Tuesday, May 22, 2012
How Higher Ed Tax Breaks Serve as Welfare for the Wealthy
As I wrote in a previous blog entry, we may be able to make all public higher ed free, if we just use all current available resources in a more efficient manner. One thing I discovered in my research is the way that tax breaks for higher ed have been used as a form of welfare for the wealthy. As shown in the study, “Moving On Up: How Tuition Tax Breaks Increasingly Favor the Upper-Middle Class,” what has been occurring is that help for poor students is being reduced as support for wealthier students is being increased: “From 1999 to 2009, the government spent $70 billion on tax breaks aimed at subsidizing higher education for families . . . about 13 percent, or $9.4 billion, of that total went to families making more than $100,000 a year. At the same time, only 11 percent went to the neediest families, those making less than $25,000. Families in the middle—those making between $25,000 and $99,999— received the lion’s share of the aid, taking in slightly more than three-quarters of the benefits.” While this research makes it sound like middle-class parents were getting most of the benefit of these tax breaks, we are later told that the movement of the funding has continued to shift to the wealthiest Americans: “nearly 83 percent of the higher education tax benefits distributed from 1999 to 2001 went to families earning less than $75,000 per year. No benefits went to those earning more than $100,000. By contrast, in the last three tax years alone, families making between $100,000 and $180,000 received nearly a quarter of the benefits. The share going to middle-income families sharply declined.” This tax system for higher education is a great example of how so many of our governmental policies end up subsidizing the wealthy as poor and middle-class citizens are left paying more and getting less.
If we made all public higher education free, not only could we do away with this unjust tax system, but we could also stop the movement of public funds to expensive private and for-profit universities and colleges. What people do not notice is that the use of financial aid and tax subsidies for individual students has resulted in a system where much of the governmental support for higher education ends up going to private institutions that cater to the super-rich or to low-achieving for-profit schools. In fact, during a 2012 Congressional investigation of for-profit colleges, it was discovered that up to a quarter of all federal Pell grant money is now going to these corporate schools that charge a high tuition and graduate very few students. What this investigation did not uncover, however, was the amount of state and federal tax breaks that go to support for-profit institutions.
While recent research has been done on how much the federal government has spent on tax deductions and credits for higher education, as far as I can tell, no one has examined how much states are spending on these tax breaks for colleges and universities. However, it is safe to estimate that the total subsidy by the states is at least the same as the total federal level of support ($40 billion) since many of the states have tax deductions that exceed the national tax breaks for tuition, and most states have tax-advantaged 529 college savings plans. For example, in New York state, the tuition tax credit goes up to $5,000 per year per student, and the tuition tax deduction is $10,000 for each eligible student. It is important to point out that tax deductions favor the wealthy since so many low-income families pay little if any federal income taxes.
One of the great secrets in higher education funding is the role played by 529 College Savings Plans: “In 2000 a total of $2.6 billion was invested in 529 plans. This grew to $14 billion in 2001 and more than $92 billion in mid-2006. The student aid resource Finaid.org projects that total investment in 529 plans will reach $175 billion to $250 billion by 2010, with a total of 10 million to 15 million accounts opened.” Not only do state governments lose billions of dollars in tax revenue each year due to these 529 plans, but the wealthy have figured out how to use these plans as all-purpose tax shelters. For example, if a couple puts $26,000 a year for each child into account, and then decides later to use the money to buy a yacht, only the investment gains will be assessed a 10% penalty and taxed as income. Also, contributions made to a 529 are removed from a family's estate, and 529 plan owners can name a successor to the account when they die, which enables the plans to shelter money for multiple generations.
One way that wealthy people use these accounts to avoid paying taxes is by giving each other gifts. In this structure, gift taxes can be avoided if contributions into the plans over a five-year period do not exceed $65,000 for single taxpayers and $130,000 for married couples. Clearly, it is only the wealthiest Americans who are able to profit from this type of plan. In fact, according to a recent Department of the Treasury report, "Currently there are effectively no limits on Section 529 account balances. Because 43 states offer plans open to residents in other states, a beneficiary can have accounts in as many as 44 states, each state with a limit exceeding $224,465." It is obvious that only wealthy people can afford to save and invest this type of money. Moreover, the same study of 529 plans details how the richest families are using these plans for tax shelters: "data from the 2007 Survey of Consumer Finance found that among households in the top five percent of income — average income, $548,000 per year — those with education savings plans held an average balance of $106,250. That’s more than triple the average for households in the 90th-95th percentile, more than ten times the balance for the 50th-75th percentile, etc. Second, among households in Kansas who took a state income tax deduction for 529 contributions, the average deduction for households making over $250,000 per year was $10,323. For those in the $100K-$250K range it was less than $5,000, for everyone else, less than $3,000.” As this federal government report indicates, 529 plans have now become an effective way to subsidize wealthy people; meanwhile, states are forced to cut their higher education budgets due to their lack of tax revenue.
If we took all of the state and federal money that is lost each year due to these tax credits, deductions, and shelters, we could make public higher education free for millions of Americans; however, the tax code is rigged to provide aid to wealthy people, and one side-effect of this system is that private universities are able to charge higher tuition because they know that the parents of many of the incoming students will only pay a fraction of the full price due to merit aid, institutional aid, and tax breaks. Furthermore, once the private universities increase their tuition, they raise the bar for everyone else, and this makes tuition increases at public universities appear to be more tolerable. Furthermore, since the top public universities compete with the top private universities for star faculty and administrators, the more the privates are able to increase their tuition, the more the public institutions have to pay their star faculty.
To contain the rising tuition at private universities and the subsidization of high-cost, low-value for-profit schools, the government needs to move away from the current emphasis on tax breaks and tax shelters, and this can be done in part by making all public higher education free. Instead of relying on a mix of financial aid, institutional aid, tax subsidies, and grants, direct funding for public institutions could give the government a way to control costs at both public and private universities and colleges. The federal government could also require states to maintain their funding for public institutions in return for increased federal support, and once we stabilize funding and make higher education free, then we can eliminate the need for so many students and institutions to go into debt.
Thursday, May 17, 2012
UC, the State, and the Post-Stimulus Blues
In his End this Depression Now!, Paul Krugman argues that the best way to get the U.S. economy out of its current slump is for the federal government to provide direct support to the states to stop the loss of public workers. Krugman and others have pointed out that while there has been an increase in private sector employment, there are about two million public sectors workers who have lost their jobs or about to lose their jobs. These job losses not only depress consumer demand, but they also hurt state revenues.
In the case of California, Governor Brown’s latest revised austerity budget calls for an additional reduction of the UC budget of $38 million with another $250 million cut if his tax initiative does not pass in November. In the best case scenario, the UC will receive $2.5 billion in state funds, and if the tax initiative does not pass, the figure goes down to $2.2 billion, which means we are down $1 billion from the funding level of 2007-8.
While some may say that we have faced bigger cuts in the past, what few people understand is that a lot of the past state reductions were replaced by federal stimulus money, which is now all gone. As I pointed out a couple of years ago, when the UC administration called for furloughs and layoffs, it often failed to mention that the state reductions were being replaced by federal dollars; however, now, the UC is really struggling with increased costs and decreased revenue, and tuition increases and out-of-state students can only fill part of the hole.
Recently, I have shown how we could fund free public higher education, and while this is a long-term goal, we have to also think about the short-term and the medium term. Right now, we are pushing to increase UC funding to stop tuition increases, but we will have to make our arguments during a time when the poor and the needy are facing tremendous cuts. One possible solution is for the UC to lend the state a large amount of money on the condition that the state increases UC funding. Another medium-term solution is to either push for a new initiative guaranteeing higher ed funding, like the one that that exists for K-14, or to tie a reduction of prison spending to an increase in higher ed funding (if we got rid of the three strike rule and we decriminalized drugs, we could free up money to be spent on our universities and colleges).
What should be clear is that the current political class is not proposing any comprehensive solutions, and instead, we are suffering from a thousand cuts. What we need to do is to organize around a set of propositions that would modernize our tax system and replace spending on incarceration with funding for instruction while controlling healthcare costs and improving the quality of public services. In short, we have to formulate a workable program that will inspire people to counter the agenda of the ruling class.
In the case of California, Governor Brown’s latest revised austerity budget calls for an additional reduction of the UC budget of $38 million with another $250 million cut if his tax initiative does not pass in November. In the best case scenario, the UC will receive $2.5 billion in state funds, and if the tax initiative does not pass, the figure goes down to $2.2 billion, which means we are down $1 billion from the funding level of 2007-8.
While some may say that we have faced bigger cuts in the past, what few people understand is that a lot of the past state reductions were replaced by federal stimulus money, which is now all gone. As I pointed out a couple of years ago, when the UC administration called for furloughs and layoffs, it often failed to mention that the state reductions were being replaced by federal dollars; however, now, the UC is really struggling with increased costs and decreased revenue, and tuition increases and out-of-state students can only fill part of the hole.
Recently, I have shown how we could fund free public higher education, and while this is a long-term goal, we have to also think about the short-term and the medium term. Right now, we are pushing to increase UC funding to stop tuition increases, but we will have to make our arguments during a time when the poor and the needy are facing tremendous cuts. One possible solution is for the UC to lend the state a large amount of money on the condition that the state increases UC funding. Another medium-term solution is to either push for a new initiative guaranteeing higher ed funding, like the one that that exists for K-14, or to tie a reduction of prison spending to an increase in higher ed funding (if we got rid of the three strike rule and we decriminalized drugs, we could free up money to be spent on our universities and colleges).
What should be clear is that the current political class is not proposing any comprehensive solutions, and instead, we are suffering from a thousand cuts. What we need to do is to organize around a set of propositions that would modernize our tax system and replace spending on incarceration with funding for instruction while controlling healthcare costs and improving the quality of public services. In short, we have to formulate a workable program that will inspire people to counter the agenda of the ruling class.
Tuesday, May 8, 2012
How to Make All Public Higher Ed Free in America (Version 2)
Flagship public universities across the nation are asking for more autonomy so that they can increase tuition and set their own enrollment targets. Meanwhile, student loan debt has surpassed a trillion dollars as states continue to cut their support for higher education. It is clear that the funding model for public higher education in America is broken, but no one appears to be coming up with a coherent plan to address the problem.
In my research for my upcoming book, I have discovered that we could make all public higher education free in America if we just used our current resources in a more coordinated way. Looking at higher education enrollment patterns in 2009-10, we find that 6.4 million full-time equivalent undergraduate students were enrolled at public universities and 4.3 million were enrolled in community colleges. In the same year, the average cost of tuition, room, and board for undergraduates at public four-year institutions was $14,870, and for 2-year public colleges, it was $7,629. If we multiply the number of students in each segment of public higher education by the average total cost, we discover that the price for making all public higher education free was $127 billion in 2009-10.
While $127 billion seems like a large figure, we need to remember that in 2010, the federal government spent $35 billion on Pell grants and $105 billion in new student loans, while the states spent $10 billion on financial aid. Furthermore, looking at various tax breaks for higher education, we can add billions to the public support for universities and colleges.
Here is a list of some of the current federal tax breaks and how much each one cost in 2010 (this list does not include state tax breaks): student loan interest rate exemption ($1.4 billion), the exclusion of employer-provided educational assistance ($1.1 billion), exclusion of interest on student-loan bonds ($0.6 billion), exclusion of scholarship and fellowship income ($3.0 billion), exclusion of tax on earnings of qualified tuition programs: savings account programs ($0.6 billion), the HOPE tax credit ($5.4 billion), the Lifetime Learning tax credit ($5.5 billion), parental personal exemption for students age 19 or over ($3.4 billion), state prepaid tuition plans ($1.75 billion), American Opportunity Tax Credit ($14.4 billion), and part of the deductibility of charitable contributions (education) ($4.9 billion).
To the almost $40 billion of federal tax breaks listed above, we also need to add the numerous state tax subsidies; in fact, many states offer tax credits and deductions that exceed the federal tax breaks. Moreover, there is currently over $100 billion in 529 College Savings Plans, and if we made all public higher education free, we could do away with these tax shelters, which mostly benefit the wealthiest families.
When we add the cost of tax breaks to the current level of state and federal financial aid for higher education, not only could the government pay for the full cost of undergraduate education for public universities and community colleges, but we could also make most of graduate education free at these institutions.
In my research for my upcoming book, I have discovered that we could make all public higher education free in America if we just used our current resources in a more coordinated way. Looking at higher education enrollment patterns in 2009-10, we find that 6.4 million full-time equivalent undergraduate students were enrolled at public universities and 4.3 million were enrolled in community colleges. In the same year, the average cost of tuition, room, and board for undergraduates at public four-year institutions was $14,870, and for 2-year public colleges, it was $7,629. If we multiply the number of students in each segment of public higher education by the average total cost, we discover that the price for making all public higher education free was $127 billion in 2009-10.
While $127 billion seems like a large figure, we need to remember that in 2010, the federal government spent $35 billion on Pell grants and $105 billion in new student loans, while the states spent $10 billion on financial aid. Furthermore, looking at various tax breaks for higher education, we can add billions to the public support for universities and colleges.
Here is a list of some of the current federal tax breaks and how much each one cost in 2010 (this list does not include state tax breaks): student loan interest rate exemption ($1.4 billion), the exclusion of employer-provided educational assistance ($1.1 billion), exclusion of interest on student-loan bonds ($0.6 billion), exclusion of scholarship and fellowship income ($3.0 billion), exclusion of tax on earnings of qualified tuition programs: savings account programs ($0.6 billion), the HOPE tax credit ($5.4 billion), the Lifetime Learning tax credit ($5.5 billion), parental personal exemption for students age 19 or over ($3.4 billion), state prepaid tuition plans ($1.75 billion), American Opportunity Tax Credit ($14.4 billion), and part of the deductibility of charitable contributions (education) ($4.9 billion).
To the almost $40 billion of federal tax breaks listed above, we also need to add the numerous state tax subsidies; in fact, many states offer tax credits and deductions that exceed the federal tax breaks. Moreover, there is currently over $100 billion in 529 College Savings Plans, and if we made all public higher education free, we could do away with these tax shelters, which mostly benefit the wealthiest families.
When we add the cost of tax breaks to the current level of state and federal financial aid for higher education, not only could the government pay for the full cost of undergraduate education for public universities and community colleges, but we could also make most of graduate education free at these institutions.
Wednesday, April 25, 2012
Understanding Financial Aid: Not Easy
I have always wanted to know what it means when UC says that students would not have to pay tuition if their parents made less than $80,000 a year. So I went to the UCLA financial aid estimator, and I punched in a few variables, and here is what I found.
In the case of a family of four with an income of $75,000, here is what we get: Parent Contribution: $10,860.00;
Estimated Award Letter
Grant Award: $11,586.00
Self Help Award: $9,200.00
Family Help Award: $10,860.00
Estimated Total Price of Attendance
University Fees +$12,685.00
Room and Board +$13,980.00
Books and Supplies +$1,509.00
Transportation +$789.00
Personal +$1,368.00
Health Insurance +$1,225.00
Loan Fees +$90.00
Total Cost of Attendance: $31,646.00
So, the first thing you might want to know is what are “Self Help” and “Family Help” awards. I looked all over the web site and several other sites, and I could not find any definition of these categories. I then called the UCLA financial aid office, and after waiting several minutes on hold, I finally got a live voice, but this voice could not answer my questions, and so I was transferred to a supervisor. When I asked him what these terms meant, he said he thinks “self help award” refers to student loans and work-study aid, but he had never heard of a “family help award.” I told him that it is on his web site, but he responded that the federal government is requiring the university to put this information online, but they are not responsible for its content.
I am guessing that the family help award is a loan, but I really don’t know; however, what I do know is that while everyone talks about the high cost of tuition, the biggest driver of costs and student debt is housing and related expenses. It turns out that this issue tracks national data. In 1990-91, total tuition, fees, room and board at public universities averaged $5,585, and in 2009-10, this cost rose to $16,712, which represents an increase of $11,127. Meanwhile for community colleges, the total cost in 1990-91 was $3,467, and in 2009-10, it went to $7,703 for an increase of $3,403. During the same period, average tuition and fees for public universities rose from $2,159 to $8,123 for an increase of $5,964, while for community colleges tuition and fees went from $824 to $2,285 for a total increase of $1,461. This means that the biggest cost increases for public higher education concern room and board, but few people ever discuss this fact.
Next Week I plan to return to my last blog on how to make all public higher education free. I had to take it down because there was an error in my analysis.
In the case of a family of four with an income of $75,000, here is what we get: Parent Contribution: $10,860.00;
Estimated Award Letter
Grant Award: $11,586.00
Self Help Award: $9,200.00
Family Help Award: $10,860.00
Estimated Total Price of Attendance
University Fees +$12,685.00
Room and Board +$13,980.00
Books and Supplies +$1,509.00
Transportation +$789.00
Personal +$1,368.00
Health Insurance +$1,225.00
Loan Fees +$90.00
Total Cost of Attendance: $31,646.00
So, the first thing you might want to know is what are “Self Help” and “Family Help” awards. I looked all over the web site and several other sites, and I could not find any definition of these categories. I then called the UCLA financial aid office, and after waiting several minutes on hold, I finally got a live voice, but this voice could not answer my questions, and so I was transferred to a supervisor. When I asked him what these terms meant, he said he thinks “self help award” refers to student loans and work-study aid, but he had never heard of a “family help award.” I told him that it is on his web site, but he responded that the federal government is requiring the university to put this information online, but they are not responsible for its content.
I am guessing that the family help award is a loan, but I really don’t know; however, what I do know is that while everyone talks about the high cost of tuition, the biggest driver of costs and student debt is housing and related expenses. It turns out that this issue tracks national data. In 1990-91, total tuition, fees, room and board at public universities averaged $5,585, and in 2009-10, this cost rose to $16,712, which represents an increase of $11,127. Meanwhile for community colleges, the total cost in 1990-91 was $3,467, and in 2009-10, it went to $7,703 for an increase of $3,403. During the same period, average tuition and fees for public universities rose from $2,159 to $8,123 for an increase of $5,964, while for community colleges tuition and fees went from $824 to $2,285 for a total increase of $1,461. This means that the biggest cost increases for public higher education concern room and board, but few people ever discuss this fact.
Next Week I plan to return to my last blog on how to make all public higher education free. I had to take it down because there was an error in my analysis.
Thursday, April 12, 2012
The Ugly Face of Austerity: Pepper Spraying the Other
The image of a UC police officer using a weapon with indifference on prone students may become the iconic image of the Age of Austerity. This scene, which went viral on the Internet, tells us much about our current political and economic moment: young people protesting the decreased support from the state are treated with brutality and indifference.
In reading the recently released report on the UC pepper spraying "incident," I was struck by two reoccurring themes: the university administrators and police wanted to see the student protesters as outside elements, and they sought to protect their imagined daughters from sex. This underlying paranoid fantasy is brought to the surface in several moments in the report. For instance, "The administration did not consider the Occupy movement encampment to be a conventional campus protest. The Leadership Team appeared to perceive it as a vehicle through which non-affiliates might enter the campus and endanger students." We can read the term "non-affiliates" as shorthand for dangerous, unspecified Others, and as the report relates, the central irrational fear of the administration appeared to be that these dangerous Others would violate “young girls”: "“We were worried at the time about that [nonaffiliates] because the issues from Oakland were in the news and the use of drugs and sex and other things, and you know here we have very young students . . . we were worried especially about having very young girls and other students with older people who come from the outside without any knowledge of their record . . . if anything happens to any student while we’re in violation of policy, it’s a very tough thing to overcome.” Representing college students as "young girls" and protesters as dangerous sexualized Others serves to justify a violent reaction by a protective, paternalistic institution.
Of course, this cultural fantasy of the unknown Other violating “young girls” was often used in the American South to justify the lynching of African Americans because of their threat to white female purity. In fact the sexualization of Others has historically helped Christian invaders to justify brutalizing and dehumanizing native people; however, if you think I am reading too much into the passage from the report cited above, let us ponder the following statement: "Vice Chancellor Meyer expressed similar concerns in an interview conducted on Dec. 7. He explained, “our context at the time was seeing what’s happening in the City of Oakland, seeing what’s happening in other municipalities across the country, and not
being able to see a scenario where [a UC Davis Occupation] ends well . . . Do we lose control and have non-affiliates become part of an encampment? So my fear is a longterm occupation with a number of tents where we have an undergraduate student and a non-affiliate and there’s an incident. And then I’m reporting to a parent that a nonaffiliate has done this unthinkable act with your daughter, and how could we let that happen?”" Once again, in this cultural fantasy, the administration sees itself as protecting the purity of its daughters by eliminating the threat posed by a violating Other.
Why it is important to understand this underlying fantasy is that it helps us to understand how the administration could see its own students as threatening outsiders intent on corrupting their own precious purity. From this perspective, Lt. Pike was not simply protecting public safety; rather, he was following the administration's lead by trying to eliminate the Other from the space of the same. I use these abstract terms to point to the underlying psychology behind austerity politics in California: Just as the Other (brown and black students) started to enter into our higher education system, a tax revolt resulted in the defunding of public universities. Moreover, as our public schools become increasingly self-segregated, austerity becomes color-coded. Older and Whiter Californians simply do not want to share their wealth in order to support the education of young people of color.
While we have been socialized not to talk about race and to keep our prejudices indirect and coded, it is clear that even though the police at UC Davis knew they were looking at UC Davis students, what they saw were wild outsiders threatening to violate their daughters. Only serious and committed education can help us to overcome these collective cultural fantasies that at once dehumanize some students and purify others.
In reading the recently released report on the UC pepper spraying "incident," I was struck by two reoccurring themes: the university administrators and police wanted to see the student protesters as outside elements, and they sought to protect their imagined daughters from sex. This underlying paranoid fantasy is brought to the surface in several moments in the report. For instance, "The administration did not consider the Occupy movement encampment to be a conventional campus protest. The Leadership Team appeared to perceive it as a vehicle through which non-affiliates might enter the campus and endanger students." We can read the term "non-affiliates" as shorthand for dangerous, unspecified Others, and as the report relates, the central irrational fear of the administration appeared to be that these dangerous Others would violate “young girls”: "“We were worried at the time about that [nonaffiliates] because the issues from Oakland were in the news and the use of drugs and sex and other things, and you know here we have very young students . . . we were worried especially about having very young girls and other students with older people who come from the outside without any knowledge of their record . . . if anything happens to any student while we’re in violation of policy, it’s a very tough thing to overcome.” Representing college students as "young girls" and protesters as dangerous sexualized Others serves to justify a violent reaction by a protective, paternalistic institution.
Of course, this cultural fantasy of the unknown Other violating “young girls” was often used in the American South to justify the lynching of African Americans because of their threat to white female purity. In fact the sexualization of Others has historically helped Christian invaders to justify brutalizing and dehumanizing native people; however, if you think I am reading too much into the passage from the report cited above, let us ponder the following statement: "Vice Chancellor Meyer expressed similar concerns in an interview conducted on Dec. 7. He explained, “our context at the time was seeing what’s happening in the City of Oakland, seeing what’s happening in other municipalities across the country, and not
being able to see a scenario where [a UC Davis Occupation] ends well . . . Do we lose control and have non-affiliates become part of an encampment? So my fear is a longterm occupation with a number of tents where we have an undergraduate student and a non-affiliate and there’s an incident. And then I’m reporting to a parent that a nonaffiliate has done this unthinkable act with your daughter, and how could we let that happen?”" Once again, in this cultural fantasy, the administration sees itself as protecting the purity of its daughters by eliminating the threat posed by a violating Other.
Why it is important to understand this underlying fantasy is that it helps us to understand how the administration could see its own students as threatening outsiders intent on corrupting their own precious purity. From this perspective, Lt. Pike was not simply protecting public safety; rather, he was following the administration's lead by trying to eliminate the Other from the space of the same. I use these abstract terms to point to the underlying psychology behind austerity politics in California: Just as the Other (brown and black students) started to enter into our higher education system, a tax revolt resulted in the defunding of public universities. Moreover, as our public schools become increasingly self-segregated, austerity becomes color-coded. Older and Whiter Californians simply do not want to share their wealth in order to support the education of young people of color.
While we have been socialized not to talk about race and to keep our prejudices indirect and coded, it is clear that even though the police at UC Davis knew they were looking at UC Davis students, what they saw were wild outsiders threatening to violate their daughters. Only serious and committed education can help us to overcome these collective cultural fantasies that at once dehumanize some students and purify others.
Monday, April 9, 2012
The UC Budget and the Damage Done
At the last UC Regents meeting, a discussion of the UC budget outlines the following evidence of the deterioration of educational quality in the UC system:
• At UC Riverside, they will walk onto a campus where enrollment has grown in the last three years by nearly 3,000 students – many of them the first in their families ever to attend college – while at the same time the number of faculty has been reduced by five percent. The result: class sizes have grown by 33 percent. Introductory physics classes that used to average 95 students have exploded in size in three years to 573 students.
• At UC Santa Cruz, students will be provided with 84 fewer course offerings and their class sizes will have spiked 33 percent. The student-faculty ratio has exploded by nearly 15 percent, and the campus lacks funding for 125 faculty FTE – 14 percent of its faculty positions. Yet for all the cuts, the campus still faces a daunting $38 million budget gap.
• UC Santa Barbara has over 1,000 more students than it did three years ago, but the number of staff has declined by 450 (nearly 11 percent) during that time, and the faculty has remained the same size. The results are fewer student services, larger classes and discussion sections, and reductions and eliminations in many programs.
• And across the system, pension costs alone will rise to $1.8 billion annually in the next five years – an expense that campuses did not have to shoulder as recently as three years ago. If there is no increase in either State funds or tuition during this time, campuses will have to find the equivalent of funding for 7,000 staff or 3,900 faculty to fund this expense alone.
In other words, classes are getting bigger, courses are being cut, the number of faculty has been reduced, but the number of students has gone up. Moreover, the campuses are about to be hit with major pension costs, and it is unclear whether the state budget will provide any significant funding for the UC system.
These internal budget cuts not only mean a shortchanging of undergraduate instruction, but they also result in a longer time to degree, which in itself restricts access and reduces affordability.
• At UC Riverside, they will walk onto a campus where enrollment has grown in the last three years by nearly 3,000 students – many of them the first in their families ever to attend college – while at the same time the number of faculty has been reduced by five percent. The result: class sizes have grown by 33 percent. Introductory physics classes that used to average 95 students have exploded in size in three years to 573 students.
• At UC Santa Cruz, students will be provided with 84 fewer course offerings and their class sizes will have spiked 33 percent. The student-faculty ratio has exploded by nearly 15 percent, and the campus lacks funding for 125 faculty FTE – 14 percent of its faculty positions. Yet for all the cuts, the campus still faces a daunting $38 million budget gap.
• UC Santa Barbara has over 1,000 more students than it did three years ago, but the number of staff has declined by 450 (nearly 11 percent) during that time, and the faculty has remained the same size. The results are fewer student services, larger classes and discussion sections, and reductions and eliminations in many programs.
• And across the system, pension costs alone will rise to $1.8 billion annually in the next five years – an expense that campuses did not have to shoulder as recently as three years ago. If there is no increase in either State funds or tuition during this time, campuses will have to find the equivalent of funding for 7,000 staff or 3,900 faculty to fund this expense alone.
In other words, classes are getting bigger, courses are being cut, the number of faculty has been reduced, but the number of students has gone up. Moreover, the campuses are about to be hit with major pension costs, and it is unclear whether the state budget will provide any significant funding for the UC system.
These internal budget cuts not only mean a shortchanging of undergraduate instruction, but they also result in a longer time to degree, which in itself restricts access and reduces affordability.
Monday, April 2, 2012
Meeting at the White House, the State Tax Initiative, and the UC Regents
On March 27th, I made a presentation at the White House on how to control tuitin increases at American research universities. My first major point was that any attempt to contain tuition at public universities has to deal with state budget cuts for higher ed. I was told that the administration is aware of this issue, and they have been meeting with the presidents of several public universities to come up with a way to motivate states to stabilize higher ed funding.
My second major point was that while President Obama has been stressing affordability and access, he also has to focus on the quality of instruction. To make this point, I discussed how universities have been increasing the sizes of their classes and their dependence on under-supported non-tenure-track faculty to drive down the costs of instruction; meanwhile, the cost of administration, athletics, and construction has continued to increase. As I argue in my forthcoming book, the only way to control costs in higher education is to focus on providing quality instruction and research, but there are no incentives to make universities concentrate on their core missions.
One possible way of changing how universities spend their funds is to rank and rate universities based, in part, on the percentage of their budget that they spend on direct instructional costs (faculty salaries and benefits). I suggested to the administration that they add to their new College Scorecard statistics on how much of a university’s budget is spent on direct instructional costs and what percentage of their student credit hours are taught by full-time faculty. If universities had to report on these factors, they would need to commit more attention and funding to their core mission.
We also discussed President Obama’s fight to stop student loan interest rates from doubling this summer. I mentioned that in California, we are trying to freeze tuition by increasing the taxes on the wealthy, but we still need the federal government to combine the current emphasis on access and affordability with a focus on educational quality. Moreover, in the case of the UC system, it is clear that we have to force the governor and the legislature to dedicate new tax revenue to higher education. In fact, at the recent Regents meeting, several of the regents said that they do not think they can support the governor’s tax initiative if it does not dedicate funds directly to the UC in order to prevent another tuition increase. I have been meeting with people from the governor’s office and key legislators to push for a major increase in UC funding, but so far, no one has committed to guaranteeing UC funding and tying the higher education budget to the new tax initiative. We all need to work together now to push the governor and the legislature to provide enough funding to roll back recent tuition increases.
My second major point was that while President Obama has been stressing affordability and access, he also has to focus on the quality of instruction. To make this point, I discussed how universities have been increasing the sizes of their classes and their dependence on under-supported non-tenure-track faculty to drive down the costs of instruction; meanwhile, the cost of administration, athletics, and construction has continued to increase. As I argue in my forthcoming book, the only way to control costs in higher education is to focus on providing quality instruction and research, but there are no incentives to make universities concentrate on their core missions.
One possible way of changing how universities spend their funds is to rank and rate universities based, in part, on the percentage of their budget that they spend on direct instructional costs (faculty salaries and benefits). I suggested to the administration that they add to their new College Scorecard statistics on how much of a university’s budget is spent on direct instructional costs and what percentage of their student credit hours are taught by full-time faculty. If universities had to report on these factors, they would need to commit more attention and funding to their core mission.
We also discussed President Obama’s fight to stop student loan interest rates from doubling this summer. I mentioned that in California, we are trying to freeze tuition by increasing the taxes on the wealthy, but we still need the federal government to combine the current emphasis on access and affordability with a focus on educational quality. Moreover, in the case of the UC system, it is clear that we have to force the governor and the legislature to dedicate new tax revenue to higher education. In fact, at the recent Regents meeting, several of the regents said that they do not think they can support the governor’s tax initiative if it does not dedicate funds directly to the UC in order to prevent another tuition increase. I have been meeting with people from the governor’s office and key legislators to push for a major increase in UC funding, but so far, no one has committed to guaranteeing UC funding and tying the higher education budget to the new tax initiative. We all need to work together now to push the governor and the legislature to provide enough funding to roll back recent tuition increases.
Subscribe to:
Posts (Atom)