State study recommends higher out-of-state tuition at 3 UC campuses
With the goal of generating additional revenue for the University of California system, a new report from the state’s nonpartisan Legislative Analyst’s Office recommends charging out-of-state students higher tuition rates at the three most popular campuses among them.
Across the system, international students and those from out of state pay nonresident supplemental tuition on top of the tuition paid by all students. For the 2026-27 school year, annual tuition excluding other fees for a Californian attending a UC campus as a new undergraduate has been set at $15,588. For nonresidents, this same figure is $39,270 higher at $54,858. These rates generally increase annually for new cohorts.
At present, that additional tuition for nonresident students is the same across the UC’s nine general campuses. The LAO, which provides fiscal and policy information and advice to the Legislature, suggests differentiating that rate across campuses by piloting higher rates at UC Berkeley, UCLA and UC San Diego than what will be charged at the other six schools including UC Davis and UC Merced.
Those three schools, the report prepared by economist Florence Bouvet says, receive more applications from nonresidents than the other six combined. While they have the lowest admission rates, they enroll the highest shares of nonresident students at about 20% of their total student bodies.
“The University of California looks forward to conversations with the Legislature on the best way to fund our mutual goal of California undergraduate enrollment growth,” a UC spokesperson said in response to the report.
The model of differential tuition is followed at other public university systems like University of Michigan, for example, where nonresident rates at the flagship Ann Arbor campus are more than 4.5 times higher than at the Flint campus.
This recommendation from the LAO comes on the heels of its suggestion in a February budget report that California pause its 2022-2027 plan to replace 902 nonresident students each year with resident students at UC Berkeley, UCLA and UC San Diego. In a bid to reduce budgetary expenses, the LAO suggested funding the additional resident students as planned while leaving the number of nonresident students — who bring in more revenue — untouched. In Gov. Gavin Newsom’s revised 2026-27 budget released Thursday, funding for the original nonresident replacement plan remained intact.
What could happen if this model is implemented?
The LAO report recommends a four-year pilot beginning in the 2027-28 school year. If the UC system raises the nonresident tuition rate by $6,000 at UC Berkeley, UCLA and UC San Diego while limiting that increase to $2,000 at its other six campuses that year, the report estimates that an additional $20 million in revenue will be generated. By the fourth year, this number will jump to $80 million.
This additional revenue could then go towards the university’s core operations, including covering basic cost increases as well as expanding programs. Alternatively, it could be used to reduce state funding for UC in response to competing budget priorities.
One potential drawback of the proposal for higher tuition rates could be a resultant drop in enrollment levels of nonresident students. Per existing research, the report says, higher tuition rates do not appear to deter nonresident undergraduate students from enrolling at public universities in the country.
This is also corroborated by the fact that applications at UC Berkeley, UCLA and UC San Diego increased manifold in the last decade even as tuition rates saw a big jump.
While the overall enrollment of nonresident students is unlikely to be affected, per the report, the potential tuition increase could change the composition of that section of the student body at all three schools. With the price hike, the nonresident student body could see a jump in enrollment of wealthier applicants.
To keep an eye on any such impact if the proposal is implemented, the LAO recommends that the UC system collect data to determine if the tuition hike lowers demand among nonresident students or raises the household income level among that section of the student body. This will enable the UC system to make evidence-based modifications to the rate structure at the end of the proposed four-year pilot.
