Master Plan Partnerships: Undergraduate Student Financial Aid and Campus-Based Student Fees. Meeting of the Regents of the University of California

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1 Master Plan Partnerships: Undergraduate Student Financial Aid and Campus-Based Student Fees Meeting of the Regents of the University of California March 2005

2 Master Plan Partnerships Undergraduate Financial Aid Partnership between Students, Parents, the University, and State and Federal Governments to achieve affordability Campus-Based Student Fees Partnership between students and the University to maintain and enhance the quality of the co-curricular, non-instructional aspects of the University experience 2

3 Financial Aid: Then and Now When the Master Plan was adopted in 1959, Fees were very low $120 systemwide, plus $10-$15 campus fees Many more UC students lived at home Little financial aid was available 3

4 Financial Aid: Then and Now Today, Fees are higher $6,141 for , plus campus fees 90% of students live away from home Avg. on-campus budget is $22,100 in Much more financial aid is available Federal, State, and UC 4

5 Goal of UC Undergraduate Financial Aid is to Ensure Affordability Under the Master Plan, UC has a commitment to serve all eligible students (top 1/8 th ) This commitment is only meaningful if UC is affordable to students at all income levels 83% of all grants and scholarships received by UC students are awarded based on need 5

6 What Do We Mean By Affordable? We consider 3 aspects of affordability: Do we enable low-income students to enroll and graduate? Is our net cost (after financial aid) comparable with other institutions? Is the amount we expect students to contribute from work and borrowing manageable? 6

7 What Do We Mean By Manageable? Work Students work should not impede their academic performance & progress Manageable Range: Between 6 and 20 hours/week, plus full-time in summer Borrowing Students should be able to manage their debt upon graduation Range: Loan payments requiring between 5% and 9% of starting salary 7

8 How Do We Manage and Award Our Financial Aid to Achieve Affordability? Context is the student s total cost of attendance Involves a partnership of students, parents, State and Federal governments, and the University Expect students to work and borrow, but at a manageable level Expect parents to contribute according to their ability to pay (Federal standard) Build in Federal and State grants Provide UC Grant to meet remaining cost 8

9 Must Consider the Total Cost of Attendance Total On-Campus Cost for : $22,100 Room & Board, Books & Supplies, Personal, Transportation, Health Insurance 69% Systemwide Fees - 28% Campus Fees 3% 9

10 Student s Role: A Manageable Contribution from Work and Loans Student Loan/Work Total On-Campus Cost: $22,100 $9,500 $9,500 $9,500 $9,500 $20,000 $40,000 $60,000 $80,000 Parent Income 10

11 How Students Can Meet Their Expected Contribution Students have flexibility in meeting their contribution Can choose the right balance between work and borrowing Students can lower their expected contribution Reduced spending on discretionary items Scholarships UC and outside sources 11

12 Student s Role: A Manageable Contribution from Work and Loans Total On-Campus Cost: $22,100 Scholarship Student Loan/Work Last year, 1 in 4 Needy Students Received a Scholarship Worth, on Average, $3,400 $9,500 $3,400 $6,100 Without Scholarship With Scholarship 12

13 Parents Role: Contribution Based on Ability to Pay Total On-Campus Cost: $22,100 Parent Contribution Student Loan/Work $2,460 $5,730 $12,200 $9,500 $9,500 $9,500 $9,500 $20,000 $40,000 $60,000 $80,000 Parent Income 13

14 How Parents Can Finance Their Parent Contribution Over 30% of parents of needy dependent students had a parent contribution of $0 in Parents are not expected to finance their contribution from current income alone Current income Savings Low-interest Federal PLUS loans 4.17% interest rate for Federal income tax credits and deductions are also available 14

15 Federal, State, and University Role: Cover Remaining Gap With Grants Grant $12,600 Total On-Campus Cost: $22,100 $10,140 $6,870 $2,460 $5,730 $400 $12,200 $9,500 $9,500 $9,500 $9,500 $20,000 $40,000 $60,000 $80,000 Parent Income 15

16 Grant Assistance: Where Does the Money Come From? Federal Grants $160M 29% Cal Grants $196M 35% UC Grants $202M 36% Total: $558M 16

17 Undergraduate Scholarships and Other Benefits UC Students received $139M in scholarships and other benefits in Over half awarded to needy students Includes $62M of UC scholarships Over 85% from gifts and endowments 17

18 How Affordable Is the University? Are the actual amounts that students work and borrow really manageable? 18

19 Actual Student Borrowing: Manageability of Debt at Graduation Did not borrow Manageable Debt High Debt 4% 3% 2% 1% 70% 57% 40% 26% 26% 40% 58% 73% $0-$42,000 $42,001-$84,000 $84,001-$120,000 $120,000+ Parent Income 19

20 Actual Student Work Hours: Hours Worked Per Week Do Not Work 1-20 Hours 21+ Hours 15% 18% 15% 13% 47% 44% 41% 37% 38% 39% 44% 50% $0-$42,000 $42,001-$84,000 $84,001-$120,000 $120,000+ Parent Income 20

21 How Affordable Is the University? Are the actual amounts that students work and borrow really manageable? Do we enroll and graduate a high percentage of low-income students? 21

22 Enrollment of Low-Income Students: Pell Recipients as % of Students UCR UCLA UCB UCSD UCI UCD UCSC UCSB All N. Carolina Michigan Wisconsin Virginia USC Stanford Yale Harvard 50% 40% 30% 20% 10% 0% 22

23 Persistence After Two Years by Parent Income $0-$42,000 $42,000-$84,000 $84,000-$126,000 $126, % 80% 70% 60% 50% 40% 30% 20% 10% 0% Year Entered UC 23

24 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Graduation Rate After Six Years by Parent Income $0-$42,000 $42,000-$84,000 $84,000-$126,000 $126,000+ National National Average, Major Research Universities Year Entered UC }UC 24

25 How Affordable Is the University? Are the actual amounts that students work and borrow really manageable? Do we enroll and graduate a high percentage of low-income students? How does our net cost (after financial aid) compare with other institutions? 25

26 Comparisons With Other Institutions: Some Challenges Limited to published information Information about aid at other schools is delayed Most recent aid data are from Other schools exclude items from published costs E.g.: health insurance or transportation UC includes everything 26

27 Average In-State Cost Before Grants/Scholarships, Average across all housing types: on/off campus & commuters $20,000 $15,000 $10,000 $5,000 Total: $17,957 Total: $17,814 Total: $16,991 Total: $14,592 Total: $14,498 $0 Michigan UC Illinois SUNY Buffalo Virginia 27

28 Average In-State Cost for Needy Families After Grants/Scholarships, Average across all housing types: on/off campus & commuters $20,000 $15,000 $10,000 $5,000 $12,997 $10,031 $11,948 $12,278 $6,475 $0 Michigan UC Illinois SUNY Buffalo Virginia 28

29 Summary: Undergraduate Student Financial Aid Generally, Students who borrow graduate with manageable debt Students who work are working manageable hours Similar patterns across income levels Low-income students are enrolling in large numbers and graduating UC s net cost is below comparison publics Data suggest that UC is meeting its Master Plan commitment to be financially accessible 29

30 Summary: Undergraduate Student Financial Aid Financing a UC education is not easy Parent contribution is often demanding Student contribution from loan/work has increased It is doable only if all partners do their share Students State & Federal Governments Parents UC Everyelement of the Partnership is critical to maintaining affordability 30

31 Communicating UC Affordability 31

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33 Total Cost of Attendance Total Undergraduate On-Campus Cost for : $22,100 Room & Board, Books & Supplies, Personal, Transportation, Health Insurance- 69% Systemwide Fees 28% Campus-Based Fees 3% 33

34 Master Plan Partnerships Undergraduate Financial Aid Partnership between students, parents, the University, and State and Federal Governments to achieve affordability Campus-Based Student Fees Partnership between students and the campus to support co-curricular, non-instructional aspects of the student experience 34

35 Campus-Based Student Fees and the Master Plan The State does not support co-curricular aspects of student life Under the Master Plan, students have a partnership responsibility to help pay for those costs not directly related to instruction, including specifically student services and the facilities that house them 35

36 Campus-Based Student Fees Support co-curricular student programs, activities, and facilities Reflect student choice, and are student-initiated through referenda Reflect the unique character of each campus Differ widely in purpose, number, and amount 36

37 What Campus-Based Student Fees Make Possible (1) Softball (UCSD) Bike Path Improvements (UCSB) Student Government (All) Student Commons (UCR) Anteater Recreation Center (UCI) 37

38 What Campus-Based Student Fees Make Possible (2) Graduate Student Commons (UCSC) 38

39 What Campus-Based Student Fees Make Possible (3) Soccer field (UCSC) A group of UCSF student volunteers committed to improving the health of children Activities and Recreation Center (UCD) Bear Transit (UCB) 39

40 What Campus-Based Student Fees Make Possible (4) Student Activities Center (UCLA) 40

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44 Undergraduate Campus-Based Student Fees $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Berkeley Davis Irvine Los Angeles Riverside San Diego Santa Barbara Santa Cruz Capital Program 44

45 Graduate Campus-Based Student Fees $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Berkeley Davis Irvine Los Angeles Riverside San Diego San Francisco Santa Barbara Santa Cruz Capital Program 45

46 Total Cost of Attendance Total Undergraduate On-Campus Cost for % 67% 1% 27% 6% 27% UCB ($23,100) UCD ($22,500) Room & Board, Books & Supplies, Personal, Transportation, Health Insurance Campus-Based Fees Systemwide Fees 46

47 Current Presidential Policy: Permitted Uses & Required Approvals Uses: Student-related services and programs Construction and renovation of student facilities Student governments and registered student organizations Approvals: Majority student approval through the campus student referendum process Final approval by the President on the Chancellor s recommendation 47

48 Current Presidential Policy: Student Referendum Procedures Campus flexibility on such issues as: Minimum voting pools; Combining multiple fees on a single ballot; Facilities Fee collection and use following completion of debt service; Assessing Fees before or after a facility is complete and available for use by students; and Inclusion of Return-to-Aid on Campus-Based Fees 48

49 Presidential Policy: Amendment Process By Policy, review and amendment of Presidential Policy requires full consultation with: Students Faculty Staff 49

50 Presidential Policy: Amendment Process (continued) Upon conclusion of review and adoption of amendments to Policy, report back to Board 50