Push for more UC aid urged

In order to keep up with rising costs for undergraduates’ education, the University of California should attempt to create a $2-billion endowment for extra financial aid, according to a report presented Wednesday to the Board of Regents.

All of that money might come from private donations over the next 10 years or be split between such donations and state funds, suggested UC Berkeley Chancellor Robert Birgeneau, who headed a study group on the affordability of undergraduate education.

To not attempt such a boost in financial aid would mean shutting out low- and middle-income students in the future, he said.

“We must make it possible for them to attend,” Birgeneau said.

His proposal, which included such other ideas as devoting more income from student fees to aid, received a mixed reception from the regents, who met at UCLA.

Facing proposed cuts in the state budget later this year, regents said any major initiative on financial aid would be studied over the next few months and have to be weighed against such other needs as funding faculty raises, ensuring pensions and repairing buildings.

Some said they feared a new fundraising drive would drain donations from such needs as running hospitals and backing research.

The report said financial aid is working relatively well now at UC.

About a third of all 167,693 undergraduates come from families that earn less than $40,000 a year, and more than half of undergraduates receive some kind of grant or scholarship, most frequently from the university or the state and federal governments.

Only about half the students graduate with student loans and those students face average debts of about $14,000, much less than students who attend private universities.

Birgeneau cautioned, however, that the rising costs of housing, food, books and healthcare would have a much greater effect in the future than the UC fees that students pay.

If the 7.4% increase proposed in Gov. Arnold Schwarzenegger’s budget is approved, basic UC fees for undergraduates will be about $8,000 next year.

But the overall annual costs, including housing, will be about $25,000.

Lt. Gov. John Garamendi, who is an ex officio regent, appeared to be dubious about some of Birgeneau’s ideas. He said it would be more useful for the university to keep its fees frozen or raise them very slowly.

Besides the huge potential fundraising drive for aid, the plan calls for several other controversial tactics, including finding more lucrative returns on university investments and devoting more of that to scholarships.

The proposal would increase the portion of any fee hike that is given to aid from the current 33% to 40%. That way, even some families earning about $100,000 might be eligible for some aid while low-income students could avoid huge debt, according to the proposal.

Birgeneau acknowledged that his plan echoes themes expressed recently by wealthy private institutions, including Harvard and Yale, that have vastly raised their amounts of financial aid and increased the threshold of aid eligibility to households earning as much as $180,000 or even $200,000 in some cases.

“They set a great example for us,” the chancellor said.

In other business Wednesday, the regents at least temporarily shelved a plan that would have raised the salaries of the 10 campus chancellors.

Given the projected $14-billion state budget shortfall and proposals to hike student fees and cut other university spending, the time is not right for such pay increases even if they are merited, officials said.

“We are recognizing the circumstances around us,” said regent Monica Lozano, who heads the committee on compensation.

The chancellors’ pay, not including benefits and the value of their campus housing, averages $360,500, officials said.

That is about 30% below the average at 26 other public and private institutions included in a recent survey, and some regents said they were worried about losing talented administrators to schools that pay more.

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larry.gordon@latimes.com