UC tuition to increase next year in first significant fee hike since Great Recession

The University of California approved its first significant tuition increase in a decade and set a course to continue raising fees every year for the next five years.

Tuition will grow by $534 for incoming students in the 2022-2023 school year, a 4.2% increase from current undergraduate tuition and fees.

Under the plan, students keep the same tuition rate for six years, allowing them to finish a degree at the same cost as the year they began.

Each incoming class would pay a higher rate for the next five years mostly based on inflation. The UC plans to designate 45% of revenue from tuition hikes for student aid.

Five years from now, in-state tuition is projected to cost $2,500 more per year than what it costs now.

The costs are higher for out-of-state students, who would pay about $8,500 more than they pay per year now.

The tuition comes on the heels of the $1.3 billion increase in state funding for the UC that the Legislature adopted last month, marking the largest ever single-year funding increase.

Lt. Gov. and UC Regent Elena Kounalaukis was one of five regents who voted no on the plan, criticizing the timing of raising tuition in a year when many families are still reeling from the coronavirus pandemic.

“I think it is the wrong time to pass a plan for tuition increases at the exact same time that the commitment of the state of California to our students has never been greater,” Kounalaukis said.

The original proposal allowed for tuition to raise with each new class indefinitely, but an amendment passed during today’s board meeting requires the regents to re-authorize the program in five years.

Tuition increase cannot exceed 5% each year, unless approved by the regents.

The UC projects that students would see a greater rise in financial aid dollars compared to the rising tuition and fees, making the cohort-based model a more affordable option for families making $120,000 or less compared to the current flat-rate tuition system.

UC President Michael Drake told the regents that growth in tuition and state funds hasn’t kept pace with enrollment growth. This year, a record number of students were admitted to the UC’s nine campuses.

Drake said he supported the program because it provides financial stability to students, saying that “it’s no secret the UC’s funding has been unstable for years.”

“We all acknowledge that increasing tuition is not an action to be taken lightly, but this is the best option we have to provide cost predictability, enhance student support and preserve the excellence of the university,” Drake told the regents.

What UC tuition costs now

In-state tuition has remained flat for the past nine years, with a current cost of $12,570 for in-state students.

Tuition and fees rose by thousands of dollars during the Great Recession from 2009 to 2011 to supplement a drop-off in state funds.

In previous decades, state funding made up the bulk of the UC’s revenue. Today funding equally comes from state revenue and from students’ tuition.

Regents Chairwoman Cecilia Estolano said she was at first skeptical of a cohort-based model, but came around to the plan to avoid to future tuition spikes during hard economic times like what the UC saw during the Great Recession.

A cohort based model was first discussed by the regents in 2019 and has been on the table multiple times since. It was tabled due to the coronavirus pandemic.

‘Post-COVID pressures of students and families’

While the UC controls the amount of institutional aid going to students, it doesn’t have full authority over the Cal Grant. Under California law, the governor can reduce state funds for the UC or CSU if a university decides to raise tuition.

Chancellors and other UC officials told the regents repeatedly that under the plan, “people who can least afford to pay will pay the least.”

Students expressed concerns about affordability for students in coming years if the cost of a UC education continues to rise.

“A cohort-based plan developed under the pressures of the 2010s will not meet the post-COVID pressures of students and families in the 2020s, 2030s, 2040s, and beyond,” Aidan Arasasingham, outgoing president of the UC Student Association, told the Regents.

“A better vision for the future can only be achieved with your willingness to go against the tide and accept the responsibility of truly grappling with the issue of college affordability for the state’s most vulnerable communities.”

Regents in support and against the plan agreed that more transparency is needed to monitor how much tuition will rise per cohort and whether the program helps low- and middle-income families.