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UC Budget Proposal To Raise Tuition, Cut Employee Benefits

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UC Berkeley

The campus at University of California at Berkeley. (CBS)

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OAKLAND (KCBS / AP) — The University of California would raise undergraduate tuition by 8 percent but provide financial aid to more students next year under proposals announced Monday by school administrators.

The proposals would also impact UC employees’ benefits and lead to more staff cuts, according to UC President Mark Yudof.

 KCBS’ Bob Melrose Reports:

Under the plan, student fees for California residents would increase by $822 to $11,124, which doesn’t include individual campus fees or room and board. The increase, which would go into effect in fall 2011, would raise an estimated $180 million in annual revenue, with $64 million set aside for financial aid.

UC student leaders denounced the proposed tuition hike, which would follow a 32 percent increase that went into effect this year.

“Raising fees again is intolerable,” said Sameer Khan, a UC Berkeley student who chairs the Council on Student Fees. “The administration must find another way to fund the university, as students and their parents are shouldering too big of a financial burden already.”

Yudof said the tuition hike, along with proposed changes to employee retirement benefits, are needed to close a $1 billion budget shortfall caused by unprecedented cuts in state funding.

Without it, the university would likely have to lay off more staff, eliminate academic programs and turn away more qualified students, he said.

To offset the tuition hike, UC administrators have proposed expanding its financial aid program, called the Blue and Gold Opportunity Plan, so students from families earning less than $80,000 annually would not have to pay any tuition _ as long as they qualify for state and federal aid. The program currently covers families earning less than $70,000.

Under the plan, financially needy students from families earning less than $120,000 would not have to pay the 8 percent fee increase for one year. UC officials estimate that proposal would cover about 55 percent of the system’s 181,000 undergraduate students.

“We are trying as hard as we possibly can to make sure we are not closing the doors of opportunity” to low-income families in California, Yudof said.

University officials are also proposing more changes to employee retirement benefits to help close a $21 billion unfunded liability in its retiree pension and health programs.

The proposed plan would create a new tier of pension benefits for employees hired on or after July 1, 2013. The minimum retirement age would rise from 50 to 55 and the age to receive maximum benefits would increase from 60 to 65. The proposed plan is estimated to cost about 20 percent less than the pension plan for current employees.

The Board of Regents is scheduled to hear a presentation on the proposed pension reforms next week and vote on a plan at a special meeting in December.

In September, the regents voted to increase university and employee contributions to the UC Retirement Fund, which faces a massive unfunded liability after a 20-year period when it did not receive contributions from the university, employees or the state.

“I think the time is gone when we can defer making these decisions,” Yudof said. “My goal is to move the university past the current economic crisis toward a more stable future.”

The UC Board of Regents was expected to vote on the proposals when it meets in San Francisco next week.

California State University’s Board of Trustees also was scheduled this week to vote on raising undergraduate tuition by 15 percent next year.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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