The few vs. the many
There is more than one way to look at the recent and rapid diminution of California’s once-great higher education system. Politicians want you to see it only through the prism of the shrinking state budget. That, of course, is the immediate cause of cutbacks in state subsidies and increases in student costs.
But there are other factors involved that are broader and deeper than just the budget problems in California. A number of recent studies have looked at the country’s economy from 1973 until 2007 in terms of wealth and class. The former students of 1973 are now faced with financing their own children’s college education and are horrified at how much the landscape has changed in that short time.
An article by Nobel Prize-winning author Joseph Stiglitz in Vanity Fair magazine discussed the top 1 percent of wealth-holders in this country. Stiglitz said that nearly a quarter of today’s income is being earned by the top 1 percent. Even more staggering, he said that the same 1 percent actually controls 40 percent of the nation’s wealth.
Additionally, the income for this rarefied group has grown 18 percent over the past decade, while the other 99 percent of Americans have seen practically no income growth or have seen their incomes decline. Higher education is one of the biggest factors in determining lifetime income. Stiglitz said men without a college degree have seen their income drop by 12 percent during the past 10 years.
Where have all the unions gone?
The middle class has been blindsided by financial situations out of its control over the past few years. Unions and immigrants have been blamed for the poor state of the nation’s economy. According to Stiglitz, the movement to dismantle the power of unions, engineered by corporate interests and enacted by Republican politicians, has reduced the standard of living for all working people who are not in the wealthiest 1 percent. This has harmed the middle class in ways that have not been seen in this country for seven decades.
The decline in union representation appears to be inextricably tied to the decline in all workers’ wages, both union and non-union. Harvard study author Bruce Western said in a published interview, “Union decline marks an erosion of the moral economy and its underlying idea of fairness. Wage inequality in the non-union sector increased as a result.”
The decline of the power of unions, Western said, creates anger in the general working population. “Once the right to organize is lost, there’s nothing to counterbalance the power of employers in the political process and the public conversation about fairness in American society. People have ideas about what a fair wage and price is in the labor market. When those expectations of fairness are violated, people are outraged.”
The point of view that as the fate of unions go, so goes the American workforce, was echoed by Julian Posadas, vice president for Food Service Workers with American Federation of State, County and Municipal Employees (AFSCME) 3299 for University of California, Santa Barbara.
Posadas said the cavalier attitude from the top has hurt and continues to stymie the wages of the UC service workers. “One of the ways that we have been able to secure our wages is through our collective bargaining rights that we still have, but that is always under attack,” he said. “The workers are paid roughly five to 10 percent below market.” Food service workers are now paid $13 an hour. It will rise to $14 an hour in two years.
As state politicians continue to participate in a budget stalemate that allows the deficit to continue to rise, furloughs and pension limitations have been imposed on the union workers. “But at the same time, we saw that the UC executives weren’t taking the same hit as the lowest-paid workers,” Posadas said.
A survey conducted by The Chronicle of Higher Education was released on April 3. It looked at compensation for the presidents of public universities across the country. Among its findings, 59 public university presidents will be making more than $500,000 next year.
In defense of these huge compensation packages that are set by the trustees and the presidents themselves, they insist they lag behind potentially higher income that they could be making in the private sector. UC President Mark Yudof was paid $783,103 in 2009-2010, nearly double that of his recent predecessor.
There appears to be no consistency of pay scales among three types of universities: UC Santa Barbara (UCSB); Cal State University, Channel Islands (CSUCI); and California Lutheran University (CLU). Also, there is a wide difference in compensation levels for similar or identical job classifications within each of the schools.
At UCSB, 68 professors made more than $200,000 in 2009. The highest-earning professor made $402,696 that same year. The lowest-earning professor earned $5,775. The average pay for a professor in 2009 was $112,544. That is up from an average pay of $100,594 in 2004.
Also at UCSB, in 2009 food service workers made an average of a little less than $25,000.
The UCSB chancellor was paid $312,494 in 2009, up from $289,616 in 2004. At the same school, in 2009, coaches made an average of $55,000. At the top of the heap, however, the highest-paid coach in 2009 earned $230,000.
At CSUCI, the president made nearly $334,000 in 2010, a decline in salary from 2008, when he made $350,000. The top-rated administrator earned a little more than $188,000 in 2010, down from the previous year, when she made more than $193,000.
The highest-paid CSUCI instructional faculty member was paid $151,500 in 2010, but that same year the highest-paid department chair received a lesser $127,000. Listings of compensation for CSUCI employees are unorganized, but a guesstimate of the average pay for instructional faculty is in the range of $80,000. An average income for department chairs would clock in at about $100,000.
The compensation rates for employees at CLU were requested but were not provided, and because it is a private university, that information is not publicly available.
CLU President Chris Kimball, however, explained how the salaries are determined. “Our goal is to pay our people at the mid-point of the compensation levels of private universities similar to CLU. We have been raising our pay to meet the mid-point goal.”
The Master Plan in shreds
More than half a century ago, politicians in California peered into the future and saw the need for a roadmap to the University of California higher education. In 1960, the Donohue Higher Education Act, which included the Master Plan, was passed.
In 1962, new admission requirements for UC schools were established. Every student in the top 12.5 percent of his or her high school class would automatically be admitted to one of the UC campuses. Simple, effective and arbitrary. The system was tuition-free for qualified California residents. And the Master Plan promised a top-tier education, especially at the upper-class and graduate level.
Gov. Ronald Reagan, however, eliminated tuition-free higher education at the UC campuses in 1970, opening the door for ever-increasing costs. Tuition spiked from $1,624 in 1990, up to $2,320 in 1991. In 2003, UC and CSU students were handed a mid-year tuition increase. And in November 2009, UC tuition was hiked a whopping 32 percent. Today, as the state continues to struggle with the budget, there is a strong possibility that UC tuition rates of $11,703 could skyrocket.
As of this moment, the cost of attending UCSB, including living on campus and all normal expenses, is $31,000 annually.
The cost of attending CSUCI in 2009-2010, including on-campus housing, was $22,209.
At CLU, a private institution, a student living on campus will pay $46,192.
The challenge of paying for college
Mark Kantrowitz of finaid.com and fastweb.com articulated the painful truth for students and families who intend to pay for college. “Start saving for college and searching for scholarships as soon as possible. The sooner you start, the more your savings will earn and the better your chances of winning a scholarship.”
The uncertainty of the future of the Cal Grants program, a mainstay of financial assistance, is preventing families from making financial arrangements. Without such plans, a student cannot decide which schools are affordable. The Cal Grant program, when funded, pays the full amount of tuition for eligible students.
Mike Miller is the director of financial aid and scholarships at UCSB. Miller noted that students have few options when paying for school. “Right now, we have more needy students than ever before,” he said. “We do hear from students that it is difficult to find jobs on campus and it is extremely difficult to pinpoint what is going to happen in the near future.”
Miller’s advice for reducing the total bill is not always realistic. “The biggest and best way to cut costs is to graduate early. Sometimes, it is difficult advice for me to give students because college is so much a part of the formative years. To take away one of those years is tough. But for students who want to get out and get on with the rest of their lives, a good alternative is summer school.”
And then there is post-graduate hangover: student debt. “The average UCSB student leaves school with an average of $17,000 debt,” Miller said. “A UC education, which lasts for the rest of your life, is the best investment you can make. It will pay you back more than any other investment that you are ever going to make, as long as you borrow in moderation, only what you need, and you get out on schedule.”
Joanne Coville is the vice president of Finance and Administration at CSUCI. Coville said that her smaller campus was spared the worst of the CSU cuts.
Nevertheless, CSUCI is struggling to manage with less funding. “We have been very clear that our first priority is our instructional program and getting our students the classes they need to graduate,” Coville said. “We haven’t had to lay off any professors or instructors.”
But the number of sections of required classes has been reduced. “Do we still have enough classes out there that students can get into so that students can finish their degree? Yes,” Coville said. “Although it has always been difficult, they can get through in four years, and we will give you a roadmap to figure out how to do that.”
Coville said the lack of budgetary information makes her job nearly impossible to do. “The inability to plan because we don’t have the knowledge is my biggest frustration,” she said. “The legislature has got to give us the tools.”
Still, Coville said, CSU schools are a great educational bargain. “It is an entire education for only $5,000 tuition. Access is now the big problem.”
CLU has a different approach to making the school affordable; and because it is private, it has more flexibility with finances.
CLU President Chris Kimball said most of the students need some form of financial help. “Our students are less affluent than UC students on average. The price students pay to attend CLU does not cover the entire cost of educating them. We make up the difference.”
Matt Ward, CLU vice president for enrollment management and marketing, said CLU has two programs that make attending the school more affordable. “Through the CLU Guarantee Scholarship, all students who are admitted to CLU and at least one of five UC institutions (UCLA, UCSB, UC Davis, UCSD or UC Berkeley) can attend CLU for the average cost of attending those state universities.”
Ward said that the school has another program aimed at getting students through the program on time. “The 4 to Finish program guarantees students that they will graduate in four years or the university will pick up the tab for any remaining classes.” Of course, to qualify, students must meet certain standards.
The financial need for students has increased over the last five years, Ward said, and the average debt load for a CLU graduate is about $15,000.
What the future may hold
Gov. Jerry Brown recently stated that without a vote on maintaining current tax levels, there could be dire consequences to students if he is forced to balance the budget only through cuts. Brown predicted that UC tuition could double to reach $25,000.
UC Regent Richard Blum publicly expressed another idea, saying that cutting enrollment was not a good choice.
Raising tuition with corresponding financial aid packages would be a better idea. Financial aid, however, has been one of the first costs to be eliminated for all but the neediest students, shutting out the middle-class families.
At the CSU system, trustee William Hauck predicted a worst case scenario that turned on holding a vote for the tax extension. Without that income, he said at a trustee meeting last month, CSU could face a $1 billion reduction in state funding.
Although CSU has already approved a 10 percent tuition increase for the 2011-2012 academic year, the financial gap still remains unbridgeable. So the solution will be to drastically cut enrollment next year by 10,000 students, and to reduce faculty and staff, thereby increasing the size of the classes.
Finally, at the community college level, the pressure to accept more students will be met next year with an enormous reduction in enrollment. The system plans to enroll 400,000 fewer students and eliminate thousands of classes.
The UC system has nine campuses. There are 23 campuses in the CSU system. And there are 112 community colleges in California.
Kantrowitz summed up the looming budget problems. “Some students will shift to lower-cost schools, causing declines in bachelor’s degree completion. Some will drop out of college or not pursue a college education in the first place. And the rest will graduate with thousands of dollars of additional debt.”