University of California: The hidden cost of tuition hikes

By Katy Murphy

If the University of California hikes its fees, defying the governor’s tuition freeze, students won’t be the only ones footing the bill. Taxpayers would likely end up paying an extra $45 million next year alone, and at least $250 million more annually by 2019 — for their share of the rising costs.

As tuition soars, so does taxpayer-funded financial aid, becoming a larger — though often-overlooked — piece of the UC funding picture. Each time the state cut the university’s budget during the Great Recession, UC hiked tuition, and the state, in turn, gave ever-greater sums of tuition grants to help low-income students pay for their UC educations. UC itself last year granted students $775 million out of its own funds.

Fifty-five percent of in-state undergraduates have all of their tuition covered through a combination of state, federal and university grants; another 14 percent receive some subsidy. Just 31 percent pay the full price, $12,192 this year.

For the state, the main vehicle for tuition aid is Cal Grants, into which it invests hundreds of millions of dollars. Gov. Jerry Brown reminded university regents of that fact as they railed about the loss of state aid earlier this week.

“When you talk about the state’s disinvestment, don’t neglect the Cal Grant program,” he said.

While the state made nearly $1 billion in cuts to the UC system between 2008 and 2012, an analysis of student aid shows the state at the same time increased UC’s Cal Grant awards by nearly $400 million to help students cover their rapidly rising tuition bills.

By 2013, the state spent about $773 million on Cal Grants for UC students alone — up from $339 million in 2008, according to preliminary figures posted on the university’s website. Although the governor has yet to propose Cal Grant amounts for next year’s budget, UC assumes the grants will continue to keep pace with tuition, said a spokeswoman, Dianne Klein. Earlier this month, UC financial aid director Chris Carter said the same thing in a letter to students.

“I write to reassure you that if tuition does increase, financial aid resources are expected to increase, too,” he said.

Left in the lurch are the other Californians attending UC: those who pay some or all of their tuition, in addition to the substantial costs of room, board and books — which drives the total cost well higher than $30,000 a year.

Many of them are middle-class. “Those are the folks — middle class and up — that have to figure out, ‘How do I do this?'” said Dean Florez, a former state senator and CEO of the 20 Million Minds Foundation.

For some of those students, though arguably in a better position to pay, even a small increase — like the $600 hike on the table for next year — can hurt, said Sadia Saifuddin, a student regent.

“Six hundred dollars may not seem like a lot, but that’s almost an entire month’s rent for some students who are barely making it by as it is,” Saifuddin told the regents. “And I was one of those students.”

During her sophomore year at Cal, she said, she learned she would no longer be eligible for financial aid because her family income had risen above $80,000. But her parents — with four other children to support — couldn’t make up the difference, and so she worked four jobs, dropping out of her extracurricular activities and falling into depression.

“My grades plummeted, as basic survival became more of a priority than getting A’s,” she said.

Many anticipate relief from a new scholarship aimed at the middle income level, but it’s unclear whether the Middle Class Scholarship will be able to cover up to 40 percent of their tuition, as promised. If the greater costs put a strain on the fund, it is possible the scholarships would be reduced in size or number.

Assembly Speaker Toni Atkins said she worried the tuition increases would “nullify” what the Legislature put in place to help those students.

“I am extremely disappointed the UC Regents voted to raise tuition and impose new burdens on middle-class students and their families,” she said in a statement after the vote.

Atkins has a budget proposal of her own: Give UC $50 million — half of what the university has said it needs to avoid a tuition increase — as long as it keeps tuition stable and enrolls more Californians.

Were UC and the Legislature to agree, that scenario would cost the state about as much as it would to shield low-income students from the fee hikes.

[Source]: San Jose Mercury News