In the next few weeks the Board of Regents will be considering a
student fee increase for the 2003-2004 year. Because this is an
important issue for all students and their families, I would like
to explain why this is occurring and what the University of
California will be doing to help ease the impact on students.
California is facing the most serious budget crisis in its
history, with a budget deficit estimated as high as $38 billion.
The governor’s budget for 2003-2004 includes $300 million in
base budget cuts for the University of California, which now
receives about $3 billion in funding from the state each year.
These cuts come on top of other reductions made in the last two
years.
Outside of student instruction, essentially all areas of
University operations ““ administration, libraries, research,
student services, public service programs and many others ““
are taking major budget cuts. Some programs are slated for cuts in
the range of 30 percent to 50 percent and have begun or are
preparing for employee layoffs. Salaries for faculty and staff are
significantly behind, which can’t occur if UC is to remain
competitive and maintain its high levels of quality.
As this crisis has unfolded, the University has placed one
priority above all others: maintaining access and quality in the
student instructional program. We have worked with the state to
target budget cuts to non-instructional areas, because we do not
want to restrict access for UC-eligible students, reduce class
offerings, or delay students from getting their degrees.
The latest news is both good and bad. The good news is that the
governor’s May Revision proposed no further budget cuts for
the UC. The bad news is that the Legislature is considering
additional budget cuts of $80 million to $400 million for the UC
system.
In this environment it is clear that a student fee increase will
be needed in 2003-2004. We look to a fee increase reluctantly, and
only as part of a broader package including significant cuts in
University spending. This is an important point: the University is
not seeking to balance the budget solely at the expense of
students. In fact, increased fees currently represent only about 20
percent of our solution to the overall problem, with the rest
coming from spending reductions.
Under the governor’s budget, fees for resident
undergraduates would increase by $795 per year in 2003-2004, on top
of the $405 annualized increase that took effect this spring. Fees
for resident graduate academic students would increase by $855.
Nonresidents would see a $925 increase in mandatory systemwide fees
and an increase in nonresident tuition of $500 for undergraduates
and $445 for graduate students. Students in selected professional
schools would see fee increases of between $1,105 and $1,955,
depending upon the school.
All these figures could be adjusted higher if the Legislature
enacts additional budget cuts for UC beyond those proposed by the
governor. The regents will set final fee levels in June or July,
once we have more reliable information about the outcome of the
state budget.
I know a fee increase is always unwelcome and that it is
particularly unwelcome now. For seven years, starting in the
mid-1990s, we had no such fee increases ““ the state covered
the university’s annual inflationary cost increases. Right
now, the state pays about three-quarters of the cost of educating
each UC student. But the budget crisis means the state’s
subsidy must be reduced.
Fortunately, financial aid will ease the impact for many
students, and no student should look at the “sticker
price” of fees without considering the potential impact of
our aid programs. Indeed, one-third of the new fee revenue will go
to increased financial aid. Cal Grants will also increase. As a
result, we expect that 40 percent of UC undergraduates will not
have to pay an increase in mandatory systemwide student fees at
all, no matter what the amount.
In general, financially needy undergraduates from families with
annual incomes of $60,000 or less will not have to pay the fee
increase; a UC grant or Cal Grant will offset it. Also, in general,
other financially needy undergraduates from families with incomes
up to $90,000 would receive a UC grant covering at least a portion
of the fee increase. Students from all income groups who encounter
extraordinary financial difficulties would be considered on a
case-by-case basis for a reassessment of their financial aid
eligibility, and those who are found to have sufficient need would
receive a UC grant to offset a portion of the increase.
I wish we did not have to confront these issues. But I believe
that, to maintain the quality of the UC educational experience, a
fee increase needs to be one part of our answer to the
state’s budget crisis. As you think about your own financial
situation, I hope you will refer to our Web site, “You Can,
We Can Help,” which profiles UC students from various
financial backgrounds and shows how they have made college
affordable. You can find it at
www.universityofcalifornia.edu/admissions/youcan/.
Richard C. Atkinson is president of the University of California
system.