A University Divided: Separate and Unequal

Although we do not have information on how many students have accepted UC offers of admissions for 2015-16, we do know that there has been another large increase (2,453) in non-resident student acceptances and a decrease in students from California (down 1,039).  We also know that extra tuition for non-resident students will go up 5% to $24,700 per student, while in-state tuition will remain at $12,192.  This increased incentive to enroll non-resident students has resulted in the following admissions figures: “45 percent of offers at UC Berkeley went to out-of-state and internationalstudents; the figure was 42 percent at UCLA, 39 percent at UC San Diego and 35percent at UC Davis.” In other words, these campuses stand to take in a huge amount of extra funds.  For instance, if a campus enrolls 1,000 non-resident students for four years, the increased funding is $100 million.  It is no wonder that UC has rejected the legislature’s offer of $25 million if the entire UC system increases enrollments for Californian students by 5,000.  Instead of getting an extra $5,000 per resident student, the UC can get an extra $24,700 per non-resident student. 

Of course this whole logic means that money has become the main value, and many students from California will end up paying more to go to public schools in other states or to expensive private universities.  Moreover, the rush for non-resident student revenue will enhance the inequity of the system so that the campuses with the highest number of underrepresented students (UCR, Merced, UCSB, UCSC) will continue to receive the lowest level of revenue, and the campuses with the highest number of wealthy students will receive the most funding.  As I have previously reported, last year’s admissions enhanced the inequity among the campuses:

This chart tells us that campuses that received higher funding in the past (see the last column) built up their reputations and now can cash in on non-resident student revenue (NRT) (the second column). Moreover, the extra NRT funds on one campus do not help the students on other campuses, and the amount of financial aid for non-resident students ($32 million last year) is almost as much as the total amount of rebenching ($37 million last year). 

As the state auditor pointed out in 2011, the campuses receiving the lowest level of per student funding were also the campuses with the highest number of underrepresented minority students.  The chart below lists the percentage of undergraduate underrepresented minority students and Pell grant students for each campus in 2014-15:

                           Underrepresented           Pell

UCB	16	27
UCD	19	37
UCI	22	48
UCLA	21	31
UCR	41	56
UCSD	17	30
UCSB	27	41
UCSC	30	51
Merced	47	63

Thus, while 16% of undergrads at Berkeley were underrepresented minority students this year, Riverside had 41%, and while Berkeley took in over $40 million in extra non-resident student tuition revenue, Riverside only brought in $7.5 million.  Furthermore, 31% of undergrads at UCLA are Pell grant eligible, but 51% at UCSC fall into this low-income category, and yet UCLA brought in an additional $41 million in non-resident student tuition, while UCSC brought in $19 million.  These statistics clearly show that UC has a separate and unequal funding model based on race and class, and this situation only promises to get worse next year. 

When the state auditor pointed out the racial component of the campus funding imbalance in 2011, President Yudof wrote that, “There is absolutely no basis – statistically, historically, or ethically – for drawing such a connection. Furthermore, the BSA makes no investigation into or observation of disproportionate or inequitable treatment or outcomes for students at different campuses” (p. 81).  However, after making this statement, the UC then later admitted that the correlation between funding and race may have been the unintended result of an ad hoc funding process, and yet, nothing has changed and things are only getting worse.  The UC can no longer plead ignorance and must find a way to share NRT revenue among the campuses. 

  

Questions about the UC Budget Deal

The recent state budget agreement has brought up many important issues for the UC system.  Here are some of my top questions:

1)   What is the current status of the deal made between President Napolitano and Governor Brown?  Did the state budget deal certify or nullify the original pact? For example, the earlier pact clearly calls for the option of new employees to pick a define contribution plan, but the state budget does not include this. The original deal also has the state giving UC $436 million over three years for the pension, but the state budget only mentions one year of funding ($96 million).  Is the deal with the governor like the deal the governor thought he had last year with UC, which prevented any tuition increases for four years?

2)   What happened to UCOP’s claim that it needed to raise tuition 5% over the next five years in order to maintain excellence?  It is clearly getting less money, and the new money can only be used to pay down the pension liability.  Was the earlier claim only a bargaining ploy, or does the UC really need more money than it is getting? 

3)   What is the status of all of the non-monetary issues (online ed, time to degree, three-year degrees, transfer rates) contained in the Brown and Napolitano agreement?  First of all, aren’t these areas the domain of the faculty senate? 

4)   What exactly did the UC get in terms of enrollment funding?  The state says they can get an additional $25 million if they promise to do many different things, including adding 5,000 additional students from California, but how did the legislature come up with the figure of $5,000 per additional student? Is this the result of UC’s continued refusal to come up with a fact-based analysis of how much it costs to educate each additional undergraduate student?

5)   What happened to all of the legislation about sharing non-resident tuition among the campuses? There was a lot of sound and fury about this issue, but in the end, it appeared to be dropped.

6)   Did Napolitano really get anything by taking on the governor in such an aggressive fashion?  Yes, she may have commandeered more funding for the pension, but at what price?  Not only will the UC have to introduce a pension calculation salary cap for new hires, but it also may end up introducing a very bad defined contribution plan that could ultimately work to defund the defined benefit pension plan and hurt the retirement of many future workers.  Also, what does it say about an institution when it leaders says don’t worry about the changes because they only affect future workers?

You can post your answers below, or email me at bobsamuels_us@yahoo.com

Free Public Higher Ed Goes Viral

When I published my book Why Public Higher Education Should be Free two years ago, I felt like a lone, crazy voice in the wilderness, but recently we have seen many initiatives to attain the goal of debt-free public higher education.  President Obama helped to shape the debate by promoting a plan to make the first two years of community college free. The president’s policy drew from the Tennessee experiment with free communitycollege and other similar programs that have emerged around the country.  Following the president’s lead, members of Congress signed on to a resolution to make all public higher education debt free, and presidential contender, Bernie Sanders has made free public higher education the cornerstone of his campaign.

The central argument I have been making is that our current system does not work: in the last three decades, we have spent trillions ofdollars on financial aid and higher tax breaks, and the result is that students coming from families in the top income quartile have a 77% chance of attaining acollege degree, and students from the bottom 25% have a 9% rate.  Moreover, not only have students been forced to take out over $1.3 trillion dollars of debt, but as more students go to college, the US has moved from 1st to 12th in college attainment.  

Just as many of our K-12 schools have become self-segregated by class and race, our institutions of higher education have also becomeseparate and unequal. Low-income Black and Brown students tend to go to low-funded community colleges with low graduation rates, while wealthier students attend wealthy universities with high graduation rates.  In fact, the celebrated California Master Plan was founded on a principle of hierarchy and has resulted in a system of  de facto segregation.  

In order to make higher education an engine of social mobility and not a generator of economic inequality, we have to rethink how we fund these institutions.  Instead of using an ad hoc voucher system that provides aid to individual students, the federal government needs to send funds directly to institutions with a strict set of requirements, including a maintenance of state funding, a cap on tuition and room and board increases, and a financial aid system that makes the total cost of attendance free for low- and moderate-income students.

What needs to be realized first is that no single state or institution can fix this problem on its own.  There has to be a joint federal-state-institution compact because we have aid coming from all of these different sources.  Bernie Sanders believes that we should fund this type of program through a new financial transaction tax, but as I argued on a recent radio show and on a Fox News debate, a more effective strategy would be to use money currently going to tax breaks and tax exemptions to make higher education free and accessible. 

In the current system, wealthy individuals and wealthyinstitutions are being subsidized through taxation policies catering to thesuper-rich. Not only do private universities with tax-exempt, multi-billion dollar endowments allow wealthy individuals to escape taxation through charitable giving, but these institutions run tax-exempt enterprises without paying local property taxes.  Meanwhile, wealthy individuals have turned to 529 College Savings plans as a new tax shelter. 

All of the tax breaks dedicated to high-income individuals and institutions help to decrease state and federal tax revenue, and this reduction of funds creates an environment where politicians can say they have no money for public higher education.  What citizens have to fight for is integrated, debt-free public higher education, and this can be done by taking on the higher ed tax subsidies for the wealthy.   

For more updates on free public higher education, click here.  

The Good, the Bad, and the Ugly Budget Deal

The deal between President Napolitano and Governor Brown is a mixed bag.   On the one hand, the plan brings more money to the system than many expected, and the governor does increase support for the UC pension plan. The deal also buys out the undergrad tuition increases for the next two years, but the graduate and professional schools fees are free to increase.  Finally, the plan allows for non-resident tuition to increase 8% each year, and the governor has promised that he will not block a legislative effort to add more money for enrollment growth.

On the bad side, the deal was negotiated by two leaders without any real effort at shared governance.  In fact, the university will still have to negotiate with unions and faculty over pension reform measures.  Like the fast-tracking of free trade agreements, this method of negotiation values secrecy over democracy.  As is often the case in the UC system, consultation occurs after a decision has been made, and this represents a fake form of democracy and shared governance.

The most threatening aspect of the plan is that it requires a new pension tier, but the details of the plan are not spelled out. A big concern is the talk of a defined contribution plan, which we have told the university is not only bad for the employees but also bad for the entire shared defined benefit plan.  History shows that once you allow employees to opt into a reduced benefit, the main benefit plan becomes destabilized.  

Attention now turns to the legislature where there are many competing plans for UC.  Just as UC employees are concerned about the lack of democracy in the Committee of Two, legislators are surely feeling squeezed out of the democratic process.