The UC Tuition Hike

As applications surged into the UC System, Janet Napolitano, the UC System president, announced a plan to raise UC tuition at a 5% annual clip over the next five years.

The tuition hike is scheduled for the 2015-2016 term, raising tuition by $612, and will take tuition from the current $12,192 to $15,563 in 2019-2020. Out of state tuition would rise to $36,828 next year and ascend to $44,766 by 2019-2020.

The UC proposal breaks with the 4-year budget deal that has annually increased state funding in return for a tuition freeze. State funding has increased 5% in each of the past two years.

Napolitano has several reasons for the proposed tuition increase and believes the tuition hike is essential to maintaining the quality of a UC education.

Foremost, from 1990 till 2010, the UCs and its employees did not contribute to their retirement system.  Now the pension payment holiday is over and there is $7.2 billion (an amount larger than the annual budget of the UC System) in outstanding liabilities. This is the proverbial elephant in the room, which, in all honesty, won’t be offset by the relatively scant revenue raised by the tuition hike. The tuition hike will raise $100 million annually; 50% of which will improve academic quality, restoring classes, offering more classes to insure timely graduations, hiring faculty; 30% will go to financial aid; and 20% to cover a planned 5,000 increase in undergraduate enrollment. The curious can only assume that the tuition increase covers the aforementioned and the state general funds (which are supposed to increase at a steady 4%) will cover the pension shortfall.  

That’s, of course, assuming that Governor Jerry Brown continues funding at current levels in the face of the Napolitano tuition hikes. The state General Fund provides 43% of the UC System budget (about $3 billion out of its total $7 billion) Jerry Brown, who is an Ex-Officio Regent, proposed to increase state funding by 4% during the next two years if the tuition doesn’t rise. He has hiked it 5% each of the last two years under the tuition freeze. Napolitano says those proposed increases are not sufficient.

To add insult to injury, 2 months ago, the UC regents gave pay raises of up to 20% to top administrators at UCSB, UCSC, UC Merced, and UC Riverside. Their salaries range from $383,000 to $485,000; last year UC Davis hired a PR person at a $260,000 salary. To put salt in the wound, the Governor of California earns $177,000; The President of the US $400K; the UC President $570K.

Brown offered ideas for the UC administration to cut its budget: “boosting online courses, awarding work experience credit, 3-year bachelor’s degrees, expanding its community college transfer numbers.” Furthermore, according to Brown, “the pressure of not having enough money can force creativity that otherwise cannot even be considered.”

Such budgetary shenanigans are not without precedent. In 2010 under former UC President Mark Yudof,, the California Regents voted 15-5 to hike tuition by 8% to close a budget gap of over $1 billion. That came a year after the regents hiked the tuition fees 32%. All that without even mentioning the unfunded pension plans.

Look on the bright side. According to the LA Times, even if the tuition increases to $15,500 in 5 years, the UC will still be less expensive than other top-ranked public universities such as the University of Virginia, or Michigan.  Additionally, families with annual incomes below $150,000 would receive financial help through the state’s middle-class scholarship program.

Frustrated California applicants might elect to abandon the UC System for Western University Exchange (WUE) schools, the University of Minnesota, Morris, whose out of state tuition continues to stay under $12,500, or Grove City College. There are less expensive alternatives available without the drama and circus atmosphere of the UC System. As Governor Brown implores, get creative.