The Brief

California State University’s trustees will vote Wednesday on whether to increase how much the system’s 22 campus presidents and other senior executives earn, potentially paving the way for up to 15% in annual incentive-based raises paid for by philanthropic funds and base salaries that reflect how much presidents at similar universities earn.

Exact numbers aren’t available; those will be revealed during Wednesday morning’s board meeting. Committee members will discuss the matter and decide on whether to advance the idea during a scheduled vote before noon. The full board will vote on the measure in the afternoon. The plan will kick in the next year or two. No executives will receive raises under the proposed plan this year.

Several hundred unionized staff and faculty rallied outside the board of trustees meeting today, raging against the proposed executive raises at a time of budget austerity, layoffs and program cuts.

“I am mad,” said Erin Foote, a union board member for California State Employees Union, during the rally. The union represents 35,000 office and student workers. The union is in a dispute with the system over additional raises.

“We are going to knock the doors of our legislators so hard there will be holes in them until they stand with us in their budget negotiations,” she said, vowing to organize for a governor who’d replace Cal State’s chancellor and appoint more union-friendly trustees.

Average base pay for campus presidents currently is $453,000, ranging from $370,000 to more than $500,000, system data show.

Under the compensation plan, raises to executive base pay would be part of overall wage increases for Cal State workers. That’s in addition to the 15% incentive-based bump to base pay executives would be eligible for.

The criteria for receiving the 15% increases hasn’t been finalized, said the system’s interim chief financial officer, Patrick Lenz, in an interview last week. The chancellor’s office will need a year or two to work on that, he said.

The plan would depart from Cal State’s previous standard of capping base pay of presidents at a salary that’s no more than 10% above what their predecessors made. That plan, last updated 18 months ago, “inappropriately prevents the CSU from offering competitive compensation” to presidents who can lead large universities, the chancellor's office staff wrote for the board meeting agenda item.

Higher education landscape in turmoil

The overhaul comes at a time when the system is hurting for cash and also is contending with epochal challenges to higher education as the Trump administration seeks to claw back billions in funding to universities and challenge long-held academic freedoms at campuses.

Last month, Cal State pushed through initial hesitation to seek a $144 million zero-interest loan from California lawmakers, a financing deal the Legislature permitted to compensate for an equally sized cut to the system’s state support this year. System leaders say they want to use the money to offer one-time bonuses to unionized workers and other staff, including senior executives. Union members want ongoing raises that also support expanded benefits.

And Cal State is expecting smaller increases in state support than lawmakers initially signaled. The Legislature intends to increase state spending for Cal State in 2026-27 by just $101 million — far lower than previous promises from Gov. Gavin Newsom of about $250 million.

That’s upset some system trustee members, who say they OK’d raises for workers — many who went on strike for higher pay — and other spending increases based on those promises.

Cal State explains need for plan

In explaining the increased executive compensation proposal, a senior Cal State official said few individuals have the experience and skill set to run campuses with budgets in the hundreds of millions of dollars.

“We want people in these positions who will ensure that a campus’ fiscal condition is spot on, that they're trying to meet enrollment challenges, that they're dealing with the overwhelming fact that the state's going to be hard pressed to invest in higher education over the next couple of years, and the federal government is decimating us,” Lenz said. “These are the people that we need to come in and help us get through these really tough times.”

Cal State in the past four years increased staff and faculty pay by 17%, chief human resources officer Frank Hurtarte told CalMatters last week. He said campus presidents saw a 7% raise in that time span.

The faculty union calculates that presidential pay has grown 81% in the past two decades, even as inflation grew 63%.

While typical executive pay is several times what it is for faculty and staff, the vast majority of the system’s spending goes toward pay for workers who aren’t executives — $5.6 billion, or 73% of the system’s budget, wrote Jason Maymon, a Cal State spokesperson, in an email.

Executives — the systemwide chancellor, campus presidents and vice chancellors in the central office — collectively earn $18 million, or 0.25% of the Cal State operating budget, Maymon wrote when asked. That’s about as much as the chancellor’s office cut from its budget this year, part of a systemwide effort to slash costs, including letting go of some lecturers.

Hurtarte pointed out that nationally about 30% to 40% of campus presidents left their jobs in the past 24 months. Cal State has six campuses with president vacancies, he noted. There’s both a lot of churn in the campus presidential job market and competition to fill vacancies.

Margarita Berta-Ávila, president of the California Faculty Association, which represents 29,000 members, said in an interview that the executives have mismanaged state and tuition money and don’t deserve raises anyway. Some faculty don’t earn enough to afford rent in expensive cities, she said.

“It's unconscionable that they're even talking about [the raises] when you got people living in cars,” she said.

She’s also upset that leadership at Cal State Los Angeles shared faculty names and other personal information with the federal government as part of an investigation into alleged antisemitism. The union has sued the Cal State board of trustees.

Pay plan details

Executive compensation under the proposed plan would have four components: base pay, standard executive health and retirement benefits plus housing and car perks for presidents, a new deferred compensation plan and the possibility of the annual pay rising by as much as 15% after a performance review.

While the base pay, like much of Cal State’s budget, would be paid with tuition and state revenue, the extra 15% would be funded with campus philanthropic efforts. The universities each have fundraising arms, and they’d be expected to raise the money to supplement presidents’ pay, Lenz said.

That fundraising money also will go toward the new deferred compensation program, basically an additional retirement account for executives at nonprofit or governmental organizations, such as universities.

Cal State wouldn’t be alone in paying campus leaders with private funds. At the University of California, several campus heads, called chancellors, have a portion of their salaries paid with outside funds.

“Compensation decisions must also be fiscally prudent, align with the CSU’s public mission and be made within the constraints of available funding and budget priorities,” the agenda item says.

Under this plan, the systemwide chancellor will propose raises each November for board approval.

The new compensation plan seeks to better attract and retain campus presidents by offering new presidents and other executives a base salary that reflects what peer universities pay and the skills the candidate brings. Those peer institutions include the public college and university systems in New York, Texas State University and the UC, Maymon wrote.

Under the current policy, raises for incumbents are no higher than 10%. They kick in only after a satisfactory employee review and an analysis of whether the executive was underpaid relative to other presidents across the country. This approach “constrains competitiveness and adds administrative burden,” the agenda item says. The 10% cap for incumbents would also sunset in favor of the eligibility for annual 15% incentive pay.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

The U.S. Citizenship and Immigration Services wants to expand a Biden-era policy known as public charge that could further curtail immigrants' use of public benefits.

That means that migrants' use of safety net programs, like the Supplemental Nutrition Assistance Program (SNAP) or Medicare, could be considered when determining whether they should be granted further legal status, such as a green card.

Homeland Security Department officials released a new proposed regulation this week that's set to be published in the Federal Register on Wednesday. It would rescind a Biden-era version of the public charge rule, and expand the scope of what public benefits may be considered by immigration officers, to any social or health services people may use.

"Rescission would restore broader discretion to evaluate all pertinent facts and align with long-standing policy that aliens in the United States should be self-reliant and government benefits should not incentivize immigration," the proposal states.

Advocates were quick to criticize the proposal, arguing its new broad scope is too vague and could disincentivize the use of the benefits by immigrants who need them and qualify for them.

"This dangerous proposal puts the nation's health and economic wellbeing at risk," said Adriana Cadenas, executive director of the Protecting Immigrant Families Coalition. "By creating chaos and confusion, it deters lawfully present immigrants and U.S. citizens from seeking health care and help they need and qualify for under federal law."

Politics of social safety net programs

The proposed regulation from DHS comes as the Trump administration and Republicans in Congress are making false statements of rampant fraud in immigrants' use of social safety net programs.

People without legal status do not have access to SNAP, the healthcare marketplace, Medicaid and other public benefits.

Still, Congress recently applied further restrictions stripping health coverage and SNAP access from a range of lawfully present immigrants including refugees, asylum seekers and those with other humanitarian protections. It also cut funding from states that use their own funds to provide health care regardless of citizenship status.

The new rule proposed this week takes a broad approach that would also consider state-funded benefits in the review of immigrants' applications.

U.S. citizen children of noncitizens are still eligible for these programs.

Executive order targeted benefits

In February, Trump issued an executive order to end "all taxpayer-funded benefits for illegal aliens."

Trump's order is part of the administration's broader political messaging about Democrats and immigration. It came despite the lack of data to support the idea.

Only about 1% of over- or underpayments for SNAP were related to eligibility for citizenship. This data also does not indicate those without legal status were fraudulently using the program.

Trump in his first term had expanded the scope of benefits that could count as a "public charge" on someone's immigration record, and therefore make it harder for them to receive permanent status.

Public health providers said the regulation at the time created a chilling effect on immigrants being afraid to seek benefits they might have access to. The effect was exacerbated during the COVID-19 pandemic, when advocates said immigrants feared seeking health resources, such as getting medical care or using a food bank, out of concern that they would be considered a public charge for doing so.

In 2022, the Biden administration unveiled a new rule affecting immigrants and benefits that was similar to the regulation before Trump's 2019 revision. It meant that using benefits such as the SNAP, housing aid or transportation vouchers would not count against green card applicants.

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When La’Toya Cooper applied to Long Beach City College to pursue psychology, she didn’t know how she would balance her education with parenting two young children and working full-time.

But LBCC identified her as a good fit for the shorter-format courses the college was offering, geared toward students like Cooper who are navigating busy adult lives amid their studies.

“I went to the orientation, and when I heard everything, I was super super interested,” she said, deciding she could handle the coursework on top of her day job at an organization addressing youth homelessness.

In August 2024, she enrolled in LBCC’s accelerated 8-week courses, which cover the curriculum of typical 16-week courses in half the time.

In recent years, LBCC has significantly expanded this compressed format and seen tremendous success, particularly among Black students and adult learners returning to school, according to O. Lee Douglas, vice president of academic affairs. “This is one of our biggest equity initiatives for the campus,” he said.

Douglas said LBCC began shifting toward 8-week courses when “student success rates were not where we wanted them to be.” According to data from LBCC’s office of institutional effectiveness, about two-thirds of students were passing their courses with a C or better, well below the state average.

In fall 2024, the college doubled its offering of shorter format courses, which now make up a third of the LBCC classes – and student success rose dramatically, Douglas said.

Furthermore, Black and African American students and adult learners were self-selecting the 8-week courses, Douglas said, and performing better than students in traditional 16-week courses. The college took note. By fall 2026, LBCC plans to offer at least half of its courses in the compressed format.

LBCC has been a pioneer of shorter-format courses in California, Douglas said, and more colleges across the state are catching on. A group of California researchers analyzed statewide administrative data and found that in 2021, almost a quarter of community college enrollments were in compressed class formats.

Douglas said that LBCC is now working with other schools, including El Camino College and Mt. San Antonio College, as they expand shorter course formats.

LBCC is implementing the compressed format thoughtfully. Course requirements remain the same, regardless of length, but “we didn’t want what was typically taught in a 16-week class just to be crammed into eight weeks,” Douglas said. He added that professors are taking different pedagogical approaches for shorter courses: more in-class assignments, peer collaboration, and instructor and student feedback.

Kirsten Moreno has been teaching at LBCC for 24 years and taught Cooper’s first LBCC class: English. Cooper said Moreno got students’ “boots on the ground running,” holding them to high standards while also offering flexibility for the demands and challenges of their lives. “I felt very included and very seen,” Cooper said.

“The students who come in, students like La’Toya, they are very driven to succeed, and they are managing a lot,” Moreno said. She checks in with them often and honors their lives outside the classroom.

Almost two-thirds of LBCC students are indirect matriculants, meaning they are not entering directly from high school. Recognizing that these students have different needs, LBCC is “actively seeking ways to remove barriers,” Moreno said, “so that they have access to quality education and that they are supported all the way through the transfer process.”

Cooper will graduate with her transfer degree in June, and she hopes to enroll at Cal State Long Beach next fall to finish her psychology degree and eventually become a therapist.

“I have lived experience of the foster care system, the juvenile system and the homeless system,” she said. Therapy has helped her heal from some of these experiences, she said, but she added, “I never had a therapist who I can identify with, and that was troubling for me.”

Now, she plans to offer the support to children and families she didn’t have growing up. Already, she said her studies in psychology have given her more insight into her own children. “It’s a beautiful experience so far,” she said.

Last week, President Donald Trump caused a media frenzy after he floated the idea that the government should back the creation of a 50-year fixed mortgage.

Many commenters, including some of Trump's own supporters, hated the idea. They complained that it would result in Americans being in debt for their entire adult lives, essentially renting from a bank. They complained that this type of mortgage would explode the amount of interest homeowners would have to pay over the lifetime of their loans. They complained that borrowers would be stuck paying interest-only payments for many years and be prevented from actually paying down their principal and building equity in their homes.

"It will ultimately reward the banks, mortgage lenders, and home builders while people pay far more in interest over time and die before they ever pay off their home," posted Rep. Marjorie Taylor Green (R-Ga.). "In debt forever, in debt for life!"

President Trump "is creating generational debt," said Josh Johnson on The Daily Show. "They're going to be fighting to get out of grandma's will. Grandkids will be like, 'I barely knew her!'" (Side note: Josh Johnson is very funny. I'm a fan.)

The uproar over the 50-year mortgage idea reached such a high pitch that apparently the White House was furious with the administration official who pitched President Trump the idea, according to reporting from Politico.

Sure, it won't solve our housing affordability problem. But is a 50-year mortgage really such a crazy idea?

"It's not quite as outlandish as it sounds," says John Campbell, an economist at Harvard University.

"Honestly, I kind of think it's a fine idea," says Eric Zwick, an economist at The University of Chicago Booth School of Business. "It's not obviously so different from a 30-year fixed mortgage."

The 50 vs The 30

First of all, the reality is most homeowners ditch their mortgage well before its end date. Some refinance. Others move.

In America, unlike some other countries, including the UK, you can't take your mortgage with you if you sell your house. So when people sell their house and move, they end their mortgages.

The typical American homeowner spends less than 12 years in their home, according to a Redfin analysis of the U.S. Census data. That's actually high compared to recent history. Back in the early 2000s, Americans typically spent only about seven years in their houses.

" Most people will not have that 50-year mortgage product for that length of time," says Daryl Fairweather, the chief economist of Redfin. "I think in a world where this product exists, a lot of people might sign up for it initially and then try to refinance later."

In other words, the 50-year mortgage would not be a 50-year trap. It would basically serve as another option on the menu for homebuyers looking to finance their homes. And, because you have longer to pay off the loan, it comes with the benefit of having somewhat lower monthly payments. Maybe that could help some secure their dream house or reap the benefits of investing in the housing market.

"I think affordability is a concern in the housing market," Zwick says. "And one element is the down payment, but another element is the monthly payment. And a longer duration mortgage is gonna lower the monthly payment."

And, sure, there are real drawbacks to this sort of financing, including especially a much higher interest bill over the life of the loan and an extended period where homeowners aren't paying down their principal and building equity. But those same issues also arise with the 30-year fixed mortgage, albeit to a lesser degree.

And Americans apparently love the 30-year mortgage. More than 90% of American mortgage holders have one!

The American mortgage market is weird

The fact that so many American homeowners have long-term, fixed rate mortgages, and they're able to basically refinance pretty easily whenever they want, makes the U.S. mortgage market pretty weird compared to most other countries.

We won't get into the complicated history here (we might actually do a Planet Money episode on this history in the future). But, for now, we'll say the 30-year mortgages date back to the Depression era. And they're fundamentally a creature of government intervention. The government-sponsored enterprises Fannie Mae and Freddie Mac buy mortgages from private lenders, allowing them to offload (and socialize) the risks associated with lending large sums of money for decades at fixed interest rates.

Without this intervention, the 30-year mortgage would probably not be so ubiquitous. I mean, think about it. Would you want to lend someone hundreds of thousands of dollars for decades and freeze the amount they will pay you for providing them with that money? What if they lose their jobs or die? What if interest rates skyrocket and you can find much more favorable terms for lending out that money? And then, to boot, if interest rates fall, the borrower can just walk away from that loan and get a new mortgage at any time when economic conditions are more favorable to them? I mean, yikes. No thanks.

A long time ago, Planet Money interviewed financial journalist Bethany McLean about 30-year fixed mortgages, and she described them as "a financial Frankenstein's monster" from the perspective of lenders.

Without an important role for the government in backing these loans, "I don't think any rational bank would offer this product," says David Berger, an economist at Duke University.

" You need the public sector to play an important role for really long duration mortgages to be viable in the financial system," says Joseph Gyourko, an economist at the University of Pennsylvania's Wharton School of Business.

It helps explain why this sort of mortgage system is so rare in the world.

The Pros of long-term, fixed-rate mortgages 

There are some clear benefits of the weird mortgage system we have in the United States. One is lower monthly payments because homebuyers can pay off their loans over 30 years. Another is homebuyers are given an incredible ability to freeze their housing costs in stone and then refinance when it suits them.

Several of the economists we spoke to had 30-year mortgages themselves, and they had refinanced when rates sank below 3 percent a few years ago. They were very nice people, but I hate them now. (I bought a house more recently and the mortgage rate is close to 7 percent).

Anyways, the ability to freeze rates and then refinance later if the opportunity arises is clearly a huge benefit to homebuyers. It offers predictability on your housing costs. And, especially nice, a fixed-rate mortgage basically shields you from inflation and its accompanying higher interest rates. Everything else may get more expensive, but your housing payment actually falls in real terms when there's inflation!

The Cons of long-term, fixed-rate mortgages

That said, as we already alluded to, both 30-year and hypothetical 50-year mortgages come with costs: they tend to have higher interest rates than adjustable rate mortgages and you have a longer period upfront paying interest and not actually paying down your loan much.

But there's more.

If the housing market gets dicey and prices start plummeting, having a large outstanding loan at a fixed interest rate can create serious problems. Gyourko, the economist at Wharton, says long-term, fixed-rate mortgages increase the probability that you can go underwater on your home, a situation where you owe more on your house than it's worth.

" The borrower on a really long duration loan — 30 or 50 — does not build equity very quickly at all," Gyourko says. " There's a risk that if there's a severe drop in house prices, you go underwater."

Going underwater is a nightmare. If you sell, it means the money you get won't cover your debt. It gets much harder to refinance, meaning you're stuck with a higher interest rate than you could otherwise get in a situation where the housing market tanks.

If you have a fixed-interest rate and the housing market tanks, "your house price goes down and you're kind of stuck," says Berger, the economist at Duke. "No one is gonna lend to you when you're underwater. If you had an adjustable rate, your rate would've just dropped automatically," and maybe that would help you make your housing payments and not lose your house.

"And are you more likely or less likely to be laid off if house prices drop a lot? Answer: more likely," Gyourko says. "So you run that risk of those two events coinciding, and then you've lost a huge amount of your personal wealth."

Depending on the state of the economy, the direction of interest rates, and your financial circumstances, it might not make sense to fix your interest rate. Actually, that may be the case right now. Interest rates spiked in 2022 and 2023 and have already started to come down, and many expect them to go down further, especially if the economy enters a recession.

" Right now, I think it does make more sense for people to get an adjustable rate mortgage," Fairweather, the chief economist at Redfin, says.

Adjustable-rate mortgages typically start with lower interest rates than fixed rate mortgages. Fairweather says you can think about the choice to buy a long-term, fixed-rate mortgage instead of an adjustable rate mortgage as effectively paying extra for insurance against future interest rate hikes. And, just like the standard advice for buying any other kind of insurance, "you don't really want to get insurance if you can afford to self-insure," she says. In other words, if you think you could afford the possibility that interest rates spike in the near future, it probably makes sense to get an adjustable rate mortgage.

" So if you get the adjustable rate mortgage, what I would advise is to make sure you have some room in your budget left over for when the mortgage rate resets potentially at a higher level so that you're not hit with costs that you aren't able to pay," Fairweather says. "But if you could take that savings and you know, put it in your savings account, then you'll probably end up a-okay with an adjustable rate mortgage and actually save money compared to the fixed rate."

Fixed-rate mortgages may distort our economy

But there are other, economy-wide issues with having so many mortgage-holders with long-term fixed rates.

One is that the government involvement in the housing market that makes our system of widespread 30-year mortgages possible can occasionally result in big problems for taxpayers, especially if regulators aren't vigilant in preventing shady loan practices. Just see what happened during the global financial crisis back in the late 2000s.

"The worst possible situation is what happened in the global financial crisis when Fannie and Freddie were basically insolvent, were put on the treasury's balance sheet and to this day remain there," Gyourko says.

Another problem with America's weird system of ubiquitous fixed-rate mortgages is that it may weaken the Fed's ability to juice the economy or lower inflation when needed (aka conduct monetary policy).

That's because fixed-rate mortgage holders are shielded from interest rate changes. If everyone had an adjustable rate mortgage, the Fed could maybe more easily juice the economy by lowering people's monthly payments, nudging them to spend more in the economy. That said, if interest rates go low enough, it will induce many American homeowners to refinance, lower their payments, and potentially goad them to increase their spending and boost the economy.

In inflationary times though, when the Fed needs to bring down spending in the economy, the Fed's job may be tougher and more distortionary to the economy. If everyone were on adjustable rates, the Fed could just raise rates and, boom, homeowners would probably start spending less and inflation would come down. But most American homeowners are shielded from rate increases, so it's new homebuyers — often younger people — who feel more of the pain. Some argue that's unfair.

Speaking of unfairness, Harvard's John Campbell points out that maximizing your personal wealth in our weird mortgage system relies on considerable financial literacy, and populations that are poorer and less educated tend to be less financially literate. So this system results in greater inequality.

"A lot of people don't know when to refinance and they just don't do it," Campbell says. "And there's some very troubling evidence that, in this country, black and Hispanic borrowers are much slower to refinance than white borrowers." The result, he says, is they tend to pay higher interest rates.

There's another problem with our system: lock in. This has been talked about in recent years. There are tons of homeowners out there who now have rock-bottom interest rates on their mortgages — like, ahem, many of the very financially literate economists I spoke to — and they're reluctant to move.

Lock-in may be one reason why American home prices have been stubbornly high over the past few years, even as interest rates have spiked. Other countries, where adjustable rate mortgages are more the norm, have seen their housing prices dip a lot more in recent years.

" I think that their housing markets are more reactive to their overall economies," Fairweather says. "So in other places where there's more adjustable rate mortgages, when interest rates go up, that means that homeowners have a reason to sell because their payments are going up. And if they can't afford them or they don't want to pay them, then they'll put their homes on the market.  In our housing market, that doesn't happen. There is this unequal treatment between first time home buyers and existing homeowners. And it really benefits long-term homeowners."

Even more, economists believe that the lock-in that fixed mortgages create is bad for the economy. Many people may be refusing jobs where they could be more productive because they don't want to move.

The real fix for housing affordability

So, yeah, many of the problems identified with the 50-year mortgage idea are also present with the 30-year mortgage.

The real motivation for this idea is to enable more Americans to buy houses. With high prices and higher interest rates than a few years ago, many Americans are priced out.

The economists we spoke to all stressed that this new financial product will not solve the fundamental problem of housing affordability. To do that, we need to start building a lot more homes. Some even said that by juicing demand with this new financial product and not increasing supply, this proposal could actually make housing prices go higher, contributing to the problem.

"Proposals to help home buyers — whether it's this 50-year mortgage or whether it's Kamala Harris's proposal in her presidential campaign to give money to first time homebuyers — the main beneficiaries are actually the people selling houses," Campbell says. "Because given the supply, if you make it easier for buyers, they're bidding against each other for the same supply. The price is gonna go up. The winner is gonna be the person selling."

So, yeah, we need to build more homes. But, in that world, maybe a 50-year mortgage would have some benefits for some people. Of course, they will need to know the facts about this financial product and make sure it's the right product for them.

Berger, the economist at Duke, recommends that the government invest more in helping Americans become more financially literate about mortgages and provide better information about alternative financial options to the 30-year mortgage. This stuff is complicated!
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