Higher Education

Due to the State's significant budget shortfall, the Governor's Budget proposed to suspend the provisions of the Higher Education Compact (Compact) to help achieve fiscal balance. The May Revision protects education funding and makes additional resources available to the University of California (UC), the California State University (CSU) and the California Community Colleges (CCC) to ensure affordability, preserve quality and maintain essential levels of access. As discussed in the K-12 section, the Proposition 98 guarantee will be met which will provide additional resources for CCC to meet instructional demand and ensure local property tax declines do not impose hardships on the colleges. While the greater budget gap prevents fulfillment of the Compact, additional General Fund resources are provided to UC and CSU to ensure that fees will not increase beyond the levels agreed to in the Compact, to preserve enrollments in high-state-need instructional programs, and to address cost pressures from required implementation of new Teaching Performance Assessment standards pursuant to Chapter 517, Statutes of 2006. Thus, mandatory undergraduate fees will rise by no more than 7.4 percent for UC students and 10 percent for CSU students. CSU fees will remain the lowest in the nation for comparable public four-year comprehensive colleges and UC fees will remain very competitive with other comparable public research universities.

For the Student Aid Commission (CSAC), the Governor's Budget assumed a current year, one-time revenue adjustment of $500 million related to the sale or other authorized transaction (Transaction) to maximize the value of CSAC's auxiliary organization, EdFund, pursuant to Chapter 182, Statutes of 2007. The state's selected sale advisor has decided to withdraw its commitment to help prepare the EdFund Transaction. In addition, there have been numerous changes in the student lending industry and credit pressure on Wall Street. Given these conditions, it is necessary to postpone this transaction to maximize the value of this asset. As the student loan guaranty function is not a core function for state government, a sale will continue to be pursued and completed in 2009-10. Therefore, the May Revision reflects a shift of $500 million in anticipated revenue from the end of the current year to the 2009-10 fiscal year. Additionally, the May Revision reflects conforming state operations adjustments since decoupling of CSAC and EdFund operations will not occur in the budget year.

For CSAC local assistance programs, the $80 million Cal Grant workload cost placeholder that was included in the Governor's Budget as a contingency in the event UC and CSU raised fees further is no longer necessary and has been deleted from the budget. The May Revision also proposes that approximately 30-percent of projected Cal Grant costs be shifted from General Fund to Temporary Assistance for Needy Families (TANF) reimbursements from the Department of Social Services to help address the state's TANF Maintenance of Effort (MOE) shortfall. Please refer to the Health and Human services section for more details.

Changes to the Community Colleges budget reflect workload adjustments for revised estimates of local property tax revenues, including relief in the current year, increased funding for enrollment growth, and a policy change to provide more flexibility in categorical spending similar to K-12 categorical programs.
CHAPTER HIGHLIGHTS for Higher Education Back to Top

 Total Funding by Segment
 University of California
 California State University
 California Student Aid Commission
 California Community Colleges
PRINTABLE BUDGET DOCUMENTS Back to Top
Revised Budget Summary - Higher Education (pdf * - 70K) -
Provides the entire Higher Education Chapter in pdf format.
ADDITIONAL INFORMATION Back to Top
Revised Budget Detail - Higher Education
Displays Revised Budget Detail information for Higher Education.

Proposed Budget Summary - Higher Education (January 2008)
Displays Proposed Budget Summary information for Higher Education.