SAN FRANCISCO, November 12, 2014—Although in-state tuition at California’s public universities more than doubled in the past decade, most students with federal financial aid and family incomes under $75,000 pay little or no tuition because federal, state, institutional, and private grants have expanded to cover the increases, according to a report released today by the Public Policy Institute of California (PPIC).
Given tuition and fee levels that remain at all-time highs, the report concludes that policymakers can help keep college affordable by improving outreach to students who can benefit from aid.
“Low-income students who successfully navigate the financial aid process pay little or no tuition at UC or CSU,” said Jacob Jackson, PPIC research fellow and author of the report, Higher Education in California: Student Costs. “Given the importance of higher education in California’s future, it is more important than ever to reach students who are eligible for aid but don’t apply for it.”
From 2008 to 2011, the average tuition at a California State University campus increased from $3,793 to the current $6,486. But students with financial aid and family incomes under $75,000 saw little or no change in their net tuition—the full tuition price minus grant and scholarship aid. Average tuition at the University of California rose from $8,057 to $13,208 over this period. Even students with families making as much as $110,000 saw virtually no change in their net tuition if they received federal aid.
The total amount a student pays for college can far exceed the costs of tuition and fees. The full price of attending UC and CSU has increased in recent years, but the net price for low- and middle-income students has grown more slowly because grants and scholarships can be used for expenses other than tuition. On average, students from the state’s lowest-income families are paying no more to attend UC than they did before the tuition increases. CSU students have seen small increases in the average net price. The PPIC report notes that even a modest increase is cause for concern for low-income students, who are more likely to attend CSU than UC. The dollar amounts are small, but they represent a relatively large share of family incomes.
Net tuition and net prices are difficult to advertise because they are highly individualized, depending on a student’s exact family income, family size, and other financial and academic factors. The PPIC report suggests a range of actions to reach students from low-income families who are eligible for financial aid but do not apply for it. Universities can make it easier to find and use net price calculators on their websites. The state can enact policies to ensure that more students complete the required Free Application for Federal Student Aid (FAFSA) form–national data suggest that significant numbers of low- and middle-income students fail to do so now. And the federal government can simplify the process of filling out the FAFSA.
The report is one of three companion pieces focusing on higher education finance in California. A second report, Higher Education in California: Institutional Costs, evaluates both revenues and spending in the UC and CSU systems. It finds that costs—including faculty salaries and benefits, the largest budget category—have not increased significantly in the past several years.
A third report, Higher Education in California: Performance Budgeting, suggests that as California begins to reinvest in public higher education, it could tie funding more closely with results—for example, the number degrees awarded. This approach could expand student access and improve student performance. The report raises key questions to consider in designing such a system.
The three reports were supported with funding from the California Postsecondary Education Commission Foundation and the Donald Bren Foundation.
PPIC is dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.