Changing Universities

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.

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.

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.

I am currently completing a book entitled Beyond the University of Debt, and one of my central arguments is that the main way to improve access, affordability, and quality at American public universities and colleges is to make all higher education free in the United States. Of course, this sounds like a pipe dream, but if you actually crunch the numbers, you will see that federal and state support is already spending enough to accomplish this important goal.

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 multiple 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 universities free is $95 billion, and the cost for all community college students would be $32 billion; therefore the combined costs for all making all undergraduate public higher education free was $127 billion in 2010-11.

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 loans, while the states spent $79 billion on higher education. If we add the federal grants to the state costs, we have $114 billion.

Furthermore, looking at various tax breaks for higher education, we can add an additional $46 billion to the current public support for universities and colleges. Here is a list of some of the current tax breaks and how much each one costs (this list does not include many 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), and state prepaid tuition plans ($1.75 billion). There’s also the stimulus’s American Opportunity Tax Credit ($14.4 billion) and part of the deductibility of charitable contributions (education) ($4.9 billion).

When we add the cost of tax breaks to the current state and federal funding for higher education, we get $160 billion. So the government could pay for the full cost of undergraduate education for public universities and community colleges with $33 billion to spare.

If we also include the 1.4 million students who go to graduate and professional schools at U.S. public institutions, the average cost is $37,300, and so the total cost to make all public graduate and professional school in America free is $52 billion. If students paid for less than a quarter of the costs to go to law school, medical school, and business school, all public higher education could be free by just using current expenditures. Moreover, these costs would be greatly reduced if we motivated schools to concentrate on education and research and reduce their expenses attached to increased administration, athletic subsidies, and expensive amenities. What this money does not fund is for-profit schools, which have been shown to use a high-level of federal aid, while only graduating a small number of students.

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.

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.

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.

There have been a few big changes on the tax initiative front the last few days. As many of you might know, a deal has been made to combine the Millionaire’s Tax and the Governor’s tax initiative. I will list the details of the new initiative below, and in many ways, it is an improvement over the governor's initial proposal, but unlike the Millionaire's Tax, it does not dedicate revenue for higher education. So we are currently meeting with legislators to put new language into the state budget to dedicate funds to higher ed. It is important to stress that we were told by legislators that even if the Millionaire's Tax provided money for higher ed, the legislature would still have to reduce higher ed funding to balance the budget, so we think the new initiative might turn out to be better for the UC system. We will now have to work together to push the legislature and the governor to re-fund higher ed.

We met with the governor’s budget people and several legislators on March 19th to push for budget language that would increase transparency and funding for the UC system. If all goes well, tuition will be frozen for three years, and the state will increase its contribution to the UC system by at least 4% each year.

Here’s a description of the new initiative:

1. PERSONAL INCOME TAX:
a. 1% increase on incomes of $250,000 ($500,000 for couples). No change from Governor’s initiative.
b. 2% increase on incomes of $300,000 ($600,000 for couples). Governor’s initiative was 1.5%.
c. 3% increase on incomes of $500,000 ($1 million for couples). Governor’s initiative was 2%.
d. These tax increases remain in place for 7 years. Governor’s initiative was 5 years.
2. SALES TAX: increase ¼ cent (Governor’s was ½ cent). Same expiration as the Governor’s.
3. STRUCTURE: The measure will be based on the Governor’s initiative structure, with the changes noted in #1 and #2 above.
4. REVENUES (NOTE: THESE ESTIMATES ARE PRELIMINARY): This new measure will generate about $9 billion for the 2012-13 budget (up from the $6.9 billion in the Governor’s initiative).

Also, there will be additional comments in statements from the principals about re-investing in higher education as a priority. (Not to mention the fact that the new measure will generate higher revenues.)

We need to pressure the legislature and governor to dedicate funds to higher education in the May Revise budget.

While most studies of university compensation look at average salaries, I have stressed that we need to examine wage inequalities. For instance, in the case of UC senate faculty, we have seen a growing disparity between the top earners and everyone else. A recent study of faculty compensation helps us to see that a major cause for this increased disparity is the use of off-scale salaries, which are usually negotiated between an administrator and an individual faculty member. This privatizing system not only creates a system of competing free agents, but it also decreases transparency by circumventing the peer review process.

The Academic Council’s report shows how the use of off-scale salaries varies from campus to campus; here is the percentage of professors with off-scale salaries on each campus: Merced 88%; UCLA 80%; Santa Cruz 73%; Berkeley 72%; Irvine 66%; Santa Barbara 66%; San Diego 64%; Riverside 59%; and Davis 52%. The fact that Merced is so high could point to the recent move to hire most professors off scale. Currently, in the system, “91% of assistant professors are hired off-scale, 94% of associate professors, and 80% of full professors. On average, 89% of new hires were off-scale.”

While some argue that this need for off-scale salaries is due to the faulty nature of the current professorial salary scale, others believe that by keeping the scale low, administrators and individual faculty members are able to justify making secret, private deals. In response to these issues, the Academic Council wants to create a new system, which would: “Maintain funding for merit actions based on existing merit and CAP review processes, such that faculty who advance to a new rank and/or step receive a new salary at least equal to the average of campus colleagues at the same rank and step.” Thus, instead of relying on off-scale salary negotiations, this new system would combine the current merit system with a new way of making sure that all faculty of the same rank would have similar salaries.

The major problem with this good proposal is that it is hard to imagine faculty members and administrators moving away from a system of private negotiations. Like the general economy, everyone thinks they are going to be the exception, so no one wants a more equal system. In other words, even the people who do not receive star salaries believe in the star system because they imagine that someday they will also be stars. So if this new compensation structure did go in effect, what would probably happen is that a majority of faculty would still receive off-scale increases, which would result in raising the average salaries for each rank, while still maintaining the large disparities within ranks and between campuses. The only way to change this system is to simply update the salary scale and get rid of most off-scale negotiations.

At the center of this question of compensation are the debates over equality versus individualism and public versus private. While many faculty members insist that they want to keep the university public, and they believe in pursuing social and economic equality, everything in the system is moving towards a more unequal and privatized structure.

March 5th brought thousands of students, teachers, labor activists, and occupiers to Sacramento to protest cuts to higher education and push for the Millionaire’s tax to fund vital public services. While students were inside lobbying legislators to protect our public colleges and universities, thousands marched to the Capitol for a spirited rally that included speeches by Lt. Governor Gavin Newsome, Senate Leader Steinberg, and Assembly Leader Perez. While the legislators stated that the best way to support higher education is to support the governor’s tax plan, most of the speakers argued for the Millionaire’s tax.

After the rally, hundreds of people entered the Capitol and attempted to occupy the building. There was a heavy police presence, and for several hours, we were allowed to hold a general assembly to vote on our demands. The central demands were to support the millionaire’s tax, make public higher education free, and forgive student loan debt. At about 5 p.m., the police decided to close the building early, and we were soon told that we would be arrested if we did not leave. During this time, three students were arrested for trying to hang a banner from the second floor of the Rotunda. When I confronted the California Highway Patrol officers about their efforts to choke off the constitutional rights of free speech and the freedom of assembly, I was told that the students are a threat to public safety because they were blocking the pathway to the exists. I guess if you put highway patrol people in charge of the Capitol, they see everything in terms of traffic.

At 5:30, we held a scheduled rally outside of the Capitol. In a short speech, I argued that we are not only fighting for more revenue for higher education in the state of California, but our push for the Millionaire’s tax is a national fight to reverse forty years of conservative tax cuts and the de-funding of public education. I did a radio interview during the rally on this topic that you can listen at here.

After the rally, we attempted to deliver pizzas to the people who were still in the Capitol. Hundreds of us marched to the other side of the building where we met a very large group of police in full military-style riot gear. We told them that we wanted to deliver the food to the people in the building, but we were informed that the occupiers had to come out to get their pizza. We then a long standoff, which was punctuated by several chants like, “How do we want our Pizza?,” “We want it hot!” and “Let them Eat!”

We were never able to deliver the pizza, and soon 70 occupiers were arrested, but we did deliver our message. I want to thank Charlie Eaton from UAW, who did a great job coordinating many of these activities. To support the Millionaire’s tax go here, and for more media about March 5th, go here.

The “Millionaire’s Tax” is being seen as a fight that has national and international implications. As austerity policies spread throughout the world, very few states or countries have tried to reverse the course and raise taxes to support needed public programs. In response to the global financial crisis of 2008-9, the general consensus has been that one must bailout the wealthy, while one cuts governmental services for everyone else. For instance, as the US Federal Reserve continues to give trillions of dollars of no-interest loans to banks and investment firms, almost every state has cut its funding for higher education. Also, as state cuts result in larger tuition prices, students are forced to take out huge loans, while universities and colleges increase class sizes and reduce enrollments.

At the heart of this push for austerity is a conservative revolution based on a tax revolt. Starting with Prop 13 in California, rich people realized that if they wanted to increase their income and decrease their taxes, they would need to demonize government and equate it with welfare for minorities. In other words, the major way that conservatives have justified tax cuts for the wealthy is by arguing that we do not need taxes to support Big Government, and how they make this anti-government rhetoric work is by connecting symbolically Big Government to minorities. In turn, to show that minorities do not need our help, and in fact these minorities on welfare are the victimizers and not the victims, conservatives had to convince people that minorities are no longer the victims of racism, sexism, and classism. Thus, according to this logic, if we live in a post-racial and post-gender society, there is no need to help out disadvantaged minorities through welfare, and therefore we do not need Big Government or even taxes.

Of course, it does not matter that welfare makes up a small part of the federal budget, and most people on welfare assistance are white; what matters is that by conjuring the image of the Welfare Queen or the Food Stamp President, conservatives are able to access the part of our brain that is structured by unconscious, symbolic associations. For example, in a study of word associations, it was found that conservatives often associate the words crime and welfare with black people. This type of automatic, intuitive, unconscious association is often in conflict with the conscious ideas that people hold. Therefore, people may think that they are color-blind, but a part of their brain color codes social representations, and this is why the conservative use of coded attacks is so effective. For instance, when New Gingrich uses the phrase “our Food Stamp President,” he is not only saying that Democrats like to give food stamps to poor people, but the President himself is imagined to be a black man on food stamps.

In terms of the Millionaire’s tax, the reversal of this unconscious conservative cultural revolution will entail re-educating people about what the government can do, while we also reverse the reversed racism that sees poor people, immigrants, and public employees as the victimizers and rich people as the victims. Instead of pitying the billionaires, we have to get people to see that we are all part of the 99%, and the 1% should pay their fair share. In fact, the Occupy Wall Street movement has helped to create a new set of unconscious associations that link the wealthy to the exploitation of everyone else. Let us wok together to push for the Millionaire’s tax and a reversal of the conservative revolution. We will have rallies on the UC campuses on March 1st, and then we will occupy Sacramento on March 5th.

The UC Academic Council (the system-wide faculty senate) has rejected the new proposed compensation system (APM 668) , which would “allow academic departments to use non-state funds to provide additional salary for general campus faculty, similar to the health sciences compensation plan.” The Council declared that, “All ten divisions and five committees (CCGA, UCAP, UCFW, UCORP, UCPB) responded. Academic Council discussed the proposal at its meeting on December 14 and concluded that it cannot support adoption of the proposed APM 668. While many members expressed support for the goal of finding creative ways to better compensate faculty and improve retention, Council agreed that the proposal as written is fundamentally flawed and strongly opposed its implementation.”

This news is very welcomed because the proposed plan would have created incredible inequality within the senate faculty ranks. According to the report, “While a minority of individuals and two divisions (UCSD, UCSF) welcomed the proposal as a way to offer competitive salaries to retain faculty, the majority found it deficient because: 1) it undermines UC’s tradition of setting salaries through peer review based on a common salary scale and cedes too much authority for setting salaries to deans and department chairs; 2) it exacerbates inequities by rewarding only those achievements that receive external funding; 3) it is likely to cause conflicts of interest and faculty effort; and 4) it does not anticipate or provide mechanisms for addressing unanticipated consequences.” This new compensation system would have allowed faculty to increase their base pay through external grants and departmental revenue, and this would undermine the salaries of faculty in the humanities and the social sciences, while it would increase the salaries of the highest earning professors. Moreover, this system would circumvent the peer review system and would increase the collusion between faculty and administrators.

What this report does not say is that a large number of professors are already gaining large salary increases through retention offers and private negotiations with individual administrators, but this rejection of the new system is a step in the right direction. As my research has shown, the major problem that senate faculty face in regards to compensation is the growing disparity between the stars and everyone else. While the report does recognize this issue, it actually dismisses the role played by off-scale salaries in creating huge compensation disparities: “Off-scale salaries are not arbitrarily determined; they reward exceptional merit through the regular academic personnel review process (UCSB). If implemented, the policy should require that deans consult with CAP to validate salary decisions (UCI).” Although the people from UCSB argue that the current retention system does not circumvent shared governance and the peer review system, a past report revealed that a large majority of UC professors have negotiated individual deals with administrators, and while merit reviews do go through peer review, retention offers are handled by administrators.

The Council did point out that the new compensation system could “worsen gender and racial salary equity issues, and that it would “reward only some forms of faculty effort and accomplishment (UCPB).” Moreover, the Council report states that this system “could provide incentives for faculty to shift their effort toward revenue-producing research activities and away from other types of research and teaching and service, producing a “conflict of effort”.” Once again, it is important to stress that we already have a system that does incentivize research over teaching, but it is good to know that the Council is aware of this issue.

Another important point in the report is that the new policy “is an ill-considered step toward increasing privatization of the University, absolving the state of its responsibility to support the institution in the name of entrepreneurship.” While this process of privatization is also already happening, it is vital that the Council is thinking about this ongoing issue. Furthermore, some of the campuses have rightly pointed out that the new plan could also hurt the ability of grants to cover their full costs by decreasing the Indirect Cost Recovery (ICR): “first, since ICR does not fully cover the cost of research, an increased number of grants could worsen the university’s fiscal situation (UCLA, UCSB). Second, ICR could be reduced due to the diversion of research funding to salaries (UCORP).” As I have been arguing for years, one of the central problems still facing the UC system is how to pay for the full cost of research.

Another concern is that by stressing the generation of entrepreneurial revenue, the university would be undermining its public nature: “Some fear that it would negatively impact the public character of the university by encouraging the creation of more high-fee, self-supporting programs that drain faculty resources from core programs (UCLA).” In fact, I have feared that this new compensation plan would push faculty to accept the move to online courses because departments have been told that these high-tech classes will generate extra revenue for professors.

In this new privatized and corporatized university, increases in compensation inequality could create a culture of resentment, and therefore the Council warns that, “the proposal may benefit a small number of faculty but that it will not solve systemic compensation problems.” Unfortunately, the solution proposed by the Berkeley campus would only increase the current problem: “Berkeley suggested that allocating revenues, when available, to provide additional off-scale salary increments, would be a better way of funding increases, without the problems associated with the proposed negotiated salary program.” This emphasis on off-scale salaries will not reduce compensation inequalities and the circumvention of the peer review policy. What the senate faculty need is a new and improved salary scale.

Three recent reports have recently come out that show how the California Master Plan for Higher Education has failed. While this plan worked for a few decades, it now has been undermined, In fact, the most telling statistic in the report entitled Beyond the Master Plan: The case for restructuring Baccalaureate education in California is that, “California now ranks last among the states in the proportion of its college students that attend a 4-year institution.” In other words, there are simply not enough spots open at universities for California students, and while many students do go to community colleges, very few of these students end up graduating or transferring to universities.

The new Master Reality is one that is dominated by racial disparities: “Relative to their share of the state’s college-age population, Latino, African American, and American Indian students are more poorly represented in California’s 4-year universities than in any other state except Arizona. Inevitably, the state’s low rate of minority enrollment in 4-year institutions translates into low rates of baccalaureate attainment: California ranks 45th in the proportion of its underrepresented minority population that attains a B.A.” While these underrepresented minority groups now represent the majority in California, their level of college degree attainment is one of the lowest in the country.

A conspiracy theorist would say that the state started to defund higher education when it saw that most of the students were going to be non-whites, but we do not need a conspiracy to explain this situation. The major factor for this problem is that the state has simply not spent enough money building new four-year institutions. Due to this lack of enrollment space, community college students have no way to transfer to universities. Moreover, as the press release “Civil Rights Project Reports Call for Fundamental Changes in California’s Community Colleges” argues, “Almost 75% of all Latino and two-thirds of all Black students who go on to higher education in California go to a community college, yet in 2010 only 20% of all transfers to four-year institutions were Latino or African American. Pathways to the baccalaureate are segregated; students attending low-performing high schools usually go directly into community colleges that transfer few students to 4-year colleges. Conversely, a handful of community colleges serving high percentages of white, Asian and middle class students are responsible for the majority of all transfers in the state.” In other words, if you are not white and you do not go to the right community college in California, you have virtually no chance of ever getting a four-year degree. In fact, I recently discovered that a large group of community college students who do end up transferring to the UCs are in reality out-of-state and international students who come to California in order to eventually transfer to the UC system.

The second report, “Unrealized Promises: Unequal Access, Affordability, and Excellence at Community Colleges in Southern California,” reveals how “segregated high schools with weak records feed students into heavily minority community colleges where few students successfully transfer.” The de facto system in the new Master Reality is that a conveyer belt has been produced that moves students from segregated high schools serving low-income Black and Hispanic students to segregated, low-performing community colleges, which produce very few transfer students. The end result is that everyone ends up paying more, while the state has fewer students earning four-year degrees.

We clearly have a system of institutionalized racism in the state, but no single group is responsible for this sad state of affairs. Instead, we have a conspiracy of unintended consequences. Just as the number of under-represented minority high school students in the state was increasing, Prop 13 was passed, which resulted in the reduction of taxes and the decrease of state support for higher education. In order to make up for this loss of state funds, universities decided to increase the number of non-resident students and slow the growth of enrollment for students from California. In turn, due to white flight, public high schools became self-segregated as the local tax support for these schools was decreased. Since many white parents were no longer sending their kids to public high schools, they saw no reason to pay more taxes to support these schools. Furthermore, due to the real estate bubble, non-white families were priced out of the few neighborhoods that still had high-quality public high schools.

One of the main solutions proposed is that in order to create more enrollments spaces for transfer students, we need to create hybrid four-year universities: “Examples include university centers and 2-year university branch campuses. Under the university center model, 4-year universities offer upper-division coursework at community college campuses, enabling “place bound” students to complete their baccalaureate degree program there. Under the 2-year university branch model, some community colleges are converted, in effect, into lower-division satellites of state universities, thereby expanding capacity at the 4-year level and eliminating the need for the traditional transfer process. What these and other hybrid models have in common is that they help bridge the divide between 2-year and 4-year institutions, enabling more students to enter baccalaureate programs directly from high school and progress seamlessly to their degrees.” While these hybrid institutions may be a good temporary solution, the question still remains of how do we confront the institutional racism of our entire education system in California.

Scott Martindale’s article “UCI faculty: Quality eroding as class sizes swell,” in The Orange County Register does a good job at showing how recent budget cuts are hurting the instructional quality in the UC and CSU systems. The central claim made is that as students pay more, they end up getting less: “Tuition has soared at the University of California and Cal State systems in recent years, but not by enough to offset deep state cuts. The universities have responded with some creative ideas, but the solutions haven’t staved off fundamental changes in how students are educated and in the quality they can expect from their ever-pricier education.’’

In order to explore how educational quality is being affected by budget cuts, this article focused on specific classes and professors. For example, it points out that, “Instead of two teaching assistants for a class of about 50 students, UC Irvine professor Mark LeVine now gets one.” The article continues by pointing out that not only are there now more students per graduate student assistant, but many small, interactive classes have disappeared: “Instead of being able to lead intimate seminar classes of just a dozen or so, LeVine is under pressure to teach more large, lecture-style classes.” In the push to get professors to teach more students for less money, students are paying more to get a reduced educational experience.

In fact, the move to larger classes staffed with fewer graduate assistants means that, “Instead of assigning multiple, full-length research papers throughout the quarter, the history professor has modified class assignments for his students so they're easier and quicker to grade.” These changes have a profound effect on how and what students are taught, and they also work to diminish important critical thinking and communication skills. According to LeVine, "We're forced to really lower our demands so that we can actually get through all the work in terms of grading.” This statement is a profound indictment of how educational quality is being downgraded as undergraduate students pay more and go into greater debt to fund their education.

For LeVine, this sacrifice of educational quality defines the fundamental crisis at our nation’s universities: "The whole idea in the humanities is to take seminars of 12 or 14 students, where we teach them to think critically, where we really create the scholars and doctors and lawyers. We can't do nearly as many seminars because even 20 students isn't cutting it anymore. ... We're talking about a university that is undergoing a profound crisis." As I have previously pointed out, the only reason why universities are able to charge more as they deliver an inferior educational experience is that no one seems to monitor the quality of undergraduate instruction at American research universities.

While most students and parents rely on U.S. News & World Report to determine the quality of our universities, this ranking system does not even attempt to judge the level of student learning or the quality of teaching at these institutions. The result is that universities, like UCI, can continue to claim that they are excellent institutions, while they essentially rob their undergraduate instructional budgets to subsidize professional schools, administration, and non-departmental research. Moreover, accreditors turn a blind eye to questions of educational quality as many administrators refuse to hold university budgets accountable to the undergraduate instructional mission.

My research has shown that while universities know that small classes are often the key to effective education, they have moved to large classes in order to save money. However, large classes can end up being more expensive than small classes once you factor in the full cost of having graduate students teach the small sections attached to the large lecture classes. Of course universities never realize or admit this point, and instead, the OC Register tells us that professors are agreeing to teach large classes now so that they can fund their graduate students: “And tenured professors are increasingly agreeing to teach the classes. It's the only way to financially justify the continued existence of some of the university's smaller but respected academic programs and departments, professors say, and the only way to get desperately needed TAs.” According to this logic, professors accept the expansion of class sizes and the downgrading of educational quality because they want to provide jobs for their graduate students. In turn, the use of graduate students increases the cost of the large classes, and so we must ask, why do professors accept this crazy situation.

Of course, professors need to attract graduate students and give them jobs as section leaders in order to insure that their graduate programs stay alive and there are students for the small graduate seminars that professors prefer to teach. However, these same programs must realize that half of their doctoral students will never earn their degrees, and half of the graduate students who do get doctorates in the humanities and social sciences will never get tenure-track jobs, and half of the one’s who will get tenurable positions will not end up at a research university. In other words, the vast majority of graduate student instructors are actually low-paid, part-time faculty who help to drive up the cost of undergraduate education as they unknowingly participate in their own future unemployment.

As the OC article documents, many of these graduate instructors are now forced to teach more students, and this increase in class size results in cutting corners and delivering an inferior education: “Tetsuro Namba, an UC Irvine undergraduate writing TA for the past three years, has watched student-to-TA ratios go up in many academic departments. In his writing classes, capped at 21 the first quarter and 23 afterward, he's fearful of the same trend. His classes are already too large for him to be as effective as he could be, he says. "I definitely know I have shortchanged giving my students feedback just because I didn't have time," said Namba, 28, a fourth-year Ph.D. student in comparative literature. "I really wish the classes were smaller. As class sizes get bigger, the quality of education goes down because the instructor can't help them as much."” Once again, students are paying more and getting less, as graduate students have to work more to provide decreased instructional quality.

Meanwhile, services related to helping students succeed in their classes have been reduced: “Students also lament that library hours were temporarily shortened in 2009 because of budget cuts, and that a campus peer tutoring program – the Learning and Academic Resource Center, which provides help to students in small group settings – was pared down dramatically, offering help in fewer courses.” This reduction in library hours and peer support has been going on for years, but recently, the speed of service reduction has increased.

It should be clear from the picture of education drawn here that something is radically wrong with the priorities of our research universities.

At the University of Michigan, President Obama made an important speech about his new push to control tuition increases and student debt at American universities. In Ann Arbor, he told college and university leaders that, “You can't assume that you'll just jack up tuition every single year. If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down. We should push colleges to do better. We should hold them accountable if they don't.” The policy behind this statement can be found in his new Race to the Top initiative for higher education. Basically, the president wants to use federal grants and loans as a way of pressuring public universities and colleges to contain tuition increases, and while he does realize that state budge cuts have played a role in tuition increases, it is clear that he thinks that there are other reasons for the escalating costs. Moreover, the president wants to use a billion-dollar grant system to provide funding to states that help to control tuition increases.

In order to discuss this new initiative, PBS had President Yudof on the News Hour. The first question asked was the following: “At basic level, do you agree with the president's observation that the fast-rising cost of getting a college education is harming access?” Yudof’s response was, “You have to remember the president didn't mention that there's been systematic disinvestment in higher education. Our budget was cut $750 million in a year, about 25 percent . . . A third of our tuition goes back into financial aid and is distributed to low-income students -- 55 percent of our students pay no tuition -- 39 percent of the students are Pell-eligible, relatively low-income families. That's the reality.” In other words, Yudof blamed the move to a high fee, high aid model solely on state budget cuts.

While it is obvious that the state budge cuts have a direct effect on tuition increases, we have also seen tuition increases when the state contribution to the UC system has gone up. Furthermore, the other guest on the show, Richard Vedder, pointed out that there has been a massive increase in federal money going to universities and colleges, and that the increase in federally funded grants and loans has allowed universities to continue to spend more as they reduce their reliance on state support.

When President Yudof was asked about the rising costs of higher ed, he responded in the following manner, “Our costs are actually down 15 percent per credit hour over the last 10 years. That's the reality. The states don't want to pay. So it's like you go to your drugstore, the insurance company doesn't want to pay, your co-pay goes from $10 to $20. That doesn't mean the cost of the drug has doubled. It just means your costs have doubled.” This response is very revealing because Yudof is openly admitting that as tuition increases, the university is actually spending less money on educating students.

So not only are students paying more and getting less, but as Richard Vedder argued, universities are increasing their spending on non-educational expenses, like administration: “But it is also clear that universities in the United States over the last generation or so have enormously increased their staffs, for example, administrative personnel, student service personnel. There are climbing walls. They're not in and of themselves all that important, but the cumulative effects of a lot of spending on things outside of the core missions has contributed somewhat to the inflation in college costs.” In support of Vedder’s claims, my own research shows that universities now spend on average about 10% of their total budgets on undergraduate education, but undergraduates and states support 35% of the total university budgets. Meanwhile, the costs for professional education, administration, and research continues to increase, and so as undergraduates pay more, they end up subsidizing other parts of their universities to a greater extent.

When asked what would happen if the federal government decreased its support for the University of California, Yudof replied that, “classes will get bigger, class access may suffer, time to degree may grow. I agree with Professor Vedder. We have to do a better job of cutting our budgets. If we have too many administrators, let's reduce the number.” While we have seen some reduction of administrators at the Office of the President, we are still waiting to see what the campuses will do about administrative bloat. Furthermore, class sizes have already gotten bigger and the access to require classes has already decreased, so it is hard to see how the university is going to maintain educational quality as it increases tuition and aid.

What we should push for is clearer budget transparency so we can see how universities are actually spending the money they do have. We also have to insist on a renewed commitment to undergraduate education, and a major emphasis on making sure that federal research grants receive enough overhead funding (indirect costs) to make them at least break even. As a way of pushing this agenda, I have been invited to the White House to make a presentation to the administration.