College & Careers

LAO calls for tuition hikes at UC and CSU


The state Legislative Analyst's Office says students at UC and CSU should pay a little more in tuition. Photo credit: UC Berkeley

The state Legislative Analyst’s Office says students at UC and CSU should pay a little more in tuition. Photo credit: UC Berkeley

The nonpartisan Legislative Analyst’s Office said it has “serious concerns” about Gov. Jerry Brown’s higher education budget proposal and is urging legislators to reject it, including the governor’s call for a three-year freeze on tuition increases.

Brown has proposed a little over a billion dollar funding increase for the University of California, California State University and California Community Colleges.

At issue is a fundamental disagreement with the governor’s approach to funding. The LAO argues that the governor should tie increases in state funding more closely to better student outcomes at universities and colleges, including improving graduation rates and reducing the time it takes for students to earn their degrees.

“We recommend the Legislature require UC and CSU to discuss their performance in specific areas (such as student access and success) at budget hearings each spring. The Legislature could use this opportunity to learn more about each university’s performance, develop performance expectations moving forward, and make funding decisions based on this information,” the LAO wrote in an analysis of the higher education budget released earlier this week.

The LAO also opposes Brown’s tuition freeze and instead recommends a 2.5 percent fee hike at UC to generate $78 million, and a 3.3 percent hike at CSU to raise $84 million. Between 2007-08 and 2011-12, CSU raised tuition by $2,700 to its current level of $5,472 for California residents. UC undergraduates pay $12,192, more than double the amount from five years ago.

“California’s tuition and fee levels are relatively low” and are offset by financial aid programs for low- and middle-income families, according to the LAO. “As a result, the net price they pay (after fee waivers, grants, and scholarships) often is far less than the list price.”

UC spokeswoman Brooke Converse said in an email that the university has already promised not to raise student fees next year and would “like to find a way to provide stable and predictable tuition for our students and their families in the future.”

The LAO would also eliminate the governor’s proposed funding increase to UC for enrollment growth, arguing that the university’s own reports estimate that enrollment will not increase next year. CSU would still receive $42 million to meet an anticipated 2 percent boost in enrollment.

Converse said the university finds that disappointing, noting that during the recession, UC did not reduce enrollment despite losing state funding for about 7,500 students a year.

A CSU spokesman said officials in the chancellor’s office reviewed the report but did not have a comment on it.

Brown proposed raising the community college budget by 11.4 percent to $6.2 billion, including $163 million to pay down deferrals – payments the state pushed from one fiscal year to the next to make ends meet, and then never paid back – and $200 million in dedicated funding for the Student Success and Support Program and similar categorical programs designed to provide support for low-income and racial and ethnic minority students.

The LAO report would keep that funding but consolidate all the programs into a Student Success Block Grant. The LAO also urges the Legislature to study enrollment trends at community colleges to determine if they really need increased funding for a 3 percent increase in students. The LAO says that in recent years, campuses haven’t met their enrollment targets and this may be a trend.

The chancellor’s office prefers the governor’s budget plan, said Paul Feist, vice chancellor for communications for the community college system.

“We think the governor’s original budget proposal contains the right mix and approach to restoring access to our colleges,” Feist said in an email, “which had to turn away 500,000 students during the years of recent budget cuts, and investing in student success initiatives that will improve time to completion.”

Contact senior reporter Kathryn Baron and follow her on Twitter @TchersPet. Sign up here for a no-cost online subscription to EdSource Today for reports from the largest education reporting team in California. 

Filed under: College & Careers, Community Colleges, State Education Policy

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3 Responses to “LAO calls for tuition hikes at UC and CSU”

  1. Manuel said

    on February 15, 2014 at 2:32 pm

    Interesting. According to this article,

    “California’s tuition and fee levels are relatively low” and are offset by financial aid programs for low- and middle-income families, according to the LAO. “As a result, the net price they pay (after fee waivers, grants, and scholarships) often is far less than the list price.”

    Is this true? How much is “far less than the list price?” How poor does a student have to be to get a “free ride?”

    This may be a matter of semantics because the LAO (or, more specifically, the author of this report) may have simply looked at the cost of the “average award” and compared it to the amount paid in “University fees” at a UC, for example. In other words, the LAO is not looking at the total cost of attending a particular school, just the fees, ma’am, just the fees.

    I looked for a simple calculator to define the amount of Cal Grant available to a family with a given income and the ones I found were a bit on the complicated sign. So I turned to the calculator made available by UCLA. It’s URL is http://www.fao.ucla.edu/aid_estimator/Dependent.aspx. I entered income amounts of 100K all the way to 30K per year for a family of three with $7k in assets (a stretch, I know), no income for the student, and figured the amount of fed taxes from the instructions for the 1040 assuming that this fictional family took the standard deduction as well as the standard exemptions ($12.2k + $17.7k).

    The results blew me away. Here’s what I got:

    Income Cost to family
    $100k $26,189
    $80k $19,576
    $60k $13,869
    $50k $11,982
    $40k $10,346
    $30k $8,667

    How can a family that’s below poverty level ($40k?) afford $10k annually to send their precious one kid to college? The expected level of contribution is $8,667 for a family “making” $30k! This is ludicrous.

    (N.B.: this is how this “cost” is described in the calculator:

    Estimated Net Cost is the difference between your Cost of Attendance and the amount that will be covered by grants. Since this calculation is based on the standard budget estimated for each student and may not accurately reflect your actual expenses, we recommend that you and your family put together an individual budget (based on actual rather than standardized expenses) to better approximate your net cost. Your Estimated Net Cost consists of two components: a) an Expected Family Contribution (covered by annual earnings, savings, and/or parent loans) and b) a self-help component, which can be covered with outside scholarships (such as Kiwanis and National Merit Scholarships), student Federal loans, earnings from work (including work-study), and/or student private loans).

    Notice that it talks mostly about loans as a way of making the cost up.)

    And just so you think, well, let them take loans, imagine if you are a poor person being asked to cosign a loan for one-third of your annual income for one year of college. Does it make sense? It all seems like a cruel joke if our state institutions engage in this kind of “gapping” (refers to the practice of offering admission without the funds to fully pay for attendance). No wonder smart kids that are offered full ride scholarships by Ivies and private colleges take them without thinking twice.

    So, the LAO report may be correct when it says that the state is picking up the tab for college expenses because it is basically waiving the inflated fees. But it sure is not helping poor people to get through college without paying for it. A poor kid will end up with more than $40k in debt after four years. Is that reasonable?

    Anyway, I think the LAO is not doing the right thing here. Which is too bad as I expected the LAO to be a cool head in these things. If the LAO feels that it can’t be afforded, then it should say so instead of making up what seems to me at this time to be a flimsy excuse. Maybe I am wrong in thinking that way, but looking at the bottom line of the costs of attending UCLA informs my opinion. (No, I did not check any other UCs, but I am sure they are in the same ballpark.)

  2. Paul said

    on February 16, 2014 at 1:17 pm

    Manuel, you have hit the nail on the head, and exposed a blind spot in the work of the LAO. It’s disappointing that this finding on tuition, and the one on CTE/ROP/etc. funding, are long on ideology and short on facts.

    The claim about ‘paying less than the list price’ is informal, and it ignores the fact that the difference between the ‘list price’ (“Cost of Attendance”) and the price paid (“Expected Family Contribution”) is often made up with loans.

    The federal Pell Grant is available only to the very poor, and never to undocumented immigrant students. It is less than $6000 per year. The state’s Cal Grant program has been cut, and recommended for cuts, over the past few years. The absolute maximum Cal Grant is less than $13,000 per year. Although this source of funds is at least available to undocumented students, the program carries a mean-spirited GPA requirement! Now, you know that I favor academic selectivity, as a requirement for ALL participants in a program. In this case, it is patently unfair to let rich people slide by with low GPAs, with only the poor subjected to a requirement.

    It is conceivable that a U.S. citizen CSU student from a very poor family could meet the true, full cost of attendance (tuition, room, board, textbooks, transportation, computer, and health insurance, with the last three not always included in a university’s standard student budget for financial aid purposes) from these sources. Even the poorest UC or private university student would be forced to add loan financing. There is no credit/cosigning requirement for federal Perkins or Stafford Loans, the main loan programs relevant here, but saddling people with loans hardly creates equitable, need-blind access to college.

    The LAO is silent on a fundamental shift from stable, token user contributions for public university education to contributions that represent (a) a substantial cost to users, (b) an unpredictable and rapidly-growing cost to users, and (c) for the first time ever, an appreciable share of the total cost of a public university education. Those are three major political changes, and they should be decided directly, rather than slipped in as mere footnotes to successive annual state budgets.

    • Manuel replied

      on February 16, 2014 at 10:26 pm

      Paul, the UCLA calculator does include health insurance (it is mandatory) and transportation. It still does not include a computer. Maybe they expect it to come from “Personal” or “Books and Supplies.”

      The calculator does not explicitly states it, but I suspect that the Pell and Cal grants are included, and as for the “unmet need,” yes, I am aware that everyone is told “take a loan.” But expecting a student from a poor family with not much experience in financial matter to take around $10k/year in loans is way too much, IMO.

      What the LAO is not telling us is that the state funds for UC have decreased over the years in “real” terms. I once was told that UC used to get around $15k/year for each full time student. Now it is around $8k. UC simply raised the fees to cover the shortfall. (N.B.: UC has the actual numbers here.) Is it then the state’s fault or UC’s fault that the fees have gone up so much and students have to make up the difference regardless of household income? Talk about a very specific tax.

      (I think the state did the same to CSU and the community colleges but I don’t have the numbers.)

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