Monday, March 31, 1997
FINANCIAL AID:
Analysts say more UC funds need to be diverted to studentsBy
Brooke Olson
Daily Bruin Staff
When the UC Regents fall short of their legislative promise to
increase funds for financial aid, it’s the students who may have to
foot the bill.
Disputes over the 1997-98 University of California budget have
led legislative analysts to recommend that state lawmakers divert
$19.8 million in UC funds to the Cal Grant program.
If analysts get their way, funds intended specifically for UC
schools will become available to any student in the Cal Grant
program  regardless of whether they attend a public or
private school.
According to the annual review of Gov. Pete Wilson’s budget
proposal, the nonpartisan analyst’s office believes that the UCs
have fallen short of providing adequate financial aid, even as the
university has continued raising student fees.
"What we’re interested in is how much the UCs themselves spend,"
said legislative analyst Buzz Breedlove. "If they’re going to
continue to raise fees, they’re going to need to provide more
financial aid … and the numbers don’t show that they will.
"(The) amount of money UC spent on financial aid actually went
down" over the last two years, he added.
UC officials contend that the recommendation is a result of a
"technical misunderstanding," as analysts did not fully account for
all student aid doled out by the nine-campus system.
"We are committed to providing enough financial aid … and the
(UC) budget for the state is a different book than actual
university expenditures," said university spokesman Mike
Lassiter.
But analysts said their recommendation is based on numbers given
to them by university officials.
"The officials gave me these numbers … and now they’re saying
that (the budget) is incorrect?" Breedlove questioned.
According to the governor’s budget, UC revenue from resident
student fees totaled $583 million in 1995-96. Current-year revenue
estimates stand at $618 million, and 1997-98 estimates are $630
million.
The increase in revenue is due to larger enrollments and higher
fees for selected professional schools.
But even as revenues and fees went up, the amount set aside for
financial aid is declining, according to figures from the
governor’s budget.
While the UC spent $220.8 million for student financial aid in
1995-96, the university plans to spend $213.2 million in the
current year, and $216.5 million in 1997-98. The budget proposal
represents a decrease of $4.3 million, or 1.9 percent, in financial
aid since 1995-96.
The state Legislature requires that the university set aside at
least one-third of additional student fee revenues for financial
aid, in accordance with a UC compact signed by the governor in the
early 1990s.
While the university has consistently met this requirement since
the compact was initiated, UC officials indicated that they would
continue to abide by the agreement.
"At the beginning of the year we put in an estimate of the
amount of financial aid we will need to spend," Lassiter said. "But
that number changes as the year goes on … and we always tend to
spend more (on financial aid)."
Analysts acknowledge that the regents have lived up to their
agreement with the Legislature in the past, but questioned whether
the UCs would continue to provide adequate financial aid.
"Judging from the UC’s budget … it has not directed increased
student fees to financial aid," the analysts’ review noted. "Based
on past practices, we expect financial aid to students would
increase as the level of student fee revenues increases.
"Instead, the budget figures show a $4.3 million decline. Our
review indicates that, based on past practices, UC spending on
financial aid should be $19.8 million higher than proposed in the
1997-98 budget."
Analysts recommended shifting $19.8 million in UC funds to the
state Cal Grant program to increase the number of students eligible
for financial aid at the higher-education institution of their
choice.
"If that money is in the UC budget, 100 percent of it goes to UC
students," Lassiter said. "But if it’s in the Cal Grant program,
all of the students in California will be able to benefit from the
increase."
State Senate President Pro Tem Bill Lockyer, D-Hayward, said the
financial aid issue will be explored fully in budget hearings this
spring but doubts that the analysts’ numbers are incorrect.
"I have found as a general matter that the legislative analysts
do excellent work and it’s rare that there are errors of that
sort," Lockyer said. "I don’t think (the analysts) can predict to
the penny what the demands or need will be  that obviously
changes with student demographics.
"But the university should establish a higher goal to help more
students … they should be more sensitive to the students’ need
and not think of them as an afterthought," Lockyer added.
UC officials note the analysis does not account for campus-based
financial aid and other sources of scholarships that are not built
into the budget proposal but show up in the final accounting of
UC’s spending.
The university’s total spending on financial aid is more than
$850 million a year, said UC Budget Director Larry Hershman.
However, over half of that money is provided by the federal
government, with the university chipping in about 27 percent of the
total financial aid amount, according to the 1997-98 budget.
Analysts suggested that university officials "anticipate"
spending more money on financial aid but fail to identify an exact
dollar amount in the budget, which gives the university more leeway
over how those funds are used.
But university administrators defended their commitment to
providing affordable higher education.
"We haven’t shifted any funds away (from the financial aid
program)," Lassiter said. "It’s really a technical
misunderstanding."
This misunderstanding should be cleared by the time the
Legislature votes on the analysts’ recommendation, UC officials
said, adding that they believe the matter will be resolved in the
university’s favor.