California State University Board Approves Five-Year Annual 6% Tuition Hikes

Tuition for California State University (CSU) students will increase by 6% annually for five years beginning in 2024-25 under a plan approved Wednesday by the university's Board of Trustees.

Under the schedule, the annual undergraduate tuition for CSU will increase from the current $5,742 to $6,084 in the 2024-25 school year. The total would jump to $6,450 the following year, then to $6,840 in 2026-27, then to $7,248 and ultimately to $7,682 in 2028-29.

"State general fund and student tuition revenue are the two primary sources that support the university's annual operating budget plan and the educational endeavors of approximately 460,000 CSU students," according to a staff report outlining the proposed tuition increase. "To support the expenditure priorities of the budget plan, it would require a significant infusion of new, ongoing revenue from the state general fund and from a tuition increase. But the amounts of new revenue forecasted (state general fund) and proposed (tuition), will not be sufficient to fully support the new expenditures included in this plan."

According to the staff report, the tuition increase would generate an additional $148 million in the 2024-25 academic year.

The CSU was initially considering implementing an ongoing 6% tuition hike, but opted to limit the proposal to five years after vocal opposition from students and some members of the Board of Trustees who said it would create significant financial hardship for students amid the rising cost of living and housing.

During a Wednesday morning meeting of the Trustees' Finance Committee, the panel rejected a motion to reduce the schedule to only three years of increases. During the meeting of the full Board of Trustees, another motion was made to impose only four years of increases, but the board also rejected that change.

Interim CSU Chancellor Jolene Koester strongly opposed any reduction in the length of the tuition increases, saying it would be a major financial hit to the university system.

University officials said revenue increases are needed to cover a roughly $1.5 billion budget shortfall. CSU officials told reporters earlier this month said the university has already implemented steep cost-cutting measures, but without additional revenue, it could be forced to cut course offerings or other services.

The university also noted that more than half of CSU students have either part or all of their tuition covering by grants or scholarships.

Trustee Jack McGrory said raising student costs is a difficult decision, but he noted that 60% of the CSU system's funding is state money while the other 40% is from student tuition.

"We've had only one increase in tuition in 12 years," he said. "That's not a business model that's going to work long-term. It's not sustainable.

"I know it's tough to do this, we don't like it. ... But we've got to make the numbers work. And we've got to do something long-term that makes sense and continues the quality of education we have on these 23 campuses."

Lt. Gov. Eleni Kounalakis spoke against the tuition hike, saying the CSU has not fully analyzed what the consequences will be among its student body.

"You are headed into an action that you do not fully understand the consequences of," she said. "... We're talking about 184,000 students who are going to have a $2,000-a-year increase by the time this is implemented in five years. And we have done no work (or studies) ... on what that increase is going to mean to our student body. I don't see how we can do this without knowing what a $2,000-a-year increase is going to mean for our students."

She suggested that anecdotal evidence suggests that many students may drop out of school, while others may take longer to graduate. She urged the board to delay the hike until more studies can be done on its impact.

The tuition hike does require the CSU to perform an assessment of the impacts of the increase on students, which will factor into the decision of whether to continue the tuition hikes beyond the five years in the current package.

Steve Relyea, CSU chief financial officer, told the trustees' Finance Committee Wednesday morning that an "absence of tuition increases in 11 of the last 12 years has prevented CSU (from having) sufficient resources to keep up with rising costs."

He conceded there will be a financial impact on some students, but noted that CSU leaders met with student groups and agreed to meet some of their concerns -- by including in the university's tuition policy a guaranteed increase in funding for tuition support, the establishment of a standing financial aid advisory committee and the inclusion of students in tuition assessment that will be conducted after the hikes are implemented.

Ryan Storm, CSU assistant vice chancellor for budget, said that in the first year of the tuition hike, CSU will increase financial aid funding by $49 million, and it will increase by $280 million over the five years of tuition hikes.

He noted that 18% of CSU students have their tuition partially covered by some form of grant, scholarship or waiver, while 60% of students have their tuition fully covered by such programs. He said those 60% of students would continue to have their tuition fully covered despite the increase.

There were a series of protests by student and other groups oppose the tuition measure ahead of the vote. On Monday, a group of CSU student assistants had a virtual event, saying they already earn sub-minimum-wage pay and will be overly burdened by an ongoing rate hike.

"Working-class students come to the CSU hoping to build a better future for themselves," John Logan, professor and director of Labor and Employment Studies at San Francisco State University, said in a statement. "Student assistants work because they need the money to get by. Not only are they paid minimum wage without benefits, their financial insecurity is now compounded by tuition increases. CSU leadership must allow them a choice on a union and collective bargaining, which would improve their financial security and access to education."

The California Faculty Association union called the proposed tuition hike a "shocking and unconscionable" measure that would bump student costs by 34% over the five-year period.

Students from Cal State Sacramento issued a statement blasting the tuition proposal, while pointing to executive compensation paid by the CSU system, noting the $795,000 annual salary of new CSU Chancellor Mildred Garcia.

"The CSU is essentially asking students who are already at a disadvantage to pay for the CSU Chancellor's Office and Board of Trustees' decades of mismanagement and misuse of funds, increasing the likelihood of fewer marginalized and underrepresented students enrolling in and graduating from college," according to the statement.

Students and faculty held a boisterous rally outside the CSU Chancellor's Office in Long Beach Tuesday to oppose the tuition hikes.