Tuesday, January 31, 2012

Obama, Yudof, and the Future of Higher Ed

At the University of Michigan, President Obama made an important speech about his new push to control tuition increases and student debt at American universities. In Ann Arbor, he told college and university leaders that, “You can't assume that you'll just jack up tuition every single year. If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down. We should push colleges to do better. We should hold them accountable if they don't.” The policy behind this statement can be found in his new Race to the Top initiative for higher education. Basically, the president wants to use federal grants and loans as a way of pressuring public universities and colleges to contain tuition increases, and while he does realize that state budge cuts have played a role in tuition increases, it is clear that he thinks that there are other reasons for the escalating costs. Moreover, the president wants to use a billion-dollar grant system to provide funding to states that help to control tuition increases.

In order to discuss this new initiative, PBS had President Yudof on the News Hour. The first question asked was the following: “At basic level, do you agree with the president's observation that the fast-rising cost of getting a college education is harming access?” Yudof’s response was, “You have to remember the president didn't mention that there's been systematic disinvestment in higher education. Our budget was cut $750 million in a year, about 25 percent . . . A third of our tuition goes back into financial aid and is distributed to low-income students -- 55 percent of our students pay no tuition -- 39 percent of the students are Pell-eligible, relatively low-income families. That's the reality.” In other words, Yudof blamed the move to a high fee, high aid model solely on state budget cuts.

While it is obvious that the state budge cuts have a direct effect on tuition increases, we have also seen tuition increases when the state contribution to the UC system has gone up. Furthermore, the other guest on the show, Richard Vedder, pointed out that there has been a massive increase in federal money going to universities and colleges, and that the increase in federally funded grants and loans has allowed universities to continue to spend more as they reduce their reliance on state support.

When President Yudof was asked about the rising costs of higher ed, he responded in the following manner, “Our costs are actually down 15 percent per credit hour over the last 10 years. That's the reality. The states don't want to pay. So it's like you go to your drugstore, the insurance company doesn't want to pay, your co-pay goes from $10 to $20. That doesn't mean the cost of the drug has doubled. It just means your costs have doubled.” This response is very revealing because Yudof is openly admitting that as tuition increases, the university is actually spending less money on educating students.

So not only are students paying more and getting less, but as Richard Vedder argued, universities are increasing their spending on non-educational expenses, like administration: “But it is also clear that universities in the United States over the last generation or so have enormously increased their staffs, for example, administrative personnel, student service personnel. There are climbing walls. They're not in and of themselves all that important, but the cumulative effects of a lot of spending on things outside of the core missions has contributed somewhat to the inflation in college costs.” In support of Vedder’s claims, my own research shows that universities now spend on average about 10% of their total budgets on undergraduate education, but undergraduates and states support 35% of the total university budgets. Meanwhile, the costs for professional education, administration, and research continues to increase, and so as undergraduates pay more, they end up subsidizing other parts of their universities to a greater extent.

When asked what would happen if the federal government decreased its support for the University of California, Yudof replied that, “classes will get bigger, class access may suffer, time to degree may grow. I agree with Professor Vedder. We have to do a better job of cutting our budgets. If we have too many administrators, let's reduce the number.” While we have seen some reduction of administrators at the Office of the President, we are still waiting to see what the campuses will do about administrative bloat. Furthermore, class sizes have already gotten bigger and the access to require classes has already decreased, so it is hard to see how the university is going to maintain educational quality as it increases tuition and aid.

What we should push for is clearer budget transparency so we can see how universities are actually spending the money they do have. We also have to insist on a renewed commitment to undergraduate education, and a major emphasis on making sure that federal research grants receive enough overhead funding (indirect costs) to make them at least break even. As a way of pushing this agenda, I have been invited to the White House to make a presentation to the administration.


  1. Bob,
    yes there are too many administrators and they are too highly paid. But if you look at the budgets of Colleges - the fundamental academic unit of a campus - they spend the majority of their base budgets on ladder rank faculty salary. I am familiar with the budgets of three Colleges on my campus and in each one ca 80% of the state funds base budget goes to academic senate faculty. Lecturers, TAs, staff, and operational expenses amount to ca 20%. Not only that, senate faculty salaries continue to rise rapidly, fed by the senate merit & promotion system and a rapid rise in the number of accelerated merit actions. Maybe all this is justified - certainly we want to recruit and retain excellent professors. I just want to make the point that senate faculty salaries are a large expense and one that is increasing. No one on the faculty side ever wants to admit that. But when I see a prof making $300K/yr and teaching one 10 week class that seems just as ridiculously expensive as hiring useless administrative drones.

  2. Here's what you ask:

    1) Insist that the schools have "skin in the game." They are brokering loans just as the mortgage brokers did. If the IBR only yields a payback of 45% of the principle, then the schools only get 45%.

    2) Push your research that schools can make money on students, even at much lower than they charge. The costs of putting kids in rooms with 200 chairs is very, very cheap.


  3. On an all in basis UC Berkeley is the most expensive public university in USA. Foreign student tuition at UC Berkeley (UCB) is subsidized in the guise of diversity while instate student tuition/fees are doubled. UCB Chancellor Robert J Birgeneau displaces Californians qualified for public UCB with a $50,600 payment from foreign students.

    UC Berkeley is not increasing enrollment. Birgeneau accepts $50,600 foreign students and displaces qualified instate Californians (When depreciation of assets funded by Californians are in foreign and out of state tuition calculations, out of state and foreign tuition is more than $100,000 + and does NOT subsidize instate tuition). Like Coaches, Chancellors Who Do Not Measure Up Must Go: remove Birgeneau.

    More recently, Chancellor Birgeneau’s campus police deployed violent baton jabs on students protesting Birgeneau’s tuition increases. The sky will not fall when Birgeneau and his $450,000 salary are ousted. Opinions make a difference; email UC Board of Regents marsha.kelman@ucop.edu

  4. I just realized that I am a useless drone in going into 2 decades of work for the UC in a public service capacity. Never in a million years did I imagine that the barbarian inquisition would lead to a lifeboat ethics sacrifice of UC staff employees while the faculty and administrators just keep counting their money. After hearing Obama's "keep a lid on costs speach" staff members should be shaking in their boots as the future looks grim (given that the major expense of a University are staff employees and their benefits). After the canceled retirement medical benefits, the new soon to be 5% (or 6.5%)of pay pension contributions, increased parking fees, increased medical premiums, compacts that failed and the UC's generous 3% pay increase over the last 5 years (average .6% raise each year for unrepresented employees) only God knows what they are going to do to us next. At this point I honestly believe that anything can happen at work at any time. I wish I would have gone to work at an employer that really had a performance based human resources approach, instead of one that claims to (the UC) while coming up empty year after year. At this point just a written plan for the future would be nice, but then again after the numerous failed compacts- would I believe it? Who would have thought that going to work at the worlds "premier research university" as a staff employee would be tantamount to being shanghaied onto a sinking ship and financially rat%*#@ed. If you are headed to the White House please take this posts sentiment with you- and tell Obama to put this in his pipe and smoke it.

  5. Chancellor’s and Provost ‘s tuition increases make it impossible to keep the promise of equality of opportunity: access, affordability is farther and farther out of reach. Self-absorbed Chancellor, Provost are outspoken for elete public UC Berkeley ‘charging Californians much higher’ tuition. Cal. Chancellor Birgeneau, Provost Breslauer leave an indelible legacy on university access, affordability.

    Cal. tuition is rising faster than costs at other universities. Number 1 ranked Harvard is now less costly. Birgeneau, Breslauer decision to ‘charge Californians higher tuition’ for eletist Cal. make it the most expensive of the expensive public universities!

    Birgeneau ($450,000) Breslauer ($306,000) like to blame the politicians, since they stopped giving them every dollar demanded. The ‘charge Californians higher’ tuition skyrocketed fees by an average 14% per year from 2006 to 2011-12 academic years. If Chancellor Provost had allowed fees to rise at the same rate of inflation over the past 10 years they would still be in reach of most middle income students. Breslauer Berheneau increase disparities in higher education and defeat the promise of equality of opportunity. An unacceptable legacy for all Californians.

    Additional funding should sunset. The sluggish economy and 10% unemployment devistate family education savings. Simply asking for more taxes to fund self-absorbed Cal.senior leadership, old inefficient higher education models and fund excessive faculty staff compensation, burdensome bonuses, is not the answer.

    UC Berkeley is to maximize access to the widest number of Californians at a reasonable cost: mission of diversity, equality of opportunity. Birgeneau’s Breslauer’s ‘charge Californians higher’ tuition denies middle income families the transformative value of Cal.

    The California dream: keep it alive at Cal. Birgeneau resigned; fire (honorably retire) Provost George W Breslauer.

    Opinions? UC Board of Regents marsha.kelman@ucop.edu Calif. State Senators, Assembly members.

  6. There is a small error in your first snippet: when an error is found in line 5, it will be assigned to response.Text in line 7, but it will be overwritten in line 9.

    dissertation writers

  7. The development partners are helping to build changing rooms for girls in some schools, training female teachers on guidance and counselling skills and providing sanitary towels.

  8. With the description, I printed a recipe for the holiday pancake. It turned out to be perhaps the most popular recipe to appear in this newspaper. I received a letter from Mr. Eyre telling me with mock anger that he wished he had been more discreet. It seems that he was deluged with telephone calls at odd hours of the night, sometimes from thousand of miles away, essay writing service commenting on the recipe. It was not uncommon, he said, for tourists to knock on his door to tell him how much they enjoyed his contribution to their holiday breakfasts.

  9. I just wanted to comment on your blog and say I really enjoyed reading your blog here. It was very informative and I also digg the way you write! Keep it up and I'll be back soon to find out more mate.

  10. http://www.burbagssale2014.com/ Burberry Outlet
    http://www.airmaxshoesfactory.com/ Air Max Shoes
    http://www.coachblackfriday2014.com/ Coach Black Friday
    http://www.coach-storeoutletonline.com/ Coach Black Friday
    http://www.coachcoachoutlet.com/ Coach Cyber Monday
    http://www.coachxfactory.com/ Coach Factory
    http://www.coach-factoryoutletonline.net/ Coach Outlet Factory
    http://www.coach-outletonlineusa.com/ Coach Outlet USA
    http://www.coach-pursesfactory.com/ Coach Purses Factory
    http://www.coachpurseusa.com/ Coach Purses USA
    http://www.coach-storeoutlet.com/ Coach Store Outlet
    http://www.coach-pursesonline.com/ Coach Purses On Sale
    http://www.monsterbeatsbydres.com/ Monster Beats Outlet
    http://www.louis-vuittonblackfriday.com/ Louis Vuitton Outlet
    http://www.lv-guccishoesfactory.com/ Louis Vuitton Factory
    http://www.marcjacobsonsale.com/ Marc Jacobs On Sale
    http://www.mcmworldwides.com/ MCM Outlet
    http://www.mcmoutlet-jp.com/ MCM 店铺
    http://www.oakleysunglassesfactory.com/ cheap oakley sunglasses
    http://www.michael-korsmas.com/ Michael Kors Outlet
    http://www.michaelkors.so/ Michael Kors Outlet
    http://www.michaelkorsfactory-store.com/ Michael Kors Factory
    http://www.michaelkorsoutletr.com/ Michael Kors Outlet
    http://www.michael-korsfactoryonline.com/ Michael Kors Factory Online
    http://www.newcoachfactoryoutlet.com/ Coach Factory Outlet
    http://www.north-faceoutletonlines.net/ North Face Outlet Online
    http://www.polo-outletstore.com/ Polo Outlet Store
    http://www.ralph-laurenhome.com/ Ralph Lauren UK
    http://www.saclongchamppairs.com/ Sac Longchamp Pairs
    http://www.tcoachoutletonline.com/ Coach Outlet Online
    http://www.the-coachfactoryoutlet.com/ Coach Factory Oultet
    http://www.barbour-jacketsoutlet.com/ Barbour Jackets Outlet Online
    http://www.canada-gooser.com/ Canada Goose Outlet
    http://www.guccishoesuk-2014.com/ Gucci Outlet Online
    http://www.michaelkorsstates.com/ Michael Kors Outlet
    http://www.moncler-clearance.com/ Moncler Clearance
    http://www.moncler-jacketsoutletonline.com/ Moncler Jackets Outlet Online
    http://www.northsclearance.com/ North Clearace Outlet
    http://www.polo-ralphlaurenonline.com/ Polo Ralph Lauren Outlet Online
    http://www.woolrich-clearance.com/ Woolrich Clearance
    http://www.cvshopfactory.com/ shop.coachfactory.com
    http://www.mksfactoryoutlet.com/ Michael Kors Factory Outlet
    http://www.zxcoachoutlet.com/ Coach Outlet Online USA
    http://www.thebeatsbydre.net/ Beats by Dre
    http://www.superbagsmarket.com/ Coach Outlet Online
    http://www.nike-jordanshoes.com/ Nike Jordan Shoes
    http://www.newoutletonlinemall.com/ Coach Purses Outlet Online
    http://www.clickmichaelkors.com/ Michael Kors USA

  11. http://www.shopbestgoods.com/

  12. Stunning! nothing is more beautiful than the gently used things from the market at Cours Saleya... so wonderful to see all your treasures! I know you had a fabulous time finding everything! off to check out your shop!Escape Room

  13. This is a great article this article may very well have lessons

  14. This time approximately, as long as you have at smallest amount one full-time year or the same of tertiary study can purchase college essays in a single university course, both your university results and your ATAR will be careful – whichever gives you the strongest chance of receiving an present.

  15. Thank you for all the information that is given This is a good website all the info provided very helpful I wait for a subsequent article once again thank you.Resort Injury Lawyer Plantation

  16. This article gives the light in which we can observe the reality. This is very nice one and gives in depth information. Thanks for this nice article.Adjustment Disorder

  17. I had heard a lot about Willpower show and searched all over the internet to find an article on it. I accidentally came across this article and I found it to be helpful. Thanks a lot for.onlinegevonden

  18. Top quality material is the key to entice the customers to go to see the web page, that's what this website is offering.Brazil Honeymoon Packages

  19. I laughed out loud, shed some tears … Scrambled Eggs is a theatrical feast for women of all ages and the men who love them!" and CBS’ Magee Hickey “I haven't laughed so hard in years. It's touching, poignant, funny and oh so very real."how much is a loft conversion

  20. How you get this kind of great information, I hope it helps the other and Thanks for sharing.Personal Injury Lawyer Tampa

  21. This is such a great resource that you are providing and you give it away for free. I love seeing blog that understand the value. Im glad to have found this post as its such an interesting one! I am always on the lookout for quality posts and articles so i suppose im lucky to have found this! I hope you will be adding more in the future...Resin Bonded Permeable Driveways