Faced with flagging state funding and a $1-billion budget hole, University of California officials on Monday proposed several actions to preserve programs and stabilize finances, including far-reaching pension reforms and an 8% student fee increase for next school year.
Under the plan, undergraduate student fees for 2011-12 would rise by $822 to $11,124 annually — about $12,150 when campus-based fees are included. Some professional school fees would also rise, depending on campus and program. The fee hikes would generate about $180 million in annual revenue.
The UC Board of Regents will consider the plan when it meets Nov. 16 to 18 in San Francisco. The university raised fees 32% for the current academic year, sparking student protests.
The increases are needed to stave off more layoffs, program cuts and enrollment reductions, UC President Mark G. Yudof said in a conference call with reporters. The 10-campus system had previously furloughed faculty and staff, reduced course offerings and launched an initiative to trim $500 million in administrative expenses.
"None of these decisions are easy, but we tried to delicately balance access with the need for additional revenues," Yudof said. "The time for deferring hard choices is long past."
Nearly $64 million in revenue from the fee increase would be put toward financial aid, Yudof said, and the proposal includes expanding UC's existing financial aid program so that qualified California students with annual family incomes of less than $80,000 would not have to pay the basic education fees. Families earning less than $70,000 annually are currently covered under the program.
In addition, for the first year, the 8% increase would be waived for qualified California students with annual family incomes of less than $120,000.
Officials estimate that about 55% of UC's 181,000 undergraduates would not have to pay the fee increase next year.
Student representatives criticized the plan nonetheless.
"It's frustrating to have to go through this every year; there's no security," said UC Student Assn. President Claudia Magaña, a junior at UC Santa Cruz. "Many middle-class students don't have access to grants. There has to be somewhere else to squeeze expenses."
Yudof said the overall cost of a UC education remains lower than that of similar public universities nationwide. A state funding increase of $370 million this year was dwarfed by a $637-million cut last year, he noted. Meanwhile, in the last three years, UC's enrollment of California students increased by 16,000 and the university faces more than $365 million in mandatory costs next year as well as a $21-billion unfunded liability for retiree pension and health programs.
Yudof proposed a package of pension reforms that would require current employees and the university to contribute more to UC's pension plan, with no reduction in benefits. Employees hired after July 1, 2013, would get a lower-cost plan with less generous benefits.
Regents will consider the pension plan changes at a special meeting in December.