BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 969
AUTHOR: Florez
INTRODUCED: February 5, 2010
FISCAL COMM: Yes HEARING DATE: April 14, 2010
URGENCY: No CONSULTANT:Daniel Alvarez
SUBJECT : Public postsecondary education: mandatory
systemwide student fees.
KEY POLICY ISSUES
What should the state's guiding principles and objectives be
in a student fee policy?
What explicit expectation should there be, between the state
and students, in sharing of the cost of a public higher
education?
Should guiding principles and objectives be flexible enough
to allow for special circumstances and changing fiscal
conditions?
SUMMARY
This bill establishes a student fee policy that (1) places an
upper limit on mandatory systemwide student fees, not to
exceed a fixed percentage of the cost of education, as
defined, (2) prohibits student fees from ever increasing
beyond the amount a student paid at the time of enrollment,
and (3) prohibits annual mandatory systemwide fee increases
for each new cohort of undergraduate students at the
University of California (UC), California State University
(CSU), and California Community Colleges (CCC) from exceeding
five percent of the preceding academic year.
BACKGROUND
At present, there is no statutory guiding policy on student
fees beyond the current fiscal condition and the stated needs
of UC and CSU, as negotiated in the budget deliberations.
However, current law does prescribe the level of student fee
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increases at the California Community Colleges. (Education
Code 76300)
Current law further 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 Regents of UC make
such provisions applicable. (EC 67400)
Current law confers upon the Trustees of the CSU the powers,
duties, and functions with respect to the management,
administration, and control of the CSU system. (EC 66066)
Current law 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)
ANALYSIS
This bill :
1) Makes statutory findings and declarations relative to
the erratic and steep nature of student fee increases
over the past few years, the state is shifting a greater
share of the costs of attaining a higher education to
students and families, and leaving students and families
unable to realistically plan for the future.
2) Specifies legislative intent to do the following:
a) Limit the increases in student fees by
bringing predictability and consistency to fee
levels over time.
b) Enact a rational, moderate, and predictable
fee policy that recognizes the partnership between
the state, students, and families.
c) Ensure that the share of costs that students
and families pay remains below the national average
and reflects a reasonable contribution from
students and families.
3) Defines "average total cost of education" as dividing
"the total cost of education" for the UC, CSU, or the
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CCC, whichever is applicable by the total number of
full-time equivalent students enrolled at that segment.
4) Defines the "total cost of education" generally as the
sum of appropriations and projected revenues from; the
General Fund, higher education fees and income, state
Lottery funds, and reimbursements.
5) Requires that the level of mandatory systemwide resident
undergraduate fees for any given academic year cannot
exceed the following:
University of California: 40 percent of the
average total cost of education.
California State University: 30 percent of the
average total cost of education.
6) Specifies legislative intent that student fees at CCC
not exceed 10 percent of the average total cost of
education.
7) Prohibits any segment of public higher education from
charging mandatory systemwide resident undergraduate
fees to a student who commences enrollment in an
undergraduate degree program at the respective segment
during the fall term of the 2011-12 academic year, or
any academic term thereafter, in an amount that is
greater than what the fees that are in effect for the
academic term at the time the student commenced
enrollment in the undergraduate degree program.
8) Prohibits annual mandatory systemwide fee increases for
each new cohort of undergraduate students at the UC and
CSU from exceeding five percent of the preceding
academic year. Requires the total amount of mandatory
systemwide fees not to exceed the limits prescribed in
#5 above.
9) Declares legislative intent that fees charged to
students enrolled in the California Community Colleges
should increase by no more than five percent of the fees
charged to students in the immediately preceding
academic year, subject to the limit prescribed in #5 and
#6 above.
10) Prohibits any increase in mandatory systemwide fees
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charged to resident undergraduate students from taking
effect until six months have elapsed from the date in
which the fee increase was adopted. However, in no case
shall mandatory systemwide fees exceed the levels
prescribed in #5 and #6 above.
11) Requests the Regents of the University of California to
adopt policies for increases in mandatory systemwide
fees charged to students that are consistent with this
measure.
STAFF COMMENTS
1) Need for the bill : According to the author's office,
California families have been hit hard by recent spikes
in student fees. Moreover, data on resident
undergraduate fees shows that year over year fee levels
have been erratic, unpredictable, and have left families
unable to plan for the future.
2) What is California's current fee policy for UC and CSU ?
As previously stated, there is no real guiding policy
beyond the current fiscal condition and the stated needs
of UC and CSU, as negotiated in the budget
deliberations.
Previous statutory higher education student fee policy,
the Maddy-Dills Act, sunset in 1996 and, since then, the
state has had no long-term policy regarding the way in
which mandatory student fees are determined. The
Maddy-Dills Act required fees to be (1) gradual,
moderate and predictable, (2) limited fee increases to
not more than 10 percent a year, and (3) 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. However, even
with this policy, when the state faced serious budgetary
challenges the statute was "in-lieued" in order to
provide the institutions some flexibility in dealing
with the lack of state General Fund support.
3) Fees have fluctuated in response to the State's fiscal
condition : When faced with an upswing in state
revenues, the State has tended to decrease or freeze
student fees as it did for 2006-07, and when faced with
difficulty in reaching a balanced State Budget, the
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State tends to increase fees, as in proposed for
2007-08, thus creating the situation described by the
authors. Families find that when their incomes go up,
fees go down, and when they are faced with stagnant or
decreased income, their fees go up. Such changes happen
annually in a manner that makes it hard to plan ahead
for college costs. The charts below illustrate UC, CSU
and community college fees over a period of years:
--------------------------------------------
| UC |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
|--------------+--------------+--------------|
| 1996-97 | $3,799 | N/A |
|--------------+--------------+--------------|
| 1997-98 | $3,799 | 0.0% |
|--------------+--------------+--------------|
| 1998-99 | $3,609 | -5.0% |
|--------------+--------------+--------------|
| 1999-00 | $3,429 | -5.0% |
|--------------+--------------+--------------|
| 2000-01 | $3,429 | 0.0% |
|--------------+--------------+--------------|
| 2001-02 | $3,429 | 0.0% |
|--------------+--------------+--------------|
| 2002-03 | $3,834 | 11.8% |
|--------------+--------------+--------------|
| 2003-04 | $4,984 | 30.0% |
|--------------+--------------+--------------|
| 2004-05 | $5,684 | 14.0% |
|--------------+--------------+--------------|
| 2005-06 | $6,141 | 8.0% |
|--------------+--------------+--------------|
| 2006-07 | $6,141 | 0.0% |
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|--------------+--------------+--------------|
| 2007-08 | $6,636 | 8.1% |
|--------------+--------------+--------------|
| 2008-09 | $7,126 | 7.4% |
|--------------+--------------+--------------|
| 2009-10 | $8,958 | 25.7% |
|--------------+--------------+--------------|
| 2010-11 | $10,302 | 15.0% |
--------------------------------------------
--------------------------------------------
| CSU |
| Mandatory Systemwide |
| Student Fees |
| Resident Undergraduates |
--------------------------------------------
|--------------+--------------+--------------|
| | | |
| Year | Fee Amount | Percent |
| | | Change from |
| | | Prior year |
|--------------+--------------+--------------|
| 1996-97 | $1,584 | N/A |
|--------------+--------------+--------------|
| 1997-98 | $1584 | 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% |
|--------------+--------------+--------------|
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| 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% |
| | | |
--------------------------------------------
---------------------------------------------------
| California Community Colleges |
| Student Fees |
---------------------------------------------------
|------------+------------+------------+------------|
| | | | |
| Year | Fee Amount |Annual FTES | Percent |
| | (per unit) | Amount |change from |
| | | (assuming | prior year |
| | | 30 units / | |
| | | year) | |
|------------+------------+------------+------------|
| 1996-97 | $13 | $390 | N/A |
|------------+------------+------------+------------|
| 1997-98 | $13 | $390 | 0.0% |
|------------+------------+------------+------------|
| 1998-99 | $12 | $360 | -7.7% |
|------------+------------+------------+------------|
| 1999-00 | $11 | $330 | -8.3% |
|------------+------------+------------+------------|
| 2000-01 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2001-02 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2002-03 | $11 | $330 | 0.0% |
|------------+------------+------------+------------|
| 2003-04 | $18 | $540 | 63.6% |
|------------+------------+------------+------------|
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| 2004-05 | $26 | $780 | 44.4% |
|------------+------------+------------+------------|
| 2005-06 | $26 | $780 | 0.0% |
|------------+------------+------------+------------|
| 2006-07 | $26 | $780 | 0.0% |
|------------+------------+------------+------------|
| 2007-08 | $20 | $600 | -23.0% |
|------------+------------+------------+------------|
| 2008-09 | $20 | $600 | 0.0% |
|------------+------------+------------+------------|
| 2009-10 | $26 | $780 | 30.0% |
|------------+------------+------------+------------|
| 2010-11 | $26 | $780 | 0.0% |
| | | | |
---------------------------------------------------
4) Primary funding sources of the UC, CSU, and the
community colleges . The funds for UC and CSU generally
come from a combination of state general funds, student
fee revenue, and to small extent state Lottery. In
recent years, the state general fund's contribution has
been around $3 billion for UC and $2.5 billion for the
CSU, respectively. However, the recent state budget
crisis has forced the state to make reductions to
various state programs, including support for UC and
CSU. A portion of these reductions will be backfilled
with federal stimulus funds and revenue from student fee
increases.
Recent reductions to UC and CSU's general fund support
have largely been unallocated. In general, the trustees
have been given discretion to decide how these
reductions should affect employee salaries, benefits,
student enrollment levels, and other expenditures.
For community colleges in 2009-10 funding comes from
Proposition 98 ($3.7 billion), local property taxes
($1.9 billion), student fee revenue ($365 million), and
a smaller portion from the state Lottery.
The impacts of the recent budget cuts vary widely
between community college campuses, because some
districts had greater financial reserves that they were
able to use to backfill the state cuts. It is important
to note that the ARRA funds and local financial reserves
were largely one-time funds, so it is possible that if
those funds are not backfilled with other revenue there
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will be reductions to course selections and student
services.
5 State General Fund support is critical and what is the
State's commitment? This measure specifies legislative
intent regarding the partnership between students,
families, and the state. However, the measure is silent
regarding any required level of state support for the
operation of each of the public segments of higher
education. If overall State budget constraints
continue, as projected by the long-range forecasts of
both the Legislative Analyst and the Department of
Finance, there are limited areas of discretionary state
General Fund supported programs to assist in balancing
the overall GF budget; the choices generally are public
safety, higher education, and health and human service
programs.
Limiting student fees increases, no matter how
well-intentioned, will constrain an already depleting
resource base for our higher education segments. If the
premise of this bill is that the state should not
balance its higher education budget on the wallets of
families in hard times - then what should the State's
commitment be to funding public higher education? If the
bottom line is creating a stable affordable process,
what are students/families actually buying? Going to an
institution where courses are not offered or are limited
in supply, or being in instructional facilities that are
not well maintained generally defeats the purpose of
affordability and quality. What is the appropriate level
of funding required from the General Fund? In recent
budget hearings, the Legislative Analyst considers
2007-08 to be the most recent "normal" year for the
higher education segments.
1) What is the actual cost of education ? This bill
prescribes a specified formula for determining the "cost
of education" which includes, among other things,
reimbursements, income, and fee revenue. What are higher
education income and reimbursements? Should fee revenue
be the net amount after the 20% - 30% of student fee
revenue set aside for institutional financial aid at UC
and CSU? Does this definition provide sufficient
clarity?
2) Why are the community colleges part of this measure?
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According to information gathered by the California
Postsecondary Education Commission (CPEC), annual
student fees at the community colleges are 49th out of
the 50 states in terms of student fee levels; couple
this with the Board of Governor fee waiver program
benefiting 30 percent of all students, it appears the
CCC already have achieved the goal of having students
paying well below the national average.
3) Student financial aid . As previously stated, the state
established the Cal Grant Entitlement Programs to
provide grant assistance for fee payment in UC, CSU and
private institutions in California, to the extent that
students are financially and academically eligible for
such support. The majority of student financial aid is
provided through either federal or state administered
programs (e.g. federal Pell Grants or state Cal Grants).
In addition to this aid, the CSU and UC campuses also
directly administer some financial aid programs
including specialized grants, loans and work study, some
which are derived from return-to-aid (typically 25% to
33%) in order to mitigate the impact of higher fees and
other costs on undergraduate students with financial
need.
In addition, the CSU Board of Trustees adopted a
financial aid policy in 1993 that set a policy goal to
cover the State University Fee for financially needy
students. In response to Trustee policy, to the maximum
extent possible, the CSU offsets the State University
Fee for low and middle-income students utilizing the
State University Grant and Cal Grant programs to promote
access and ensure affordability for students with the
least ability to pay. While all CSU students may not be
eligible for grants, campuses construct financial aid
packages with work study and loans after grants to
minimize student indebtedness.
In 1994, the University of California adopted a
financial aid policy that established the guiding
principles of the University's financial aid programs.
These principles are reflected in a framework for
determining the components of a student's financial aid
package. The framework generally (1) acknowledges the
student's total cost of attendance, (2) requires a
financing partnership between students, the state, and
the university, (3) expects all students to make a
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contribution from loans and employment, and (4) allow
for flexibility for students in deciding how to meet
their expected contribution and for campuses in serving
their student bodies.
For community college students, affordability is
preserved through the Board of Governors' (BOG) fee
waiver program. This entitlement program is designed to
ensure community college fees will not pose a financial
barrier to any California resident. It accomplishes
this by waiving the fees for all residents who
demonstrate financial need. In recent years, about 30
percent of all community college students (representing
40 percent of all units taken) have received BOG fee
waivers.
9) Related legislation . The following bills are also on
the agenda for the committee's consideration today:
SCA 26 (Denham) would amend the State
Constitution and impose upon the University of
California a waiting period of 180 days before
mandatory student fees could take effect, and
limits annual fee increases to no more than a
cumulative 10 percent over the preceding academic
year.
SB 917 (Denham), similar to SCA 26, however
the application of the provisions in the measure
would effect the California State University.
SB 1199 (Liu) requires the governing boards of
the UC and CSU to develop student fee increase
methodologies consistent with specified direction,
and includes many of the same concepts found in SB
969.
SUPPORT
None received.
OPPOSITION
California Federation of Teachers
California State University
University of California
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