CSU trustees to weigh an annual 6% tuition increase amid major funding gap

California State University leaders are moving toward imposing an ongoing, annual 6% tuition increase that could generate hundreds of millions of dollars for the cash-strapped system, with students paying $342 more the first year alone.

If approved, tuition would increase each year for undergraduate and graduate students beginning in the 2024-2025 academic year. Trustees are expected to discuss the plan during their Tuesday meeting, and vote on it in September.

For full-time undergraduate students, the proposal would bring tuition in the first year to $6,084 from $5,742. Each subsequent year would bring another 6% increase, with trustees evaluating the increases every five years. By the 2028-2029 academic year, a full-time undergraduate student would pay $7,682 a year.

Cal State officials say the hike is necessary to contend with a nearly $1.5-billion budget gap across the 23-campus system. A report released in May found Cal State is significantly underfunded, with its two main revenue sources — the state and tuition — covering only 85% of what it needs for student services, academic support, instruction and other expenses in the 2021-2022 year.

The gap means administrators are forced to make difficult choices forgoing building renovations and wage increases to cover costs for other other expenses. And the gap could worsen if the system doesn’t raise more money in the coming years, leading to fewer course offerings and student support, which could prolong the time it takes for students to graduate, officials said. Money from the tuition increases would go toward providing more academic support to boost graduation rates, improve research and internship opportunities for students, and enhance course options.

Since the mid-1990s, the state’s contribution to CSU’s operating budget dipped to 60% from 80%. The state fully funded the system’s annual budget requests only once in the last decade, while costs have risen because of inflation. Tuition has remained mostly flat over the last decade and is still among the lowest in the country.

The state has taken steps in recent years to help the system: Gov. Gavin Newsom has promised an annual 5% base funding increase through 2026-2027 in exchange for commitments to expand access and equity.

But the increase in state funding alone is not enough to pay for all the costs the CSU needs.

CSU leaders have promised to keep the system affordable. The 60% of the system’s 460,000 students who have their full tuition covered through grants, scholarships and waivers will continue to have their costs covered, officials said.

“We really care about affordability,” said Julia Lopez, a CSU trustee who helped lead the group that produced the report on the system’s finances during a May meeting. “We really care about making sure that we don’t do anything that would in any way put barriers in terms of people attending the CSU.”

The University of California imposed its own 4.2% increase in tuition and fees, which applied to incoming undergraduates entering in fall 2022. System leaders said the increase was needed for financial security and to improve grant aid.

In May, CSU sent a proposal describing three ways the system could raise tuition to the California State Student Assn.

In addition to the 6% increase, the system put forth two other rate increases. The first would have raised tuition by 8% for all students, and the second would have raised tuition by 5% for new students and 3% for continuing students.

Miya Haley, a spokeswoman for the California State Student Assn., said the group is still reviewing all the proposals and is in the midst of finalizing its response.

“We believe it is crucial to carefully consider all aspects and want to ensure that our response accurately reflects the collective voice of CSU students before making any public statements,” she said in an email.

At least one group of students is planning to protest the proposed tuition hike. The group, Students for Quality Education, plans to rally outside the trustees meeting Tuesday along with unions representing faculty and other Cal State workers who are lobbying for wage increases and calling for better recruitment and retention practices of workers.

The group also pushed back on a 5% tuition increase in 2016, which the trustees ultimately approved for the 2017-2018 year.

Vaughn Wilbur, a Cal State Fullerton student and member of Students for Quality Education, said the university should draw from its rainy day fund to help cover expenses, or consider cuts to campus police.

He also worries an increase will price out low-income students of color, undermining a core value in a system that prides itself on improving social mobility for students and their families.

“It’s hard to pay for college. And yet they’re going to be making students pay more rather than dipping into their funds,” he said. “The CSU is supposed to be … for everybody.”