The debate and discussion about the recently approved tuition increases has been marked by misinformation. So, let’s start off by dispensing two myths.
The first myth is that tuition increases will hurt students from lower-income families. In fact, low-income families will have better access to UC Berkeley with the tuition increase than they would without it. Yes, that seems counterintuitive, but that’s what happens when one-third of tuition is directed to financial aid. Currently, about 39 percent of UC Berkeley’s undergraduates have their fees and tuition completely covered by grants and scholarships. Under the new plan, Californian students from families with annual incomes below $80,000 will, in fact, continue to have their tuition and fees fully covered by financial aid. In addition, the tuition increases will not affect the vast majority of Californian students from families earning fewer than $150,000 annually. I do not mean to suggest that low-income students do not face real challenges. They do, and we will continue to maintain our focus on the programs that support access and affordability for lower-income UC Berkeley students. That, in fact, is what the tuition increases are expressly designed to do.
The second myth is that the need for additional revenue is a result of out-of-control administrative spending or executive compensation. The highly regarded nonpartisan Public Policy Institute of California just published a meticulous study showing that administrative expenses at the University of California, including salaries, have not risen substantially in recent years and indeed remain below market rates, regardless of whether your market reference is the Bay Area or other top-tier universities. What has changed, the institute reports, is state support for higher education, which on a per-student basis is now about half of what it was at its peak. That, the institute’s data clearly show, is what has been driving tuition increases for the last 20 years.
Those are the facts, and any responsible discussion of the university’s present and future must take them into account.
What makes UC Berkeley special is not just its academic excellence: There are other outstanding research universities in this country. Nor is it just the access we provide to low-income students: The cost of attendance at any public university is usually a fraction of what private peers charge. Rather, what makes UC Berkeley unique is that we are both accessible and academically pre-eminent — attributes that require resources to support financial aid, to recruit and retain the best faculty and to provide the campus community with the programs, facilities and support services it needs to thrive.
Now, there are those who will tell you the current 4-percent annual increase in state funding for the university should be more than sufficient, but that claim is mathematically challenged. At UC Berkeley, state funding has declined to the point where it only accounts for about 13 percent of our budget. Therefore, a 4-percent increase in state funding translates into a mere 0.5-percent increase in our overall revenue. That doesn’t even allow us to keep pace with headline inflation, over which we have no control.
Even though we have squeezed millions of dollars out of our operating budget through new administrative efficiencies, other expenses continue to increase, so we need to keep growing our revenues in order to provide you, our students, with the best value in higher education. This revenue has to come from somewhere, and we would much rather see the state stepping up to be a true partner with the university instead of pushing us to raise tuition.
All of us in the administration believe deeply that higher education is a public good by virtue of the research we conduct in the public’s interest, the future leaders we educate and the economic activity and innovation we generate. Study after study shows that for every dollar a state invests in higher education, it gets back four to seven dollars. This makes institutions such as the University of California one of the best investments for the public good the state government can make. That fact alone should make every voter wonder what our political leaders are thinking when they consider the university’s needs.
Yet, if higher education is a public good, we need to acknowledge that it also functions as a private good, given the material and intellectual benefits that accrue to individual graduates. According to the U.S. Census Bureau, those with a four-year college degree will, over the course of their lifetime, earn on average about $1 million more than those with a high school diploma. While the rallying cry of “Education must be free” may have superficial appeal, it is simply impossible to do what we do for free — so the real question is: Who should pay?
The university’s comprehensive tuition plan is a necessary step in the right direction, a component in a broader solution. Here at UC Berkeley, we will continue to aggressively pursue philanthropy, efficiencies and new revenue sources so we can direct every available dollar toward UC Berkeley’s world-class teaching and research. It is simply delusional, however, to think we can simultaneously reduce costs and maintain the current levels of access and excellence. Trying to achieve budgetary balance without additional revenue will simply drive the university toward mediocrity. This would not only deny the students at public universities the high-quality education the Master Plan promised but would, in turn, exacerbate the growing income divide and undermine the Californian economy.
It’s time for California to have a serious debate about how it funds higher education. While we believe the costs of education should be shared across stakeholder groups, that doesn’t mean the current balance is rational or fair. As our state’s economy recovers from several lean years, it is time to reinvest in one of our most valuable resources: public higher education. This is the message we should be delivering to Sacramento.
Nils Gilman is associate chancellor of UC Berkeley.