The State Auditor came out with a report highly critical of the UC system – not only critical of the system’s admission policy, which attempted to buttress revenue by admitting nonresident students at the expense of local students, but also shedding light on hot button issues ranging from the student protests of the UC Davis Chancellor, complaints by African American and other students of color, and, of course, local growth pressures.
The auditor, in a letter to the Governor, President Pro Tem of the Senate and Speaker of the Assembly, writes, “The university’s efforts resulted in an 82 percent increase in nonresident enrollment from academic years 2010–11 through 2014–15, or 18,000 students, but coincided with a drop in resident enrollment by 1 percent, or 2,200 students, over that same time period.”
He continues, “The university’s decision to increase the enrollment of nonresidents has made it more difficult for California residents to gain admission to the university.”
The decision to admit more nonresident students might not be a problem except that local students are seeing their enrollment drop. Moreover, by regulations, “the university should only admit nonresidents who possess academic qualifications that are equivalent to those of the upper half of residents who are eligible for admission. However, in 2011, the university relaxed this admission standard to state that nonresidents need only to ‘compare favorably’ to residents.”
The report finds, “During the three-year period after this change, the university admitted nearly 16,000 nonresidents whose scores fell below the median scores for admitted residents at the same campus on every academic test score and grade point average that we evaluated. At the same time, the university denied admission to an increasing proportion of qualified residents at the campus to which they applied—nearly 11,000 in academic year 2014–15 alone—and instead referred them to an alternate campus.”
The audit was requested a year ago by Assemblymember Mike Gipson. On Tuesday, Assemblymember Gipson posted on Facebook, “I’m thrilled that I did it. But I’m embarrassed and upset this audit has revealed this tremendous disparity between residents and nonresidents.”
He added, “It’s a form of discrimination against California students that UC would accept a lower standard for nonresidents, but maintain a higher one for Californians.”
“My reaction is utter disgust,” he said. “I’m going to use a harsh word, and the word is discrimination. We are disenfranchising California students.”
The State Auditor writes, “Because of the significant harm to residents and their families resulting from the university’s actions, we believe that legislative intervention, as outlined in the report, is necessary to ensure that a university education once again becomes attainable and affordable for all California residents who are qualified and desire to attend.”
In order to increase tuition revenue in the face of state funding shortfalls, the audit finds that “the university implemented two key procedural changes that encouraged campuses to maximize nonresident enrollment. In 2008 the university began allowing the campuses to retain the nonresident supplemental tuition revenue (nonresident revenue) they generated rather than remitting these funds to the Office of the President, which resulted in campuses focusing resources on enrolling additional nonresidents. Also in 2008, the Office of the President began establishing separate enrollment targets— systemwide targets for the number of students each campus should strive to enroll each year—for nonresidents and residents, and it allowed each campus to establish its own separate enrollment targets.”
UC Davis was among those who “increased their individual campus enrollment targets for nonresidents at a faster rate than their targets for residents. These two procedural changes satisfied the university’s goal: In fiscal year 2014–15 the university generated $728 million from the supplemental tuition that nonresidents paid—a growth of $403 million, or 124 percent, from fiscal year 2010–11.”
However, the report found that over the past ten years “the university began denying admission to an increasing number of residents to the campuses of their choice. If residents are eligible for admission to the university and are not offered admission to the campuses of their choice, the university offers them spots at an alternative campus through what it calls a referral process. In contrast, nonresidents, if admitted, are always admitted to at least one campus of their choice.”
The auditor notes, “In reaction to state funding reductions, the university has doubled resident mandatory fees—base tuition and the student services fee—over the past 10 years, which has made it difficult for California families to afford and budget for this important investment.”
Writes the auditor, “The university could have taken additional steps to generate savings and revenue internally to mitigate the impact of its admissions and financial decisions on residents. For example, the Legislature required the university to enroll an additional 5,000 residents in academic year 2016–17 as a condition of receiving $25 million in state funds. While the university estimates these 5,000 students will cost approximately $50 million to educate, or $10,000 per student, in addition to the tuition they pay, it has not conducted a study to support that estimate. The university plans to use its other funding sources to pay for the remaining $25 million, primarily by not offering financial aid to new nonresidents. These actions suggest that the university has the ability to use funds that it had dedicated for other purposes to enroll additional residents.”
In her response included in the audit’s findings, dated March 8, President Janet Napolitano said that “the draft report that has been shared with us makes inferences and draws conclusions that are supported neither by the data nor by sound analysis.”
She writes, “The audit’s subtitle, for example, presupposes a conclusion that University of California ‘admissions and financial decisions have disadvantaged California resident students.’ An alternative and more objective subtitle would be, ‘faced with unprecedented budget cuts, the University of California made every effort to sustain in-state enrollment, while maintaining academic quality and holding tuition flat.’”
She writes, “[T]o suggest from the outset that UC decisions regarding admissions were designed to ‘disadvantage Californians,’ as opposed to mitigate the impact of a 33 percent budget cut, is a rush to judgment that is both unfair and unwarranted.”
She adds, “We would have preferred a constructive set of recommendations that could help move the University and the state forward. We are deeply disappointed at this lost opportunity.”
UC officials have a counter-argument here, arguing that nonresident students did not displace resident students. Instead, the additional tuition, up to $23,000, allowed UC to enroll far more resident students than the system could have otherwise have been able to afford.
They argue that, without the extra money from out-of-state students, there would have been another $2400 or 20 percent tuition hike on resident students.
As Ms. Napolitano argued, “The State of California faces a dilemma that the draft report does not fully acknowledge. To maintain the quality of a public university system that virtually all agree is the finest in the world, sufficient funding must be found. Sources for this funding are limited.”
With state funds off the table and student tuition unpopular, nonresident tuition was the answer that they sought, where “the burden of which falls entirely on non-Californians.”
—David M. Greenwald reporting