University of California campuses will send rejection letters to more than 3,200 eligible freshman applicants who would normally have been admitted.

The letters will guarantee the students a spot at UC after they complete two years at community colleges, which will waive their fees, university officials told UC regents Wednesday in San Francisco.

The decision follows Gov. Arnold Schwarzenegger's proposal last week to cut freshmen enrollment by 10 percent to help cope with the state's budget crisis.

The regents closely reviewed the governor's proposals for the nine-campus system, which range from research cuts to a 10 percent fee increase -- an increase UC officials say may go even higher.

The university traditionally mails acceptances and rejections by early March. Even though UC won't know for certain until this summer whether it must cut enrollment, it can't accept students and later reject them, said Larry Hershman, vice president for budget.

If the university receives money for those students, it can reverse itself and accept them. But Sacramento discussions make that seem unlikely.

"No one encouraged us to believe we'll get money restored to our budget," Hershman said.

The governor's proposal made it clear he wants UC and the state university system to institute a steady schedule of fee increases with a 10 percent annual cap. Since December 2002, both systems have raised fees by roughly 40 percent to offset budget cuts.

Unless the state starts providing the university with more money, UC may have to raise fees above 10 percent to maintain quality, Hershman said. The university hasn't received nearly $1.6 billion promised since fiscal year 2001-02.

Hershman told the regents lawmakers must understand the university can't afford to sustain any more cuts. In addition to a fee increase, the university may have to reduce the number of transfer students it accepts from community colleges -- a move that wouldn't include the rejected UC eligible students who were told to go there.

Officials and regents reviewed a list of priorities to guide them as they work with the governor and Legislature on the university's 2004-05 budget.

First among them: preventing further deterioration of the student-faculty ratio.

Schwarzenegger has proposed cutting 5 percent or $35 million from spending on faculty to increase the student-faculty ratio from 19.7 to 1 up to 20.7 to 1. Thirty years ago the university had a ratio of 14.7 to 1. Elite private universities have a ratio of roughly 10 to 1.

Hershman said the university will not force campuses to increase the ratio but will give them discretion to find other areas to cut.

"It is absolutely vital if we take students we give them a quality education," he said.

Before the meeting, students told the regents how the governor's budget would affect them. Schwarzenegger has proposed eliminating money for outreach to disadvantaged K-12 schools to help prepare students there for college.

One student, who said his household made just $30,000 a year, said he would never have gotten into UC Berkeley if it hadn't been for the outreach.

"It's not just UC programs that are being eliminated, it's people like me."