Q&A with Chancellor Charles B. Reed about student fee increases

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Announcer intro:
Hi, Iím Jennifer Wicks with the California State University. Coming up Chancellor Charles B. Reed offers his perspectives on the $276 per year fee increase for undergraduate students recently approved by the CSU Board of Trustees.

Question 1:  
Chancellor, effective in fall 2008, students will have to pay more to continue their education at any of CSUís 23 university campuses. Although the news was not surprising to many, CSU students are still asking why the Trustees decided to increase the state university fee. Can you please tell us the reason for the increase?

Well, the Board of Trustees of the California State University had to raise fees because of the serious budget cuts that have been recommended by the governor for the CSU budget. We were recommended for a 10% cut, or approximately $386 million. So the Board didnít have a choice. It had to raise fees and it raised fees $276 for the year, or $138 per semester for students.

Question 2:
The CSU has increased fees 6 times in the last 7 years.  Are fee increases inevitable now?

Well, not always.  The way the governor’s Compact with the CSU works is either the legislature or the governor buy the equivalent of a fee increase out.  If they don’t have the money to buy a fee increase out, and replace it with general funds, then yes, I would anticipate that there would be some fee increase.  I really don’t know how much that would be, but it would probably be somewhere between 5 and 10 percent.

Question 3:
The CSU said that financial aid will neutralize the impact of the fee increase for thousands of students. How does the fee increase relate to financial aid?  

One-third of it is used for financial aid.  And so over 143,000 students will not feel a fee increase or get a fee increase because 1/3 of that fee increase will go to help those students that are the most needy.

Question 4:
That means that it is the children of middle class parents who will have to pay the fee increase. Do you have any suggestions for them on how to manage this new expense every year?

What we’ve tried to do is to give ample time and information to parents and students so they could anticipate what any fee increase might be.  And you’re correct, the squeeze really comes on families that make about $80,000 a year.  They’re the families that will have to come up with $276 to help pay the way for their children to get an education.  I still want to say that the total fee, which is just a little more than $3,000 a year, is one of the best bargains in America.  The California State University fee or tuition is the lowest among all institutions in the United States.

Question 5:
In addition to state provided financial aid, what other opportunities do students have to help pay for their education?

The CSU hires tens of thousands of students through our work-study and employment of students on our campuses and we try to hire as many students as we can.  We try to make available the information about scholarships, grants, federal pell grants for our students and we see that students get as much information as they can possibly use about their university finances.

Question 6:
In the past, the CSU has been talking about predictable fee increases.  Would it be possible to give the students an estimate of the fees for a 5-year period, for example.  So they would know at the beginning of their college years what the costs will be for every year they are in college?

That’s a very difficult question that you’ve asked.  What we’ve tried to say is that fees ought to be predictable.  That students and parents ought to know as far in advance as possible about what the fees might be.  But the fees also depend upon what the California economy is doing, and if the economy is good and the state budget and the revenue for the state budget is good, well, the Governor and the legislature will buy out the equivalent of the fee.  So what we try to say is, to students, the governor’s Compact provides for a 10% increase of a fee equivalent and if there’s not resources there to buy that out at the state level, then students have to come up with that 10%.  And the other thing we say is, that it will not be more than 10% unless there’s some dire emergency.

Question 7:
Chancellor, it seems that regardless of the budget crisis in California, university fees all over the nation are going up faster than inflation or the cost of living.  Why is that?

Again, that’s another good question.  One of the reasons, or there are several reasons that tuition and fees are increasing at a greater rate.  First of all, compensation is a big part of all the universities’ budgets in the United States and in California.  Almost 75% of our budget pays for faculty and staff and the people who serve students.  As a part of that compensation, it also includes healthcare cost.  The California State University healthcare cost next year is going to increase $28 million.  Well, somebody has to pay for that and that healthcare has always been way more than the national inflationary average.  Universities use very expensive scientific and technical equipment.  We use instructional technology, computing power and those items seem to cost more than the average milk and bread.  Although milk and bread are going up these days even faster.

Question 8:
The CSU Alliance, the new organization created by the university students, faculty, employees, staff and administrators has held a number of demonstrations on CSU campuses in order to educate people about the budget crisis in California.  What is the real impact of these demonstrations?

The Alliance has been so valuable to the California State University.  First of all, there were budget hearings held on all 23 campuses.  And I really believe that everybody that was a part of the CSU family got a better understanding about our budgets and where the money goes.  That’s just a transparent way of being accountable.  But in addition to that, the demonstrations, the meetings that they had on campus, the letters, the emails, the march on the Capitol by faculty and students have all raised CSU’s visibility about what we do.  And we prepare California’s future workforce.  We graduate over 90,000 students that join California’s workforce and the economy.  So that’s very valuable that legislators, governors and others really know how valuable the CSU is to California’s economy.  So I think the Alliance has made that very clear.  And also has made clear that California’s future is tied to the California State University.  We are an investment, we are not an expenditure.  If you invest $1 into the CSU, we will return $4.41 to California.

Question 9:
One last question, IF the CSU budget situation improves once the budget is adopted, is there a chance that the Trustees will reverse the fee increase?

When the Trustees took the vote to increase fees, they also provided the Chancellor the authority to lower fees, if in-fact the governor and the California legislature bought any part of that fee increase out.  And we would certainly do that.

Announcer outro:
Iíve been speaking with CSU Chancellor Charles B. Reed, head of the California State University, the largest system of senior higher education in the United States. Thank you, sir.

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