THE BLOG
10/07/2011 03:04 pm ET Updated Dec 07, 2011

A Watershed Moment for the UC System

We are witnessing a historic and watershed moment for California's public higher education system: For the first time in the University of California's history, tuition and fees now exceed state funding as a major source of revenue.

This pulling of a dramatically greater share of income from students' and families' pockets underscores the fact that the UC has officially ushered in an era that embraces market principles in order to compensate for the state's now dry reserves.

As UC continues its forced march toward "privatization," policy makers would benefit from reflecting on the likely implications spawned from transforming a previously and generously supported public mission with what is now a quasi privately-supported one.

Higher education attainment has long been considered a vehicle for social mobility, especially for marginalized students. As UCs adopt business-like models in managing admissions, costs, funding, and the like, underrepresented minorities and poorer students are faced with fewer options in attending the UCs, especially the most selective ones, as tuition and fees take a steep climb. In fact, fewer options automatically stratify such students further by funneling them into the Cal State University and California Community College systems. This cascading downward into less selective and lower cost alternative public institutions leads to a further concentration of low income and underrepresented students leaving UC.

Rising college costs and tuition increases are usually associated with privatization behaviors. Characteristic of public institutions trying to emulate successful private ones is a promise of increased financial aid to mitigate the increased tuition. Tuition discounting practices have been a distinct feature of private institutions, but as public colleges and universities continue to increase their rates they too must engage in this practice.

Current UC system-wide policy requires that one-third of net tuition revenue be earmarked toward institutional financial aid. This earmark is 100% need based aid money, meaning students who come from low-income families will be assured of receiving assistance. Some public institutions that have had such earmarks have split such aid between need-based and merit aid in order to lure out of state students, who pay higher out of state tuition and fees -- a practice that UC is undoubtedly aware of.

Now at the crossroads, the UC has embarked on a specific course of action: ratcheting up its revenue generating activities while trying to uphold its long standing commitment - and longtime priority - to delivering accessible and affordable quality higher education to Californians as prescribed by the California Master Plan for Higher Education.

Trying to maintain accessible and affordable higher education has been an aspiration of the UCs that was largely sustained with generous state support and which largely subsidized lower tuition and fees. Actually, UC campuses have done a remarkable job in maintaining access for low-income students, reflected in the largest percent nationwide of Pell-eligible recipients at a top public university system. However, the worst recession since the Great Depression has caused this great system to buckle and fold.

This is a paradigmatic shift that has led the UC to scan across the country and examine what other universities have been doing to weather their financial storms. Unfortunately, instead of leading the way on how to meet steep fiscal challenges while ensuring that access and affordability are maintained, UC has chosen to embrace the market model. UC has turned to the likes of the University of Michigan and the University of Virginia, two public universities among several who were once themselves generously state supported and are now largely less dependent on state funding.

These universities, once broadly accessible and affordable, previously had high percentages of Pell-eligible students. Yet over the course of several decades, due to earlier periods of fiscal crises, these schools have increased their out-of-state and international student enrollments and raised tuition and fees significantly. In the case of the University of Michigan, approximately 40 percent of its undergraduate population is from out-of-state. The UC is pursuing a goal of 10 percent non-residents; however, individual campuses vary widely with UC Berkeley leading the way at about 30 percent, UCLA at about 18 percent and the least selective UCs holding relatively unchanged. The systemwide goal of 10 percent is a noble goal. However, when the overall percent is disaggregated it paints a more stratified picture within the system.

Although this march to what the UC would call "self sufficiency" v. "privatization" appears to be permanent and irreversible, the UC may still have time to innovate along the way and encounter new crossroads that maintain its place as a great public higher education system that offers high quality, accessible, and affordable higher education to Californians.