Facing an alarming state budget deficit of more than $34 billion and a weak economy, we must find ways to close the gap without crippling vital services or excessively raising taxes. Recently announced plans by the University of California and Cal State University for fee increases help a little, but what they really need to do is to charge market rate tuition, at least to those who can afford to pay.
Though it is arguable that tax dollars spent to establish institutions of higher learning benefit us all, the annual cost of instruction should be borne as much as possible by the students who benefit so greatly. Studies have shown that college graduates earn on average $19,000 more per year than those without degrees.
Few among us would quarrel with the University of California's founding purpose of making a first-class education affordable to all. But we are no longer the cash-poor agrarian society we were in 1873.
Today, the median family income of entering freshmen at Berkeley is $65,000, and more than 40% of them come from families with incomes above $90,000. Yet taxpayers still subsidize all UC students.
According to data from its Web sites, the UC system spends $4.5 billion annually to operate 11 campuses with 172,500 students -- about $26,000 per student. Yet fees average about $4,000 per year, compared with $24,000-plus at private universities.
It's shameful that while we are cutting badly needed K-12 education funds to save money, the UC system is selling a $26,000 education for less than $4,000.
The CSU system operates 23 campuses with 302,000 students at a cost of $12,059 per student, yet it plans to charge only $1,572. We may assume that many of its students come from less affluent backgrounds than do UC students, but is a Cal State education worth only $1,572 per year? Why not $12,000?
I do not mean to suggest that admissions should be based on ability to pay. There will be students whose families cannot afford to pay full tuition. Some may not even qualify for low- interest student loans. Those students should of course be subsidized based on need.
But assuming conservatively that only half the students at the two systems could afford tuition or student loans, the state would save $3.88 billion per year -- about 11% of the deficit.
Why is the present system elitist? Simply put, folks of modest means are paying for the education of children of more affluent families. The fact is that a greater proportion of the children of doctors and lawyers than of blue-collar workers qualify for admission to prestigious universities, although we may argue about the reasons. For those taxpayers whose children are excluded to have to subsidize tuition for children of generally more affluent people is a form of elitism.
As a bonus, market rate tuition could also help to increase minority enrollment without resorting to racial preferences.
Competitiveness for entrance to the premier campuses seems to have resulted in minority students being underrepresented, prompting UC admissions officers to look for ways to increase black and Latino enrollment.
With market rate tuition in place, well-to-do applicants who can afford the cost of private schools but who choose UC because it is cheaper will opt out, thereby making room for more of those otherwise qualified students from inner-city high schools who have not placed as high on test scores.
Market rate tuition could shift the cost of education to the primary beneficiaries while helping to reduce elitism.