Undergraduates at the University of California may be asked to pay at least 15 percent higher fees so the university can scale back the 40 percent fee increase that Gov. Arnold Schwarzenegger has proposed for graduate students.

``The 40 percent is really untenable,'' UC President Robert Dynes said Wednesday after a budget session with the Board of Regents. He said it would hurt the university's ability to attract top students to research, which has been eroded by earlier state funding cuts.

Although students are getting fall admission notices this month, families won't know until April, May or even later exactly how much fees will increase for the coming academic year.

The university can't keep absorbing deep budget cuts year after year, Dynes told regents. ``The faculty won't stay the best. The students won't come,'' he said. ``The innovations that power the economy won't keep flowing.''

UC officials said they are working with the governor and the Legislature on a multiyear compromise plan that would give the university more control over its use of state funds while committing UC to meeting state goals.

The governor's budget identified about $370 million in state funding reductions for UC.

It calls for a 10 percent fee increase for resident undergraduates, a 40 percent increase for academic graduate students and about a 33 percent increase for professional-school students.

Schwarzenegger also wants to cut back the amount of fee revenue that campuses can use for financial aid from 33 percent to 20 percent, and eliminate it entirely for professional students.

The UC system is considering a range of fee and financial-aid options to meet the governor's budget. Among them is increasing resident undergraduate fees by 15 percent and asking students eligible for financial aid to pay slightly more toward their educations so fee increases for graduate students could be cut to 20 percent.

Matt Murray, a student regent, said he is troubled by the idea of shifting some financial aid from undergraduates to help cover graduate student costs.

The university is affected by graduate fee increases because UC pays the fees of graduate research and teaching assistants as a way to attract the brightest students from around the world. The money typically comes from research grants for projects in which the students participate. The cost in grants is so high that some faculty may cut back the number of graduate students they hire or eliminate them, Dynes said.

Students oppose the governor's fee-increase proposals, said Matt Kaczmarek, president of the University of California Student Association.

Kaczmarek said that if they go through, resident undergraduate fees would have increased 60 percent in 21 months, rising to $5,484 a year for fall from $3,429 in January 2003. Resident graduate fees would increase 102 percent in the same period, from $3,609 a year to $7,307. Campus-based fees add $500 to more than $1,500.

On top of those increases, which apply to all students, non-residents would pay a 20 percent increase in the non-resident fee. While only a small percentage of undergraduates come from out of state, about one-quarter of graduate students come from someplace else.

``I don't think there's any way we can maintain our non-resident students'' with annual fees getting close to $25,000, Hershman said.

At Schwarzenegger's urging, the university is redirecting 3,200 UC-eligible freshmen to community colleges and offering them admission as juniors.

Legislators ``are worried about the same things we are. No one wants to reduce quality,'' Hershman said. ``Everybody is worried about these things, but no one has an answer.''

Though the changes are painful, the university can't go back to Sacramento saying only that it wants more money, said Regent Ward Connerly. ``We have to recognize times have changed,'' he said. ``Education is not going to be a right in this new view.''

He said the governor had clearly indicated he wants to see some changes.

For example, Schwarzenegger has called for an undergraduate fee policy that is tied to growth in personal per capita income, capped at 10 percent annually, but wants graduate and professional students with high earning potential to pay a greater share of their education costs.

University officials say they support tying fee increases to income growth and capping them, but only if the university can count on the state for adequate financial support.