Media Advisory
University of California Regents Face Emerging Questions on Pledges of Tuition for Construction

UC faculty and staff call for moratorium on student fee increases
as speculation mounts over administration’s use of fee revenues

FOR IMMEDIATE RELEASE: October 28, 2009

PRESS CONTACT: Ali Cooper, (916) 281-7170
Bob Meister, (831) 212-3040

OAKLAND—While facing massive demonstrations scheduled for an upcoming University of California Regents’ meeting, and increasing scrutiny on the University of California’s current financial stewardship, a committee of UC Regents and auditors faced new questions on the University’s use of millions in undergraduate tuition to finance UC’s construction debt.

Earlier this month, students attending campus teach‐ins on the need for UC reform discovered their tuition payments may be footing the bill for more than educational costs. According to political thought professor and President of the Council of UC Faculty Associations (CUCFA) Bob Meister, in recent years student tuitions have become UC’s key to accessing choice credit markets. “For all practical purposes, student fee increases are serving as UC’s version of a credit swap.

Students are being asked to saddle themselves with increasing debt, without any input or transparency as to how their fees will be used. What they aren’t being told is why this is actually desirable to UC. The University is engaged in aggressive capital expansion—consistent with its accelerating path towards privatization—and you need access to credit for that. The more UC students pay out of pocket, the more debt students incur, the better UC’s credit rating gets.”

A series of reports posted on www.cucfa.org details UC’s use of student fees as collateral pledged to secure bonds for construction projects. The report goes further to question whether student tuition is also being used by UC to pay the debt service on these bonds, which would be a violation of UC Regents’ policy on allowable uses of student educational fees. “Students are being led to believe fee increases are due solely to state budget cuts, and are actually used to cover the cost of their education. Meanwhile, UC is busy telling Wall Street the University can use tuition however it wants,” said Meister.

Today at a meeting of the UC Regents’ Committee on Compliance and Audit, representatives of CUCFA and service‐worker union AFSCME 3299 requested a moratorium on student fee increases pending an investigation around UC’s use of student fees. UC’s Regents are scheduled to vote November 19 on additional tuition hikes totaling 32%.

“We know UC is already using its ability to raise student fees to enhance its debt capacity. What we don’t know is whether UC is dipping into student fees to pay off the debt itself. If this administration is using students’ tuition to fund construction projects, they need to be held accountable to that.”

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