BILL ANALYSIS Ó
AB 2064
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Date of Hearing: April 19, 2016
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 2064
(Travis Allen) - As Introduced February 17, 2016
SUBJECT: Public postsecondary education: tuition and mandatory
systemwide fees.
SUMMARY: Requires the University of California (UC) Regents and
the California State University (CSU) Trustees, to determine the
amounts of undergraduate tuition and mandatory fees and freeze
them at four-year cohorts. Specifically, this bill:
1)Requires the UC Regents and the CSU Trustees to determine the
amounts of undergraduate tuition and mandatory systemwide fees
for each incoming first-year class.
2)Stipulates that the tuition and mandatory systemwide fees set
for an incoming first-year class, as specified, shall not be
increased for that class, except under either or both of the
following situations:
a) At least four academic years have passed; and/or,
b) To reflect the percentage change, if any, in the
Consumer Price Index calculated by the Bureau of Labor
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Statistics of the United States Department of Labor during
the previous academic year.
3)Stipulates that the provisions in numbers one and two above,
inclusive, shall not apply to a student during the time the
student is taking a leave of absence to serve in the military.
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)Requires, under the Student Fee Act, UC and CSU follow
specific notice, consultation, and timeframe requirements when
approving student fee increases (Education Code (EC) Sections
66028 - 66028.6).
3)Confers upon the CSU Trustees the powers, duties, and
functions with respect to the management, administration, and
control of the CSU system (EC Section 66066).
4)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
(EC Section 67400).
5)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
Section 69530).
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FISCAL EFFECT: Unknown
COMMENTS: Background. Fee revenue works interchangeably with
General Fund support to fund the core instructional mission of
the public segments. The state's portion essentially subsidizes
the amount paid by students in the form of fees. Since 2007-08,
state support for the UC and CSU has declined significantly.
The charts below illustrate the resulting fluctuation in fees at
the UC and the CSU over the last several years.
------------------------------ ------------------------------
------------------------------
| CSU Mandatory Systemwide |
|Student Tuition/Fees Resident |
| Undergraduate |
------------------------------
|-------+----------+------------|
| Year | Fee | Percent |
| | Amount | Change |
|-------+----------+------------|
|2007-08| $2,772 | 10.0% |
| | | |
|-------+----------+------------|
|2008-09| $3,048 | 10.0% |
| | | |
|-------+----------+------------|
|2009-10| $4,026 | 32.1% |
| | | |
|-------+----------+------------|
|2010-11| $4,440 | 10.3% |
| | | |
|-------+----------+------------|
|2011-12| $5,472 | 23.2% |
| | | |
|-------+----------+------------|
|2012-13| $5,472 | 0% |
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| | | |
|-------+----------+------------|
|2013-14| $5,472 | 0% |
| | | |
|-------+----------+------------|
|2014-15| $5,472 | 0% |
| | | |
|-------+----------+------------|
|2015-16| $5,472 |0% |
| | | |
| | | |
| | | |
-------------------------------
Need for the measure. According to the author, "Due to constant
fee increases, extended graduation timelines, and the lack of
fiscal oversight, students of California are finding it
increasingly difficult to financially plan for their education."
The author contends that, "This law will stabilize tuition and
fee increases incurred by students, which will ensure that
students can financially plan for their college career."
Impacts of guaranteed tuition policies. According to an August
2015 study out of the University of Illinois at
Urbana-Champaign, entitled, "The Impact of Guaranteed Tuition
Policies on Postsecondary Tuition Levels and Other Outcomes: A
Difference-In-Difference Approach," a significant increase in
tuition levels occurs when institutions are subjected to
guaranteed tuition levels. The study also found that while a
guaranteed tuition law offers predictability in tuition levels
for students, the built in incentives appear to encourage
tuition increases, which is not beneficial to students and
families.
As found by the report, tuition freezes actually lead to higher
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tuition amounts for students. As currently drafted, this bill
stipulates that the tuition and mandatory systemwide fees set
for an incoming first-year class shall not be increased for that
class, as specified. This could result in unintended
consequences of incoming freshmen having to pay significantly
higher tuition and fees that would not be able to be spread
across all students.
The Committee may wish to consider if the Legislature should
pass a measure that could have the exact opposite outcome of the
stated goal of ensuring students' tuition and fees are
maintained at the lowest levels feasible.
Why a Freeze? The rational for enacting a four-year statutory
freeze is unclear. A fee policy allowing for modest increases
would still be predictable and would allow families to plan for
their college expenses.
California's Student Fee Act. The Student Fee Act (as described
in EC Sections 66028 - 66028.6) requires the UC and CSU to
follow specific notice, consultation, and timeframe requirements
when approving student fee increases. However, according to the
Legislative Analyst's Office (LAO) February 2016 Report,
entitled, "2016-17 Budget: Higher Education Analysis," the
state currently lacks a tuition policy. The LAO contends that a
statewide tuition policy establishes how tuition levels should
be adjusted over time. Furthermore, the LAO finds that tuition
and fee levels in California tend to follow a pattern of "flat
periods punctuated by sharp increases". The flat periods
correspond with years in which the state experienced economic
growth; the periods in which there is a steep increase,
generally correspond to periods when the state experienced a
recession.
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Negative consequences for students who take longer than
four-years to complete? This bill specifies that tuition and
fees set for an incoming first-class shall not be increased for
that class, except after at least four academic years have
passed or there is a need to reflect a change based in the
Consumer Price Index.
Due to a variety of reasons, many students do not complete their
undergraduate degrees in four-years. To note, it is estimated
that the time-to degree is approximately four years and one
quarter at UC and five to six years at CSU.
The Committee may wish to consider if this measure unfairly
targets students who, at no fault of their own, are unable to
graduate in four-years.
Impact for transfer students? This measure is silent on the fee
level that transfer students would be charged.
The Committee may wish to determine if this measure will have an
unintended consequence to transfer students and whether transfer
students should be entitled to the fee levels they would have
paid had they matriculated as freshmen.
Previous legislation. Several Assembly measures, in 2013, were
introduced that would have limited tuition increases and
establish long-term fee policies for UC and CSU. Ultimately,
the Committee and authors agreed to move forward a single fee
policy bill. AB 67 (Olsen, Chávez, and Gorell), which was
approved by this Committee, but subsequently held on Suspense
File in the Assembly Appropriations Committee, would have
prohibited UC and CSU from increasing undergraduate fees for
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California residents, until January 1, 2017, so long as
specified funding was provided to the segments in the Budget
Act.
REGISTERED SUPPORT / OPPOSITION:
Support
2 Individuals
Opposition
California State University
Analysis Prepared by:Jeanice Warden / HIGHER ED. / (916)
319-3960
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