To fund enrollment boost, UC will ‘phase out’ out-of-state financial aid

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Prospective out-of-state students might find UC campuses less accessible than most Ivies next year after Thursday’s approval of a new UC budget plan.

The UC Board of Regents approved language in the UC budget proposal Thursday that would “phase out” the need-based aid currently provided to out-of-state undergraduates and use the savings to fund a targeted enrollment increase of 5,000 undergraduate Californians in 2016-17 and a total increase of 10,000 in the coming years. Continuing out-of-state undergraduates will still be eligible for institutional financial aid, but incoming students will no longer receive any funds.

The savings stemming from the elimination of out-of-state financial aid are a major source of the funds needed to accommodate enrollment growth, as the university’s budget plan appropriates only half of the estimated cost of the increase in the next year — about $25 million — from state funds. Projected savings from phasing out the financial aid program are $14 million, according to the budget proposal.

Lawmakers condemned the existence of out-of-state financial aid in a budget hearing last May, according to the Sacramento Bee, with some saying the practice was not serving the university’s goal of educating California residents.

Assemblymember Kevin McCarty, D-Sacramento — the chairman of the Assembly budget subcommittee — commended the university’s decision.

“Through the Assembly’s zero-based budget approach of the University of California, we were able to find $32 million dollars in financial aid given to non-resident students instead of many deserving Californians,” he said in an email.

Out-of-state students pay an additional $24,024 in supplemental tuition over the base $13,432 charged to residents and are currently eligible for financial aid covering the in-state portion of their costs. Supplemental fees alone from out-of-state and international undergraduates brought in an estimated $400 million in 2013-14, the Sacramento Bee reported.

UC spokesperson Dianne Klein said in an email that providing financial aid to some out-of-state students is a “long-standing practice” and that about 3,000 out-of-state undergraduates in the UC system received institutional financial aid in 2014-15. Approximately 900 of those undergraduates attended UC Berkeley.

One-third of all students’ base tuition currently returns to aid, which is then redistributed to other needy students. The budget proposal calls for funds intended for nonresident aid to instead be redistributed around the campuses to accommodate for the planned in-state enrollment growth. Anthony Abril, a UC Berkeley senior and financial aid director at the ASUC Student Advocate’s Office, criticized the suggested redistribution.

“What’s alarming for me is the university is setting a precedent to take financial aid dollars and use them for other purposes,” Abril said. He was also skeptical of the reliance the budget proposal — which makes up for the other portion of lacking funds with increased nonresident tuition — places on nonresident students to fill funding gaps.

Along with the elimination of financial aid for incoming out-of-state students, the university is increasing nonresident tuition by 8 percent in the next year and projecting to enroll an additional 1,200 nonresident undergraduates.

Out-of-state students make up a significant portion of students on the university’s flagship campus — roughly 35 percent of UC Berkeley’s incoming students were nonresidents in 2014.

Abril raised concerns about the effects of cutting out-of-state financial aid on campus diversity.

“You’ll be creating a pipeline for that percentage of students to be entirely socioeconomically homogeneous,” he said. “You’ll lose most of the students who would ever consider coming here who are low income and out of state.”

Nonresident students are still on the hook for the supplemental tuition, but need-based aid for the in-state portion has made the difference for some undergraduates.

“It’s so helpful, even though it’s so expensive,” said Dalton Boll, a UC Berkeley senior from Wisconsin, who took out student loans to cover the remainder of his tuition.

Even though UC Berkeley made the lowest aid offer of any California school, he decided to enroll in its top-ranked computer science program and is planning to work in the Bay Area upon graduation.

“I think it’s going to make it hard for a lot of kids from working-class families to come here,” he said.

Advocates of increased Californian college attendance welcomed the new budget plan. Audrey Dow, who works at the California Campaign for College Opportunity, said the organization was very supportive of the plan. She argued that “until all qualified talented California students can access the aid they need, we have to prioritize our California students.”

The UC regents largely supported the measure at Thursday’s meeting, but Student Regent Avi Oved called the decision “purely political” and criticized California legislators for dissolving out-of-state aid to “support this aggressive enrollment plan, knowing this is beyond our capacity.”

In addition, he raised concerns about the loss in campus diversity from phasing out financial aid to eligible out-of-state students — the majority of whom are underrepresented minorities.

Regardless of UC policy, UC Berkeley is exploring ways to replace the loss of aid to out-of-state students. The campus will not finalize plans until spring, but UC Berkeley spokesperson Janet Gilmore said in an email that the campus is considering new ways to help needy out-of-state students in order to continue creating access for “the best undergraduates across the country.”

Contact Philip Cerles at [email protected] and follow him on Twitter @PhilipCerles_DC.

A previous version of this article incorrectly quoted Audrey Dow saying that until all “qualified parented California students” can access the aid they need, California students must be prioritized. In fact, Dow was referring to “qualified talented California students.”