When High Tuition Drives Resident Students Away

Plan A for saving the quality of public universities has always been restored public funding.  That plan took another beating yesterday with California Gov. Jerry Brown's latest cuts (see Michael's analysis and the UCLA FA blog's coverage).

Plan B is a high tuition strategy with various permutations, and it is well under way at UC via the tripling of fees in the past decade and another 6% tuition increase all but assured for next year, and possibly more.  But the functionality of the high-tuition model was questioned by a report last week by the Public Policy Institute of California, whose jist was captured by the Chronicle of Higher Education headline,  "California High-School Graduates Increasingly Reject State's Public Colleges."

Plan B assumes that students will continue to pay more  for a diluted product--diluted because even very high tuition increases have been covering between a quarter and a half of lost public funds.  UC's huge and growing application pool is often cited as evidence. But applicants don't pay tuition unless they enroll.  The PPIC report found that the assumption of ever-growing enrollments has not been true. 

 Over the past five years, the authors write, "the share of California’s top high school graduates enrolling in either UC or CSU has declined from 68 percent in 2008 to 55 percent in 2010, and the share of recent high school graduates enrolling in either UC or CSU has declined from 21.9 percent to 17.8 percent."   "Top" students mean those who have fulfilled the a-g entrance requirements.  In business terms, the two systems have lost a fifth of their share of their home market.


The report traces the decline to several factors, and summarizes its findings like this:

California’s recent high school graduates are less likely to find a place at UC or CSU than they were a few years ago. These declines coincide with actions taken to limit enrollment as well as with the most dramatic increases in tuition and fees in the history of those institutions— increases that were substantially higher than those of similar public universities in other states. Indeed, enrollment rates have risen in other states even as they have fallen in California

Recent stories have noted that other states are actively recruiting California students, and PPIC confirms a small but growing brain drain to other states.

PPIC also asked where the non-enrolling students go.  What they found in UC's records is that of the admits who decline enrollment, a third go to a private college, a third go to a Cal State or community college, a tenth go to an out-of-state public, and a tenth don't go to college at all. The situation is bad for everybody: UC is losing more academically excellent students than it used to, in part because it is reducing its cost advantage, while the state is getting a higher share of students who either "undermatch" by going to a campus below their level of qualification or who don't continue to college.   California is thus building its innovation economy by shrinking its innovation capacity, and growing its knowledge economy by reducing its level of knowledge.  This is a perfectly stupid policy, which will insure more stupid policies in the future.

The discouraging effect of continuous tuition hikes on the student "customer" should be no surprise. The country is now widely perceived to be having a crisis of college affordability, and to be locked in a tuition bubble which has produced a debt bubble. So there is no sustainability to Plan B's vision of raising public university tuition until the day Aragon is crowned King of Gondor.  Does anyone in Sacramento and Oakland read stories called for example "A Generation Hobbled by the Soaring Cost of College"?  If you are looking for a summary of the dire situation to send to Jerry Brown, consider this piece. Jerry will learn:

• The balance of federal student loans has grown by more than 60 percent in the last five years. That's the same five year period where UC and CSU lost 20% of their CA high school share.
• Education Department data shows that payments are being made on just 38 percent of the balance of federal student loans, down from 46 percent five years ago.
• Nearly one in 10 borrowers who started repayment in 2009 defaulted within two years, the latest data available — about double the rate in 2005.  
• A study of recent college graduates conducted by researchers at Rutgers University and released last week found that 40 percent of the participants had delayed making a major purchase, like a home or car, because of college debt, while slightly more than a quarter had put off continuing their education or had moved in with relatives to save money. 
• Roughly half of the surveyed graduates had a full-time job. 

Jerry will also discover the deceptive practices in university financial aid letters that make students think massive debt is normal -- or that in the case of a Drexel letter, that massive debt will lead to a negative payment, as though student debt meant the university owed them money!  And he can read of cases where massive debt leads to no degree at all:

“I’ll be paying this forever,” said Chelsea Grove, 24, who dropped out of Bowling Green State University and owes $70,000 in student loans. She is working three jobs to pay her $510 monthly obligation and has no intention of going back.

“For me to finish it would mean borrowing more money,” she said. “It makes me puke to think about borrowing more money.” 

The wracking university dependence on private money--student tuition in particular--has pushed a huge portion of the higher ed sector into manipulating exactly the young people they are charged to enlighten.   We start instruction by teaching them to betray their own self interest.  We burden students with debt, but more fundamentally we corrupt our relationship with them by not basing it on trust, without which there can be none of the personal development we seek to create.  We who are charged with helping them discover their future first greet them--via our financial aid offices-- by misleading them about their future's financial basis. 

At CSU and UC it hasn't quite come to this, setting aside disinformation about how good poor students have it. And yet the reward for our compromises is the growing understanding that UC will never be the same, as embodied in causal phrasing like "the state’s once-celebrated higher education system."

This brings me to the second premise of Plan B: that faculty can keep their research even if students can't keep high-quality instruction.  A PPIC figure shows this belief to be false as well.

UC has research obligations that CSU does not.  The per-student funding differential reflected no so much differences in teaching expenditures as in research costs.  What we see here is everyone's funding declining but UC's declining faster.  UC is in effect being forced onto a non-research university mean.  UC faculty are expected to compete with their national and international peers in research, and yet the research system is increasingly funded like Cal State.

In the Rays of Hope Department, this NYT piece is very clear that the tuition hikes are tied to a 24% drop in state funding per student over the past ten years. (They don't discuss the feedback loop, where the 72% average state school tuition increase encourages further state funding cuts.)  So there an at least structural interest in  Plan A, as the only alternative to the continuing ramping up of unsustainable debt.

On top of this, the PPIC report references its own finding last year that nearly 3/4ths of Californians think public funding for higher education is too low.

Obviously we have to contend with Jerry Brown, that dependent variable in the Great Equation, California's fusion of Herbert Hoover and Angela Merkel.  But the Schwarneggger-Brown Axis of Austerity is an policy choice and not a necessity. It can be unchosen through enough argument and enough public pressure.