Capitol Alert

California legislators blast UC over financial aid for out-of-state students

People walk through Sproul Plaza near the Sather Gate at the University of California, Berkeley.
People walk through Sproul Plaza near the Sather Gate at the University of California, Berkeley. Associated Press file

Lawmakers slammed the University of California on Wednesday for spending $32 million last year to provide financial aid to out-of-state and international students.

While only a small portion of the university’s multibillion-dollar operations, the money hits at a deep mistrust that has developed between the state and UC during a combative budget process over the last six months.

“It’s just alarming, puzzling and sort of unbelievable that you would spend $32 million on this population that supposedly is supporting itself,” Assemblyman Phil Ting, D-San Francisco, said during a UC budget hearing. “This type of action doesn’t give me any confidence that we should be giving UC additional resources.”

The revelation of the nonresident financial aid, uncovered by the Assembly budget subcommittee on education, comes as UC has threatened tuition hikes and enrollment freezes unless the state provides a funding increase next year of $100 million more than already promised.

Among the issues that have surfaced during those tense negotiations is the rapidly increasingly number of nonresident students, which has surged since the recession as UC turned outward to make up for steep budget cuts. Out-of-state and international students pay a $22,878 supplemental fee on top of $12,192 in tuition, which brought in an estimated $400 million from undergraduates across the system last year alone.

UC officials say nonresidents are a financially self-sustaining group, whose tuition subsidizes about 9,000 Californians not funded by the state, as well as tutoring, academic advising and student wellness programs that would have otherwise been cut or scaled back.

But the university acknowledged Wednesday that out-of-state students are also eligible for institutional aid.

A third of all tuition revenue automatically goes to UC’s financial aid pool, said associate president and chief policy adviser Nina Robinson. Nonresidents who qualify under a federal formula may receive some of that to help with tuition and living expenses, though they are on the hook for the entire out-of-state fee.

“The question that is relevant here is whether it’s fair to ask them to contribute a third of a small portion of their tuition to our institutional aid program and not allow them to be eligible to receive benefits from it,” Robinson said.

“Nonresidents make a very large contribution into the system and get a small portion back,” she added. “So we can argue about whether that’s right, but the fact is that California students are benefiting from that nonresident money that is going into the aid.”

The committee chairman, Assemblyman Kevin McCarty, D-Sacramento, was not convinced, arguing that the policy contradicted UC’s stated objective of accepting more out-of-state students as a revenue stream. He said the $32 million could have been better spent on financial aid for Californians.

“There are plenty of fish in the sea that can pay full freight,” McCarty said. “We’re not elected to expand education for low-income kids from Nevada. We’re elected to help expand access for Californians. That’s what’s so frustrating.”

The rapid growth in nonresidents – who made up a fifth of entering freshmen at UC this year, with even higher levels at flagship campuses in Berkeley and Los Angeles – has caused consternation among California lawmakers and parents increasingly worried that their children are being shut out of the state’s preeminent public university.

While the overall number of freshmen at UC has increased slightly in recent years, acceptance rates have plummeted to historic lows. Enrollment at individual campuses varies from year to year, but five schools had fewer resident freshmen last year than in 2007.

The controversy has become especially pronounced during the ongoing budget battle between Gov. Jerry Brown and UC President Janet Napolitano, who has mounted an extensive public campaign arguing that the university needs more money in order to expand student slots and meet growing pension obligations.

After UC’s governing board approved a potential five-year tuition increase in November over Brown’s stern objections, the governor added a cap on nonresident students to the funding increase he allocated for the university in his January budget proposal.

Two months later, Napolitano announced that UC would cap out-of-state levels at Berkeley and UCLA next year – while also limiting California enrollment and continuing to accept more nonresidents overall, unless the state kicks in more funding than already promised.

Brown has expressed little interest in giving more money to the university, but McCarty said in an interview Tuesday that the Assembly would likely push for a funding increase for UC with “some strings attached.”

Alexei Koseff: (916) 321-5236, @akoseff

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