UC Students Face Staggering 32 Percent Fee Hike

universitycat.pngMatt Krupnick from Contra Costa Times reported last Thursday that the University of California may raise student fees an additional 32 percent by the fall of 2010.  This would boost the annual undergraduate tuition to over the 10,000 dollar mark for the first time in the system’s history.

He reports that UC regents will meet next week to discuss the phased increases which would include a more modest 7.5 percent hike for Spring 2010 followed by a much sharper increase in the fall.

This comes on the heels of back-to-back double figure fee increases the last two years, but the magnitude of increase–nearly one-third of present tuition has students in a virtual panic.

The article quotes the President of the UC Students Association, a UC Santa Cruz undergraduate Victor Sanchez:

“It’s really coming out of left field.  What you’re going to see is an astronomical drop in the number of students able to attend.”

To make matters worse, the Regents will also consider a plan that would further reduce enrollment by 2300, which would mark the second year in which that occurred.  It may continue to reduce enrollment the next several years.  In addition, the state may not be able to raise the maximum Cal Grant to cover even the midyear fee hikes, which would put in jeopardy lower income student’s prospects for an attainable and affordable education.

Meanwhile the Sacramento Bee reports that roughly 100 UC Davis professors have signed on to walk out of classes on the first day of the new school year as an act of disobedience intended to bring attention to budget cuts at the university.

UC cut its deficit by roughly $800 million this summer through a combination of fee increases for students, cutbacks in classes and programs, and also employee furloughs.

In order to minimize the impact on education, the UC Office of the President designated that furloughs may not betaken on instructional days.  This has angered Professors who want to take some of the furloughs on days they teach–this would of course mean that classes would have to be canceled for students who are already even before the 32% fee increase being asked to pay more for their education.

By Thursday, roughly 100 UC Davis professors had signed on to support the walk out.

On the California Aggie site is a list of UC Davis faculty that are supporting the UC Faculty Walk Out, according to a list originally posted at ucfacultywalkout.com. 

Commentary:

In the 1950s California led the way with an innovative and unprecedented higher education  that would enable anyone who wished to, to attend a four year college and get a college degree.  For the next half century, California had a higher education system second to none in the world.  There was the world-class University of California system that would take the top tier of student and the California State University system that would admit virtually anyone, initially at no cost and but even to this day one of the best deals around.

As we would write on these pages in July, if this is the worst economic downturn since the Great Depression one of the biggest victims will be the California Dream of an accessible and affordable college education.

And this is really so much worse and the problem is now compounding upon itself.

According to Professors Christopher Newfield and Stanton Glantz in an Op-ed “Ending the California Dream:”

“For the last generation, campaign after campaign has cut back on government and rationed these opportunities. While most state government expenditures have been flat when corrected for population growth, higher education has been cut and cut. The University of California, billed as the greatest public research university in the world, has lost 50 percent of its per-student state funding since 1990, while still being expected to keep California at the top of the world’s knowledge economy.”

Now we finally begin to see the full-blown impact of these cuts.  We will have fewer students, they will be able to attend fewer classes, and they will be pay for more for them.  Most alarmingly it appears that programs designed to allow lower income students in on the California Dream will either be cut back themselves or less effective as they pay for a smaller and smaller percentage of the education bill.

Professors Newfield and Glantz warned:

The reality is this: Californians can rebuild the public higher education system that delivered golden age California, or watch that system be gutted in a way that prolongs the recession.

Right now we are watching that system be gutted away in a way that will prolong the recession and permanently impact the lives of thousands if not tens of thousands of prospective students.

And to make matters worse, UC Faculty are going to walk out, not to protest cuts to education, but because they cannot take their furlough days on instructional days.  Nice.

The problem in California is that it’s all about us.  Everyone fights to have their own fees untouched, their own programs uncut, their own jobs saved, their own taxes unraised, no one asks the simple question: what kind of state do we want to live in?  How much do we value education?  How much should we invest in the future?  What programs are our priorities?  How much will we need to SACRIFICE in order to pay for our priorities?

Want to know who will get hurt in any political battle–look at who is most vulnerable and who has the highest stakes.  Those with means will always find a way to survive, they will find away to get a quality education, a good job, with good benefits.  Those who struggle every day, with no support system or safety will be the ones most impacted by this.  And when you are talking about large numbers of students, they may only get one shot and their dreams are over.

—David M. Greenwald reporting

About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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68 Comments

  1. Frankly

    The Department of Energy was formed in 1977 under the Carter Administration in response to the mid-1970’s energy crisis. The legislation focused on matters of energy reliability, environmental protection, reasonable prices, economic stability, and national security.

    In 2009, the DOE budget is $25 billion with about 14,750 employees.

    Today we have unreliable energy, global warming, unreasonable prices, economic instability and national insecurity.

    This is an extreme example of the type of public-sector empire-building that results in budget bloat without a commensurate return on the investment. In the UC system, entire departments could be abolished, downsized, or merged without having a significant impact on the core mission of the system: “to provide a high quality and inexpensive education to the students”.

  2. Disgusted

    “This is an extreme example of the type of public-sector empire-building that results in budget bloat without a commensurate return on the investment. In the UC system, entire departments could be abolished, downsized, or merged without having a significant impact on the core mission of the system: “to provide a high quality and inexpensive education to the students”.”

    Amen, Jeff. I would further add that Yudof, Katehi and other fat cat execs getting pay hikes at this time of furloughs, layoffs and student fee hikes was stupid beyond belief – and is very much a part of why some of the faculty made the drastic decision to walk out in protest of furloughs only on non-instructional days. Frankly, I don’t blame the protesting faculty, but I DO NOT agree with their position. It would be far better for them to take the high road, and walk out in protest of the fat cat execs getting pay hikes!!! Or budget bloat!!! Don’t punish students for the wrongs of the state legislature or upper management!!!

  3. Sue Greenwald

    The University’s situation is dire, and it is tragic. This great University system, which is essential to the future prosperity of the State and the nation, took 150 years to build up, but it can be destroyed in a decade.

    The coming years are critical. Faculty, students and administration are going to have to work as a team to maintain the excellence of the institution. Faculty and students are both going to be hurting and the distribution of pain is worth discussing, but it would be tragic to allow destructive politicians to distract us with attacks on the University administration, which is what we have been seeing in the recently.

  4. What went wrong

    Much of what is said above is true. The University is in peril.
    It once was able to function much
    more beneficially and effectively at much lower cost.

    What went wrong?

    1. Numerous administrative burdens were added that, while well meaning, were extremely expensive and added no educational value.

    OSHA, Vice chancellors for diversity, cross cultural centers, women’s centers, counseling centers, etc

    2. There was a tremendous growth in campus bureaucrats associated to the above and to central departments.

    3. Numerous new departments and interdisciplinary initiatives were added. Many had very low academic standards. High quality scholarship develops over years of competitive ideas and these new fields often were populated by embarrassingly low grade faculty.

    4. Traditional departments in the humanities, and sometimes the social sciences, were politicized and lost their way.

    5. Changing admissions requirements and GE standards tried to populate the new fields, which had no job prospects for their graduates and little intellectual content.

    If the university returned to the model of core subjects thought with high quality by true scholars, it would have more then enough funding to function at a high level.

    The chances of this happening, however, are close to zero in my opinion.

  5. UCD prof

    And to make matters worse, UC Faculty are going to walk out, not to protest cuts to education, but because they cannot take their furlough days on instructional days. Nice.

    At best, this is a ridiculous oversimplification of the reasons for the walkout; at worst, it’s a blatant misprepresentation. Neither is appropriate for a venue that purports to be engaging in journalism. Did you read the letter that called for a walkout? It is widely available, e.g., at http://ucfacultywalkout.com/

    California’s reneging on the agreements spelled out in the California Master Plan to provide higher education for qualified citizens is appalling. How about we talk about what to do to restore it instead of slinging mud at the faculty who are trying (who have been trying for years) to call attention to the issue?

  6. Sue Greenwald

    Today’s Sac Bee headline: [quote]Lawmakers approve scaled down prison cuts[/quote]http://www.sacbee.com/topstories/story/2176901.html

    Let’s keep trying to deliver the message to Sacramento that education should be among the highest, not the lowest, of priorities.

  7. Greg Kuperberg

    [i]How much will we need to SACRIFICE in order to pay for our priorities?[/i]

    It certainly would have been better for the university to have some furlough days on teaching days, and I agree with the message conveyed by the walkout. That said, I didn’t sign the walkout petition and I’m not going to do the walkout myself.

    But there is one kind of SACRIFICE that the state can’t demand. You can’t hire serious research faculty into the furloughs. In general, you can’t persuade such people to begin work at the University of Shared Sacrifice. Some people will retire, and some people will leave, and the furloughs will shrink the university.

    [i]This is an extreme example of the type of public-sector empire-building that results in budget bloat without a commensurate return on the investment.[/i]

    You’re right, Jeff. The University of California indeed is an empire that took a long time to build. With sufficiently populist leadership, it would indeed change from that to a business that really caters to the customer. It would be a low-price diploma mill.

    [i]Let’s keep trying to deliver the message to Sacramento that education should be among the highest, not the lowest, of priorities.[/i]

    For the most part it is, Sue. Prop 98 forces the issue. Just not higher education.

  8. Dark days ahead

    Mo matter what happens a lot of people will lose their shorts. Unless 1960s-70s style funding for UC is magically gifted by the legislature and taxpayers, which wont happen, UCD is doomed in its present form.

    The group I’m most fearful for is the massive army of blue collar workers that keep UCD running. I mean all the folks that drive the white vans and pickups. UCD in particular is a practically self supporting campus everyone from its own gas/power/water utility, its own landfill, street-sweepers, landscapers, plumbers, electricians, janitors and a myriad of other services no one thinks about until they need something fixed TODAY.

    When significant cutbacks are made to these folks I feel there will be a noticeable effect on the campus that will eventually affect instruction through burnt out lights, uncleaned floors, and other ‘details’ that no one notices until a whole lot of them don’t get covered.

    FWIW I’m an undergrad student employee who has had a chance to work with a large number of these people. I know we can’t continue down the same old path but I hope that those making the decisions remember that a functioning university like UCD is a lot more than academic staff/faculty and students.

  9. UC up to the usual

    Other people have said it: UC lays off people while fat cat administrators become fatter cat administrators.

    I also notice how UCD is doing lots of new construction projects. Yet they are so strapped for cash.

  10. Greg Kuperberg

    [i]UCD is doomed in its present form.[/i]

    Not really. In the long run, student fees and out-of-state enrollment will probably replace what the state legislature refuses to pay for. For the most part it will be as simple as that. It’s important to remember that the state contract is only about 25% of the UC budget. So even though the politicians may talk a lot about “shared sacrifice” and “obscene salaries” and “lack of transparency”, in the end the state government will be the customer that walked away. That is the message of the 32% fee hike.

    It is true that UC enrollment won’t grow as fast the state population because of this. In the short term, it might even shrink back a little. But then, Davis homeowners have also put a lot of pressure on UC Davis to grow less.

    Quite possibly Cal State will be hit harder. Because it depends more on the state government, and because it doesn’t have constitutional autonomy, the state can really kick it around. Cal State could end up last in line in the entire United States to hire faculty and executives.

    [i]The group I’m most fearful for is the massive army of blue collar workers that keep UCD running.[/i]

    From one side that does not make a lot of sense. Those workers in this group that are unionized haven’t conceded anything yet, not one red cent. I know that they aren’t paid as much as faculty and I do not begrudge their right to collective bargaining. But as far as I know, the unionized ones are paid better than the private sector pays for the same jobs.

    From another side it does make some sense. At least this year, some of these workers might be laid off. They will be forced into the lower-wage private sector.

  11. Cecilia Escamilla-Greenwald3

    I have spoken with students who are very concerned about how they are going to make it through the year let alone get to their fourth year to graduate. It is very, very, very sad that we have those in the administration who are comfortable accepting a higher salary at the same time that costs are increasing for students to get a good, quality UC education while pay is decreasing for faculty.

    Something needs to change.

  12. Greg Kuperberg

    [i]It is very, very, very sad that we have those in the administration who are comfortable accepting a higher salary[/i]

    Cecelia, if this really is so very, very, very sad, can you tell me why everyone in this backlash has aimed below the top salaries in the system to target leadership? It is no secret, except maybe to those who don’t care to know it, that UC executives are not the highest-payed UC employees. Not even close.

    Why would Linda Katehi’s salary be more important than that of a former coach who is paid 60% more the she is [b]not[/b] to coach the UCLA Bruins? It makes it seem like people care more about condemning the leaders than saving money.

  13. Disgusted

    “Why would Linda Katehi’s salary be more important than that of a former coach who is paid 60% more the she is not to coach the UCLA Bruins? It makes it seem like people care more about condemning the leaders than saving money.”

    Why are you assuming that those of us who resent the fat cat salaries to UC execs, don’t resent the extraordinary pay of the athletic coaches? You could get rid of all the athletic coaches, and I wouldn’t give a fig. In fact, I would argue it needs to be done, in light the dire economy/straits UC is in from a financial standpoint. Let the athletic coaches be paid what most other professors are paid. How about that? The new stadium and UCD was a collosal waste of good money, as is the wine institute, the new music auditorium, the new convention center. And don’t tell me some of these were paid with private donations. That argument is fallacious in the extreme. The money to operate these facilities, including faculty and staff to man them over the years, is not likely to come from “donations”!

  14. Frankly

    [The University of California indeed is an empire that took a long time to build. With sufficiently populist leadership, it would indeed change from that to a business that really caters to the customer. It would be a low-price diploma mill.

    Excluding Merced which is a startup and San Francisco with is a medical teaching college, Davis has the second largest operating budget of all remaining eight UC campuses. The largest budget belongs to UCLA.

    What is more interesting is the budget per student. In this, Davis has the third highest budget per student (again, excluding Merced and SF). Per student spending: UCLA – $91,087, San Diego – $80,191 and Davis $76,593.

    UC Irvine is below Davis at $56,746 per student. Berkley spends $47,381. Santa Cruz and Santa Barbara spend $29,976 and $29,501 respectively.

    Am I to understand that these lower-cost UC campuses are “diploma mills”?

  15. Greg Kuperberg

    [i]Why are you assuming that those of us who resent the fat cat salaries to UC execs, don’t resent the extraordinary pay of the athletic coaches?[/i]

    I make no assumption about what you resent, if someone asks you. But this is just lip service at best. The material political campaign against high salaries at UC (and CSU) is exactly what I said: Aimed below the top to target leaders. That is what is in Leland Yee’s bill, that is what Leland Yee has to say about it, that is what the unions have to say about it, and that is what David Greenwald has to say about it.

    So the question remains: Why does this campaign to limit compensation aim below the top salaries to target leaders? Why has Leland Yee said nothing about the highest-paid employees of the University of California? Why does his bill say nothing about them? Is it for any better reason than that he and the unions are more interested in power games than in saving money?

  16. Greg Kuperberg

    [i]Am I to understand that these lower-cost UC campuses are “diploma mills”?[/i]

    That’s not what any UC campus is now, but that is what they would all become if they followed your smooth advice to be efficient and please the customer.

    For instance, the first thing that UC Davis would do to cost less per student is split off its medical school. Nothing drives up costs per student faster than medical care for patients who have no connection to enrollment. That is why Berkeley, Santa Barbara, and Santa Cruz are cheaper “per student” than Davis; it’s because they don’t have medical schools. Of course splitting off a medical school also cuts revenues, but if the purpose is to cost less per student, who cares?

    UC Davis could also split off the Mondavi Center. Again, UC Davis would lose revenue and donations, but again, if the goal is less budget per student, no problem.

    After that, they could split off all funded research and privatize the student dorms, so that the sum total of the UC Davis budget would be for teaching only. Then Davis would already be by far the cheapest UC campus per student.

  17. earoberts

    “So the question remains: Why does this campaign to limit compensation aim below the top salaries to target leaders? Why has Leland Yee said nothing about the highest-paid employees of the University of California? Why does his bill say nothing about them? Is it for any better reason than that he and the unions are more interested in power games than in saving money?”

    Don’t divert the issue to Leland Yee. I don’t necessarily agree with Yee’s position either. The state legislature can’t even keep their own house in order, so I sure as heck don’t want them “overlooking” the UC’s. Nevertheless, there is waste and bloat in the UC system – fat cat exec salaries, paying way too much for athletic coaches, overbuilding unnecessary facilities that have little to do w UC’s educational mission, etc. And while we’re at it, the federal/state gov’t need to pare down the number of extraneous departments UC must have, to carry out all the silly gov’t mandates that overload the university with bureacracy. It is time to do some streamlining.

  18. earoberts

    “For instance, the first thing that UC Davis would do to cost less per student is split off its medical school. Nothing drives up costs per student faster than medical care for patients who have no connection to enrollment. That is why Berkeley, Santa Barbara, and Santa Cruz are cheaper “per student” than Davis; it’s because they don’t have medical schools. Of course splitting off a medical school also cuts revenues, but if the purpose is to cost less per student, who cares?”

    Whoa, back the truck up! Something doesn’t make sense here. Why would having a medical school drive up costs per student, but at the same time bring in all sorts of revenue that should drive the cost per student down? You can’t have it both ways. Or is it that having a medical school drives up the costs per student, and whatever revenue the hospital generates is plowed right back into the medical school, so that the non-medical students are heavily (and perhaps unfairly) subsidizing the medical school if that particular UC branch has one? Maybe medical schools do need to be separated from the rest of the UC academia? I think you shot yourself in the foot here, unless I am not seeing something correctly. Please elucidate…

  19. earoberts

    “UC Davis could also split off the Mondavi Center. Again, UC Davis would lose revenue and donations, but again, if the goal is less budget per student, no problem.”

    Same problem in logic here. I very much doubt Mondavi profits go anywhere but right back into the Mondavi Center. Students very likely do not see a dime of that money. Same thing tends to happen with sports. Any money generated by ticket sales, television coverage and the like for sports, goes right back into the football/basketball program that generated the money in the first place, but does not benefit the school/students in general.

  20. Greg Kuperberg

    [i]Don’t divert the issue to Leland Yee.[/i]

    No, Leland Yee’s bill, and what Yee, David, and the unions have to say about it, are the issue. The resentments of an anonymous commenter would be a diversion, not to mention shadow boxing.

    [i]Why would having a medical school drive up costs per student, but at the same time bring in all sorts of revenue that should drive the cost per student down?[/i]

    Because Jeff didn’t subtract revenue from costs when he computed his so-called “cost per student”, that’s why. Jeff simply took all the money that each campus spends on everything and divided that by the number of students.

    So my point is, if that is the way that he passes judgment on universities, then they should split off as much as possible, even if generates a lot of revenue, in order to have a low “cost per student”.

  21. Frankly

    Greg, I think the per-student budget metric is a good indicator of relative efficiency at each campus. On one hand we could make the point that UCD is already more efficient than three of the other UC’s with medical schools. But then what about UC Irvine? The UCD cost per student metric is a whopping 35% higher than UC Irvine.

    You may be right that my smooth ideas for greater efficiency will lead to lower quality education; but that would be because of a failure in UCD leadership.

    Because of the economy, my business revenue is down about 45% this year over last. Unlike the UC, I cannot threaten to reduce service to my customers or charge more to make up the difference. Because all my competitors are swimming the same smaller revenue pool, at a time when I have less discretionary operating capital, I still have to find ways to do more to earn my customers’ business. I have to find ways to do more with less. It is a very difficult and stressful time, but my role as an organizational leader demands it.

    It frosts me when the ONLY option coming out of education organizations is to demand more government inflow, or else stick it to the kids (the customers). This is the union mentality (e.g., “I won’t do the job unless you pay me what I believe I am worth.”), instead of a mentality of seeking reward from achievement of the organizational mission.

    Think about it this way: if the UC can extract greater efficiency now, then when state tax receipts are up again, what wondrous things could be done with the excess?

    I’m not a UC employee, and never have been (although my wife worked for Alumni affairs years ago, and I know several people that currently work for various departments on campus and at the med center). I have mostly worked in the private sector, but I have also spent several years working for several state agencies as a consultant. The public sector businesses were always much less efficient. I assume UCD is no different.

  22. Greg Kuperberg

    [i]I think the per-student budget metric is a good indicator of relative efficiency at each campus.[/i]

    You might think that it’s useful to divide things that have nothing to do with students by the number of students. But it isn’t.

    [i]my business revenue is down about 45% this year over last.[/i]

    So did you lower your prices by 45%; or do you have 45% fewer work orders? Because the state cut UC’s compact by 20% without cutting the mandate at all.

    [i]It frosts me when the ONLY option coming out of education organizations is to demand more government inflow, or else stick it to the kids (the customers).[/i]

    You sound like the free-market type. If it’s really so monstrous to “stick” a fraction of the budget cut to the “kids”, did UC force them to attend in the first place?

  23. DonShor

    Jeff: “Greg, I think the per-student budget metric is a good indicator of relative efficiency at each campus.”
    Not really. I imagine that graduate and professional schools are likely to have a higher cost per student. For example, UCSD has Scripps Institution of Oceanography, which has lots of researchers and relatively few students. Again, as I said on a previous thread, my understanding of the mission of UC is not primarily as a teaching university, nor primarily as a research university. It is both, and neither mission is more or less important than the other.

  24. emersons

    You sound like the free-market type. If it’s really so monstrous to “stick” a fraction of the budget cut to the “kids”, did UC force them to attend in the first place?

    I think the big problem here is that more and more students will have to take more loans in order to stay in school, a serious problem that will only get worse. I do think UCD has done some irresponsible spending to make themselves look good, and has little to no benefit for students. It frustrates me to know that we are in economic depression and yet the school continues with new projects, as if nothing has changed.

  25. Greg Kuperberg

    [i]I do think UCD has done some irresponsible spending to make themselves look good, and has little to no benefit for students.[/i]

    There are plenty of universities that neglect to start new projects, to make themselves look bad. Generally, these new projects that look suspicious to you are in fact funded. It makes no sense for the university to turn away funding just to look more committed to students.

    I can only think of two “new projects” that are partial exceptions to that principle. One is Division I athletics, which truly is a distraction and an extravagance for UC Davis. But no other group came to the defense of the faculty when it voted against Division I athletics and the administration plunged forward anyway. The other is UC Merced. UC Merced is an expensive wild goose chase and it should not have happened. But the legislature would have been furious if UC had canceled that project.

    Beyond that, the state legislature has never told UC that its education compact is too expensive per student. All it said was, we don’t have the money, so here is 20% less. And that comes on top of substantial unfunded enrollment. If the idea is to put pressure on UC to spend more of its non-student money on students, it simply won’t work.

  26. Frankly

    So did you lower your prices by 45%; or do you have 45% fewer work orders? Because the state cut UC’s compact by 20% without cutting the mandate at all.

    My net inflows are down by 45% because, due to the economy, fewer customers are ordering what I sell. My “mandate” has actually increased because I have to do more to attract sales from the smaller pool of customers because my competitors are doing the same. I have to do this even though I have less discretionary cash flow to do it with. I have had to make cuts to free up capital while looking for ways to do a better job. It is a very difficult and challenging time, but it is my responsibility and there is no alternative. This is the same circumstance that most private-sector businesses find themselves today; except for those that were given bailout money from the Feds.

    To approach the problem similar to how many UC employees seem to think is reasonable, I would increase my prices while I allow the quality of my products/services to erode as a “natural” response to shrinking inflows… sort of like the US auto industry.

    You sound like the free-market type. If it’s really so monstrous to “stick” a fraction of the budget cut to the “kids”, did UC force them to attend in the first place?

    I am a free-market type, but that is beside the point. Although some private businesses and most public business have “captive customers” (think DMV) and can be mistreated without recourse, the students are – please correct me if I am wrong – the ONLY reason that any UCD employee has a job. That is why customer-orientation is so important; otherwise employees start to believe that the organization they work for exists for primarily for their employment.

    Not really. I imagine that graduate and professional schools are likely to have a higher cost per student.

    Don: Does UCD have a higher percentage of graduate and professional schools and/or students? I don’t know. I assume there are many reasons why UCD would cost so much per student. Some of these may be justified. However, from a bigger-picture view, doesn’t UCD’s cost per student being closer to UCLA than Irvine indicate a possibility that the business model for UCD is in need of some tuning? UCD is not UCLA. UCD is also not UC Irvine, but I think it is closer in profile.

  27. Greg Kuperberg

    [i]My net inflows are down by 45% because, due to the economy, fewer customers are ordering what I sell.[/i]

    Right here you have said it all. You have 45% fewer customers. Unlike UC, you do not have the exact same pool of customers giving you less money and berating you for inefficiency.

    [i]the students are – please correct me if I am wrong – the ONLY reason that any UCD employee has a job.[/i]

    You certainly are wrong. It may be the only reason that many UCD employees have a job, but it is not remotely the only reason that any UCD employee has a job. Many UCD employees have jobs because of grants, contracts, donations, and patients.

    In any case, American River College runs a much more “efficient” “business” than UC Davis. If students with your viewpoint think that UC Davis is too expensive, they are free to go to ARC instead. In the current fiscal climate, I have nothing against that at all.

  28. Frankly

    Right here you have said it all. You have 45% fewer customers. Unlike UC, you do not have the exact same pool of customers giving you less money and berating you for inefficiency.

    But in this you left out consideration for the expense cuts made. Here is how it works… typically as a company grows it can leverage economies of scale to provide same quality a lower price-point. If a company contracts due to reduced inflows, it still has to maintain the quality and price-point set by the previous. In fact, often, to survive a more competitive environment, the company has to improve quality and price-point. That is my situation and it is a common situation throughout main street these days.

    UCD has already reduced new student enrollment in response to lower state-provided revenue inflows. Is there a UC mandated to accept a certain number of incoming freshman or graduate students? If the economies of scale don’t support the same number of students, then it would seem justifiable to reduce the number of students (customers) and shrink the UC workforce accordingly. Raising fees may have the effect of lowering demand. However, this gets to my main pet peeve: it will lower demand for middleclass families that get priced out of the market. The wealthy and subsidized low-income families will take it in stride.

    You certainly are wrong… Many UCD employees have jobs because of grants, contracts, donations, and patients.

    The UC mission:
    [quote]“The distinctive mission of the University is to serve society as a center of higher learning, providing long-term societal benefits through transmitting advanced knowledge, discovering new knowledge, and functioning as an active working repository of organized knowledge. That obligation, more specifically, includes undergraduate education, graduate and professional education, research, and other kinds of public service, which are shaped and bounded by the central pervasive mission of discovering and advancing knowledge.”[/quote]
    I am personally disappointed in this mission because it seems to perpetuate the idea that UC employees serve some abstract primary purpose other than providing a high-quality and low-cost education to students.

    Questions: Would a college exist to do research without students? Conversely, do colleges exist that teach students well without so much research expense? Certainly much research is funded by grants, etc., but typically not the college infrastructure required to support it. In that respect research is at best a loss-leader for the business model. At worst it primarily only fulfills the development of academic egos and grows employee careers. Regardless, this should be secondary to providing a high-quality, low-cost education for the students… in my humble business-minded opinion.

  29. DonShor

    Jeff: “typically as a company grows it can leverage economies of scale to provide same quality a lower price-point. If a company contracts due to reduced inflows, it still has to maintain the quality and price-point set by the previous.”
    Not really. Businesses can raise prices, reduce quality, or seek to expand the customer base. In my own industry I can think of large wholesalers who have done some or all of those things.

    “I am personally disappointed in this mission because it seems to perpetuate the idea that UC employees serve some abstract primary purpose other than providing a high-quality and low-cost education to students.”

    That is not, never has been, and likely never will be the primary purpose of UC. The mission statement, though rather wordy, is exactly correct. Research and teaching are co-equal purposes of UC. Trying to monetize those missions is probably pointless, although I would note that patents resulting from research do lead to revenues for UC.

    “Would a college exist to do research without students?” Of course. My father spent his entire career at Scripps Institution of Oceanography. He and most of his peers were primarily researchers. They also taught. But the phrase “publish or perish” reflects the emphasis on research.

  30. Disgusted

    Greg, you have shot yourself in the foot yet again. You admit that UC has wasted money in at least two places – Division 1 athletics at UCD, and the UC Merced campus. Thus it is clear there is room for streamlining – but that is not happening. In fact, I would argue just the opposite is happening. UC is pretty much keeping the same programs it always has, by continuing obscene salaries for fat cat execs/athletic coaches, building new facilities as if it will have no problem funding their operations in the future, raising student fees to astronomical levels (32% increase in a matter of months), furloughing/laying off profs/staff. DO YOU SEE ANY ATTEMPTS WHATSOEVER TO CUT BACK ON UNNECESSARY PROGRAMS/EXPENSES? ISN’T IT PRETTY MUCH BUSINESS AS USUAL? SORRY, I DON’T AGREE WITH THIS POLICY IN SUCH A HORRIFIC RECESSION. STREAMLINING NEEDS TO HAPPEN SOONER THAN LATER.

  31. Frankly

    Businesses can raise prices, reduce quality, or seek to expand the customer base. In my own industry I can think of large wholesalers who have done some or all of those things.

    Don, this doesn’t make sense. Unless you have very captive customers or a monopoly there is little probability you can increase market share without some value add over competitors. In a free market, higher prices and/or lower quality will tend to decrease market share unless everyone is doing the same. Even captive customers will rebel at some point. They will be the first to jump to the alternative that offers higher quality and/or lower prices.

    That is not, never has been, and likely never will be the primary purpose of UC. The mission statement, though rather wordy, is exactly correct. Research and teaching are co-equal purposes of UC. Trying to monetize those missions is probably pointless, although I would note that patents resulting from research do lead to revenues for UC.

    If true, then I have learned something about the business of the UC system, and it puts me in a position feeling even less supportive of the complaints from UC employees about being underpaid and more frosted that budget problems are being taken out on the students. It seems that any substantive debate about budgets and tuition would necessitate revisiting the mission mindset that puts research above or even equal to education of students. I don’t have a problem with the business of research, but only if subordinate to, and contributory to, teaching.

    So I understand… elite colleges are research nurseries that happen to teach on the side? I think that would be just peachy if the college is private; but if one tax dollar is directed to the college, I have a big problem with that arrangement. You can argue that the UCD research (e.g., agriculture science) benefits me directly, but the benefits relative to the costs are too nebulous and, I think, the entire business is ripe for overages and exploitations that would be hidden from me the tax payer.

    Maybe UCD should go completely private, raise tuition to cover their expense nut, and try to survive on the merits of a non-subsidized business model.

  32. Greg Kuperberg

    [i]If true, then I have learned something about the business of the UC system, and it puts me in a position feeling even less supportive of the complaints from UC employees about being underpaid and more frosted that budget problems are being taken out on the students.[/i]

    The fact remains that they get a big public subsidy for an extremely valuable college education.

    [i]I don’t have a problem with the business of research, but only if subordinate to, and contributory to, teaching.[/i]

    Subordinate, no; contributory, absolutely. Research is why UC students want to attend UC and not the cheaper Cal State. Research keeps the instructors in practice with the material and generally upholds educational standards.

    On the other hand, research at UC isn’t “above” teaching, except to the extent that the state leaves teaching below research by paying less for it. That’s the whole point. With only 30% of the UC budget coming from the state compact and fees, you can’t expect the university to be more than about 30% committed to education.

  33. UCD prof

    Emphasis on research => hiring the top faculty, money and prestige for the university, higher value of a degree. There is a public university system in the state that doesn’t emphasize research as much, and that’s the CSU. There is room for both university emphases; both serve an important role. But there is a reason why (in general) the top students want to go to the UC rather than the CSU. Take away the research, and those top students will go to private schools like Stanford if they can afford it.

    By the way, programs WILL be cut at UCD and throughout the UC. There’s no way around it; the furloughs and the increase in tuition won’t cover the budget cuts. They may not be the things that you or I would like see cut, but there will be cuts.

  34. Greg Kuperberg

    [i]By the way, programs WILL be cut at UCD and throughout the UC.[/i]

    Yes, as they certainly should. But what the critics fail to appreciate — or maybe just fail to admit — is how much criticism is going to come from them when UC does in fact cut programs. The people who are convinced that UC wastes money do not, as a group, do not have any consistent picture of where exactly the waste is. The one thing that they can agree on is that whatever executives are paid, they should be paid less. Everything else, including the $2 million dollars per year for Tedford or Howland, is a sacred cow for someone.

    So if they simply paid the top 100 managers at UC Davis minus one million dollars a year each, the critics would be satisfied.

  35. Frankly

    But there is a reason why (in general) the top students want to go to the UC rather than the CSU. Take away the research, and those top students will go to private schools like Stanford if they can afford it.

    It would be a bit of irony to reach the point where the children of UCD professors cannot afford to attend the school.

    I think the comments about “diploma mills” and students choosing CSU and Stanford are informative. Something that I am just starting to understand: growing prestige is a driving motivation within the business models of many colleges. The thinking is that by employing a more esteemed faculty and publishing more research papers, more of the top students will want to attend. Because the goal of achieving prestige is inherently competitive, there would be a continuous ratcheting up of the investment required. I suspect that this may be at the root of why college costs have grown so much faster than the cost of living… all the colleges competing for prestige.

    Contrary to the simplistic claims of destructive greed, those of us having worked where large CEO salaries and bonuses have been paid know that the money is secondary to the prestige sought by those compensated. People, in general, are naturally greedy for attention and recognition within their peer group. It is a perpetual need… why Michael Phelps would want to win eight Olympic gold medals and why millionaires strive to become billionaires. The problem occurs when the prestige sought is damaging to others and/or is destructive to a system. For highly educated and sophisticated individuals, a moral compass should exist that helps mitigate the damage caused by this natural and rational pursuit of interest.

    I think it is worthy of debate: is the existing model for colleges competing on prestige damaging to the overall student population and destructive to the educational system? Is the rational pursuit of UC employee interests damaging or beneficial to the student population? In this country we are revisiting just about every model and every system to seek greater efficiency and control. Maybe it is time to also question the status quo for our system of higher education.

  36. Research Funding

    Aside from the university prestige, higher degree value for students, higher quality faculty, and cutting edge education… research funding benefits students as follows:

    ~Grad student fees, tuition, benefits are paid by research funding (at least in the sciences)
    ~Grad students “work” up to 50% on research projects during the academic year and 100% during the summer. This is really a paid education.
    ~Under grad students are hired on research projects
    ~Research projects pay an overhead on funding (up to 53%) to cover facility and administrative costs

    Basically, students are subsidized by research (not the other way around).

  37. Greg Kuperberg

    [i]Something that I am just starting to understand: growing prestige is a driving motivation within the business models of many colleges.[/i]

    It certainly is. Whether or not you agree with this “model”, this is a much more respectful line of thinking than that we’re just sitting around wasting time and money.

    But an operative word here is [b]many[/b], not all. There are also plenty of colleges that know that they have no realistic chance of competing on prestige, and don’t much care either. If they are private, and if they concentrate on teaching, then typically their tuition is just as high as at private universities with big-ticket research. The total cost of the operation is less, but the tuition is just as high, because they are also cut off from research funding.

    Why would these places be expensive? One basic reason is given in my son’s AP economics textbook. Despite all of the gains in efficiency in producing all kinds of widgets, it still takes four people to play a string quartet, just as it did in Mozart’s day. The same holds for many of the things that a university does. If you could replace the teachers by robots, then you could also replace the students by robots, and there would be no point to the classroom.

    [i]The thinking is that by employing a more esteemed faculty and publishing more research papers, more of the top students will want to attend.[/i]

    It’s not just the thinking, it’s the reality. It’s why the admission rate at Stanford is 7.6%, while the admission rate at the University of the Pacific is 70%.

    So it’s fine to have a “debate”, but the students are answering that debate themselves with their feet.

    [i]The problem occurs when the prestige sought is damaging to others and/or is destructive to a system.[/i]

    As the admission rates make clear, this prestige is first of all what students want. And second, doing research in pursuit of prestige is also good for society.

    For instance, you are reading this blog using a graphical web browser. Well, the graphical web browser was invented at the University of Illinois in 1993 not to make anyone rich, but in pursuit of prestige. That single invention ripped open the Internet to the entire American private sector; it has been worth as much as all public spending on research universities between then and now.

    However, there is one kind of pursuit of prestige at universities that really doesn’t help anyone teach anything or invent or discover anything of practical value. Namely, Division I athletics.

    [i]Basically, students are subsidized by research (not the other way around).[/i]

    That’s also true.

  38. Disgusted

    “So if they simply paid the top 100 managers at UC Davis minus one million dollars a year each, the critics would be satisfied.”

    No, I would not be satisfied (you don’t speak for me). I want the big fat salaries paid to athletic coaches to stop. I want the enormous funding going to Division 1 sports to stop. I want the perpetual building of facilities that do not really contribute to an educational mission to stop, e.g. fancy stadiums, convention centers, and the like. I want the federal/state gov’ts to rethink some of the mandates they are insisting universities have, that create the need for huge departments to fund them, e.g. counseling centers. Frankly, I find the attitude that the average everyman doesn’t have the sense to know what to cut at UC arrogant and insulting. If you can figure out that Division 1 sports is a collosal waste of money, what makes you think I can’t? Academics don’t have a lock on common sense.

  39. Greg Kuperberg

    [i]How much of the athletic department revenue comes from general fund sources–i.e. money that could go to education?[/i]

    This question could be read in different ways, for two reasons: First, because “general fund sources” is not always the same as “money that could go to education”. And second, because the specific answer varies a lot from campus to campus, and to make matters worse, is kept low-key by athletic departments. Also, the right question is varsity athletics, i.e., not counting any intramural sports or exercise for ordinary students.

    Davis is Division I-AA. Usually in this type of varsity athletic program, every single team loses money. You can calculate how much by subtracting “generated revenue”, which means ticket sales [b]plus[/b] athletics donations, from expenses. The typical (i.e., median) Division I-AA school spends about $10 million on varsity teams, and gets about 1/4 back from generated revenue. Almost all of the generated revenue is from football and basketball. From the snippet of financial data that I found, Davis is fairly typical.

    So where does the other 3/4 come from? According to the balance sheets at UCOP, it is all “designated” and not “general fund”. But designated by who? I couldn’t find an answer to that. One way or another, UC Davis is paying for the lion’s share of its athletic program. As far as I can tell, the “designation” of this money is a fig leaf at one level or another, either at the state legislature or UCOP or campus, to make it look like the money couldn’t be used for ordinary students.

    Another important point: In Division I-A, which at UC means Berkeley and UCLA, usually the men’s football and basketball teams make money and the other teams lose money, usually for a net loss. (But in many cases all of the teams lose money.) But even if football and basketball are profitable, that does not mean that it is profitable to pay football and basketball coaches $2 million a year. As far as I can tell, when coaches are paid that much, especially if the basketball coaches, they aren’t paying for themselves. Instead, the universities are paying for the prestige of successful coaches. And some people use the salaries themselves as the mark of success; i.e., an athletic program can have an expensive coach just so that it can brag that its coach is expensive.

    [i]No, I would not be satisfied (you don’t speak for me).[/i]

    Actually, since you’re anonymous, you have chosen not to speak for yourself either.

    [i]I find the attitude that the average everyman doesn’t have the sense to know what to cut at UC arrogant and insulting.[/i]

    But that’s not the attitude. Many ordinary people have defensible suggestions for what UC should cut and what it should keep. The problem is not that they lack sense, it’s that they don’t agree with each other. For instance, you could be right that UC Davis shouldn’t have a new counseling center; frankly I have no idea. But try running that one by the students!

  40. UCD prof

    The problem occurs when the prestige sought is damaging to others and/or is destructive to a system. For highly educated and sophisticated individuals, a moral compass should exist that helps mitigate the damage caused by this natural and rational pursuit of interest.

    Don’t forget it’s not just that the students and faculty “want” prestige, although certainly they do. It’s that companies and other universities will usually prefer to hire students from more prestigious universities. And grad schools (including medical schools, law schools, etc.) prefer to hire students from more prestigious universities. There is a real consequence to where a person goes to school; it’s the reason that high school students are increasingly stressed out (something that’s probably gotten out of hand — but that’s another story).

    And again, it’s not just that schools that emphasize research are perceived to be better, and thus are considered to be more prestigious — usually they are better in many ways.

    Finally, if you looked at the increase in spending on faculty salaries in the over the last 10 years, and the increase in overall spending in the last 10 years, you will see that it is not faculty salaries that are driving the huge increase in the amount spent on running the UCs.

  41. Frankly

    It’s that companies and other universities will usually prefer to hire students from more prestigious universities

    That depends on the job and the company doing the hiring, and unless the hiring manager is shallow or an idiot, it is generally only a part of any best practices for hiring talent. If you are a scientist or engineer, then certainly a degree from a more prestigious program might open doors. I suppose you can make the case that higher demand for a program allows the UC to select stronger students thereby increasing the likelihood that the new graduate would be a stronger employee. But in other disciplines like business, the selection of academic talent does not automatically translate to employable talent. In fact, I would fear that exposure to the UC business model would forever corrupt the students’ business sense.

  42. UCD prof

    That depends on the job and the company doing the hiring, and unless the hiring manager is shallow or an idiot, it is generally only a part of any best practices for hiring talent.

    Agreed. But everything else being equal (or close to equal), most places will prefer the more prestigious university.

  43. Greg Kuperberg

    [i]That depends on the job and the company doing the hiring, and unless the hiring manager is shallow or an idiot, it is generally only a part of any best practices for hiring talent.[/i]

    When students first enter college, they do not know exactly what doors they in the job market they will want to open. What they know is that a prestigious college degree opens a lot of doors, even if it doesn’t open every door. That is, sure, a prestigious diploma by itself is not the be-all factor for getting a good job. It’s merely a huge factor.

    Students do not spend six figures on a Stanford degree, and even before that waste their time applying to Stanford with a 1 in 13 admission rate, just because of a debate or a fad or a theory. The financial incentive is real. The amount that the average Stanford graduate makes after college, or for that matter the amount that the average Davis graduate makes vs the average Sac State graduate, bears it out.

    [i]I would fear that exposure to the UC business model would forever corrupt the students’ business sense.[/i]

    You are free to fear it. But the world’s most profitable companies, for instance Google, see it very differently.

  44. Disgusted

    “For instance, you could be right that UC Davis shouldn’t have a new counseling center; frankly I have no idea. But try running that one by the students!”

    I will bet you students would give up counseling centers in a heartbeat in exchange for a 32% decrease in their tuition. I suspect they would give it up for a 5% decrease in their tuition. We are spending enormous amounts of money on counseling centers, to “save” a few students who have thoughts of suicide, who could just as well be served by paying to have them see a private psychologist in town instead of maintaining an entire center.

    “But that’s not the attitude. Many ordinary people have defensible suggestions for what UC should cut and what it should keep. The problem is not that they lack sense, it’s that they don’t agree with each other.”

    Just because people disagree on how to streamline, does not mean we should not do it. There will always be differing opinions when a decision is to be made. Is that any reason not to make a decision?

  45. Disgusted

    “So where does the other 3/4 come from? According to the balance sheets at UCOP, it is all “designated” and not “general fund”. But designated by who? I couldn’t find an answer to that. One way or another, UC Davis is paying for the lion’s share of its athletic program. As far as I can tell, the “designation” of this money is a fig leaf at one level or another, either at the state legislature or UCOP or campus, to make it look like the money couldn’t be used for ordinary students.”

    This is always the problem when doing these sorts of fiscal analyses. The entity being budgeted always makes sure to put various funding in different “pots”, to hide the ball on how much taxpayer dollars are going for any particular program. The most famous of these smoke and mirror schemes is the “facilities pot” vs the “operational pot” con.

    For example, it is OK to build a new stadium, bc the funding is coming from the “facilities pot”, which cannot be used to fund faculty. But the fallacy of that argument is that the money comes from the same ultimate pot – the taxpayers’ collective pocket. That is why I view the argument that it is OK to build such and such a facility bc there is money in the facilities pot and it will not take away from the operational pot, a CROCK OF BULL!

  46. UCD prof

    For example, it is OK to build a new stadium, bc the funding is coming from the “facilities pot”, which cannot be used to fund faculty. But the fallacy of that argument is that the money comes from the same ultimate pot – the taxpayers’ collective pocket. That is why I view the argument that it is OK to build such and such a facility bc there is money in the facilities pot and it will not take away from the operational pot, a CROCK OF BULL!

    I’m not defending the way that money is currently spent in the UCs, because honestly I don’t know how it’s spent. But I do know that much of the money spent on the UC does not come from taxpayers, but from donors. (And it is possible that donors are specifying how their money will be spent). Indeed, it’s been the pattern over the last decade (at least) that the UC gets a smaller and smaller percentage of its budget from the state.

    Do we want to privatize the UC? IMO, that would be a very bad thing. But that seems to be the direction that we’re headed in.

  47. Anonymous

    Apparently, students voted to increase their fee to finance these athletic facilities including the stadium. I don’t know if it covered the entire costs but it wouldn’t have gone through if the students didn’t want it.

  48. Greg Kuperberg

    [i]I don’t know if it covered the entire costs[/i]

    Not by a mile.

    [i]it wouldn’t have gone through if the students didn’t want it.[/i]

    It might well have gone through if the students didn’t want it. The faculty was strongly against it, while the students were in favor only by a slight majority, and that was good enough. They also only polled currently enrolled students, including graduating students who would never have to pay the fees. They did not poll future students who would have to pay during their entire stay.

  49. Frankly

    So, we seem to have this typical class argument: brawn vs. brain. It is acceptable to dedicate budget dollars in prusuit of school prestige unless it involves athletics? I think the case can be made that UCD’s successful athletic programs generate more general prestige than most of the research projects combined.

  50. UCD prof

    I think the case can be made that UCD’s successful athletic programs generate more general prestige than most of the research projects combined.

    So, “Big 10” schools are more prestigious than Harvard?

  51. Greg Kuperberg

    [i]It is acceptable to dedicate budget dollars in pursuit of school prestige unless it involves athletics?[/i]

    Jeff, in ordinary times I wouldn’t be all that put out when the UC spends $30 million on a stadium or $2 million a year on a coach. I voted against it, but it’s not the end of the world. But football is just a game. It doesn’t even count as good exercise, because it is more about watching than playing.

    With that fact in mind, it is an insult to be told that [b]one-fifth[/b] of a coach’s guaranteed compensation is a monstrous salary that no chancellor could possibly deserve.

    I’m sure that the gridiron does generate more prestige, in certain
    quarters, than any classroom, lab, or seminar on campus. But what kind of prestige? This is not the kind of prestige that explains cancer, as Harold Varmus (UCSF) did; or the kind of prestige that invents silicon-chip-based lasers, as Herbert Kroemer (UCSB) did. This is not the kind of prestige that makes anyone a more knowledgeable teacher.

    No, varsity football is the prestige of idle entertainment.

    If SACRIFICE is truly so important for UC right now, why don’t we first sacrifice some of that.

  52. Frankly

    I’m sure that the gridiron does generate more prestige, in certain quarters, than any classroom, lab, or seminar on campus. But what kind of prestige? This is not the kind of prestige that explains cancer, as Harold Varmus (UCSF) did; or the kind of prestige that invents silicon-chip-based lasers, as Herbert Kroemer (UCSB) did. This is not the kind of prestige that makes anyone a more knowledgeable teacher.

    Hum… this seems to take us full circle back to my point about UC mission… that it should be primarily about teaching students and value of education, not primarily about making teachers more knowledgeable. I think your point was that research increases the prestige of the UC and therefore increases the value to the attending students. In this case any prestige will work as well will it not?

    When considering the value of athletics, we need to factor that successful and well-run college programs positively impact a larger percentage of the student population than do most research programs (when including all the support resources and secondary contributors and participants). Now, if you want to make the benefit to society argument, then, no, football isn’t on the same playing field (pun intended) as these noble research projects. However, when the benefits consideration is directed primarily toward the student, and not the teacher, it seems disingenuous or unbalanced to argue for the protection of research on the basis of prestige, but then argue against a very successful and respected athletic program providing the same. UCLA is a great school, but its brand is made much more attractive to many people (including hiring managers) by its athletic achievement.

    It also seems disingenuous or unbalanced to argue for market compensation for faculty, but argue against the same for coaches. Now, the social argument works for me… as in why does a gifted, experienced and successful professor make so much less than a gifted, experienced and successful coach? Much of this difference is explained simply as market reality – there are fewer gifted, experienced and successful coaches than there are gifted, experienced and successful professors. Some of the discrepancy can also be explained by job risk… as in any gifted, experienced and successful coach can lose his/her job from one losing season. However, from a pure social benefits perspective, a professor driving a successful research project to help invent a useful scientific, technological or medical breakthrough trumps a winning coach every time. So, if we are compensating people based solely on their contribution to society, the professor should make more than the coach… and Democrats and Republicans would work together and pigs would fly.

  53. Greg Kuperberg

    [i]It should be primarily about teaching students and value of education, not primarily about making teachers more knowledgeable.[/i]

    Except that in order to teach, you first have to know. That’s the heart of the matter. Faculty who are active in research can teach much more advanced material. We’re not talking about marking time with just any old syllabus.

    [i]In this case any prestige will work as well will it not?[/i]

    No it won’t. We’re not talking about prestige just for the sake of prestige. As I keep saying, prestigious research is both useful to humanity, and leads to more advanced instruction.

    [i]its brand is made much more attractive to many people (including hiring managers) by its athletic achievement.[/i]

    It seems entirely lost on hiring managers that MIT and Caltech have terrible football teams. It seems equally lost on hiring managers — other than NFL managers — that the Texas Christian University Horned Frogs are a great team.

    [i]It also seems disingenuous or unbalanced to argue for market compensation for faculty, but argue against the same for coaches.[/i]

    If I thought that having the best football or basketball coach in the region was important, then I would be the first to agree that they should be paid at least the median.

    But for the record, Ben Howland is not paid the median for college basketball coaches. He’s one of the ten highest-paid basketball coaches in America.

  54. Anonymous

    [quote]Hum… this seems to take us full circle back to my point about UC mission… that it should be primarily about teaching students and value of education, not primarily about making teachers more knowledgeable. I think your point was that research increases the prestige of the UC and therefore increases the value to the attending students. In this case any prestige will work as well will it not?[/quote]

    Isn’t that what CSU and CC are for? UC’s primary mission is research, teaching is secondary. If you want “teachers'” attention for lower tuition, then go to CSU. University’s missions are not just transferring knowledge, but to produce new knowledge. CSU/CCs have emphasis on the former and UC on the latter.

  55. Frankly

    As I keep saying, prestigious research is both useful to humanity, and leads to more advanced instruction.

    We can certainly agree on that point.

    You know, after all this back and forth I have learned a few things; but I am still stuck on the question how any business model can sustain itself when the product/service cost continues year after year exceed the CPI while the quality of the product/service remains relatively static.

    You have made the point before using the California CPI and the increases in student population to argue that the costs increases are rational and normal. However, UCD tuition and other non-housing expenses have far exceeded the CPI (especially with this last increase). Even when state inflows were high, the costs to families and students increased every year beyond the national or state CPI. In general, college costs have increased about twice the rate of inflation or about 5-8% every year. Why is that? How can this continue without the eventual consequences of fewer families being able to afford college?

  56. Greg Kuperberg

    [i]UCD tuition and other non-housing expenses have far exceeded the CPI (especially with this last increase).[/i]

    In this discussion you have been leaping between two different figures per student: Just fees, and all campus revenue. Both of these are the wrong number to look at. The UC bill per student is in two parts: Fees to the students, and the education compact with the state government. Everything else is for non-enrollment activities such as research and medical care. If you look at those two terms, fees and the compact, their sum per student has [b]not[/b] risen faster than inflation in the past 10 years.

    On the contrary, the compact has slowly gone down in constant dollars per student, until this year it fell off of a cliff. Fees have partly made up for it, but not completely.

    [i]In general, college costs have increased about twice the rate of inflation or about 5-8% every year. Why is that?[/i]

    College tuition in general is a different question than UC fees or the UC state compact. Yes it has risen faster than inflation, but you should note that private universities are the price leaders. And there are two things going on. First, wage inflation is generally higher than inflation in goods and services, because people get wealthier. Again, as my son’s economics book says, universities are expensive because of the “string quartet” model. No matter how few labor minutes it takes to build a toaster in a spanking efficient factory, it still takes the wages of four people to play a string quartet. It still takes the wages of one person to teach a class. Some other key education costs are likewise wage-driven. While it is true that tuition in general has risen much faster than inflation in goods and services, it hasn’t risen all that much faster than wage inflation.

    Second, it has risen a little faster than wage inflation, and that’s because of the pressing demand for a college education. You didn’t used to need a college education for a good job, and now you do. This is especially true of women. There are still a few decent-paying job categories for men that don’t really require college, like heavy construction work. Virtually any well-paying job for women does require college, and that’s why universities in general now have more women than men.

    As you suggest, college tuition can’t rise faster than wages forever. Since it can’t, it won’t.

    But again, that’s universities in general, not UC in particular. Again, UC fees plus the state compact have risen slower than inflation in goods and services lately, and slower still than wage inflation.

  57. Greg Kuperberg

    Right, I just learned from our colleague Phil King that the string quartet model is officially called the Baumol Effect ([url]http://en.wikipedia.org/wiki/Baumol_effect[/url]). To quote the Wikipedia article directly: “The Baumol Effect has been used as at least partial justification for the fact that, in recent decades, college tuition has risen faster than the general rate of inflation.”

  58. Frankly

    the Baumol Effect

    Interesting that Wikipedia labels it “Baumol Cost Disease”. I do remember reading about this. I think the theory makes complete sense.

    Working for large companies as an IT manager, I remember driving home after a day filled with several project meetings with my internal business partners, and having the epiphany that I was helping to reduce the number of available jobs. For example, one company I worked for employed 600 customer service reps, but I was working with the management of that division to select, purchase and implement a new call management system and website enhancements. These changes would allow the company to shed 200 jobs over a period of time and this would more than pay for the technology changes. The end result was greater efficiency which allowed the company to reduce the cost of its products, and increase market share. This led to a partial replenishment of, mostly higher level, jobs.

    My epiphany was the beginning of my thinking of the social implications for so much shedding of low and medium-skilled jobs. Of course you know that is the single biggest reason we are having a jobless recovery… the US economy is one of the most efficient because technology has supplanted many low and medium-skilled jobs, and some high-skilled jobs like computer programming. This has helped keep downward pressure on the CPI and wage inflation.

    Getting back to the cost of education, I think there are efficiencies to be discovered in the non-academic side of the business. I also think there are probably some to be discovered within the business of research and teaching. You could better compensate a smaller workforce if that workforce could perform as well or better than the larger workforce. Online instruction is an example: how much of any curricula could be delivered effectively using web technology to free up resources to apply toward instruction that requires personal lecture and lab? How many research projects could be combined to leverage economies of scale and also maybe add diversity to the brain trust?

    Another consideration (and I have to go back and revisit some of my previous research on this) is the wage inflation for teaching, healthcare and many public-sector jobs has exceeded general wage inflation for some time. It used to be that a government employee suffered lower pay, but it was somewhat offset by a less stressful, less competitive, and more secure existence. There are exceptions for high-end skills in demand and in short supply, but today it is very likely that a government job pays better than the same in the private sector… especially when considering the benefits. Similarly, wage inflation for unionized labor has grown faster than non-unionized labor. That is why nurses and firefighters make six figures these days. But what we see today is that all of these professions where wage inflation has consistently exceeded the CPI are headed for some implosion. Cities are going bust because of the cost of their fire stations. Many people cannot afford the cost of health care. Many families can no longer afford college. States cannot balance their budgets. Most of this can be explained by a lack of efficiency and/or too high wage inflation.

    In your string quartet example, my talented son can make his computer play pieces that are eerily close to the real thing. This might disgust our artistic sensibilities, but it sure is a more efficient model.

  59. Greg Kuperberg

    [i]Of course you know that is the single biggest reason we are having a jobless recovery[/i]

    Maybe replacement of low-wage workers would be a reason. As I understand it, the single biggest reason is that economic recovery in general is “jobless” in its early stages. That is, employment trails the economy.

    [i]There are exceptions for high-end skills in demand and in short supply, but today it is very likely that a government job pays better than the same in the private sector.[/i]

    Just in general, government pays better than the private sector at the low end and worse at the high end. At one end, a UC Davis janitor gets a vastly better deal than someone who cleans private homes in the city of Davis. At the other end, university faculty and managers get paid vastly less than equivalent skilled workers in the private sector. (And I will even grant that university coaches get paid less than NFL/NBA coaches.)

    [i]I think there are efficiencies to be discovered in the non-academic side of the business.[/i]

    There is no question that “efficiencies” are there to be “discovered”. Or to put it plainly, money is wasted in plain sight. But this is true of all non-profit institutions. Public universities are no worse than private ones, for instance. And for-profit universities have not had or even wanted the prestige that students want. Corporations like the University of Phoenix really are glorified diploma mills in comparison.

    [i]I also think there are probably some to be discovered within the business of research and teaching.[/i]

    There are, and we have discovered them! I post homework on the web, I post grades on a secure web site, and I answer questions by e-mail as well as in person. I wish DJUSD better followed the example set by UC Davis.

    But in higher education and health care, efficiencies are swept up and canceled by ever rising expectations. The string quartet example is again a good analogy. Of course, the easiest way to make a computer play pieces that are eerily close to the real thing is to play recordings. But if you listen to a recording of a string quartet, it makes you want to hear the quartet in person. You could listen to my recorded lectures too — I wouldn’t mind. But recordings tend to make students want to see instructors in person.

  60. Frankly

    But if you listen to a recording of a string quartet, it makes you want to hear the quartet in person. You could listen to my recorded lectures too — I wouldn’t mind. But recordings tend to make students want to see instructors in person.

    True. I purchase Great Courses from http://www.teach12.com and they are not as interesting the second or third time I view them. However, they are much less expensive after the first showing.

    But in higher education and health care, efficiencies are swept up and canceled by ever rising expectations.

    Global competition has impacted most private companies with this in a big way. They have had to figure out ways to meet those expectations while lowering price. Even Neiman Marcus prices have been somewhat affected by Wal-Mart because of ghe general expectations for price. Amazon.com has impacted expectations for price and service for just about every other retail establishment. The list goes on. I get your point that labor-intensive work lacks the same opportunity for efficiency gains. However, it will just mean we hit a wall at some point when the lower wage-inflated consumer eventually can no longer afford the higher-wage inflated service.

  61. Greg Kuperberg

    [i]However, they are much less expensive after the first showing.[/i]

    I can’t say the same of calculus, because the recordings are free the first time. If you want technological efficiency, here you are: Free book ([url]http://ocw.mit.edu/ans7870/resources/Strang/strangtext.htm[/url]), free lectures ([url]http://www.online.math.uh.edu/HoustonACT/videocalculus/[/url]). The only thing missing is human interaction.

    [i]However, it will just mean we hit a wall at some point when the lower wage-inflated consumer eventually can no longer afford the higher-wage inflated service.[/i]

    I’m sure that universities in general will hit that wall soon enough. Tuition will plateau and that will just be their problem; I really don’t care. But if you properly measure cost as fees plus the education compact, per student in constant dollars, then UC is further away from that wall now than in 1999. However, a different wall has slammed in on UC, namely the state proposition system.

  62. Moravecglobal

    $3,000,000 Reckless Spending Approved by Yudof: University of California President Yudof Approves $3,000,000 to Outsource UCB Chancellor’s Job
    The UC President has a UCB Chancellor that should do the high paid job he is paid for instead of hiring an East Coast consulting firm to fulfill his responsibilities. ‘World class’ smart executives like Chancellor Birgeneau need to do the analysis, hard work and make the difficult decisions of their executive job!
    Where do consulting firms like Bain ($3,000,000 consultants) get their recommendations?
    From interviewing the senior management that hired them and will be approving their monthly consultant fees and expense reports. Remember the nationally known auditing firm who said the right things and submitted recommendations that senior management wanted to hear and fooled government oversight agencies and the public?
    Mr. Birgeneau’s executive officer performance management responsibilities include “inspiring innovation and leading change.” This involves “defining outcomes, energizing others at all levels and ensuring continuing commitment.” Instead of demonstrating his capacity to fulfill his executive accountabilities, Mr. Birgeneau outsourced them. Doesn’t he engage University of California and University of California Berkeley (UCB) people at all levels to help examine the budget and recommend the necessary trims? Hasn’t he talked to Cornell and the University of North Carolina – which also hired Bain — about best practices and recommendations that might apply to UCB cuts?
    No wonder the faculty and staff are angry and suspicious. Three million dollars is a high price for Californians to pay when a knowledgeable ‘world-class’ Chancellor is not doing his job.
    Please help save $3,000,000 for teaching our students and request that the UC President require the UCB Chancellor to fulfill his executive job accountabilities!

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