Ask the Daily Cal: UC Budget and Tuition

On Friday,  July 15, 2011, News Editor Allie Bidwell and Assistant News Editor Aaida Samad answered reader questions about the UC budget cuts and the 9.6 percent fee hike that was approved at this month’s meeting of the UC Board of Regents. Editor in Chief Tomer Ovadia moderated the discussion.

Below is a transcript of the live chat.

Tomer Ovadia, Daily Cal: Welcome to Ask the Daily Cal! My name is Tomer Ovadia and I am the editor in chief and president of the Daily Cal. I am joined by our news editor, Allie Bidwell, as well as our assistant news editor and higher education expert Aaida Samad.

Tomer Ovadia, Daily Cal: We will be taking your questions, so please enter them below and we will be happy to answer them.

Tomer Ovadia, Daily Cal: Aaida and Allie, can you please begin by describing the lead up to the tuition increase and why the regents felt it was necessary?

Allie Bidwell, Daily Cal: Sure!

Allie Bidwell, Daily Cal: In January when Gov. Jerry Brown first announced his state budget proposal, it included a $500 million cut each to the UC and CSU. When Brown signed this cut into law at the end of March, UC President Mark Yudof said the university could absorb the cut without raising student fees, but that any additional cuts in state funding would result in fee hikes throughout the system.

Allie Bidwell, Daily Cal: Then in mid-June, state Democratic legislators proposed a budget plan that included an additional $150 million cut to the UC, as well as $540 million in deferred payments to the UC. This plan was passed June 15, but then vetoed by Brown the next day. However, at the end of the month, Brown and the Democrats announced that they had come to a compromise on a budget plan that kept the $150 million cut to the UC. At this point all bets were off the table and fee hikes were extremely likely.

Allie Bidwell, Daily Cal: On July 1, Patrick Lenz, the vice president for budget and capital resources for the UC Office of the President, told The Daily Californian that Yudof would recommend a 9.6 percent fee increase in order to offset the additional cuts from the state.
However, the regents said at the meeting yesterday that despite the fact that other ways of generating revenue for the university are either currently underway or are being planned, in order to deal with the immediacy of this cut, the fee increases were necessary.

Comment from Guest: What do they mean by ‘deferred payment’?

Allie Bidwell, Daily Cal: Aaida, can you explain deferred payment?

Tomer Ovadia, Daily Cal: That’s a good question. Readers, please don’t hesitate to ask for clarification on anything that sounds confusing. These issues can get complex.

Aaida Samad, Daily Cal: In terms of the deferred payments, what was proposed was that instead of the state paying the UC $540 million in June, they would’ve paid them in August. That would have created issues because it shifts the payment from one fiscal year to the next. In any case, the budget that included this deferral was vetoed, so it’s no longer an issue the UC is facing.

Tomer Ovadia, Daily Cal: Allie and Aaida, it’s my understanding that not everyone will be affected by the tuition increase. Can you explain how that works?

Tomer Ovadia, Daily Cal: Readers, feel free to enter your questions below. We’ll look them over and post them one-by-one.

Allie Bidwell, Daily Cal: Yes, not all students will be affected by the increases. Under the Blue and Gold Opportunity Plan, students whose families have an income of under $80,000 pay no tuition. Their tuition is covered by grants and scholarships from the university. Additionally, those students whose families make between $80,000 and $120,000 each year will not pay the increases for the first year they are effective.

Aaida Samad, Daily Cal: Overall, UC officials have said that given financial aid funding available, about 55% of undergraduates will have their increase covered.

Comment from Guest: Doesn’t the Blue and Gold plan also assume some grants from the state and federal (i.e. Cal, Pell grants), and a student contribution?

Allie Bidwell, Daily Cal: Yes, the plan combines all sources of scholarship and grant awards you receive – federal, state, UC and private – to count toward covering your fees. So if you qualify for the Blue and Gold Plan and receive Pell and Cal Grants and private scholarships that don’t fully cover your fees, UC grant money makes up the difference.

Tomer Ovadia, Daily Cal: Is there anywhere readers can go to find more information about Blue and Gold?

Allie Bidwell, Daily Cal: Yes, you can read more about the Blue and Gold Opportunity Plan here:

Tomer Ovadia, Daily Cal: Can you elaborate on the budget shortfall and financial difficulties that the UC currently faces?

Allie Bidwell, Daily Cal: Well, currently the UC is facing a $650 million total reduction in state funding.

Allie Bidwell, Daily Cal: The first $500 million cut to the university was also compounded by $362 million in mandatory costs — such as the university’s retirement contributions, energy costs and health costs — which resulted in a $862 million funding challenge for the university.
Then the additional $150 million cut passed in the state budget brought the UC’s overall budget shortfall to just over $1 billion.

Aaida Samad, Daily Cal: Overall the combined fee hikes approved in November and yesterday take care of around 26% of the deficit. The 8 percent fee hike in November takes care of around $115 million of that shortfall and the 9.6 percent hike approved yesterday takes care of an additional $150 million, bringing the overall UC budget deficit to around $747 million.

Tomer Ovadia, Daily Cal: Can you explain the various tuition increase amounts that are swirling around out there? We’ve been hearing 9.6%, 5.9% and 10.5%. What’s what?

Allie Bidwell, Daily Cal: Sure, so UC officials have said the increase in tuition is 9.6% and student leaders have said the increase is actually 10.5%.

Allie Bidwell, Daily Cal: Technically, both are correct. It all depends on how you frame it.

Allie Bidwell, Daily Cal: The increase passed yesterday will raise mandatory fees — comprised of tuition and a student services fee, which all students must pay — by a total of 9.6 percent. Tuition itself will rise from $10,152 to $11,220 while the student services fee of $972 would remain the same.

Allie Bidwell, Daily Cal: This would raise mandatory fees from $11,124 to $12,192 — a total increase of 9.6 percent.

Allie Bidwell, Daily Cal: However, since only tuition is rising, student leaders have said that the hike should be called a 10.5 percent increase because excluding the student service fee and looking solely at the jump in tuition — from $10,152 to $11,220 — tuition is rising 10.5 percent.

Allie Bidwell, Daily Cal: Now, the 5.9% fee increase. This was brought up in an agenda item for the regents meeting. The UC still faces the possibility of another $100 million cut from the state, in which case, another fee increase could be necessary.
If that midyear cut happens, the UC may consider proposing an additional 5.9% fee increase in the middle of the year.

Comment from Guest: Will graduate students pay more under the changes made yesterday?

Aaida Samad, Daily Cal: Under the changes made yesterday, graduate students will also deal with the 9.6 percent increase. At the meeting, there was debate and discussion on this topic among the regents and UC officials. Some regents expressed concern that by increasing fees for graduate students the overall competitiveness of the UC will suffer as graduate students may choose other schools over the UC because of the increased amount they are having to pay. However, other regents argued that it would not be fair to have undergraduates alone shoulder the burden of fee increases.

Aaida Samad, Daily Cal: Before the approval of the fee increase went before the board for a vote, there was a move by one regent to amend the item to have the fee increase exclude academic graduate students. However, the amendment did not pass and as a result the fee increase that was voted on will apply to both undergraduate and graduate students.

Tomer Ovadia, Daily Cal: Keep the questions coming!

Comment from John: Is the increase percentage the same for both in and out-of-state students?

Allie Bidwell, Daily Cal: Hi John! Yes, the increase percentage is the same for both in and out-of-state students.

Tomer Ovadia, Daily Cal: We’ll take questions until 1pm, so post them as soon as possible!

Tomer Ovadia, Daily Cal: Let’s talk about student mobilization and protests.

Tomer Ovadia, Daily Cal: We’ve seen protests in the past when tuition was increased. What were protests like this time around? Were students mobilized? What happened on campus here at UC Berkeley?

Aaida Samad, Daily Cal: At the meetings Wednesday and Thursday there weren’t students protests that have traditionally characterized meetings where fee hikes were being considered. Some attributed this lack of protesting to the fact that this fee hike took place during the summer when students are away from campuses.

Aaida Samad, Daily Cal: On campus, ASUC leaders sent out a campuswide email urging students to email the regents asking for them to not increase fees. Additionally, student leaders from across the UC showed up at the meeting yesterday to express their concerns to the regents.

Comment from Guest: Allie: Do you mean non-resident tuition is increasing too?

Allie Bidwell, Daily Cal: Yes, the fee increase applies to all students.

Allie Bidwell, Daily Cal: California residents and non-residents.

Comment from Guest: Can you please say how much more we’ll pay in the fall and in the spring?

Aaida Samad, Daily Cal: With the increases, undergraduate mandatory student fees will be around $12,192 annually for in-state students. We don’t have the break down per semester. Additionally, there is the possibility of a mid-year fee increase if the state cuts the UC another $100 million if tax revenues don’t come through.

Comment from Guest: My questions was whether it’s only a 10.5% to tuition (the $11,000 part that everyone pays) or also to non-resident supplemental tuition (the $15,000 or so that only non-residents pay).

Aaida Samad, Daily Cal: The 9.6 percent fee increase approved yesterday will apply to both in state and non-resident students, if that answers your question. The overall fee increase is 9.6 percent because the student service fee ($972) will remain the same. If you only look at tuition, it is increasing by 10.5 percent. However, for the mandatory student fees that everyone pays (tuition + the student service fee) the increase is 9.6 percent.

Allie Bidwell, Daily Cal: Thanks for your questions everyone! We’re out of time now but if you have additional questions, please feel free to email us at [email protected].

Tomer Ovadia, Daily Cal: And if you have any feedback on our Ask the Daily Cal events and how we can better provide you information, please let us know by emailing [email protected].

Allie Bidwell and Aaida Samad are news editors.

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