LONG BEACH -- California State University trustees on Tuesday reviewed painful potential budgets cuts that could force the 23-campus system to raise fees as much as 40 percent and turn away tens of thousands of students.

The budget proposed by Gov. Arnold Schwarzenegger would slash $240 million, or 9 percent, from CSU's funding.

The governor's proposal would require the system to reduce enrollment by nearly 20,000, including about 10 percent of incoming freshman, or 4,200 students, who would be redirected to community colleges.

Programs developed to help disadvantaged high-school students prepare for college would also be eliminated.

The CSU system serves about 409,000 students and employs 44,000 faculty and staff.

CSU officials are advising university presidents to cut enrollment by 5 percent at each campus to meet the 20,000 target.

Chancellor Charles Reed said without the reductions campuses won't be able to provide classes and other services to every student who attends.

"We can admit students but we wouldn't be able to offer them classes or sections," Reed said. "That is pretty much the worst thing that we could do."

In addition to the cuts, Executive Vice Chancellor Richard West said it is crucial to the CSU that voters pass the governor's proposed $15 billion bond measure in March. Without it, Reed said, the CSU would need to make more cuts that could include turning away as many as 40,000 more students.

Asked to give advice to prospective students, Reed said: "Do well in school. Be flexible in attending our campuses. Pray a lot."

Trustees were told Schwarzenegger's proposed budget cuts would mean fee increases of 10 percent for undergraduate students and 40 percent for graduate students, on top of 40 percent increases just last year.

Fees for out-of-state students would rise 20 percent.

In other action Tuesday, the board:

Approved a report showing that while CSU's philanthropic support hit a record of $302 million, its total outside support, which includes donations, grants and contracts, slipped to about $841 million, down 15 percent.

Ratified an agreement extending until June 2005 contracts for nearly 23,000 faculty.

Approved $126 million in changes to plans to refurbish the campus of California State University, Sacramento.