UC Pays for Itself

The University of California Pays for Itself

Harry Nelson
Professor of Physics
University of California, Santa Barbara
hnn@hep.ucsb.edu
to the Gould Commission

The State of California has historically contributed about $40,000 to the 4-year education of each new UC graduate.  The precise figure has gone up and down over the past 20 years, but $40,000 is a good average, prior to the recent cuts.

Very few of us know that new UC graduates go on to pay the $40,000 back and more, because they earn higher salaries and so they pay more taxes.

To run the numbers, recent federal Bureau of Labor Statistics data indicate that California college graduates make an average of $53,500 a year, while high school graduates make $32,400 a year.   A college degree is a classic win-win situation: not only does the college graduate benefit, but also the State of California benefits, because the graduate pays more State taxes.

The total State tax burden, including income, sales, and property tax is available from the California Budget Project, and is 8.7% for the college graduate and 9.5% for the high school graduate.

Each year the State of California is paid about $1,580 more in taxes from the college graduate than from the high school graduate, and that adds up over their careers.

The college graduate works for 43 years, and the high-school graduate for 47 years, until they both retire at 65.  Over that time, the State of California receives $55,600 more from the college graduate.

The University of California pays for itself, and more.

The State of California profits by $15,600 per UC degree.

The recent cuts, however, have reduced the State of California’s contribution by about $9,000 per 4-year degree, to about $31,000.

And thus raised the State’s profit from each UC degree to $24,600.

I’m pretty sure a UC degree actually makes the State a lot more than $24,600, because UC graduates are among the most talented and energetic college graduates in our State.

I ask the Commission to do a more thorough job of determining how much the State really makes, and to relentlessly publicize that number.

I don’t know why the State of California would ever want to be in the business of selling higher education for a profit.