University of California regents began grappling Wednesday with a new political reality -- a governor asking California students to pay a larger share of the cost of their education to help close the state's gaping budget deficit.

While expressing a desire to work with Gov. Arnold Schwarzenegger, a number of regents and university officials said they cannot live with plans that include a 40 percent fee increase for graduate education and reductions in financial aid for low-income students.

Such a dramatic rise in graduate fees could send the best and brightest graduate students elsewhere, hurting both teaching and research at the university, said President Robert Dynes.

``The budget cuts over time have begun chipping away at quality, accessibility and affordability of the university,'' Dynes said.

Jen Lilla, a graduate student in sciences at UC-San Francisco, said a 40 percent fee increase would ``decimate'' programs like hers that draw heavily on out-of-state students.

The budget proposal Schwarzenegger released last week would cut about $372 million from UC. It calls for raising fees by 10 percent for California undergraduates and by 20 percent for out-of-state students.

If UC can't get the compromises it wants, regents might consider an even larger increase for undergraduates or reducing the number of upper-division transfer students, said UC budget chief Larry Hershman. Bucking the governor's fee recommendation would be unprecedented, he said, and is something the university would like to avoid.

Regents compared their own budget priorities to the governor's proposal. At the top of their list is lowering the faculty-student ratio, which has risen to 20-to-1 from about 15-to-1 30 years ago. The governor has called for reducing spending on faculty by 5 percent, which would increase the ratio to 21-to-1.

With the cuts proposed to financial aid, the university may have to scale back financial aid to middle-income students to assist the poorest students.

``That is what the governor intends,'' Hershman said, ``shifting aid to the low income from the middle income.''

Regents expect to pass a budget in March. By then, they will know if a $15 billion state bailout bond has passed. If the measure fails, even deeper reductions in state funding are expected.

The university has advised each of its campuses to admit 10 percent fewer freshmen this fall. These students, who meet UC's eligibility requirements, will be granted admission to a specific UC campus, but will be told they must complete their first two years at a community college.

This redirection of about 3,200 UC freshmen also is part of Schwarzenneger's cost-reduction effort, because the state spends considerably less on each community college student than on UC students. The California State University system also is being told to redirect 10 percent of its freshmen to community colleges.

This kind of specific direction rubbed some regents the wrong way.

``The Legislature or the governor's office should not be telling us how to run the university,'' said Regent Richard Blum.