In the next few weeks, the UC Board of Regents will be considering a student fee increase for the 2003-04 year. California is facing the most serious budget crisis in its history, with a budget deficit estimated as high as $38 billion. The governor’s budget for 2003-04 includes $300 million in base budget cuts for the University of California, which now receives about $3 billion in funding from the state each year. These cuts come on top of additional reductions the last two years.

Outside of student instruction, essentially all areas of University operations are seeing major budget cuts. Some programs are slated for cuts in the range of 30 percent to 50 percent and have begun or are preparing for employee layoffs. Salaries for faculty and staff are significantly behind where they need to be for the UC to remain competitive and maintain its high level of quality.

As this crisis has unfolded, the University has placed one priority above all others: maintaining access and quality in the student instructional program. We have worked with the state to target budget cuts to non-instructional areas because we do not want to restrict access for UC-eligible students, reduce class offerings or delay students’ time to graduate.

The latest news is both good and bad. The good news is that the governor’s May revision to the budget proposed no further cuts for UC. The bad news is that the state legislature is considering additional budget cuts of $80 million to $400 million for the UC system.

In this environment, it is clear that a student fee increase will be needed in 2003-04. This is an important point: The University is not seeking to balance the budget solely at the expense of students. In fact, increased fees currently represent only about 20 percent of our solution to the overall problem, with the rest coming from spending reductions.

Under the governor’s budget, fees for resident undergraduates would increase by $795 in 2003-04, on top of the $405 annualized increase that took effect this spring. Fees for resident graduate academic students would increase by $855. Nonresidents would see a $925 increase in mandatory systemwide fees and an increase in nonresident tuition of $500 for undergraduates and $445 for graduate students. Students in selected professional schools would see fee increases between $1,105 and $1,955, depending upon the school.

The regents will set final fee levels in June or July, once we have more reliable information about the outcome of the state budget.

Fortunately, financial aid will ease the impact for many students, and no student should look at the “sticker price” of fees without considering the potential impact of our aid programs. Indeed, one-third of the new fee revenue will go to increased financial aid. Cal Grants will also increase. As a result, we expect that 40 percent of UC undergraduates will not have to pay an increase in mandatory systemwide student fees at all, no matter what the amount.

In general, financially needy undergraduates from families with annual incomes of $60,000 or less will not have to pay the fee increase; a UC grant or Cal Grant will offset it. Also, in general, other financially needy undergraduates from families with incomes up to $90,000 would receive a UC grant covering at least a portion of the fee increase. Students from all income groups who encounter extraordinary financial difficulties would be considered on a case-by-case basis for a reassessment of their financial aid eligibility, and those who are found to have sufficient need would receive a UC grant to offset a portion of the increase.

I wish we did not have to confront these issues. But I believe that, to maintain the quality of the UC educational experience, a fee increase needs to be one part of our answer to the state’s budget crisis. As you think about your own financial situation, I hope you will refer to our web site “You Can We Can Help,” which profiles UC students from various financial backgrounds and shows how they have made college affordable. You can find it at www.universityofcalifornia.edu/admissions/youcan/.

Richard C. Atkinson is the president of the University of California.