” Lenz said. “Our campuses and the UC Office of the President already have cut to the bone — implementing administrative efficiencies, furloughing and laying off employees, consolidating and eliminating programs, increasing class sizes, delaying faculty hires, reducing services and delaying purchases, among other actions.”

Lenz added: “We will present to the regents a variety of measures that we believe will preserve the quality of education, research and public service benefiting Californians in every part of the state, and ensure access to students from families with low and moderate incomes through financial aid.”

Editor's Note:   California State University, University of California.