Cal Poly, LOS ANGELES - Gov. Arnold Schwarzenegger plans to propose a 10 percent fee increase for Californians attending college at the University of California and California State University and a fee hike of up to 40 percent for graduate students at the universities, according to sources familiar with the governor's budget.

At the same time, the budget is also expected to contain reductions in college financial aid for students from low- and moderate-income families.

If approved as is, the proposal would result in fee hikes of about $100 per quarter for undergraduate students at Cal Poly and nearly $500 for graduate students.

The university's current enrollment is 17,540, of which about 1,000 are graduate students.

Cal Poly officials declined to comment on the proposal, preferring to wait until the budget picture becomes clear.

Tuition for full-time Cal Poly undergraduates has risen 60 percent since 2001.

Diana Fuentes-Michel, executive director of the California Student Aid Commission, said she expects the governor's proposal to tighten qualifications for Cal Grants, the state's main financial aid program. The move likely would eliminate financial aid for some students by lowering the ceiling used to determine which families are eligible for aid. Currently, students from a family of four are eligible for aid if the family income is no more than $66,700.

Fuentes-Michel said she expects the maximum size of the Cal Grant awards -- which currently range from $1,551 for community college students to $9,700 a year for students attending private universities -- to remain unchanged, but that reductions are possible there as well. The cost of the program has increased rapidly in recent years.

The governor's budget is not expected to provide better news for Cuesta and the state's other community college students. Officials at the two-year colleges have said they are preparing for the governor to propose raising fees from $18 to $26 per credit.

That move would follow a fee increase last year for community college students, from $11 to $18 a credit. The state's budget crisis also has forced the colleges to cut course offerings significantly in that time period, with more students crowding into the remaining classes.

Even with the fee increases Schwarzenegger is expected to propose, UC and Cal State fees for undergraduate state residents would be lower than the average of comparable public universities in other states.