In a recent article on the UC regents, “Beyond UC vs. Sacramento: It’s Relationships That Matter,” Hillary Violet Lehr shows that the people who are supposed to be fighting for the financial health of our university have been working to help defund higher education. Not only have many of the regents funded Republican candidates that have voted against all revenue enhancing measures, but several of the regents have pushed to lower taxes during the recent budget crisis. It is important to stress that Republican governors have appointed most of the UC regents, and several of these regents have been working behind the scenes to reduce the university’s reliance on state funds. In fact, the current Regent Chair, Russel Gould, helped Schwarzenegger in 2004 to negotiate the recent compact between the state and the UC system.
In her article, Lehr discovered that, “New Regent Makarechian spearheaded a Republican strategy group and his elite real estate company gave over $100,000 to Schwarzenegger, and Regent Zettel gave thousands of dollars to the Lincoln Club’s efforts to reduce state taxes.” In other words, the fox is guarding the hen house, and while Yudof and the regents argue in public that Sacramento is the problem, the truth is that some of them are working secretly to cut the state funding of the university and block any new initiatives that would generate additional funds for the system.
Not only are several regents against any new taxes to fund public institutions, but they are actively working to privatize higher education. For instance, regent Blum is a major stake-holder in a company called Career Education Corporation. This organization invests in for-profit colleges and has recently been sued several times for providing sub-prime loans to students at institutions that do not provide the services they advertise. It turns out that the median graduation rate at proprietary schools is 38%, and many students end up without a degree, while accumulating huge student loans with interest rates in the double digits. Moreover, a new law passed by congress uses governmental funds to guarantee these loans, and since over 70% of these loans go into default, taxpayers are left paying the bill, while profiteers like Richard Blum, turn a hefty profit.
Of course, Blum is no longer the head regent, but his replacement may be even worse. As Chris Newfield wrote on his blog, “The ‘UC Commission on the Future’ is headed by Regent Gould, a partisan Republican who, as Senior Vice-President, helped drive Wachovia Bank from one of the nation’s largest banks holding millions in student loans into bankruptcy because of toxic sub-prime home mortgages and credit default swaps.” While Blum’s company funds for-profit schools, Gould helped to supply high-interest, high-default student loans. Gould and Blum thus have a long history of profiting off of student loans and seem to have no qualms about raising student fees to increase their own profits.
It should be obvious that we need a different system for appointing the regents. We must fight to have faculty, staff, and students make up the majority of the regents so that the people protecting the financial health of the institution actually support the notion of high quality public education.