UC making history

This year at the University of California, history is being made: Students attending school this fall will be the first class charged more in tuition than the state contributes to the cost of their education.

With student fees and philanthropic sources outweighing the amount of money coming into the system from the state, when does UC cross the threshold from a public provider of higher education to a private one? Is California’s Master Plan for Higher Education, a dying fiction that has reached the limits of its sustainability?

 “The question is not whether the budget has crossed some Rubicon between students paying 49 and 51 percent tuition,” said Steve Boilard, who directs the higher education unit at the Legislative Analyst’s Office.

The issue, he said, is that “we don’t have a consensus on what we’re expecting of public higher education, which left alone could be headed toward privatization. But maybe that’s the way to go. We have to ask ourselves as a state if that’s what we want.”

Defining UC as a public entity doesn’t rest on its receipt of public funds, UC notes.

“UC’s role as a public institution should not be limited to the state funds it receives,” says Patrick Lenz, a UC vice president in charge of budget issues, citing the university’s role in indigent care. “With all draconian cuts to health and human services spending, UC is asked to be provider of last resort.”

 Lenz said that UC’s research in sustainability, transportation, and other areas also provide direct benefits to the state, keeping California a leader in innovation.
 But UC’s value as research institution and health care provider leaves unanswered the future of the educational portion of its academic mission.

 UC says it outpaces other universities in supporting financially needy students, fee waivers and dedicating a third of its tuition to financial aid. But as tuition costs rise, middle class families finance an ever-greater portion of the cost of attendance, taking out more loans to pay into a system that appears to be struggling to maintain its quality.

While many believe that the cost increases still comprise a bargain for attending a prestigious university, how long the deal can be maintained as state funding levels diminish and the cost of living and attendance rises is still a question of debate.

According to the California Postsecondary Education Commission, the body formerly responsible for coordinating the state’s higher education system recently vetoed in this year’s budget, the total cost of attendance including books and other living expenses increased by 70 percent to 80 percent between 2000 and 2009.

Since 2000, student fees have tripled, while state support fell by almost 30 percent from the 2007-08 levels. The latest batch of tuition increases since November, totaling almost 20 percent, only made up for about a quarter of the blow dealt by the state’s budget cuts and the rise in mandatory costs related to health benefits, utilities, retirement plan contributions and unfunded student enrollment.

An additional $100 million reduction looms larger as the state struggles to pull in the $ 1 billion revenue needed to stave off a round of budget trigger cuts in December, that include reductions to the state and community college systems, as well.

While too early to make predictions on the likelihood of a trigger pull, State Controller John Chaing recently released a report revealing state revenue was 10 percent below projections, making the end-of-year cuts a greater possibility.

At the same time, another 5 percent tuition increase is under consideration by the Regents in the event of the $100 million loss.

Meanwhile, cuts to academic programs, increased class sizes, delayed faculty hires, reduced availability of services and hundreds of layoffs are taking place across the campuses.
Schools continue to increase their percentage targets for non-resident students, which provided $26 million in incoming freshmen this year. UCLA hopes to increase its non-resident student base from 9 percent total of undergraduates to about 18 percent, while Berkeley’s current incoming class is comprised of 30 percent non-resident students, up from 15 percent two years ago.

While California students are not displaced because of continued over enrollment, this creates a different set of pressures as classes become harder to get into, and time of degree increases.

The system’s graduate programs and professional schools, while already receiving limited state funding, are asked to become increasingly self sufficient, increasing their tuitions to market rate.

Additionally, the recent debt ceiling negotiations eliminated federal level loan subsidies for graduate students, potentially adding several thousand dollars to the cost of going to school.

Each campus is striving to preserve the academic mission of the university, by focusing on efficiency, cuts to administration, and outside fundraising, but many are unsure how long the juggling act can be maintained.

Dan Mogulof, Berekely’s Executive Director of Public Affairs, described how the campus was able to make up for its shortfall in part by dipping into its central reserve, previously set aside for self insurance purposes. “You can tell by our numbers that we’re taking one time measures this year. That’s not sustainable.”

Even the university’s security as a research institution may be at risk, as the debt-ceiling imbroglio plays into money coming into the UC system from the federal level.

“The verdict is still out as to how long we can protect the academic quality of the campus,” said Gary Matthews, University of San Diego vice chancellor of Resource Management and Planning, “The debt ceiling negotiations and S&P reducing the national credit rating, that’s going to have an impact on us going forward as it relates to research dollars that come out of Washington.”

Lenz says the Office of the President took a $5 million cut and put together system-wide saving strategies.

“In just over a year we’ve already reached $157 million of our $500 million five-year goal,” said Lenz, while describing the program.

 Projects include a UC wide travel plan, so successful it was adopted by CSU, a graduate student health insurance program shared by each campus to lower premium costs, and a statewide energy partnership working with utilities to help finance energy-saving development.

 But these efforts may still not be enough to combat the continued loss of state money.

 “We’re not sure how many of these projects are one-time solutions, and how many are sustaining,” added Lenz. “UC is already hard pressed. If we’re cut again this year, what will our options be?”

The answer seems, inevitably, more fee increases.