On Thursday, the Regents of the University of California met at UCLA and voted to increase student fees (tuition) by about 32%. There will be a 15% increase this Spring, and another 15% increase in Fall 2010.
Friday, while the theoreticians where at the Bay Area Theory Symposium, was a day of protest on campus, which showed the best and the worst of Berkeley.
Protesters went around campus buildings pulling fire alarms (bad), resulting in my colleague David Tse teaching probability and combinatorics outside in the rain (very good — or as one of the youtube commenters put it, “epic WIN”):
A group of about 40 students tried to occupy some rooms of Wheeler hall, the English department building, and up to 2,000 students showed up outside the building on a cold (by California standards) and rainy day (very good).
A few days of occupation at Wheeler would have probably received ample news coverage and would have publicized the fundamental fact of the present situation: that the University of California, and U.C. Berkeley in particular, will lose its character of public university if the funding crisis persists, and that the budget cuts are not free money for the tax-payers; they will have real negative consequences of hundreds of thousands of middle-class families.
Yet, the administration (very bad) instead of supporting the students sent the campus police first, and then police in riot gear from the Berkeley police department and the Alameda county’s Sheriff’s force (and possibly Oakland police, whose presence is disputed) to arrest the would-be occupiers and beat up the crowd outside Wheeler.
It’s anybody’s guess what the Chancellor might have been thinking.
10 comments
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November 23, 2009 at 2:07 pm
JeffE
I see things haven’t changed much at Berkeley in 15 years.
November 23, 2009 at 7:51 pm
gappy
Usually I become skeptical when I read/hear the term “middle class”, because he concept of “class”, let alone “middle class”, seems mostly a rhetorical one, signifying “those whose entitlements must be, by definition, saved”. But in the case of the UC system, and of public universities in the US and elsewhere, I’d point to an essay by a famous economist from UCLA of all places. The highlights of Armen Alchian’s paper are here: http://econlog.econlib.org/archives/2009/11/uc_tuition_the.html ; the original paper is at http://tinyurl.com/notuition . This is not to say that a tuition increase is manna from heaven, but that it probably not true, and most definitely not self-evident, that a tuition increase detracts from an equitable education, and that “hundreds of thousands of middle-class families” will suffer negative consequences.
Ian Ayres, hardly a Palin supporter, has a perhaps a more mundane tack on the problem, but reaches the same conclusions here: http://freakonomics.blogs.nytimes.com/2009/11/23/why-californias-tuition-hike-might-be-a-good-thing/
November 23, 2009 at 11:49 pm
luca
The University of California gets about 40,000 undergraduate freshman per year. A much higher fraction than at major private universities (or even other top state schools) of these students qualify for Pell grants, which is an indication of low income. Many of the others come from families that are neither poor nor rich, and are more likely to come from Fremont than from Beverly Hills. If the past twenty years are any indication, in the next twenty years there will indeed be hundreds of thousands of Californians who will be able to attend the U.C. either at the cost of significant personal sacrifices, or not at all.
I understand the logic of an analysis that says that if a higher education is indeed more valuable than its cost, then it makes sense for all qualified students to pay full price for it, regardless of economic situation, because they can borrow the money and come out ahead. This is, however, the kind of “freshwater economics” in which people are “rational agents” who have access to unlimited credit and maximize their expected returns with no concern for risks. It is the reasoning that establishes that unemployment is either provably impossible or it occurs because people are too picky about what job to do.
In practice, people whose family finances are already stretched might balk at taking on excessive debt to finance their university studies. If so, that human capital is lost, and the loss affects society at large because it loses a potentially more productive member (and a higher tax-payer). I can’t point to a study quantifying how much the University of California has contributed to the California economy, via research and education, but I am sure that it is much more than the state pays for it. At the very least, the University gets more money from federal research grants than it gets from the state.
As for the idea that higher fees and more financial aid are, overall, more progressive (or more meritocratic, depending on the criteria for financial aid), it has merit but it has little bearing on the current situation at U.C., because the fees are not raised as a revenue-neutral way to redistribute the cost among students; they are raised to increase revenues.
November 24, 2009 at 4:12 am
gappy
I think this has nothing to do with “freshwater economics”, not only because Alchian is not one of them, but because the reasoning is much closer than, say, Life-cycle Consumption Hypothesis than Rational Expectations (was Modigliani a freshwater economist? I don’t think so). When you say that “Many of the others come from families that are neither poor nor rich, and are more likely to come from Fremont than from Beverly Hills.”, I am afraid that you are on the wrong side of facts. Just five years ago, the NYT reported that:
“More members of this year’s freshman class at the University of Michigan have parents making at least $200,000 a year than have parents making less than the national median of about $53,000, according to a survey of Michigan students.”
[http://tinyurl.com/publictuition]
I suspect that the distribution is not much different in the UC system today. In my view, this is beside the point though. The same “middle class” who is perennially under threat has sufficient access to retail credit markets to finance the cost of education. It’s the poor who don’t have it. Reducing or controlling tuition is a very blunt instrument to give them access to education or mobility. If U Mich is any indication, tuition should be indeed increased for the vast majority of students, and financial aid should be concentrated and extended at the bottom of the income distribution of households.
At last, I am also sure that the money the state has put in the UC system has been very well spent, but this is beside the point. The point is whether higher tuition for public education reduces justice, not whether UC is a good investment. Focusing on the second issue would require a very different reasoning altogether.
November 24, 2009 at 5:47 pm
Satish Rao
Hello gappy,
FWIW, Luca rarely is on the wrong side of facts….
http://economix.blogs.nytimes.com/2009/09/28/poor-students-at-rich-colleges/
Perhaps even the article you cite [http://tinyurl.com/publictuition] do not
imply that tuition should be increased for the “vast majority of students.”
……
“Michigan is still not dominated by wealth as some private colleges are. Almost half of its students are from families earning less than $100,000 a year, the student survey shows. But the changes are still unmistakable, say professors and others here.”
Michigan Costs: ~23K in state.
I think your article also suggests that the low number of poor students
is more due to a differential in resources prior to entering college rather than during…..(which is pretty obvious from a cursory look at middle class
culture these days…)
Cheers,
Satish
November 24, 2009 at 7:13 pm
gappy
Satish, I am glad you believe that Luca gets his facts right, yet I am sorry that you get them wrong: U Michigan has in-state tuition has in-state tuition between $11,659 and $13,141 according to Wikipedia. According to the original source (http://ro.umich.edu/tuition/full.php#Lower_Eng ) an engineering undergraduate pays $12,284 for two full terms.
For what pertains my article(s), I mentioned the NYT on U Mich for its factual content. And the facts are that flagship public universities are attended by students of families that either can pay for education, or have access to credit to finance that education. $100,000/yr is the 85th percentile of household income, and not a negligible income in Michigan. My conservative guess is that at least 80% of U Mich students come from families earning more than the median income. The family income distribution of students doesn’t even mimic the distribution of the population at large. It is vastly skewed, on the wrong side.
If the definition of middle class is “neither poor nor rich”, then I don’t believe its members should be entitled to a subsidy, as long they can materially pay for, or finance the cost of, education. Their income differential will justify the investment. Those who can’t should instead be subsidized directly, and at a much higher rate than the current one. In other terms, effective cost of higher education should be much, much more skewed than it is today, with the majority of students paying substantially more, and a substantial minority of deserving student paying much less, or even being actively supported in their study. I believe UC has taken a step in this direction, by increasing both tuition and financial aid but in my opinion both should be much more pronounced.
November 24, 2009 at 9:52 pm
Satish Rao
Apologies, I was quoting total cost…
http://www.finaid.umich.edu/Financial_Aid_Basics/cost.asp…
I guess I could have spelled that it out….
November 25, 2009 at 5:20 pm
luca
In 2007-08, of students who were “dependent” of their parents:
The data was unknown for the remaining 15.1% of students. (source.) Indeed a large majority of students come from families that are neither rich nor poor. (And we have more economic diversity than other state schools, lile Michigan, who are further along the path to privatization.
I have already agreed that increasing tuition and increasing financial aid in a revenue-neutral way is a good thing: it takes according to one’s ability and it gives according to one’s needs.
By the same token, it is better than the University decided to extract $400 millions from the students by raising fees by $600 millions and increasing financial aid by $200 millions, rather than just by raising fees by $400 millions.
What is being protested is the extra $400 millions that the students will have to pay.
The consequence of the increase will be that some students (the recipients of financial aid) will pay about the same, a few students will pay more but in a way that is negligible to their family income, and many students will pay more in a way that matters to their family finances. For those neither-rich-nor-poor students the fee increase is an unqualified bad thing.
Another point worth thinking about is the long-term trend. In the past twenty years, the state contribution per student adjusted for inflation is down about 40%. If, in the next twenty years, it goes down another 40%, and all the difference is covered by increasing tuition, then tuition per student would have to go up about 60% in today’s dollars. Because of the practice of setting aside 1/3 of tuition increase for student aid, however, tuition would actually have to go up by 90%, or about $20,000 in today’s dollars.
November 25, 2009 at 5:22 pm
luca
p.s. the median household income in California is about $50k
November 25, 2009 at 8:53 pm
gappy
The household income in California is $55,450 as of 2007. Although the income distribution of students at UC is closer to the population at large than Michigan, it is still skewed in the same direction. One could interpret this discrepancy in opposite ways. One side may argue that we have strayed too much from the ideal of free education, and this is the result. On the other side (mine), I would argue that differences in tuition (and cost of education) are far too small among students of UC. At least we agree on this point. Where we still disagree is on the implicit assumptions of what is equitable for students. If you are satisfied with the Marxian maxim quoted by Luca, read no further, since there is not much left to debate.
If not, you can agree that it is a truism that a fee increase is an unqualified bad thing *for those who incur it*. Is it a bad thing for society at large, or at least for California? Is it bad that a fraction of students won’t be able to attend UC next year. I don’t know, but at the very least, the answer is not obvious, because one should be consider alternative ways to spend the state’s money. I can imagine a good number of investments more worthy than subsiding university students.
What I believe however is that the financial benefits of attending UC will outweigh the education costs for these same students (and in addition they will enjoy countless intangible benefits). To extend this just a bit further, a disproportionate amount of current UC students will occupy the top decile of household income distribution, twenty years from now. That the vast majority those who can either pay or borrow a substantial part of their educational costs do so is just a form of progressive taxation.