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CSU Tuition hike hinges on Prop 30

POSTED September 17, 2012 5:57 p.m.

California State University Trustees will consider adopting a triggered, mid-year tuition increase this week, in response to a potential $250 million “trigger” budget cut to the CSU should Proposition 30 fail in November.

The tuition hike  – in addition to other budget savings measure – are unavoidable should voters turn down Prop 30, according to CSU Chancellor Charles Reed.

“It is clear that we cannot simply cut our way out of another $250 million hit to our budget,” Reed said.  “We need to take a balanced approach in terms of cost reductions and revenue enhancements.”

Prop 30, backed by Gov. Jerry Brown (D), would raise income tax on earnings over $250,000 for five years, and increase sales and use taxes by ½ cent for four years. The revenues would go toward maintaining education spending; without Prop 30 funds, the CSU faces a trigger cut which would reduce state support to only 61 percent of its 2007-2008 high, down $1.2 billion in total.

Should Prop 30 fail, tuition for in-state students would increase 5 percent, $150 per semester, effective January 2013. The move would generate $58 million in additional revenue for the CSU.

The increase would not be accompanied by additional financial aid for affected low-income students. Per the CSU, the tuition hike would need to total $225 to produce the same net revenue, should a financial aid increase be included.

The triggered hike would bring the base CSU cost for the 2012-2013 school year to $6,120, or 242 percent of the 2006-2007 tuition of $2,520. A single semester would cost $3,135 – nearly 25 percent more than an entire year six years ago.

Nonresident students would face an even sharper fee increase, amounting to 7 percent or $810 per year.

 

Fees could fall, if Prop 30 passes

The fee hike could yet be averted, and tuition could yet fall this year.

Should Prop 30 succeed, the board would rescind a 9.1 percent, $249 per semester tuition hike previously approved for the already-started fall 2012 semester. As part of Prop 30, the state would provide $125 million in extra funding next fiscal year if the CSU reverses this pending fee increase.

But in the short term, the CSU would lose $132 million in revenue this budget year. The CSU would also be forced to reprocess financial aid and grants, or issue refund checks. Approximately $50 million of losses this year would be counteracted by one-time balances in the Continuing Education Revenue Fund.

The CSU will look to save money in other areas, such as a new health care plan offering employees reduced benefits. New administrative efficiencies, including technical improvements, are expected to save $10 million.

Individual campuses will also continue to work to cut costs, the CSU says, including reducing faculty assigned time, workforce attrition, layoffs or non-renewals of contracts.

 

Some new fees, regardless

Regardless of the outcome of Prop 30, all students will likely face new fees intended to increase access to classes and reduce time to graduation, the CSU says.

Seniors who have already earned 150 semester units would be required to pay an additional $372 per semester unit. This “Graduation Incentive Fee” is intended to encourage super seniors to graduate, freeing up classes.

Students who retake a course would be required to pay $100 per semester unit. The “Course Repeat Fee” is intended to incentivize students to more carefully plan their course loads.

An “Extra Unit Tuition Fee” would charge a $200 per semester unit fee for any course load greater than 16 units. The fee is intended to discourage students from signing up for extra courses only to drop them later in the term, but would also charge hard-working students more.

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