UC: Proposed increase would offset one-quarter of $1 billion shortfall

SAN FRANCISCO — University of California regents are set to vote on a plan to increase tuition by a little more than $1,000 per student for the coming school year.

The vote is scheduled for today in San Francisco. University officials say the proposed 9.6 tuition increase, together with a previously approved 8 percent hike for the coming year, would cover about a quarter of the $1 billion shortfall they are facing.

That shortfall is largely the result of cuts in state funding. According to a news release from the UC Office of the President, the $650 million state funding cut for UC reduces total state support for the university by more than $880 million — 27 percent — from a high of $3.25 billion in 2007-08 to $2.37 billion in 2011-12.

For the first time, revenue from tuition will surpass the state’s contribution. This is the lowest level of state funding since 1997-98, when there were 73,000 fewer students — the equivalent of the UC Berkeley and UCLA campuses combined.

The proposed 9.6 percent increase in mandatory systemwide fees, together with a previously approved 8-percent hike, would offset approximately one-quarter of the billion-dollar shortfall resulting from a state funding cut of $650 million and more than $350 million in additional mandatory costs, said Nathan Brostrom, the UC system’s executive vice president for business operations. About 75 percent of the budget gap will be addressed through a combination of austerity measures, administrative efficiencies and new revenue sources.

More than half of the additional unfunded mandatory expenses represent retirement contributions and other annuitant health costs. The state has not contributed to the UC retirement fund in more than 20 years, though it does provide funding for pensions of California State University employees.

The proposed tuition increase will  would apply to all UC students — undergraduate, graduate academic and graduate professional students — effective with the fall 2011 terms.

Because of the University of California’s Blue and Gold Opportunity Plan, according to the release, students from families with annual incomes of $80,000 or less who qualify for federal, state or UC financial aid pay no tuition. For students from financial aid-eligible families with annual incomes up to $120,000, the tuition increase for the 2011-12 year is waived. One-third of revenue from tuition increases goes to financial aid.

Tuition and student services fees for 2011 were increased by 8 percent last November, with tuition rising to $10,152 and student services fees to $972. The additional 9.6 percent hike proposed to the regents applies to the total of tuition and student services fees ($11,124), with the increase of $1,068 going to tuition so that campuses can have maximum flexibility in allocating resources, Brostrom said. If approved, tuition for this academic year will be $11,220, and the student services fee will remain at $972, totaling $12,192 in mandatory systemwide charges, 18.3 percent higher than last year.

Short URL: http://www.davisenterprise.com/?p=62845

Posted by Wire and staff reports on Jul 13 2011.
Last Login:
Filed under UC Davis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry