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Sunday, September 13, 2009

Sunday, September 13, 2009

The Fee Hike Shoe Drops

While I wait for me to finish two articles this weekend, here's our pal Joe's summary of the essentials of Regents Item F1, on the ongoing budget disaster and two new rounds of student fee increases:

For an extremely discouraging read, see Item F1 for the Regents' Finance Committee:
It includes

 "Proposal. Within the current budget context, this Item proposes a mid-year fee increase for all students in 2009-10. Display 3 shows proposed increases  by type of student. For example, the proposed increase for undergraduate  resident students is $585 and increases for resident graduate students range  from $579 to $654. Because the fee increase would be effective for the spring semester, students at semester campuses would pay the entire increase when they pay for spring semester.  For students at quarter campuses, the increase  would be paid over the winter and spring quarters."

 and for 2010-2011

 "An option for a further increase, equivalent to $1,344 for resident undergraduate students (fee increases for others would vary by student level  and program), is being analyzed. A proposal for a 2010-11 fee increase will be brought to the Board for approval as part of the action on the budget plan
 at the November meeting. The development of this proposal will include  consideration of how a significant increase in student fees may affect  graduate student recruitment, given the need to provide competitive support packages."

 In this proposal, resident UG fees rise to $10,302


 "Differential Undergraduate Fees by Discipline. The University also intends to ask the Regents to establish differential fees for undergraduates in  certain disciplines, effective for 2010-11, similar to professional differential fees at the graduate level. The University is currently  exploring implementing differential fees for students at the upper-division  level (i.e., undergraduates in their junior and senior years) in business and engineering, in recognition of the higher costs associated with offering  these programs. It is expected that differential fee levels in 2010-11 would  be under $1,000 annually. Various implementation issues will need to be  addressed, including the return-to-aid component and impacts on access, affordability and diversity, in order to assess this fee in 2010-11."


Peter Krapp said...

the cut to the UC budget takes state support from $3.2 billion to $2.4 billion for the year 2008-2009, some of which the UC can offset with stimulus funds and cash on hand, but the bulk of the $814 million shortfall has to be cut from somewhere in our budget. - in addition, the 2009-10 state budget for the UC is cut from $3.2 billion to $2.6 billion or worse, which leaves us another $637 million short. nobody is expecting a miracle from the state that allows us to expect restitution of the cuts; the economy is not roaring back.

for represented labor at the UC, there have actually been increases in the past several years. however, faculty are currently 10% below market (without counting the furlough or the resumed contributions into retirement; if you count those, faculty are even more underpaid now). and the state of CA has not contributed to the retirement system for UC staff and UC faculty in 19 years. that liability leaves another gaping hole in the UC budget. as you can imagine even without actuarial analysis, 19 years of not contributing is a cumulative problem.

every year, mandatory costs to the UC increase (including labor contracts with unions, rising cost of graduate students, insurance payments, health benefits, all going up). in 2008-2009 the UC was over-enrolled by 11,700 students (i.e. students for whom the state is not paying the UC), and their fees are not covering the cost of their education. having accepted these students in the hope that the state would eventually pay its share means another large and growing loss to the UC budget.

so, unless you want to close two schools at every campus, or lay off 9,000 people, or eliminate all financial aid to students, many other things have to contribute to the solution: UCOP restructuring is saving a chunk, energy savings will help, debt restructuring will help, senior management salaries are frozen or reduced 5%, bonus payments are cancelled, hiring is suspended, travel and purchasing are severely restricted. there are service reductions, administrative consolidation, and every campus has been eating its last remaining cash reserves. class sizes will go up, upon discussion and recommendation by the units, within the limits of pedagogical reasoning. sections will be eliminated. vacant positions are being eliminated, hiring of replacements is deferred or cancelled.

meanwhile, attending the UC costs more than it used to cost, yes; but that is because of a multi-year trend of states withdrawing from higher education funding. specifically in california, state funding has not kept up with the population growth. by not fixing the tax revenue system, it also has not kept pace with the buying power of the state population. we know the political story about this. - but it is important to note that even with the proposed increases in student fees, the UC is still cheaper than its peers, or equally as affordable as our public comparison institutions.

also keep in mind that we boast a much more diverse student population than for instance michigan or virginia. here in CA, financial aid and tax credits aid 108,000 students with $1.8 billion. and grants and scholarships aid 94,000 students with an average award of $10,900. nobody whose family income is below $60k per year pays the UC for attending. federal Pell grants are going up from $4,731 to $5,350. the American Opportunity tax credit raises the income ceiling covered, and offers much larger tax credits.

student fee increases are NOT the whole story - but they must be a part of the solution. it is NOT possible to solve this crisis on the backs of students. but to the extent that students can and must expect a UC quality (R1 research university) education, the cost of that degree and experience simply cannot stay the same at a time when the public funds are withdrawn at this order of magnitude. if there is a white knight out there with a magic bullet of a billion or more, please invite them over. otherwise, we're all in for hard times.

Anonymous said...

I agree. Its not great for the students but the fact is that UC has retained a very diverse student body as fees have increased in the past. With sufficient aid, there's no reason that can't continue. Even at the new rates, the UC will still be a bargain.

Gerry Barnett said...

Forgive me. It's only a bargain for taxpayers who want the benefit of a community with a lot of college educated folks without having to pony up themselves.

It's not a bargain for undergraduates saddled with $40K of debt over four years. Oh, yeah, that debt will get made up in grants for the poor, and it's a drop in the bucket for the wealthy. Just the dying middle class who live uninteresting lives and are a dime a dozen.

And it's surely a bargain relative to any of the private universities, if you want to go there and argue public education is just a poor person's wannabe alternative for the really important private schools that apparently set the agenda for culture.

If one rationalizes this way, why be so timid and raise to $10K/year when the average for premium public universities is more like $16K/year? Why not just go ahead and be premium priced, and have the resources to give undergraduates a tremendously powerful set of opportunities--not just in the classroom, but in the field, in placement support, in study abroad, internships?

You know, it's just as bad to be slowly grinding down as it is to be slowly grinding up... if it's just a matter of being a bargain relative to $50K/year private schools, why not just get it up to $12K or $16K/yr and end the cycle of being cheap, compromised, and unable to meet the needs of qualified students once you've got them?

It won't fix other problems--research subsidies, for instance--but it would go a great way toward providing undergraduates with the experience and resources they need. If they are going to go into debt $40K rather than $25K, then they can go into debt $60K rather than $40K. It's still a great bargain for the taxpayers and relative to the private universities they couldn't afford....

I'd rather not see tuition up without some of the re-examination about how the administration of education works. It's the easy out. It's going up about 30% over two years here at UW. Not a peep about it. Still a great bargain, I guess.

Aldo Antonelli said...

Peter: well, yes, that is one way to do it. This is exactly what Yudof advocated in his 2002 piece on the hybridization of the public university on the Michigan model. Look, at some level, it's no skin off our noses, right? None of our colleagues in Ann Arbor are complaining about their salaries, are they? But the point is whether we want to save the very idea of affordable, high-quality education that has characterized UC all along (or at least since the Master Plan). This idea has been under attack for a long time in the form of diminished per student funding from the state. We have to decide whether this is worth fighting for. If not, then Gerry Barnett is right: why not go all the way to 16K tuition and alleviate many of the university's problems?

Bob Samuels said...

How is the UC going to force the state to give us more money if we keep on raising fees? UCOP should have come up with a policy stating that if the state did not restore full funding next year, fees would go up a certain percent. It makes no sense to raise fees now. This is another example of bad leadership.

Bronwen Rowlands said...

I agree with Bob Samuels. And I think that announcing the new fee increases now is a raw and vulgar show of power intended to frighten all UC employees from mounting protests on Sept 24. To the ramparts!

Peter Krapp said...

Aldo: it's not so clear whether the Michigan model works so well for Michigan. (if this wasn't such a sad topic, I would joke that I don't drive a Michigan model). California is significantly larger and more diverse than the the state of Michigan. what we would need here is 10 Universities of Michigan, with more diversity than they currently make possible at Michigan. do you think 16k per enrollment could make that possible? we'd also need a much larger endowment than the UC has. and we would still need the state to be a reliable partner...

Gerry Barnett said...

This comparison document might be of some help. Doesn't reflect recent tuition increases around the country, however.


Here's how the "it's still a great bargain" bit works at UW.


Chris Newfield said...

Great comments. Here are a few questions.
- why didn't UC announce its fee hikes in the way that CSU did, before the year began, so students could plan?
-why didn't UCOP announce fee hikes when they could still get the full year's revenues to respond to a full year's cuts?
- why are UCOP revenue solutions always so far below its income gaps ($1.1 Billion below the Compact level, which already didn't fully fund cost increases and all new students)?? This happens annually. WHY?
-is UC such a great bargain when resources fall faster than fees go up? Why isn't this just more of "pay more, get less"?
-hasn't UCOP put us right back in Dante's Purgatoria? We can't ask for big state GF recovery becuse we constantly raises fees (built into the Compact). And we don't give up on GF so we can raise fees enough. Isn't this worst of both worlds - average affordability for increasingly average quality?

Anonymous said...

UCOP raising fees is perhaps the single best thing it could do for the cause of affordable public education.

UCOP does not have the power to confront the State and make it change its polices, and neither does the faculty. But population of students and would-be students and their families is a potentially enormous voting force.

If students and would-be students and their families are awakened by fee hikes and then go on to take political action, then there is some hope for preserving public funded higher education.

On the other hand, if that does not work, then nothing else will, and the only way to keep UC functioning will be fee hikes.

Raising fees was the right thing to do.

Gerry Barnett said...

Here's the Univ of Virginia approach to the issue, it's Budget Overview--2009-10 Update. In my figure of $16K in the note above, it's actually around the average of public + private peers, not the public premium average... which is near there, anyway...but $10K appears to be the current safe level of backing into the idea that a college education is a personal not a community investment, and is a commodity deliverable not a craft experience. Not there yet, but the blimp's direction is pretty clear, pretty rational, and pretty consistent over the past decade.


The chart on page 5 I think brackets the situation nicely, with a line at $17,360. Looks like a bargain at $9,490.

Raising tuition *is* rational. It *is* a proximate option. It *does* solve problems. For that matter, it may even improve rankings, attract more top desirable (poor, with interesting lives; rich, with interesting parents) students to the institution, diversify its student population (more international and out of area students injecting vitality of their perspectives into classroom discussions), and meet national and international challenges, not merely regional ones. It's all totally *rational*.

That's the problem for anyone who thinks raising tuition is a simplistic, generally bad response. We are at the limit where, working on rational lines, one changes the character of what one has got. What we had before, is passing. It wasn't irrational or even inefficient then. It just made its commitments and handled its administration with a different reasoning. To do that now would appear wildly "idealistic", "impractical no matter how desirable" and ultimately "irrational" and "counter- productive at this juncture". From this, one can deduce much of the vision and capability that is driving the blimp along.

Chris Newfield said...

Gerry - thanks for the UVA link. I think you are entirely right about the blimp's internal calculations, and about the direction in which it is nosing its massive bulk, dragging us like a tiny "Use Coppertone" banner in its wake . . .

On Anon's sense of the effects of tuition hikes. Yes, but. The hikes also suppress the desire to "pay twice" - hey I'm paying 10k for fees, forget higher taxes. Same with the non-college crowd, the older-wealthier-white folks with very high voting likelihoods: high fees let them totally off the hook for the effects of their anti-tax positions. I think this has been the historical effect - a swap of fees for GF. The state literally used to do this prior to the Compact (it's only good quality was stopping this). The state did it again with ARRA money - total zeroing out of any stimulus. so it easily backfires.

Aldo Antonelli said...

Gerry: yes raising tuition is rational, but as my Bayesian friends would say whether that is the way to go, that really depends on your priors. Chris also points it out with his "Yes, but."

Michael Meranze said...

Gerry's comments are indeed very helpful because as both Chris and Aldo point out what counts as a solution depends on how the problem is defined. Doesn't that mean that we should work to be clearer on articulating what we think the problem (or the aim)is so that we too can work towards "rational" proposals? I think that most here are committed to more access than the administration and the regents are heading for, a greater commitment to the "core educational" functions, and to the public quality of the university. So what would be "rational" answers to those questions. Where are James and Dewey when we need them?

Norman said...

Thanks so much for this article, quite effective piece of writing.

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