In the midst of the University of California’s struggle to overcome a host of budgetary challenges, University President Mark Yudof announced on Friday that he would step down and open the way for “fresh leadership.”

The UC president will officially end his term — which first began in 2008 — this August, explaining in a statement that his departure comes with a “mixture of emotions.” In the statement, he cites “taxing health issues” as the cause for his leaving, but says he has faith that the University will overcome unfinished budgetary challenges in his absence.

“When I first arrived in 2008, the economy had begun to unravel and state coffers were tumbling deep into the red … Now, it appears the storm has been weathered,” Yudof said in the statement. “We are not fully in the clear, but we are much closer than we were even a few months ago.”

Yudof formerly acted as the chancellor of the University of Texas system and president of the University of Minnesota system, working in administrative positions at the University of Texas at Austin and as a visiting law professor there, as well as at UC Berkeley. He plans to teach law at UC Berkeley when his tenure ends.

Since 2008, as Yudof’s leadership begun in the early wake of the national financial crisis, the fiscal woes of the UC have left him facing criticism from students, university members and state lawmakers alike.

The new state budget reduces expenditures for other public services to provide revenue to higher education, but the University has requested an increase in its budget by 11.6 percent. Governor Jerry Brown said lawmakers are only willing to increase the budget by five percent, leaving a critical monetary gap.

Brown has suggested the UC find ways to become more financially sustainable, pointing to online courses or coursework as one viable solution to filling the budgetary gap.

“That’s a gap of 6.6 percent and if nothing else happens, the students will pay for that,” Brown said. “The students, and their ability to borrow money in student loans, are the default for whatever the University can’t find money for.”

Under Yudof’s time as president, budgetary shortcomings were, in fact, compensated by fee increases that have risen steadily in recent years — from an annual cost of $7,517 for state residents in 2007 to $12,192 this year. There have also been reductions in the number of offered courses and the amount of non-tenured teaching staff, all changes which left many blaming Yudof and other top-level university officials and Regents.

State lawmakers, in particular, have become increasingly critical of the University’s fiscal practices, as Brown said the UC system must develop a “more economical model.” He pointed to the amount of instructional time spent by faculty as one area of improvement, adding that the research-oriented focus of many campuses — and the increased amount of time teaching assistants, rather than professors, spend with students — is a byproduct of the poor distribution of UC funds.

“What is the balance between teaching hours and the money spent for teaching versus research, between in 2013 and 1975 and 1995?” Brown asked. “Is the same amount of time spent by tenure-track professors with students today, or is that time shrinking?”

In spite of such criticism, Yudof attempted to protect the quality of the University by other means, managing to increase financial aid offerings and not reducing enrollment.

Yudof’s successor will be elected through a lengthy selection process, whereby the UC Board of Regents Chair Sherri L. Lansing will appoint a special committee to guide the candidate selection process, which involves a number of other formal committees and procedures.

UC Office of the President spokeswoman Dianne Klein said the new president will continue to grapple with budgetary issues, which have yet to be fully resolved.

“The realities of the budget dictate that we have to live within the budget,” Klein said. “We already determined that we will not raise tuition, but the efficiency and cutbacks will continue.”

UCSB Associated Students President Sophia Armen said she sees Yudof’s resignation as a welcome opportunity for ongoing change within the University, adding that the UC president often practiced “silencing of faculty, staff and worker voices, who are often our allies,” while leaving a negative influence on Regent decisions.

“He was the dominant force on the board,” Armen said. “That being said, it’s safe to say that Regental policy for the last five years has been Yudof policy.”

During his tenure, Yudof continually pointed to lack of state funds as the primary cause of what Armen calls a “privatization” of the UC. In 2011, he addressed the American Law Institute at San Francisco with a speech on public commonwealth, in which he called education a “hybrid” good that demanded subsidization from public and private sources alike.

He said university officials do not resolve budgetary issues proactively, just as the state does not proactively provide additional funds, at least not until Proposition 30’s passage last November.

“At every [Regents] meeting, people stand up in outrage over tuition, pensions and other similar concerns,” Yudof said in the speech. “But there is no outrage over the threats to UC’s academic quality. And when these meetings are over, our chancellors, administrators, employees and faculty … are simply left to contend with the budget realities on the ground.”

—Nelson Moreno and Carissa Quimbao contributed to this article.

 A version of this article appeared on page 1 of January 22nd, 2013’s print edition of the Nexus.