BILL ANALYSIS Ó
AB 970
Page 1
Date of Hearing: June 9, 2011
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Marty Block, Chair
AB 970 (Fong) - As Amended: June 3, 2011
SUBJECT : Public postsecondary education: systemwide student
fees: student financial aid report.
SUMMARY : Requires the University of California (UC) and the
California State University (CSU) to follow specified
consultation and public noticing provisions prior to considering
an increase in mandatory systemwide undergraduate, graduate, and
professional student fees (fees) and requires UC and CSU to
return one-third of student fee revenue to institutional aid and
to report specified information to the Legislature annually
regarding the use of student fee revenues and the cost of
education. Specifically , this bill:
1)States legislative intent that California has been committed
to broad access to higher education, the increasing cost of
education is putting college out of reach for many students,
UC and CSU student fees have increased in recent years, and
fee increases should be accompanied by increased funding for
need-based student financial aid.
2)Creates the Working Families Student Fee Transparency and
Accountability Act, which establishes public noticing and
consultation time frames prior to fee increases, reporting
requirements, return-to-aid percentages, among other
provisions, for the UC Board of Regents and CSU Board of
Trustees.
3)Establishes the following policies relative to student
financial aid and mandatory systemwide fees at UC and CSU: a)
the state should understand the impact of the changes on
students; b) students should be consulted before fees are
increased; c) students should receive adequate notice of fee
increases; d) students should be provided with information
about financial aid; e) financial aid programs should be
aligned with the distinct financial needs of the respective
segment's student populations and student fee levels; and f)
every effort should be made to ensure increased transparency
on the uses of fee revenues and the rationale for making any
student fee increases.
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4)Prohibits UC and CSU from changing the terminology of
systemwide "fees" to "tuition."
5)Requires UC and CSU to consult with appropriate student
representatives through the recognized statewide student
associations and student fee advisory committees at least 90
days prior to publicly noticing a proposed increase in fees.
6)Requires the UC Regents and CSU Trustees to follow the
specified notification procedures, as follows:
a) Notice the fee increase in a public meeting agenda and
the notice shall include the following:
i) Justification and supporting facts for the fee
increase;
ii) An analysis of impacts on access, persistence, and
graduation of historically underrepresented students and
low-to-middle-income students, with a detailed
description of measures to mitigate the impacts of the
proposed increase in fees; and,
iii) A statement specifying the purposes for which any
revenues will be used.
b) Encourage, solicit and receive public comment on the
proposed fee increase for at least 60 days after providing
the public notice and to make the comments, with
appropriate responses to each of the comments, available to
the public at least 10 days prior to the meeting at which
the fees are noticed for action.
c) Delay implementation of the fee increase until at least
six months after the fee increase is adopted.
d) Notify their students when a fee increase has been
adopted and to simultaneously inform students about the
availability of financial aid and procedures for obtaining
that aid.
7)Requires the UC Regents and CSU Trustees to develop a
transparent methodology by April 2, 2012, for adjusting fees
consistent with the student fee policy principles set out in
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this bill, as follows:
a) Consider the impact on access, persistence, and
graduation for historically underrepresented students and
low- to middle-income students, and identification measures
to mitigate impacts on those student populations;
b) Consult with appropriate student representatives through
the recognized statewide student associations and student
fee advisory committees;
c) Formally adopt the methodology in open public meetings
of the respective boards; and,
d) Serve as the basis for any fee increases included in the
segments' budgets, which shall also specify the purposes
for which any revenues derived from an increase in fees
will be used.
8)Requires the UC Regents and CSU Trustees to set aside at least
33% of student fee revenues for institutional student aid and
to include information on their compliance with this section
through annual reporting on institutional financial aid per
existing law.
9)Requires the UC Regents and the CSU Trustees, commencing with
the 2012-13 academic year, to annually provide the following
information to the Legislature by February 1:
a) Detailed expenditures for revenues derived from student
fees,
b) Uses of institutional financial aid, and,
c) Information regarding the total cost of education per
student, categorized specifically by undergraduate and
graduate education costs, including fixed costs, variable
costs, administrative costs, instructional costs, and
student services costs.
10)Requires the Legislative Analyst's Office (LAO), commencing
with the 2012-13 academic year, to annually review by March 1,
institutional compliance with the policies set forth in this
bill, and report, in writing, to the Legislature findings,
conclusions, or recommendations regarding the implementation
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of these policies, including an assessment of the information
provided by the UC Regents and the CSU Trustees.
11)Requires CSAC to report to the Legislature no later than July
31, 2012, on the policies and interactions between various
state and federal financial aid programs, including the
interactions between systemwide and campus-based student fees,
institutional financial aid at UC and CSU, Cal Grants, and
federal financial aid programs, and requires the UC Regents
and CSU Trustees to cooperate with CSAC and provide any
information and data, including institutional financial aid
information and data, as requested by CSAC. Sunsets this
provision on January 1, 2016.
12)Includes the following definitions:
a) "Campus based fees" means the fees that are imposed on
students at individual campuses at UC and CSU that must be
paid by all registered students to whom the fees apply,
including (1) student-related services and programs,
including, but not limited to, referenda-based student
health insurance programs; (2) construction and renovation
of student buildings and other facilities such as student
centers and recreation facilities; and (3) authorized
student governments, registered campus organizations, and
student government-related and registered campus
organization-related programs, events, and other
activities.
b) "Mandatory systemwide fees" means the fees that all
students enrolled in UC or CSU, as applicable, are required
to pay in order to enroll in courses for the academic term
pursuant to any law or any policy adopted by its governing
board, as applicable.
c) "Regents" means the Regents of the University of
California.
d) "Trustees" means the Trustees of the California State
University.
e) "Resident" means a student who is exempt from paying
nonresident tuition pursuant to Chapter 1 (commencing with
Section 68000) of Part 41.
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EXISTING LAW :
1)Authorizes the UC Regents and the CSU Trustees to charge
various fees and prohibits certain fees from applying to
specified categories of students.
2)Provides that statutes related to UC (and most other aspects
of the governance and operation of UC) are applicable only to
the extent that the UC Regents make such provisions
applicable. (Education Code § 67400)
3)Confers upon the CSU Trustees the powers, duties, and
functions with respect to the management, administration, and
control of the CSU system. (EC § 66066)
4)Establishes the Cal Grant Entitlement Programs to provide
grant assistance for fee payment in the UC, CSU and private
institutions in California, to the extent that students are
financially and academically eligible for such support. (EC §
69530)
FISCAL EFFECT : Unknown
COMMENTS : This bill was referred to the Assembly Higher
Education Committee from the Assembly Floor on June 1, 2011,
pursuant to Assembly Rule 77.2, due to the significant policy
amendments placed in the bill since it left this Committee on
March 29, 2011. The current provisions have not been heard in a
policy committee.
Need for this bill . According to the author, "Current law
governing California's postsecondary institutions lacks needed
policies that guarantee our state will remain committed to
ensuring affordability and access at public colleges and
universities, and that all financially needy students have the
assistance they need to enroll in institutions of higher
education and reach their postsecondary education objectives."
The author notes that the state does not have a proper
accounting of the total costs of educating students at UC or CSU
or the actual uses of student fee revenues nor does the state
require advance public notice to students or require
consultation with students before fees are increased.
Affordability . On February 15, 2011, this Committee held an
oversight hearing on "Ensuring Affordability at California's
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Colleges and Universities," during which several themes emerged:
General Fund support for higher education has declined since
2007-08, and new fee revenue has offset those reductions.
(LAO)
While student fees remain lower than most states, the high
cost of living in California raises the overall cost of
attendance. (California Postsecondary Education Commission)
Financial aid programs have generally been spared, and about
half of students receive need-based aid to cover full tuition
costs. Further on average, UC and CSU students graduate with
modest student debt. (LAO and The Institute for Student
Access and Success)
Systemwide fees . There are several types of systemwide fees
charged by UC and CSU, and this bill would apply to each of
those fees, including application, undergraduate, graduate,
teacher credential, doctoral, and professional program fees.
Fee history . Through 1996, fees at California public
postsecondary institutions were governed by the Maddy-Dills Act,
which was enacted by the Legislature in 1985 to provide for a
statewide fee policy. The Act required fees to be gradual,
moderate and predictable; increases to be limited to 10% a year;
and fixed at least ten months prior to the fall term in which
they were to become effective. The policy also required
sufficient financial aid to offset fee increases. Even with
this policy, when the state faced serious budgetary challenges
the provisions of the Act were set aside in order to provide the
institutions some flexibility in dealing with the lack of state
General Fund support. In 1996, the Act was allowed to sunset,
and since that time, the state has had no statutory long-term
policy to set fees. Below is a recent history of UC and CSU
fees.
------------------------------ ------------------------------ ------------------------------
| CSU Mandatory Systemwide |
| Student Fees Resident |
| Undergraduate |
------------------------------
|-------+----------+------------|
| Year | Fee | Percent |
| | Amount | Change |
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|-------+----------+------------|
|1996-97| $1,584 | N/A |
| | | |
|-------+----------+------------|
|1997-98| $1,584 | 0.0% |
| | | |
|-------+----------+------------|
|1998-99| $1,506 | -4.9% |
| | | |
|-------+----------+------------|
|1999-00| $1,428 | -5.2% |
| | | |
|-------+----------+------------|
|2000-01| $1,428 | 0.0% |
| | | |
|-------+----------+------------|
|2001-02| $1,428 | 0.0% |
| | | |
|-------+----------+------------|
|2002-03| $1,500 | 5.0% |
| | | |
|-------+----------+------------|
|2003-04| $2,046 | 36.4% |
| | | |
|-------+----------+------------|
|2004-05| $2,334 | 14.1% |
| | | |
|-------+----------+------------|
|2005-06| $2,520 | 8.0% |
| | | |
|-------+----------+------------|
|2006-07| $2,520 | 0.0% |
| | | |
|-------+----------+------------|
|2007-08| $2,772 | 10.0% |
| | | |
|-------+----------+------------|
|2008-09| $3,048 | 10.0% |
| | | |
|-------+----------+------------|
|2009-10| $4,026 | 32.1% |
| | | |
|-------+----------+------------|
|2010-11| $4,429 | 10.0% |
| | | |
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|-------+----------+------------|
|2011-12| $4,884 |10.0% |
| | | |
-------------------------------
Fees and the budget . There is an implicit policy whereby
students and the state are expected to share educational costs,
but the relative proportions are dependent on the state's fiscal
situation. As a result, fees have increased steeply during
difficult budget years and then gradually declined when the
state's fiscal situation improved and more General Fund support
could be provided to UC and CSU (see chart above). As a result
of the most recent budget deficits, UC and CSU fees have
increased significantly: since 2007, fees have increased by 68%
at UC and 76% at CSU (see chart below). Both segments announced
at their May 2011 board meetings that fee increases will be
considered if the segments face additional significant cuts
beyond the recently approved $500 million reduction to each
segment's 2011-12 budget.
University Funding and Tuition Since 2007-08
----------------------------------------------------------------
| Academic Year |UC Budget | UC Fee | CSU | CSU Fee |
| |Reduction | Change | Budget |Change |
| | | |Reduction | |
|--------------------+----------+----------+----------+----------|
|2007-08 | None | 8.7% | None | 10.0% |
|--------------------+----------+----------+----------+----------|
|2008-09 | $201 | 7.4% | $172 | 10.0% |
|--------------------+----------+----------+----------+----------|
|2009-10 | $610 | 9.3% | $610 | 32.1% |
|--------------------+----------+----------+----------+----------|
|2009-10 midyear fee | -- | 15.0% | -- | -- |
|increase | | | | |
|--------------------+----------+----------+----------+----------|
|2010-11 | None | 15.0% | None | 5.0% |
|--------------------+----------+----------+----------+----------|
|2010-11 midyear fee | -- | -- | -- | 5.0% |
|increase | | | | |
|--------------------+----------+----------+----------+----------|
|2011-12 | $500 | 8.1% | $500 |10.0% |
| | | | | |
----------------------------------------------------------------
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Public notice and consultation . This bill provides that UC and
CSU must consult with students 90 days before noticing a fee
increase, observe a 60-day comment/response period, and cannot
implement fee increases approved by their boards until six
months after the date of adoption. In effect, to raise fees for
the following academic year (beginning in August), UC and CSU
will need to consult with students no later than mid-August of
the previous year so they could notice the fee increase at their
mid-November board meetings in order for a fee increase to be
voted upon at their mid-January meetings. The Committee may
wish to consider the following:
1)What is the effect of this policy if the annual Budget Act is
late?
2)How would these provisions impact the systems' ability to
respond to mid-year cuts?
3)What constitutes "student consultation?" The author may wish
to consider refining this process.
Return-to-aid . In recent years, UC and CSU have generally
returned 33% of student fee increases to their institutional aid
programs. This bill mandates 33% of all student fee revenues be
returned to aid.
1)This provision will likely require UC and CSU to make cuts in
other areas to increase funds to their institutional aid
programs.
2)This provision applies to undergraduate, graduate, and
professional programs, where a one-size-fits-all approach may
not be appropriate or in the state's best interests.
Terminology: fees v. tuition . This bill would prohibit UC and
CSU from changing the terminology of systemwide "fees" to
"tuition." California has a long-held policy that its public
higher education institutions be tuition-free. However,
various "fees" have been adopted over time, which have become
increasingly significant. The segments believe these fees now
resemble what would otherwise be labeled "tuition" (i.e.,
student charges for teaching expenses), and in November 2010,
the UC Regents and the CSU Trustees voted to change their
respective terminologies from systemwide "fees" to "tuition."
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Arguments in support . This bill's sponsors, the California
State Student Association and the University of California
Student Association, state that students have experienced
skyrocketing fee increases while existing financial aid programs
have been put at risk, balancing their budgets on the backs of
students and making financial planning impractical for students
and families. The sponsors believe this bill maintains the
promise of affordability and access to higher education by
adding stability and predictability for setting mandatory
systemwide fees.
Arguments in opposition . UC and CSU both express concern that
this bill looks at fees separate and apart from the budget,
noting that any fee methodology is dependent on state funding.
UC and CSU also challenge the bill's findings regarding their
affordability, transparency, and accountability, noting that
they engage in extensive consultation with stakeholders,
including students, and publish detailed information about the
uses of revenue and financial aid in their annual budgets and
financial aid reports, respectively, and as part of the annual
budget process.
Previous legislation . SB 969 (Liu, 2010), which died on the
Assembly Floor, would have required UC and CSU to develop a fee
methodology and to notice fee increases three months prior to
their implementation.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
Local 3299
California State Student Association
The Greenlining Institute
University of California Student Association
Opposition
California State University
University of California
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960
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