University of California (UC) regents and other officials engaged in a debate on Thursday over whether they should raise the tuition in the coming years and discussed how to raise funds to support the budget. They proposed a long-term budget plan that included a tuition hike as much as 16 percent every year. Nevertheless, the debate did not reach any conclusion and they will not vote for the budget until November.
The debate came at a situation where the university has been facing severe funding shortfalls. According to the university, by 2015, there could be a $2.5 billion shortfall. With such financial uncertainty, there will be more difficulties when the campus leaders try to expand programs and hire the new faculty.
Many reasons contribute to the UC funding problem. The primary reason is the huge budget cut of state funding. This year there is a $650 million reduction and there could be more cuts in the coming year since the whole economic situation of California is gloomy. Though the university needs to fund health and retirement plans for the staff and faculty, with the economy going down, UC has stuck into a deficit and needs to find a balance. In this regard, the students and parents have become a more important funding resource.
Secondly, the number of students is growing each year and UC cannot contract easily as private business.
Thirdly, due to union contracts, labor costs account for a significant part of the budget of UC and colleges are usually very labor-intensive. Actually, up to 70 percent of the budget of a college can go into salaries and employees benefits. This also tells us why colleges and universities across the country have been raising tuition fees at a faster rate.
If the tuition raising plan is approved, the ones who are going to be impacted the most are middle-class students since they receive limited financial aid, according to Magana, who attends UC Santa Cruz. Currently, the annual tuition of undergraduates in UC is $12,192 which does not cover boarding or campus fees. By the 2015-2016 academic year, it will top $22,000 if state funding remains flat for the next five years. According to the proposed plan, the amount of the tuition increase would depend on how much the state contributes. If the state raises funding by 8 percent, the university would increase tuition by 8 percent.
Concerning the proposed budget plan, some regents and officials argue that the university should seek other ways to solve the financial uncertainty, which include raising funds from corporate donors and wealthy alumni. The Board Chair Sherry Lansing also believes that the university can raise revenue by lobbying legislators and gain public support from a fundraising campaign.