BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 969
AUTHOR: Florez
INTRODUCED: As proposed to be amended
FISCAL COMM: Yes HEARING DATE: April 21, 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, and (2) prohibits annual mandatory systemwide fee
increases from increasing by more than the implicit price
deflator for state and local government for goods and
services, as defined.
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.
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
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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, as proposed to be amended (deletes current
contents and replaces):
1) Establishes a student fee policy for resident
undergraduate students enrolled in the University of
California (UC) and California State University (CSU),
that among other things:
a) Specifies the total cost of a public
postsecondary education is a
shared responsibility of students, families, and
the State of California; with the State bearing the
preponderance of responsibility for funding.
b) Specifies adjustments in resident student fees
should take into consideration a number of factors,
including the total cost of educating a student,
the appropriate share of the costs of instruction
to be paid by the student, and information
concerning families' ability to pay.
c) Student financial aid policy and programs
should ensure affordability
for students from all income levels. Efforts
should be employed to mitigate any negative impact
on financially needy students.
d) To the extent that budget decisions are made
in a timely manner, adequate notice should be
provided to students regarding future student fees,
allowing them greater time to prepare for the fees
to be assessed.
e) In order to ensure access is not precluded for
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any eligible student, all current and prospective
students should be provided with timely information
concerning student financial aid.
f) Revenues derived from student fees should
remain within the respective university system's
budget in order to provide benefits to the students
enrolled with the system.
3) 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.
1) Prohibits annual mandatory systemwide fee increases from
increasing by an amount exceeding the percentage change
in the annual average value of the Implicit Price
Deflator for State and Local Government Purchases for
Goods and Services, as specified. Requires the total
amount of mandatory systemwide fees not to exceed the
limits prescribed in #3 above.
2) Prohibits any increase in mandatory systemwide fees
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.
3) Requires the regents and trustees to develop a rational
and transparent methodology for adjusting mandatory
systemwide student fees consistent with the student fee
policy principles prescribed in #1. The methodology
shall be developed in consultation with appropriate
student representatives and formally adopted in open
public meetings.
4) Requires the governing boards, following the final
action on student fees to notify students of the fee
level to be assessed, provide information on the
availability of student financial aid, and the
procedures for obtaining that aid.
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5) Requires the California Postsecondary Education
Commission by March 1 of each year to review
institutional compliance with the policies established
in this measure, and report findings, conclusions, or
recommendations regarding the implementation of the
policies.
6) Make the following definitions:
"Average total cost of education" as dividing
"the total cost of education" for the UC and CSU,
whichever is applicable by the total number of
full-time equivalent students enrolled at that
segment.
"Total cost of education" generally as the sum of
appropriations and projected revenues from: the
General Fund, higher education fees and income, and
state Lottery funds.
"Mandatory systemwide fees" as the fees that all
students enrolled in the CSU or the UC 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.
1) 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.
2) Makes findings and declarations relative to student
fees, historical investment of state fiscal resources
for higher education, and appropriate funding of
need-based student financial aid.
STAFF COMMENTS
1) Senate Education Committee . On April 14, four student
fee policy measures - SB 917 (Denham), SB 969 (Florez),
SB 1199 (Liu), and SCA 26 (Denham) were heard in
committee, but not voted on. The direction of the
committee was (1) to not approve multiple student fee
measures, but rather a single measure, if any; and (2)
direct the authors' to settle on one measure and with
the assistance of committee staff, make an attempt to
draft a single measure for vote at our April 21 hearing.
This measure, as proposed to be amended, is the product
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of those discussions.
2) Need for the bill : According to the various authors,
college students are being subjected to significant, and
for many, unaffordable increases in student fees. Tying
student fees to the overall cost of educating a student
would provide more predictability for families, the
universities, and the state, but also, the process of
establishing and adjusting fees would provide a measure
of transparency and accountability for university
operations.
3) 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
State tends to allow an increase in student fees.
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:
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--------------------------------------------
| 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% |
|--------------+--------------+--------------|
| 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% |
|--------------+--------------+--------------|
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| 2008-09 | $3,048 | 10.0% |
|--------------+--------------+--------------|
| 2009-10 | $4,026 | 32.1% |
|--------------+--------------+--------------|
| 2010-11 | $4,429 | 10.0% |
| | | |
--------------------------------------------
4) Primary funding sources of the UC and CSU . 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.
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
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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.
6) 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. 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?
7) 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
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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
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.
8) 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 on this version.
OPPOSITION
None received on this version.
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