California State University students rally against annual tuition hikes of 6% over 5 years

Sophomore Michael Lee-Chang works about 40 hours a week to help take some of the financial burden of his education at Sacramento State off his mother’s shoulders.

He will be rallying alongside other students outside a Tuesday meeting of the California State University Board of Regents in Long Beach, opposing a proposal by interim Chancellor Jolene Koester to raise tuition by 6% annually over five academic years starting in 2024-25.

CSU leaders said in an email to The Sacramento Bee that they would invite student representatives to join them in studying the impact of this tuition increase in 2027 and that the regents would have to authorize any tuition changes in the 2029-30 academic year.

Lee-Chang remained concerned about the impact, saying: “There’s a statistic that the CSU uses, saying that the tuition increase will not affect 60% of CSU students because the majority of CSU students are low income and therefore their tuition is usually covered by like Pell grants or state grants. But the thing that the CSU fails to consider is that a lot of students use financial aid refunds for other things like housing. … I feel that’s mis-representation because if tuition is covered, the students are getting less of a financial aid refund.”

He shared an open letter in which Sacramento State students and faculty called upon new university President J. Luke Wood, campus administrators, community leaders, the CSU Chancellor’s Office and CSU trustees to join them in “publicly opposing the absurd, endless, multi-year tuition increase proposal.”

After a query from The Bee, Wood said: “It is CRITICAL that student voices be amplified on this issue and others. I take seriously the impact that tuition changes can have on students. CSU trustees will decide whether to raise tuition. .... I’m focused on what is within my authority and control. That includes working to ensure that tuition increases won’t create barriers for students to attend and graduate from Sac State.”

Wood said he would be listening attentively to students to determine how best to mitigate the financial impact. Possible solutions, he said, could include increasing scholarships, improving financial aid and scholarship distribution, rigorously adding support services, lowering fees or other costs, and exploring more open education resources.

Why are CSU leaders seeking a tuition hike?

After reviewing the tuition proposal, California Lt. Gov. Eleni Kounalakis cautioned “against significant tuition hikes without sufficient student involvement or the new chancellor’s evaluation.”

Kounalakis, who sits on the CSU board of trustees, proposed an annual review of the tuition increases, saying thorough analysis and research must be done on the potential burden for students.

As part of an examination of CSU’s long-term financial sustainability, Koester appointed a work group last year that spent eight months assessing how the university system’s expenditures and revenues aligned.

Their stark conclusions are what have galvanized university leaders to pursue the increases: “CSU is under real financial stress, with growing cost pressures that well exceed current revenues. The prevailing approach to financing and budgeting within the system is not adequate for current circumstances.”

This was true even if the work group excluded both legislative mandates and long-overdue improvements to campus infrastructure, the group said in a May 2023 report to Koester.

The two main sources of revenue for CSU are appropriations from the state general fund and tuition. While the allocation from the general fund has grown by 34% since 2011-2012, this funding source has been volatile in the past. It plummeted, for instance, amid the Great Recession and other economic downturns.

Tuition revenues, on the other hand, have actually dipped by 1% during that same time period because CSU has raised tuition only once in the last 12 years. Consequently, when enrollment declines, as it has since the COVID-19 pandemic, less money is collected.

The university is facing increased competition as many reputable online providers aggressively recruit students for courses tailored to work around their jobs, the work group noted..

To manage sharp cuts in general fund allocations in the past, CSU chose to forego some expenditures — filling staff vacancies or making infrastructure improvements, for example — or it has taken money from one program and transferred it to something considered more urgent, the work group noted. This means spending has not always reflected CSU’s mission, student characteristics or curriculum needs, they said.

The work group recommended that the CSU chancellor raise tuition and update the tuition policy, clearly committing to affordability and ensuring that any tuition increases are “modest, gradual, and predictable.”

In a statement emailed to The Bee, CSU leaders said: “CSU has historically had one of the lowest tuitions in the nation, and even with what is proposed, the CSU’s tuition would remain below the national average.”

How might the tuition increase happen?

The US Department of Education lists tuition and fees charged at 740 four-year, public universities: CSU Sacramento, which ranks at 456 in terms of cost, sits near the University of Montana, San Francisco State University and a half-dozen campuses of the City University of New York.

The chancellor’s work group suggested a few methods that CSUS could take when raising tuition:

▪ Universal increases that affect every undergraduate student annually. In their example, the work group used a figure of 3% a year.

▪ Cohort increases like those being used at the University of California where each class of freshman pay more than the previous cohort of incoming students. In the work group’s example, they looked at hikes of 5% for each new class.

▪ Or, it could be a hybrid model where tuition increases for each incoming freshman class, say 5%, and then in each subsequent year, the students see a smaller increase of, say, 3%.

In an online Q&A about the rate increase, CSU leaders said a cohort model with a 6% increase would have raised only a third of the money that the proposed universal increase will fund.

The work group examined how much money each tuition model might raise, and over a five-year period, the cohort model provided the highest source of revenue. The examples were provided only as illustrations, the work group said, noting that the chancellor and staff would ultimately have to decide the best parameters.

A portion of any tuition increase should be set aside to offer financial assistance to those students who have unmet financial need, the work group recommended, and CSU leaders said they have ensured this will happen.

In the statement sent to The Bee, the chancellor’s team said: “The CSU is committed to maintaining affordability and is allocating a third of the revenue from the tuition increase to new financial aid. For 60% of students — approximately 250,000 students, many of whom have greatest financial need with family income around $75,000 — their tuition is fully covered by non-loan aid.”

This last sentence is the statement that troubles Lee-Chang because he fears the tuition increases will mean less money left over from grants to pay for housing, food and other expenses, and he said he’s also concerned that many students don’t know it’s coming.

Lee-Chang does some community organizing for a faculty labor union, he said, and in that role, he’s spoken to hundreds of students. Few of them knew about the planned tuition increase, he said, leading him to wonder why CSU hasn’t done a better job of broadly communicating what’s coming.

CSU leaders said that, as required by statute, they discussed the proposed tuition increase with student government leaders in the Cal State Student Association, meeting about a dozen times to discuss the proposed tuition increase and to address concerns.

In this academic year, CSU tuition is $5,742. It will be $6,084 in 2024-25, $6,450 in 2025-26, $6,840 in 2026-27, $7,248 in 2027-28 and $7,682 in 2028-29.

The tuition would total $34,304 over five years, up about 20% from the total that students would pay if tuition remained the same as it is now.

Where is more money most needed?

As the work group suggested, a third of revenues generated from the proposed tuition hike would go into CSU’s State University Grant program, university leaders said, roughly $49 million in the first year and $280 million by the fifth year.

CSU is facing a number of challenges when it comes to its budget, the work group said, and a key one is that students are increasingly from underrepresented groups and first in their families to go to college. These students require additional educational and support services to get through college coursework, according to the report, with City University of New York estimating that it spent 60% more to help underprepared students.

The new tuition revenue will be allocated to address specific student needs — tutoring, advising, additional course offerings, as well as services that support student basic needs and mental health, CSU leaders said in their statement.

The multi-year, 6% tuition proposal, they said, would ensure that the CSU has the stable funding needed to deliver on its commitment of providing an affordable high-quality education for current and future generations of California students.

There’s also an increased demand for graduates in high-cost science, technology, engineering and mathematics (STEM) and health occupations, the report noted

The work group recommended that the chancellor take a look at policies and rules currently preventing the campuses from pursuing other sorts of revenue or limiting how they use resources, and they urged the CSU chancellor to appoint a work group to study and develop a comprehensive financial aid policy.

Moreover, the report suggested that CSU adopt a strategic, multi-year approach to budgeting that emphasizes long-term financial sustainability, and they offered up resources and examples to accomplish this goal.