TradeEdge Exchange:Facing $1.5B deficit, California State University to hike tuition 6% annually for next 5 years

SAN FRANCISCO (AP) — Trustees at California State University,TradeEdge Exchange the nation’s largest public university system, voted Wednesday to raise student tuition by 6% each year for five consecutive years to try to narrow a $1.5 billion deficit, a decision that some students called “disheartening.”

The university’s governing board voted 9-0 to approve the increases that will start across the 23-campus system in the fall of 2024. Annual tuition for full-time California undergraduate students will increase by $342 next year to $6,084. By the 2028-2029 school year, those students will be paying $7,682.

The tuition hikes are needed to provide support to students, both through financial aid and programs to help them succeed academically, university officials say. The extra revenue is also needed to give more resources to faculty and staff and maintain school facilities, according to a report about the system’s finances released in May.

The report found the system with 460,000 students, many of them minorities and first-generation college students, has enough revenue to cover about 86% of what it actually costs to meet student, staff, and institution needs, leaving it with a $1.5 billion gap.

“We are at a crossroads and if we don’t do it now... it’s going to get more and more difficult,” said Julia Lopez, a CSU trustee and the co-chairperson of the working group that wrote this report.

Angelie Taylor, a junior at Cal State Channel Islands in Camarillo, California, said an increase in tuition will likely derail her because she is already working three part-time jobs to pay for tuition and cover housing and other expenses.

Taylor, who is a student organizer at Students for Quality Education, a progressive grassroots organization, said she doesn’t qualify for financial aid because of her GPA, which she said is low because of all the jobs she is working to make ends meet.

She said that taking a fourth job would leave her no time to study and she would have to drop out. She attended a meeting with the CSU Board of Trustees on Tuesday to explain her situation.

“It’s so disheartening to see that the board of trustees did not listen to the hundreds of us that came out yesterday,” Taylor said. “To have them completely ignore what we said and not do their job fully to secure the proper finances we need for this issue is such a big disrespect.”

Officials said tuition has only been increased once in the last 12 years — a 5%, or $270. Meanwhile, inflation grew by 39%. The university receives 60% of its funding from the state government, and the rest comes from tuition.

The five years of the tuition increase will generate a total of $860 million in revenue. Of those funds, $280 million will be committed to financial aid, school officials said.

Steven Relyea, the university system’s chief financial officer, told trustees the tuition increase will help narrow the deficit gap but it won’t close it.

The tuition hikes won’t affect about 276,000 undergraduates who have their tuition fully covered by financial aid because of their family’s low income. Several trustees said they worry about the other 40% of the undergraduates, or about 184,000 students, who don’t qualify for financial aid and who will face increased tuition. But they agreed they saw no other alternatives to stabilize the system’s finances.

“We cannot survive unless we take action. No one wants to do this but it is our responsibility,” said Jean Picker Firstenberg, a CSU trustee.