A first: UC fees exceed state funding

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For the first time, the total amount that University of California students pay in tuition this year will surpass the funding the prestigious public university receives from the state. It is a historic shift for the UC system and part of a national trend that is changing the nature of public higher education.

Propelled by budget crises in California and elsewhere, the burden of paying for education at a public college or university, once heavily subsidized by taxpayers, is shifting to students and their families.

At UC, the changes are prompting soul-searching among administrators, alumni, students and others about whether the 10-campus, 230,000-student system is at a crossroads.


Some say the university must choose among facets of its long-standing public mission -- to offer a widely accessible, moderately priced and high-quality education to California’s young people -- as it supports itself increasingly through tuition, private fundraising and growing numbers of out-of-state students.

“It’s a significant moment,” said Terry W. Hartle, senior vice president at the American Council on Education, an umbrella group for the nation’s major universities.

Compared with other states that already have passed most educational costs to students, California historically has kept tuition low and provided generous support for higher education. But now, Hartle said, the Golden State is becoming more like others in the view that students are the main beneficiaries of a college education and should bear most of the cost.


For most of its history, UC charged students little or nothing for their education. In recent years, though, multimillion-dollar cuts in state funding have led to soaring tuition. Back-to-back increases for the coming school year have pushed tuition and fees for undergraduates to more than $13,000, with the total price of attendance, including room and board, topping $31,000 a year.

Patrick Lenz, UC’s vice president of budget and capital resources, said the funding change is historic and probably permanent. “When these things happen, how often do they reverse themselves?” he said. “Never.”

The university, founded in 1869 as a single campus, was a compromise between those seeking a school to train frontier experts in mining, agriculture and engineering and others who pushed for a humanities focus to fulfill the young state’s cultural aspirations. As it expanded beyond its Berkeley campus, UC’s ascent paralleled California’s growing importance in farming, manufacturing, defense and science.


Patricia Pelfrey, an education researcher and co-author of a UC history, said that the university weathered previous economic crises but that the task is now tougher given the state’s mounting budget woes.

“It is really a question of defining what kind of institution UC will be five or 10 years from now and whether the assumptions that guided us in the past ... are going to guide us in the future,” said Pelfrey, of UC Berkeley’s Center for Studies in Higher Education.

State funding for UC and the California State University was cut $650 million this year for each system. As a result, in-state UC undergrads will pay 18.3%, or nearly $1,900, more in tuition and fees than last year. Many will get financial aid, and students from families with annual incomes up to $120,000 may be eligible for reprieves on the latest increases.

UC leaders note that its tuition is on a par with other top public research schools. The University of Michigan at Ann Arbor will charge state residents about $14,000 this year; the University of Virginia, $11,600; and the University of Texas at Austin, $10,000. But UC student leaders say that living costs are much higher in California.

Sherry Lansing, a former Hollywood studio executive who chairs UC’s Board of Regents, said the university was trying to find new revenue to replace state funding and avoid repeated tuition hikes. She said it must become more entrepreneurial to keep academic quality and student access.

Under consideration are efforts to boost private and alumni donations; reap more financial rewards from inventions and companies born in UC labs; and develop online classes that would attract a broader paying audience. The university also is seeking to save money by consolidating payroll and computer support functions. “We are just at the beginning of this,” Lansing said.


UC is one of many public universities experiencing a fundamental shift in how it operates, with more emphasis on revenue-producing activities, Hartle said.

“It doesn’t mean you have a second-rate university,” he said. “You can have a first-rate university but more focused on their bottom line. And when that happens, the public university starts looking more like the private university.”

UC expects to collect $2.9 billion in tuition this school year, up from $2.56 billion last year. The state is to provide $2.4 billion in general funds and lottery money, down from $2.9 billion last year, and that funding could drop if tax revenues weaken. The university’s total budget, including hospital revenues, federal research grants and donations, is $20 billion; UC leaders note that most of that money is restricted and cannot be used for undergraduate education.

One way UC has tried to raise revenue has been to enroll more out-of-state undergraduates, who pay significantly more than California residents. The goal is for nonresidents to make up about 10% of UC undergraduates, still far fewer than at top public schools elsewhere. This fall, UC Berkeley will have the system’s largest share of non-Californians, nearly 30% of freshmen. UC San Diego and UCLA are next, with about 18% each.

The University of Michigan’s Ann Arbor campus, which has seen sharp state funding cuts over the last two decades, is sometimes seen as a possible model for UC. About 40% of students in last year’s freshman class at Michigan were from out of state, and the campus is boosting its recruitment worldwide. It has closed some research centers and increased alumni fundraising. Undergraduate fees vary by academic divisions, and the university’s business school has moved to mainly private funding.

With such tactics, Michigan has been able to maintain financial aid for needy students and protect unprofitable academic departments, including the humanities, that have suffered deep cuts at other schools, said John Burkhardt, a Michigan education professor who directs the National Forum on Higher Education for the Public Good.


He said the campus is a hybrid, its public mission unchanged but its financing increasingly private.

UC is considering similar actions. The regents are debating whether campuses should charge undergraduates varying tuition levels, and UCLA’s Anderson School of Management wants to wean itself from state subsidies in exchange for higher tuition.

Deeper reforms are needed, said Steve Boilard, higher education director of California’s Legislative Analyst’s Office. Among other areas, he said, UC should increase online classes, eliminate duplication of academic departments and study whether professors devote too much time to research and not enough to teaching.

As students pay more, he said, they deserve an “improved, modernized” university.