2012/13 Executive Summary

Revenue Forgone

State University Grants (SUG) and Tuition Waivers—Revenue Forgone

Revenue ForgoneThe State University Grant program is unique to the CSU and is a critical source of grant assistance for CSU students. Since its inception in 1982/83, the State University Grant program has provided need-based grants to cover the cost of mandatory systemwide tuition fees and to offset the impact of increased charges for students with the greatest financial need.

Prior to 1992/93, the state provided funds for the SUG program to ensure adequate grant assistance was available for the CSU’s neediest students. Since 1992/93, the CSU has continued grant assistance to these students by forgoing one-third of annual revenue increases from tuition fees.

The amount projected for 2012/13 SUG from tuition fee revenue is $602.9 million, an increase of $25.5 million from 2011/12. The SUG adjustment is due to a one-third set-aside from tuition fee revenue derived from 5 percent enrollment growth (estimated 2012/13 marginal cost of $1,265 per FTES), as well as additional financial aid requirements of recently enacted legislation, AB131. In addition, the annual budget act earmarks $33,785,000 of the CSU’s General Fund appropriation for SUG, bringing the projected total of SUG for 2012/13 to $611.2 million.

Under current law, there are three state-mandated tuition fee waiver programs: the California Veterans Waiver for children of disabled/deceased veterans (Education Code 66025.3), the Alan Pattee Waiver for dependents of deceased law enforcement or fire suppression personnel (Education Code 68120), and the tuition fee waiver for California residents who were dependents of victims killed in the September 11, 2001, terrorist attacks (Education Code 68121). In addition to state-mandated tuition fee waiver programs, other tuition fee waiver programs include waivers for employees and employee dependents pursuant to collective bargaining agreements. Other nonmandatory waivers have been established by CSU Board of Trustees policy and California statute that include programs for high school students and California residents age 60 years and older, among others. The state has not provided General Fund support for CSU tuition fee waiver programs since fiscal year 1992/93.

The following is a three-year summary of the total revenue forgone and applied to State University Grants and mandatory waivers from 2010/11 through 2012/13.

Three-Year Summary of State University Grants and Tuition Fee Waivers/Revenue Forgone
  2010/11
Actuals
2011/12
Budget
2012/13
Budget
State University Grants (SUG)
(Forgone from Tuition Fees)1
$431,007,000 $577,421,000 $577,421,000
2012/13 SUG Adjustment from Enrollment Growth 0 0 20,981,000
2012/13 SUG Adjustment from AB131 0 0 4,500,000
Tuition Fee Waivers2 43,868,000 53,868,000 53,868,000
Total SUG and Tuition Fee Waivers Revenue Forgone $474,875,000 $631,289,000 $656,770,000

1SUG covers tuition fees for eligible students with financial need. Amounts awarded reflect forgone tuition fee revenue for the CSU. There is an additional $ 33.8 million SUG funded by General Fund appropriation.

2Includes the campus tuition fee waivers reported annually in Enrollment Reporting System Students (ERSS) database (Waiver Codes 01-08). Amounts awarded reflect forgone tuition fee revenue for the CSU.

In the 2010/11 college year (fall, winter, spring, and summer), 11,313 tuition fee waivers were granted to CSU students. When tuition fee rates are applied to these waivers based on student enrollment status, it amounts to about $44 million in revenue forgone to the CSU. When the 2011/12 tuition fee rates are applied to these numbers, the level of revenue forgone rises to $54 million.

2010/11 Systemwide Tuition Fee Waivers Graph

2010/11 Systemwide Tuition Fee Waivers
California Veterans 5,593
Alan Pattee 267
Employees and Dependents 3,110
Other Discretionary Waivers 802
High School Students in Special Programs 1,490