UC gets ‘critical’ support in Newsom’s proposed budget

“The budget introduced today by Governor Newsom continues to provide critical support for the University and our students,” UC President James B. Milliken said in a statement. He added that the support is especially important because UC faces “tremendous financial pressures stemming from rising costs and unprecedented federal actions.”

California universities — and especially UC campuses — have faced intense scrutiny from the Trump administration over the past year. 

Most notably, the U.S. Department of Justice last year charged UCLA with antisemitism and demanded it pay a $1.2 billion fine and make a number of changes to campus policies in exchange for restoring $584 million in frozen federal grant funding. A federal judge has since blocked the fine, but the Department of Justice has said negotiations with UC are ongoing. 

CSU is also under multiple investigations and facing its own federal funding uncertainties. 

CSU Chancellor Mildred García praised Newsom’s budget proposal, calling it “a bold stand for higher education in what has been a very challenging time for California’s colleges and universities” and higher education nationwide.

“With this budget proposal, Governor Newsom has made it clear that higher education remains a key priority for California,” García added. 

Compact and deferrals

The $716.3 million in new funding for UC and CSU is money that was promised years ago as part of a multiyear deal between Newsom and the university systems. Under the so-called compact agreement, the systems are supposed to receive annual budget increases of 5% in exchange for working toward increasing graduation rates and enrolling more California residents, among other goals. 

The state, though, has not consistently provided UC and CSU with those increases in the year they were expected, with the money sometimes being deferred to future years. Last year, UC was due $240.8 million and CSU was due $252.3 million as part of the compact, but that funding was deferred.

This year’s proposal includes partial payment of what was owed last year: UC is getting $96.3 million, and CSU is receiving $100.9 million. The remainder would be paid in future years. 

Separately, the systems would receive the 5% increases that are due to them this year: $254.3 million for UC and $264.8 million for CSU.  

The proposal would also defer $273.5 million — $129.7 million for UC and $143.8 million for CSU — until next year. That funding was cut from each system’s budget last year, with Newsom and lawmakers at the time pledging to restore it this year. Instead, Newsom is now proposing to repay it in 2027-28. In the meantime, UC and CSU would be able to use state loans to access that money.

State lawmakers could look to get some of that deferred money to UC and CSU on a faster timeline. Assemblymember Mike Fong, D-Alhambra, who chairs the Assembly’s Higher Education Committee, said he plans to work with Newsom and the Legislature to “consider options for providing funding earlier in order to maintain stability and effectively deliver expanded access to educational opportunities.”

Financial aid

The budget proposal also includes $3.2 billion to support Cal Grant, the state’s main financial aid award that is available to students attending UC, CSU, community colleges and many private universities. 

That’s $488 million more than last year, according to a state Department of Finance spokesperson, who said the increase is due to higher tuition at UC and CSU and increased eligibility among students because more are completing financial aid applications. Many students who meet income requirements are automatically awarded Cal Grants to cover the full cost of tuition.