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Remarks by Dr. Charles B. Reed – July 12, 2011

Chancellor, California State University
CSU Board of Trustees Meeting
July 12, 2011

Thank you Chair Carter.

Presidential Transition and Appointments

I want to take this opportunity to welcome Elliot Hirshman as our new San Diego State president. Also welcome to Leroy Morishita, our interim president at Cal State East Bay, and to Mo Qayoumi as our new San Jose State president. Congratulations also to Jeff Armstrong, who was inaugurated as president of Cal Poly SLO last month.

Also congratulations to Mildred Garcia, who has been named to the President's Advisory Commission on Educational Excellence of Hispanic Americans. She will be part of a group that advises President Obama on the educational attainment of Hispanic students. I know she will represent the CSU well.

Budget

The budget dominates almost every aspect of our discussions for this meeting.

I am extremely disappointed that the Legislature could not arrive at consensus to support the needs of California. Even though we were cut $500 million in March, we were optimistic that we wouldn’t be cut further.

However, since there was no legislative agreement, we were cut an additional $150 million. Plus a gun is aimed at us to pull the trigger to cut another $100 million in January if the state cannot collect the $4 billion it needs.

So therefore I know that I have the responsibility to recommend tuition increases of 12 percent – or $294 per semester and $588 per year. This will bring our annual tuition to $5,472 for undergraduates.

While this is a lot of money, it is still the lowest tuition for comparable institutions in the United States. It is also a good return on the people who invest in us.

I want to be clear that we are not balancing the budget on the backs of students. We raised tuition 10 percent last November for a net revenue increase of $147 million after financial aid. If you apply that to the $500 million reduction, that was a $343 million absolute cut. We have to add to that health and benefit costs to make a $403 million real cut. If we add the $150 million additional cut that is effective July 1, and a 12 percent increase in tuition, that nets out.

So our real absolute cut is $403 million – plus we are facing the threat of an additional $100 million cut in January.

Our total state General Fund budget will be $2.1 million. That’s the same as it was in 1999/2000, except this time around we have 90,000 more students. This is an extremely difficult situation, and we are all working to do the very best we can with what we have.

Affordability

As we discuss the budget, I want to call your attention to a new report by the Education Trust on college affordability called, "Priced Out: How the Wrong Financial-Aid Policies Hurt Low-Income Students.” The report analyzed data from approximately 1,200 four-year colleges and universities to review rising costs in college education.

It names two CSU campuses – Fullerton and Long Beach – as among only five universities in the country cited for being the most affordable and accessible with high graduation rates.

The Ed Trust also recognized the CSU for being "deeply, publicly committed to closing the access and success gaps between low-income and high-income students, and between whites and underrepresented minorities."

President Alexander and I will be participating in a briefing on the report at the end of this week in Washington D.C.

Looking at our budget situation from an affordability perspective, I want to point out that we have added almost $800 million in financial aid since 2007. Approximately 170,000 undergraduates will be unaffected by the tuition/fee increases because of tuition fee waivers, State University Grants, or Cal Grants. So even though the current increase is dramatic, we are still covering for those students for whom this would be a financial hardship.

Impaction

Next, it is my duty under the Education Code to report to you of approved changes in admission practices before those changes can be enacted.

Both Cal Poly Pomona and Sacramento State have demonstrated that they are receiving more applications from eligible applicants in certain programs in the initial filing period than there is capacity to support these applicants at their campuses.

Both campuses have complied with the provisions of the law that require a series of public hearings and public disclosure in advance of submitting their final program impaction requests.

Cal Poly Pomona has provided justification and has received permission to impact its programs in Psychology and Sociology beginning in the fall. Sacramento State has provided justification and received permission to impact programs in Criminal Justice, Health Science and Psychology beginning in the fall.

Graduation

Last but not least, we graduated approximately 100,000 students from CSU campuses this spring. That says a great deal to me about the CSU’s contribution to the state of California. It also says a lot about our ability to continue to help students reach their goals in spite of the devastating budget circumstances.

We recently honored 50 of those graduates who are emancipated foster youths. Less than 10 percent of foster children go on to earn a college degree. I am proud to be a part of a university that can support those kinds of kids and help them achieve incredible things despite the adversities they have faced.

Congratulations to all of our graduates – and to our campuses for the support and services they provide to our students.

Chair Carter, that concludes my remarks.