In an intimate meeting with Gov. Arnold Schwarzenegger on Monday afternoon, a handful of University of California students said greater funding of higher education would help pull the state out of its recession and asked him to back away from a proposal to reduce the Cal Grant program that covers university fees for needy students.

"Stability of the California Grant program is essential," said Victor Sanchez, 21, a UC Santa Cruz senior who is president of the statewide UC Student Association. "A lot of our students are being pushed out. The grant covers on average one-third of the cost of attending."

The meeting in the governor's office capped a day of lobbying by UC students and administrators that included dozens of face-to-face meetings with lawmakers, a noisy but peaceful march near the Capitol and a sit-in inside legislative offices that resulted in the arrest of five students.

The students were cited for disrupting state business and demonstrating without a permit, then released less than two hours after being arrested, said CHP Sgt. Steve Stone.

About 500 students participated in the lobbying day, according to the UC Student Association. Police estimated that about 150 students gathered for a morning march and rally.

The students had clear messages about both budget problems and budget solutions.

They lobbied in favor of Assembly Bill 656, which calls for taxing oil and natural gas drawn from California soil or waters, and devoting the money to UC, CSU and community colleges. It would raise $1 billion a year.

The bill by Assemblyman Alberto Torrico, D-Fremont, is sponsored by the California Faculty Association, the union that represents CSU professors and librarians.

Schwarzenegger's January budget proposal is relatively kind to the state's public universities. While he proposed cuts in every other area of government, he suggested increasing funding to UC and CSU by 12 percent.

But the governor's budget calls for suspending the so-called "competitive" Cal Grant, which would eliminate scholarship funding for up to 22,500 students. And it would freeze remaining Cal Grant payments at the current level, meaning students would have to pay the difference every time fees go up.

UC students had a lot to say about that. Threats to Cal Grant brought Robert Garcia to protest at the Capitol for the first time. The 23-year-old UC Merced student said Cal Grant is the only thing that allows him to attend UC. He said he works weekends at a library and will still graduate with $20,000 in debt.

"Without the Cal Grant I really cannot afford it," Garcia said.

Before their march on Monday, about 100 students gathered outside UC's office on K Street and talked to President Mark Yudof and UC Regents Chairman Russell Gould about a recent spate of inflammatory incidents on UC campuses.

Last week, a noose was found hanging in the UC San Diego library – two weeks after a student group threw a party mocking Black History Month. At UC Davis last week, a swastika was carved into the dormitory door of a Jewish student, and offensive graffiti were scrawled on the Lesbian, Gay, Bisexual, Transgender Resource Center.

Many students said Monday that they felt UC was becoming less racially diverse and less tolerant of differences among students.

"These are the worst incidents of racism I have seen on campuses in 20 years," Yudof told the students, according to a statement from his office.

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