The higher-education budget deal announced Tuesday between the governor and higher-education leaders is a betrayal of thousands of qualified students who will be turned away from the University of California and California State University in the coming year, said students, faculty and Democratic legislators.

But Gov. Arnold Schwarzenegger, UC President Robert Dynes and CSU Chancellor Charles Reed defended the six-year plan as the best deal possible in the face of a staggering state budget deficit. They said it would bring the universities some measure of financial stability.

After one more year of substantial budget cuts, the agreement calls for regular state-funding increases of 3-4 percent to the university's base budget, plus an annual 2.5 percent increase for enrollment growth.

The deal's tuition proposal would keep fees below the average for comparable schools, the governor said, and ``give families the stability they need to plan for their kids' college years.''

The agreement calls for a 14 percent fee increase next year for California undergraduates and 8 percent in each of the next two years. For graduate students, fees would increase 20-25 percent for 2004-05, and 10 percent in each of the following two years.

The compact would provide for 2.5 percent enrollment growth in future years, but enrollment would drop sharply next school year. The universities are cutting their freshman class by 10 percent for 2004-05. That means offering deferred admission to about 15,000 students who meet all eligibility requirements, telling them they will be admitted as juniors if they attend community college first. Assemblyman Marco Firebaugh, D-South Gate, promised a fight, saying the Legislature would not ``rubber stamp'' the agreement.

The governor's promises of future funding are ``pie in the sky,'' said Sen. John Vasconcellos, D-San Jose.

But Schwarzenegger said the money would be there. ``We know now that the economy is coming back,'' he said.

John Travis, president of the California Faculty Association, said the cuts next year would harm thousands of students. ``There will be no alternative but to cancel thousands of classes,'' Travis said. ``It is the only way to achieve that magnitude of reduction.''

Sen. Bruce McPherson, R-Santa Cruz, called the plan realistic, but less than ideal. Its pluses include continuing academic outreach programs aimed at students in low-performing schools, he said.