BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 1199
AUTHOR: Liu
INTRODUCED: February 18, 2010
FISCAL COMM: Yes HEARING DATE: April 21, 2010
URGENCY: No CONSULTANT: Daniel
Alvarez
SUBJECT: Public Postsecondary Education: Mandatory systemwide
resident
student fee policy.
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 state policy regarding mandatory
systemwide resident fees and financial aid by, (1)
prescribing that students pay an amount equal to a percentage
(yet to be determined) of the cost of instruction
(undefined), (2) student fees cannot increase by an amount or
percentage (yet to be determined) on an annual basis, (3) any
annual adjustment would be tied to changes in the Consumer
Price Index, and (4) lays out the process that the University
of California (UC) and California State University (CSU) must
follow prior to the adoption of fee increases.
BACKGROUND
At present, there is no statutory guiding policy on student
fees beyond the current fiscal condition and the stated needs
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of UC and CSU, as negotiated in the budget deliberations.
However, current law does prescribe the level of student fee
increases at the California Community Colleges (CCC).
(Education Code 76300)
Current law further provides that statute 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) Enacts a student fee policy for all students enrolled in
the state's
public universities, 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) Changes 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
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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
any eligible student, all current and prospective
students should be provided with timely information
concerning student financial aid.
f) Students enrolled in graduate and professional
programs that provide the prospect of significant
personal economic returns may be subject to higher
student fees.
g) 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.
i) Specifies legislative intent that
all of the following occur:
Undergraduate students at the (UC) and (CSU)
should pay student fees that equal an
unspecified percent of the overall cost of
instruction at those institutions; and
ii) Undergraduate student fees should
not be increased by more than some unspecified
percent in any academic year.
iii) After student fees reach the
unspecified level prescribed as a percent of
the overall cost of instruction, the student
fee amount should be adjusted annually by the
annual adjustments in the Consumer Price
Index.
1) Requires the Regents of UC and the Trustees of CSU to
bear the primary responsibility for adjusting mandatory
systemwide resident student fees at their campuses.
2) 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.
3) Requires the regents and trustees, at a minimum, to
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mitigate any negative impact that the methodology may
have on financially needy and underrepresented students,
average time to degree completion, and the total cost to
students obtaining a degree. In addition, the UC and
CSU shall annually report to the Legislature and
Governor concerning their analysis of the impact
associated with implementation of its student fee
methodology.
4) Requires the regents and trustees to annually propose an
adjustment in the level of their respective mandatory
systemwide resident student fees; and assume no state
General Fund will be made available to backfill for any
proposed changes in student fee levels.
5) Requires any adjustment in student fees to be discussed
and acted on in an open public meeting, consistent with
the state's open meeting law provisions.
6) Requires the regents and trustees to discuss and act
upon any proposed changes in student fees by no later
than each November 30, in order for student fee changes
to take effect the academic term commencing after July 1
of the following calendar year.
7) Declares legislative intent to allow student fees to
increase or decrease in a manner consistent with the
respective methodologies adopted by the regents and the
trustees. And if additional state General Fund resources
become available, the Governor and Legislature are
encouraged to utilize such funds for other ongoing
operational needs of each of the institutions, rather
than backfill for proposed changes in fee levels.
8) Specifies that if the level of student fees to be
assessed in an upcoming academic year differ from the
level previously approved by the UC and CSU, that action
must take place in an open public meeting.
9) 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.
10) Requires the governing boards to report by November 30
in any fiscal year in which any of the following
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situations occur: (A) any changes to the student fee
methodology, (B) any changes to the student financial
aid policies or student financial aid funding levels, or
(C) if proposed student fee or student financial aid
policies are deemed to have a possible negative impact
on disadvantaged or financially needy students.
11) 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.
STAFF COMMENTS
1) Need for the bill : According to the author's office,
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.
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.
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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 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 tables below illustrate UC and
CSU mandatory systemwide student 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% |
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|--------------+--------------+--------------|
| 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% |
|--------------+--------------+--------------|
| 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% |
| | | |
--------------------------------------------
4) Primary funding sources of the UC and CSU . The funds
for UC and CSU generally come from a combination of
state general fund, student fee revenue, and to small
extent state lottery. In recent years, the state general
fund's contribution has annually 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 (GF) supported programs to assist in
balancing the overall GF budget; the choices generally
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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?
6) What is the actual cost of instruction ? This measure
does not define "the cost of instruction" nor specify
the percentage of the cost of instruction that students
would be required to pay. Does this definition provide
sufficient clarity? According to information provided
by the Legislative Analyst Office, we do not have
adequate data on what it actually costs to educate a
student in UC or CSU; we simply know what we spend each
year.
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 fee and
financial aid policy in 1993 that set a policy goal to
cover the State University Fee for financially needy
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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
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:
SB 917 (Denham) requires any fee increase
adopted by the Trustees of CSU (1) from becoming
effective before 180 days have elapsed from date of
adoption, and (2) limiting any increase in
mandatory systemwide student fees from exceeding 10
percent for the immediately preceding fiscal years.
SCA 26 (Denham) constitutional changes similar
to SB 917 that would apply only to the University
of California.
SB 969 (Florez) establishes a student fee
policy that places limits on increases in mandatory
systemwide student fees, establishes an upper limit
that student fees could never exceed based on the
overall cost of instruction, and beginning 2011-12
places a prohibition on undergraduate fee increases
to no more than five percent.
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SUPPORT
None received.
OPPOSITION
The California State University