The Private University of California

by zunguzungu

The Regents of the University of California are meeting to discuss a multiyear funding proposal that will increase tuition by a cumulative 81% in the next four years, if the state does not increase funding. As a point of reference, UC tuition has already gone up 330% since the year 2000. And as Bob Samuels points out, if past experience is any guide, it’s much more likely that the state will actually decrease public funding in the next four years, and that tuition will rise even higher and faster than that.

In short, while UC students paid around $4,000 a year in tuition in 2000, their successors will pay over $22,000 a year in 2015.

To quote myself:

At a certain point, public universities will have ceased to exist. We will only have a variety of private universities, some of which will be subsidized a little bit by tax-payers. Depending on where you draw the line, the University of California might already be at that point — student tuition now makes up a larger portion of the UC’s budget than state funding — but the long-term trend is undeniable: since 2004, the amount of money the UC has gotten from the state of California has been cut in half, and has continued to decline, every year, with utter and complete reliability. And where the UC and CSU systems are now, every other public university will soon follow. This is not a trend that’s going to end tomorrow. This is a trend that ends with the end of public universities. It just depends on where you decide to draw the line.

A few days ago, even the Economist pointed out that California’s public universities are privatizing, to their profound detriment. And they threw out this chart showing the gigantic rise in tuition (which we used to call “fees,” but no longer do, for the obvious reason that they are no longer “nominal” fees, but are simply payments):

The reason tuition is rising in California public universities is that the State of California is no longer funding them. College students must pick up the tab, which means taking on more debt. Which is why, coincidentally, the total amount of student debt has quintupled since the year 2000:

Also — from the same site — note that while credit card debt went down when the recession started, student debt just kept rising.

It’s almost as if students don’t have a choice but to put their future in hock. Finally, enjoy Chris Newfield’s vision of the endgame here, a state of affairs he calls “Gold University”:

Gold U does enormous volumes of high-end research at colossal medical centres and national laboratories, and loses enormous amounts of money doing so (there’s UC’s gross revenues of $3.5 billion, which lead to net revenues of minus $720 million). But they lose this money on behalf of politically and financially powerful external sponsors, such as Intel, BP, and the Departments of Energy and Defense, as well as of thousands of overloaded faculty scientists, struggling with reduced grant acceptance rates and shrinking support staff. Gold U will be obliged to continue to lose this money in order to save money for influential sponsors. Similarly, philanthropy, given its highly targeted nature, doesn’t have a prayer of keeping up with cuts to public revenues for general operations. The philanthropic network is also compromised by being embedded in the top fraction of American business and finance that has decoupled from the fate of the domestic economy. Fundraisers will continue to seek the ‘game-changing eight-figure gift’, but they will be looking to people who have little or no stake in mass quality for the batches of 220,000 or 450,000 college students who are piling out of a K-12 system that in California is 70 per cent students of colour. If the top 0.1 per cent or 1 per cent of the income ladder gives big, it will be as a targeted investment in a technology or disease area of special interest to their social world or to their portfolios. These same major players will continue to put a bipartisan kibosh on serious university resistance to cuts, since that would eventually lead to restoring business and various kinds of wealth taxes the cutting of which has allowed for incomes of the top 1 per cent to grow from between 90 per cent and 385 per cent (for the top 0.01 per cent, in real dollars) in the period after 1975 that saw real incomes grow for the bottom 90 per cent by –1 per cent.

Gold U will turn for money to its natural constituency, the middle and upper middle class (the top 20 per cent and the top 10 per cent exclusive of the top 1 per cent, respectively), which did see moderate income growth and who will be asked to cover fee hikes not quite of the 300 per cent grandeur about to appear in the United Kingdom, but of many small increases (of 7–10 per cent per year, three times the rate of overall inflation), punctuated with giant leaps of 20–33 per cent every few years (for 2009–10 and 2011–12 in California). Since Gold U’s private-sector partners have been redistributing wealth upward for years, leaving half of the student population with no private reserves for college, Gold U will take 33 per cent and in some years 50 per cent of fee increase money to pay financial aid. For this and other reasons, such universities will continue to cut educational opportunities, particularly the expensive, small-scale, face-to-face student-centred learning that is essential to the higher-order cognitive skills clearly needed to create equitable, sustainable economies and to solve the world’s most urgent problems. These repeated cuts to educational capacity mean that the coming decade will intensify the last decade’s student rule of thumb of pay more to get less. Student customers, especially those with the strongest academic records, will realize that $37,000 for State U lectures with 700 students and half-graded problem sets is not a good consumer deal, and will go elsewhere. Gold U will offer factory-style white-collar education at a high price for a post-white-collar economy. Although universities have traditionally enjoyed a captive audience, the business model of charging more for less will produce deteriorating returns, threatening not only the educational core but also the capacity of the university to transfer tuition money to cover the deficits created by sponsored research.