UC-Berkeley Announces New Tuition/Financial Aid Plan

Below is the press release and a related video. Note that the aid is said to be financed by non-state sources including recycling revenue from out-of-state students.

UC Berkeley launches groundbreaking middle-class financial aid plan

By Public Affairs, UC Berkeley | December 14, 2011

University of California, Berkeley, Chancellor Robert Birgeneau announced today (Wednesday, Dec. 14) a new financial aid program to help middle-class families pay for the growing cost of an undergraduate degree.

For families whose gross income ranges from $80,000 to $140,000 annually, the new plan caps the contribution parents make toward the total annual cost of a UC Berkeley student’s education at 15 percent of their earnings. Total cost includes tuition, fees and expenses, such as room, board and books.

The initiative, named Berkeley MCAP (Middle Class Access Plan), is the first program in the nation at a public university to extend comprehensive financial aid to this category of middle-class families. The university is launching this initiative in recognition of California’s high cost of living, the challenges these families face and the significant tuition increases of recent years.

“Berkeley has an outstanding record of providing access through financial aid for students. As a result, our undergraduates leave college with among the lowest levels of student debt in the country,” said Birgeneau. “While our extraordinary commitment to financial aid has, in recent years, led to both an increasing number of lower income students on the Berkeley campus and a reduction in their net cost of attendance, we see early signs that middle-income families who cannot access existing assistance programs are straining to meet college costs. As a public institution we feel strongly that we need to sustain and expand access across the socio-economic spectrum. This plan is part of our commitment to ensuring that financial challenges do not prevent qualified students from attending one of the preeminent public universities in the nation.”

Financial aid awarded through the new program will be for the 2012-13 school year, which begins in August, and is for domestic undergraduate students, including incoming freshmen. Berkeley MCAP will augment the campus’s robust financial aid program that already provides grant aid to more than half of the campus’s 25,885 undergraduates and has lowered by 15 percent since 2005 the net cost of attendance for students from the most economically disadvantaged families. UC Berkeley distributes more than $600 million each year in grants, loans, work-study, fellowships and scholarships. Currently, approximately 40 percent of all undergraduates effectively pay no tuition.

Berkeley MCAP will assist all families within the $80-140,000 income range that have assets of less than $200,000, excluding the value of a home and retirement savings. Campus officials estimate that about 6,000 undergraduate students come from families in this income range. Residents of other states also will be eligible for assistance, although this program will not cover the cost of non-resident tuition. International students will not be eligible for Berkeley MCAP assistance. The parameters of the program will be reviewed on an annual basis.

“As state support for Berkeley has declined by more than half in just the past few years, tuition has increased dramatically, making up for only a portion of this disinvestment,” said Vice Chancellor for Student Affairs Harry LeGrande. “Today, the total cost of attendance is at a level that can be easily accommodated only by affluent families. Even as we continue to advocate for increased state support, we feel the need to address the very real issues of our middle-class families.”

Campus budget officials estimate that Berkeley MCAP will require between $10 million and $12 million in funding over the course of the 2012-13 academic year. They said they will not use state funds to fund the program, but instead will redirect expanded financial aid resources, philanthropy and revenue from the increased number of UC Berkeley students paying non-resident tuition.

The current cost of attendance at UC Berkeley for California residents living on campus is estimated to average $32,634 per year for students living on campus, including $12,834 in tuition and fees. Non-residents pay an additional $22,878 per year. To reduce the cost of attendance, students from economically disadvantaged families receive substantial grant aid from sources that include Pell Grants, Cal Grants and direct aid from the University of California.

The Berkeley MCAP announcement is being made now to ensure that families of students applying for 2012-13 admission know about Berkeley MCAP assistance before the financial aid application process begins in early January. UC Berkeley’s acting director of financial aid, Rachelle Feldman, encouraged eligible families of both currently enrolled and prospective students to file the “Free Application for Federal Student Aid” (FAFSA) form if they wish to be eligible for Berkeley MCAP.

“For these families, it’s a three-way partnership: Parents, students, and financial aid all make a contribution toward the cost of attendance. The Berkeley MCAP program is designed to help families with costs above and beyond the amount we expect students themselves to contribute,” Feldman said. “All students receiving financial aid assume some responsibility for paying for their own education, usually through work-study or student loans. At the same time, we take great pride in the fact that our students have, on average, among the lowest student debt levels in the nation upon graduation: The 40 percent of our undergraduates who graduate with any loans have an average debt of $16,056, as opposed to the national average of $25,000 for two-thirds of graduating students.”

According to recent reports from the Public Policy Institute of California, approximately half of all families in the state are in the middle-income bracket, and the gap between the highest and lowest income families is the widest in 30 years. Chancellor Birgeneau noted that the institute found that, “The most important factor driving the gap between high- and low-income workers is education,” and said he supports the report’s request that the state find “innovative ways to promote opportunity through education, especially so that middle- and lower-income families are not left behind.”

“The Berkeley MCAP program is necessary and completely consistent with everything we stand for as an institution,” Birgeneau said. “Public universities are the gateway to the American Dream, and the engine of future economic growth. We will continue to do everything in our power to serve the greater good through steps to preserve the excellence and affordability of this university.”

From: http://newscenter.berkeley.edu/2011/12/14/berkeley-middle-class-access-plan/

Video of the announcement: