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.
zunguzungu 
But I get the impression that Californians don’t want to fund their own universities. Its the suicide gene.
One other thing. One thing is missing from these arguments; the fact that UC Berkeley pays tuition for low income students. That low income status is surprisingly high, somewhere around 60 or even 80,000 single or joint income [of parents for younger students] yearly [I could be wrong, remembering off the top of my head, but it sounds right]. UCB paid for my ed in just this way. What we’re talking about is rising tuition for the middle class. That’s bad of course, because middle class people deserve to be able to send their kids to a public institution without selling their kidneys. But its quite a different argument than the one I most often hear about who will be affected. The truth is that the small number of low income kids and adults who manage to zig zag through the roadblocks to higher education will most likely not experience an increase in tuition, but those that only make a little bit more money will be devastated. The middle class will become working class to send their kids to college, and the working class who have decent jobs won’t have a chance at all.
[…] at what’s happening in California, for example: The Regents of the University of California are meeting to discuss a multiyear funding […]
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Camille, your points about the dndasvaitages of the college loan program are very well taken. But I think a good deal of the problem comes out of our having propagandized kids, their parents, and employers into thinking that if you don’t have that sheepskin, the only thing you’re good for is to mop the floor! Of course if more kids cram into our colleges, colleges will have more expenses and will raise their fees. In Europe, they only allow as many young people into their colleges as they think they’ll have college-level jobs in future years. You don’t see English BA’s working as Starbuck’s baristas (to take one example). And Europe (at least until the recent recession began to affect it) definitely had a functioning economy. If college is so vital, it should be made mandatory and financed out of taxes. But it isn’t. There are thousands of decent, well-paying, respectable, satisfying jobs that can be learned in the military, through apprenticeships, or at vo-tech schools or junior colleges. For most of America’s history, we did just fine by that route. It’s important to remember that the WW2 vets, whose wonderful performance after they got college degrees through the GI Bill is at the root of our current college mania, were tried young men in their 20 s who’d had experiences no 17- or 18-year-old has. I think what we need to do is: (1) help each young person find his true gifts and passions LONG before he’s 17, ideally by way of repeated aptitude tests, and assist him in figuring out how to relate them to making a living; (2) encourage each youngster who goes to college to spend the first two years at a junior or community college, learning something useful and job-related, rather than spend them marking time at introductory (i.e., remedial) required courses at an expensive four-year school, then transfer later on if she wants to; (3) require employers to hire on the basis of true ability, not just grades and a diploma. Certainly kids who are bright and intellectually curious should have the opportunity to go to college. So should those who want to go into fields that require extensive specialized training law, medicine, teaching, architecture, social work, etc. But in fact many who go end up dropping out or flunking out (and wasting All That Money!) before they ever get their degrees, as they discover that college just isn’t right for them or they for it.
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you can’t apply to be a resident. Once you are deeemd out of state you are ALWAYS going to be considered out of state. your residence is based on your parents until you are 24, generally depending on the state. It doesn’t matter where YOU live. Besides, you can’t count time living in that state while you are a college student AND you moved to Arkansas for the ONLY purpose of going to college, making it IMPOSSIBLE to change your state of residence. You could graduate with a bachelors degree, start your masters program in AK and you would still be considered an out of state student.
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The U.S. is making great strides towards becoming a rentier state. I read an article in the Left Business Observer recently which concluded that college tuition has been rising because of a decline in state funding since the 1970’s, so these developments do not auger well.
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