Governor's Revision Restores Some Budget Cuts

Regents Approve 2008–09 Student Fees

In the face of lagging state support for public higher education at the same time as operational costs are increasing, the University of California Board of Regents approved a 7.4 percent student fee increase for the 2008–09 school year.

More than one-third of UC undergraduates — generally those who are considered needy under federal standards — will not have to pay the increase, which for them will be fully covered by a federal grant, Cal Grant or UC grant.

The Regents' vote on student fees came the day after Gov. Arnold Schwarzenegger released the May revision to his January state budget proposal. In the new budget, the governor restored $98.5 million of the UC funding he had earlier proposed cutting. Though the University welcomed the restoration, the amount still falls short of covering its operational needs for 2008–09.

The May revision leaves UC's 2008–09 state-funded budget at the same level as in 2007–08. It does not provide funding for enrollment growth, inflationary cost increases or investment in high-priority needs such as expanded student mental health services. Both spending cuts and student fee increases are needed to address the shortfall.

The January budget had contained a funding increase for UC consistent with the governor's compact with the University, then applied a 10 percent, or $332 million, reduction. The Regents' request had included funding for enrollment growth, faculty and staff salary increases, and other inflationary cost increases. In addition, the University sought an $8 million increase in funding for student mental health services on campuses, a priority endorsed by both the Regents and UC student organizations.

The student fee increases will generate approximately $70 million for University operations after funds for student financial aid are set aside, and will help make up for a portion of the gap in state funding, including helping to fund student mental health services.

Portion of Fees Returned to Aid

Effective this summer, the mandatory Universitywide fees for resident undergraduates will increase by $490 per year, to $7,126. With additional miscellaneous fees charged by individual campuses, average systemwide fees will total approximately $8,007. Mandatory systemwide fees for resident graduate academic students will also increase by 7.4 percent, or $546. In addition to a previously approved increase for resident graduate academic students, the systemwide fee for most professional students will rise by $486.

Out-of-state students must pay nonresident tuition as well as mandatory systemwide fees. Nonresident undergraduate tuition will increase by 5 percent in 2008–09, from $19,068 to $20,021. Nonresident tuition will remain at $14,694 for graduate academic students and $12,245 for professional students. Taken together with mandatory systemwide fees and campus fees, nonresident student charges in 2008–09 will total $28,615 for undergraduate students and $25,380 for graduate academic students.

For undergraduates, the University will return an amount equivalent to 33 percent of revenues generated by the fee increase to financial aid. This return to aid, when combined with federal grant aid and the state's Cal Grant program, will allow UC to provide additional financial assistance to UC grant recipients whose family incomes are lower than approximately $60,000 per year.

UC also will provide a grant covering approximately 50 percent of the fee increase to other needy on-time financial aid applicants whose family incomes are below $100,000 per year.

Other provisions will make available a 50 percent return-to-aid for graduate academic students and a 33 percent return-to-aid for professional school students.

Other actions to close the budget gap at UC have yet to be determined, but approximately $68 million is expected to be realized through savings in administrative spending.

Even with the fee increase, total charges for resident undergraduate and graduate academic students are expected to remain well below the average fees charged at the University of California's four public salary comparison institutions (University of Michigan, University of Illinois, University of Virginia and SUNY Buffalo).

The comparisons for UC's nonresident undergraduate and graduate students currently exceed the average fees for the comparison institutions,  though they continue to represent the mid-point among the public salary comparison institutions.

also in this issue:

UC Notes Home

© 2007 Regents of the University of California