The UC Board of Regents will discuss the possibility of stabilizing and preventing an increase in student housing costs at UC Berkeley during the March 28 regents meeting.
According to a meeting action item — which proposes restructuring the campus’s housing debt — campus housing amounts to 43 percent of a student’s total cost of attendance. The proposal states that room and board at UC Berkeley is on average higher than the university’s systemwide average. This academic year, the UC system had an average housing cost of $13,200, while the Berkeley campus had an average of $14,06o.
The cost of on-campus housing at UC Berkeley has also previously been ranked among the costliest in the nation by U.S. News & World Report, which released a list of the 10 colleges with the most expensive housing in September 2011. UC Berkeley was ranked second on the list, with a room and board of $15,272 for the 2011-12 academic year.
According to UC spokesperson Dianne Klein, the restructuring would include refinancing the bonds that UC Berkeley received from the regents to build on-campus housing. Klein said restructuring would result in the campus paying less interest on those bonds, which currently allow the campus 10 years to pay them off.
Since the operating budget of student housing is funded by rent charged to students, a lower interest rate on the bonds would potentially allow those students to be charged less because less of that money would need to go toward paying bond interest, according to Klein. This will also allow the current housing fees to remain the same or be lowered.
Restructuring of UC Berkeley’s current housing debt may also include pushing the estimated $38 million in debt service obligations due to be paid by the campus over the next 10 years into future years when the report says “the Campus has additional cash flow flexibility.”
UC spokesperson Brooke Converse said the restructuring plan would take advantage of low interest rates for bonds and would potentially enable students to pay less for on-campus housing.
“Interest rates are historically low, so restructuring the debt will allow the campus to pay less interest and therefore charge students less for housing costs,” Converse said. “What that means is that the campus potentially will be able to lower the amount of money that a student is spending on housing costs.”
The proposed restructuring of the campus’s current housing debt would enable students’ housing and dining fees to remain flat in the 2012-13 school year and would limit their growth in the following years, with the goal of reducing what students pay for housing as a percentage of the total cost of attendance to between 41 to 42 percent within the next three years. According to the action item, without the proposed restructuring, students’ housing and dining fees would have to increase by 5 percent every year starting with the 2012-13 school year to keep up with increasing costs.
Marty Takimoto, director of marketing communications for Residential and Student Services Programs at UC Berkeley, said controlling the cost of housing is an important issue that this plan might help to address. Takimoto said Residential and Student Services Programs has attempted to keep rates low by not raising rates last year and raising rates this year by less than 2 percent.
“We don’t want to price ourselves out of being a place where students can go to college,” Takimoto said. “We are thrilled that through some refinancing measures, like the one regents are considering, we will be able to keep room and board rates lower.”
Jamie Applegate covers higher education.