(Nov. 16, 2011) — The California State University Board of Trustees today unanimously approved its 2012-2013 budget, which requests that the governor and legislature provide an additional $333 million in state funding for the upcoming fiscal year. The board also approved an increase in tuition of $498 a year that will go into effect for fall 2012. The vote was 9 to 6*.
“The additional revenue requested in this budget is critical to addressing the deep and painful cuts the CSU has had to absorb, and to ensure that students have access to needed courses and support services,” said CSU Chancellor Charles B. Reed.
“While there is still so much uncertainty in the state’s fiscal condition, we wanted to provide students and parents with as much notice as possible that tuition will go up in the fall. That said, we must all work with state leaders to restore the funding needed to maintain access and quality for CSU students.”
CSU is also actively reviewing options to more effectively package financial aid with the goal of providing more grant aid to a broader number of students.
“We recognize that increased tuition impacts many of our students in varying degrees, so we will be looking at financial aid options for students who have not to this point been eligible for full financial aid,” said Reed.
Under CSU’s current financial aid, students from households making $70,000 or less on average pay no tuition. Since 2007, annual financial aid to CSU students has increased nearly $800 million, with grants, scholarships and waivers making up $475 million of this total.
In two of the last four fiscal years, state funding to the CSU has been dramatically reduced, forcing the board to approve sizable tuition fee increases. However, increases in revenue from tuition hikes – after setting aside one-third for financial aid – have not kept pace with state funding cuts. For the current fiscal year 2011-2012, tuition increases raised approximately $300 million, but CSU’s budget was cut by $650 million, with another $100 million trigger cut looming. This would reduce CSU state funding to $2 billion or a year-over-year reduction of 27 percent.
The approved budget request for 2012-2013 assumes that any additional “trigger cuts” that occur in the current fiscal year will be one-time and not affect the ongoing base of state support the CSU receives.
The budget plan identifies increased funding needs of $535.6 million, and asks the legislature for a total increase of $333 million in state general funds. Approximately $64 million in revenue will come from tuition fee revenues associated with enrollment growth of 5 percent or approximately 20,000 students, and $138 million from the tuition fee increase. In addition, included in the budget ask is a 3 percent compensation increase for all employees (subject to collective bargaining for represented employees), funding for the Graduation Initiative and related efforts for student advising and counseling, as well as funding for increased mandatory costs including employee health care benefits.
Specific expenditure increases include:
Enrollment growth (5 percent) $155 million
Mandatory costs (health benefits, energy) $ 26 million
Compensation increase (3 percent “pool”) $ 85 million
Graduation Initiative /Student Success $ 58 million
Urgent maintenance needs $ 30 million
Information technology infrastructure $ 20 million
Tuition for full time undergraduates in fall 2012 would rise from $5,472 to $5,970. Including the CSU average of campus-specific mandatory fees of $1,047, total fees would average $7,017. Approximately 45 percent of CSU undergraduates would not pay the tuition fee increase due to grants or aid.
CSU provides a total of $2.0 billion in financial aid for students each year, and most CSU bachelor degree recipients graduate without any student loan debt. Types of financial aid provided to CSU students includes:
• $700 million State University Grants
• $611 million Pell Grants
• $350 million Cal-grants
• $270 million American Opportunity Tax Credit
• $54 million fee waivers
• Total excludes subsidized federal loans
*Ayes: Hauck, Mehas, Chandler, Monville, Carter, Achtenberg, Farar, Linscheid, Kung
Nos: Cheyne, Glazer, Mendoza, Newsom, Torlakson, Guzman
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NOTE: The Committee on Finance’s presentation on the 2012-2013 support budget, financial aid and tuition fees to the CSU Board of Trustees on November 16, 2011 can be found here.