Come graduation day, some students may find themselves more concerned with their tuition bills than their college degrees.
Last year’s college seniors graduated on average nationwide with $25,250 of student debt. However, compared to the nation, UC Berkeley students on average find themselves carrying a lighter debt load.
While the percentage of undergraduates nationwide taking student loans has jumped to nearly 56 percent for four-year public schools from 19 percent in the 1989-90 school year, at Berkeley only 40 percent of undergraduates take loans to finance their education.
Widely accepted benchmarks place acceptable student debt levels at anywhere below 9 percent of initial postgraduate income. At the University of California, only four percent of students had debt exceeding that level.
In 2010, UC Berkeley students graduated with average debt of $16,056, less than their peers at the campus’s four public comparator schools, the University of Virginia, The University of Michigan at Ann Arbor, the University of Illinois at Urbana-Champaign and SUNY-Buffalo — the four public schools against which UC Berkeley benchmarks itself.
But student debt levels at UC Berkeley still exceed those at each of its private competitors — Harvard, MIT, Yale and Stanford — leaving UC Berkeley students feeling less financially sound than their privately educated counterparts.
In March, the Bay Area News Group reported it would be cheaper for a student from a middle-class background to attend Harvard than to attend Cal State or UC Berkeley, signaling the need for UC Berkeley to offer more financial aid in order to remain an attractive destination for top students.
In an effort to be more like its private peers, this January UC Berkeley laid out the Middle Class Access Plan, which emulates financial aid programs at schools like Harvard and Yale.
The plan caps parent contributions at 15 percent of total income for families making between $80,000 and $140,000.
Amid legislative gridlock at both the state and federal levels, the MCAP shifts the burden of accessibility to the campus’s own financial aid program instead of the state or the university at large.
Matthew Reed, program director at the Institute for College Access and Success, said the plan, which would exchange student loans for grant money, is a step in the right direction.
While the new plan comes in the spirit of the 1960 California Master Plan for Higher Education’s original promise of universal accessibility, it violates the plan’s core promise of a tuition-free education. In the plan, the authors took a firm stance against raising tuition for California residents.
“(Raising tuition) negates the whole concept of widespread educational opportunity made possible by the state university idea,” the report quoted University of Minnesota President James L. Morrill as stating. “It conceives college training as a personal investment for profit instead of a social investment. No realistic and unrealizable counter-proposal for some vast new resource for scholarship aid and loans can compensate for a betrayal of the ‘American Dream.’”
Though the MCAP appears to be the “counter-proposal” Morrill denounced, it may be the campus’s only means of maintaining accessibility as it seeks to reconcile its idealistic goal of universal accessibility in the face of fiscal difficulties exacerbated by waning state funding levels.
MCAP shifts the burden of funding accessibility away from increasingly unreliable state and federal partners and onto other developing funding sources.
Campus officials have estimated MCAP will require somewhere from $10 million to $12 million in funding for the next academic year, which will be drawn from “expanded financial aid resources, philanthropy and revenue from the increased number of UC Berkeley students paying non-resident tuition,” according to a campus press release.
Zach Williams, a UCLA political science doctoral student and recording secretary of the Los Angeles unit of UAW 2865 — the university’s graduate student union — took issue with the use out of state tuition to maintain access for Californians, saying it created a “questionable” reliance on out-of-state students.
However, this dependency on fees to keep costs in check is anything but new.
In 1970, just 10 years after publication, authors of a review of the Master Plan had anticipated an increasing gap between the cost-per-student and projected revenue.
In response, they reneged on the promise of tuition-free education. The authors of the review recommended, “Resident students with the ability to pay should share in the direct costs of their instruction at both the University of California and the California State University and Colleges.”
Though they added the caveat that tuition levels should never exceed levels at comparable public institutions in other states, the condition seems to have gone unnoticed.
The annual cost of attending including the cost of living at UC Berkeley has climbed to $28,162 for a student living off-campus, surpassing levels at all four of the university’s public comparator institutions.
Since the authors’ recommendations 40 years ago, the university, when faced with the question of how to reconcile fiscal difficulties, has had a propensity to look to tuition increases.
But by relying on out-of-state students, the plan produces unintended side effects.
While she took no issue with the use of philanthropy, UC Berkeley Haas School of Business associate professor and Berkeley Faculty Association co-chair Christine Rosen said the reliance on out-of-state students limits the number of seats available to California residents, defeating the entire purpose of increasing accessibility.
“There’s a way in which we might be borrowing from Peter to pay Paul,” Rosen said.
Unlike UC Berkeley, other schools have not relied on tuition to fund some of their significant financial aid programs. The University of Michigan, for example, funds its M-PACT financial aid program entirely with philanthropy.
UC Berkeley Chancellor Robert Birgeneau said in an April interview with The Daily Californian, “out-of-state and international students’ revenue from them is an important component of our ability to offer financial aid to middle-class Californians, which is a tremendous boost to the public character to the university.”
Still, UC Berkeley’s weaker endowment efforts — compared to schools like the University of Michigan or its private peers like Harvard and Yale — and continued dismal levels of state funding may force its hand toward even more out-of-state student fees.
The next few years will be a critical time for UC Berkeley and its goal of accessibility as the campus sees whether it can substantially increase its endowment. And, as the economy slowly picks up steam, the campus will soon learn whether the state plans to resume its investment in California’s higher education institutions or if it plans to continue steadily reducing funding.
In 2001, UC President Clark Kerr predicted the Master Plan would have its big test in the next 12 to 15 years.
He wrote, in the spirit of the labor economist that he was, “The test is whether enough student places, at reasonable tuition levels, can be created to continue universal access and full service to the labor market.”
The Middle Class Access Plan appears to be UC Berkeley’s strongest effort in achieving that goal. The test will be whether the campus can do so without abandoning its promise to the residents of California.
Curan Mehra is the lead higher education reporter.