UC Regents to vote on fee increases
Proposed mid-year fee increases
Resident undergraduates - $585, increasing the fee from $7,788 to $8,373
Nonresident undergraduates - $633, increasing the fee from $8,436 to $9,069
Resident academic graduates - $654, increasing fees from $8,736 to $9,390
Nonresident academic graduates - $681, increasing fees from $9,078 to $9,759
Resident and nonresident professional schools graduates - $579, increasing fees from $7,722 to $8,301
Proposed 2010-11 fee increases
Resident undergraduates - $1,344, increasing the fee from $ $8,958* to 10,302
Nonresident undergraduates - $1,458, increasing the fee from $9,702* to $11,160
Resident graduates - $1,506, increasing fees from $10,044* to $11,550
Nonresident graduates - $1,566, increasing fees from $10,440* to $12,006
Resident and nonresident graduate professional - $1,332, increasing fees from $8,880* to $10,212
*These fees are based on the full annual amount of the mid-year increase although students would only pay that increase for half the year.
Faced with unprecedented budget shortfalls and declines in state support, UC Regents will consider a proposal for both a 2009-10 mid-year student fee increase and a 2010-11 fee increase at their November meeting.
The university recognizes that additional fee increases for students would be painful and is taking steps to minimize the impact on students and families through financial aid. However, without additional revenue, the university's academic quality is in jeopardy. The university is eliminating courses, increasing class sizes and dismantling programs, all of which will eventually erode the value of a UC degree and are already severely constraining UC's ability to attract and retain faculty.
"I actually think the students ought to be angry about the fee increase proposal," UC President Mark Yudof told Regents at their September meeting. "I'm angry about it, too. I liked the old system. The closer education was to being free the happier I was. But that's not the world I live in."
UC budget experts delivered a grim outlook at the September Regents meeting where the fee increases were proposed. In 2009-10, UC has a funding gap of more than $1 billion: a $637.1 million reduction in state general fund revenue and $368 million in unfunded mandatory costs, including enrollment growth, health and retirement benefits and other inflationary costs. In 2010-11, the funding gap is expected to grow to $1.2 billion.
Deep cost-cutting
UC has taken steps to fill the funding gap: a 12-month employee furlough/salary reduction plan that started Sept. 1 to save $184 million, debt restructuring to save $75 million and an already approved 2009-10 fee increase to raise $210.8 million.
Members of UC's senior management group, including the president, agreed to reduce their salaries by 5 percent starting July 1. These reductions increased to 9 to 10 percent under the furlough program and a systemwide salary freeze has been imposed on them.
Downsizing and restructuring of the UC Office of the President have saved more than $60 million and additional savings are expected.
Certain bonus and incentive programs have been cancelled or deferred, the staff merit program was eliminated and travel and other purchases have been significantly curtailed.
Campus cost-cutting measures have included: a $137 million reduction in the instructional budget, layoffs of approximately 1,900 employees, elimination of 3,900 positions and deferred hiring of 1,600 positions.
"The truth is that this budget will be on the backs of a lot of people," Yudof said. "It will be on the backs of administrators and faculty and students. We didn't go to the fee increase first."
The proposed mid-year fee increase would generate an estimated $117.3 million in new revenue, with $42.2 million set aside for financial aid. The proposed 2010-11 fee increase would raise an estimated $291.7 million with $104.6 million set aside for aid.
Offsetting the pain
UC sets aside 33 percent of the revenue generated from fee increases for undergraduate financial aid, with 50 percent and 33 percent of fee increases set aside for aid for graduate academic and professional school students, respectively. UC's Blue and Gold Opportunity Plan ensures that mandatory fees are fully covered for financially needy resident undergraduates whose total family income is $60,000 or below. UC is considering raising the income ceiling to $70,000.
UC projects that, on average, students with incomes below $180,000 will experience financial aid increases, either through gift aid or expanded tax credits, to cover the full amount of the fee increases already approved for 2009-10, along with the proposed 2009-10 mid-year increase.
For 2010-11, nearly half of all UC students - including more than 93 percent of UC's need-based aid recipients - would have 100 percent of the proposed fee increase covered by a combination of Cal Grants and UC grants. Students who qualify for these grants typically have household incomes up to $60,000 to $70,000 per year. If their household income falls below $120,000, students with financial need will have half of the proposed 2010-11 fee increase covered.
UC Regent Eddie Island, who historically votes against fee increases, said at the September meeting that he would reluctantly support them, given the magnitude of UC's budget challenges.
"Some will say I've gone over to the dark side," Island said. "No. I've gone to the side of necessity. I will vote for a fee increase, and I'll be very sad to do so."
Many Regents echoed his feelings, saying they regretted having to consider the increases.
"Our board and administration have been forced to make tough decisions," said student Regent Jesse Bernal. "No one wants to have furloughs, and no one wants to increase fees. It's the state, not the Regents, who are increasing the burden on students."
With the state facing a projected $7 billion to $8 billion deficit, Regents were told not to expect the university's budget crisis to end in the next fiscal year. The operating budget and fee increases they will consider in November will provide the university with stability, Yudof said.
"This is a very difficult time, but the University of California will get through this," Yudof said. "I have no doubt in my mind. And at the end of the day it will be stronger and it will have more access and its quality will be preserved."