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The plan for the M.B.A. program at the University of California at Los Angeles to give up state funds in return for more independence has become something of a Rorschach test in discussions over the future of public higher education. Has the UCLA business school come up with a way to prosper when the state won't provide much in the way of funds anyway? Or is one of the premier divisions of a great university poised to abandon its public mission?

While the business school at the University of Virginia has for years largely operated on a similar model -- and others have expressed interest -- the idea hasn't spread. Many see UCLA potentially influencing other institutions, since it is certainly not the only public university to see state support shrink while aspirations to compete with wealthy private institutions have grown.

The critics -- who appeared to have lost the battle in June, when the UCLA faculty approved it -- may have a new shot at blocking the plan. A University of California Academic Senate committee (with faculty members from throughout the California system) has reviewed the proposal and issued an unusually harsh report about it, tabling consideration of the idea. The panel found that the proposal raised questions about faculty priorities, access for students and the potential for donor influence of the business school. Further, the panel blasted UCLA for failing to answer numerous questions as it was reviewing the proposal.

The proposal to move the M.B.A. program away from state support (and some state controls) has been questioned by faculty panels in the past at UCLA. And the plan has come back from votes that appeared to kill it off before. But the committee that has just criticized the plan is the one whose approval would clear the way for Mark Yudof, president of the university system, to give the final go-ahead. And the analysis is so damning of the proposal that it is giving new hope to those at UCLA who never liked the idea in the first place.

A spokeswoman for the business school declined to comment on the specifics of the committee's analysis, except to say that officials there were "studying the implications" of the report.

The university, late Tuesday, issued a statement that defended the proposal, but did not address the specifics of the criticism in the faculty report. "UCLA leaders believe it is imperative to find innovative solutions to ensure continued academic excellence amid dramatic reductions in state support. The proposal to convert the UCLA Anderson School of Management MBA program from a state-supported to a self-supporting degree program adds an estimated $8 million for undergraduate programs campus wide, and preserves the university's public mission," the statement said. It noted the many reviews the proposal had at the campus level and referred to the Academic Senate vote at the system level as "an advisory action and not the end of the process."

Part of the problem found by the Coordinating Committee on Graduate Affairs was that there was no policy to allow for "self sufficiency" to be approved, and so the panel said that if the system wants to consider such proposals, it needs a policy. That would seem like a problem that could be solved by the creation of a policy. But the report also detailed numerous substantive problems with the idea, under which tuition is expected to rise and private donations are expected to far exceed the lost funds from the state (which are already a small fraction of the M.B.A. program's budget). Among the issues identified:

  • Lack of evidence that the plan would improve educational quality. Proponents of the plan have said repeatedly that greater independence from the state would promote better-quality education. But the panel said that there was "no evidence that the proposed conversion will improve the quality of education for any students," and that there was instead "the potential" for the shift "to reduce the quality of education for students in various programs." Specifically, the panel cited concerns about the potential impact on Ph.D. students as the M.B.A. program takes priority status.
  • Inconsistent answers on financial aid. The panel found that some business school documents suggest plans for increases in financial aid, while others don't. If there isn't additional aid (and tuition goes up substantially), the report suggests, access could be hurt for lower-income students. This was an area where the faculty panel said that UCLA's answers to its questions "fail to provide sufficient information, and in some instances are unclear."
  • Faculty priorities. The report said that the UCLA plan was "internally inconsistent" in that it says that the faculty teaching in a self-sufficient M.B.A. program would receive enhanced flexibility (presumably encouraging them to spend more teaching time there than in regular, state-supported courses), while at the same time saying there would be no change in faculty incentives.
  • Donor influence. The faculty panel noted that UCLA offered a "vehement denial" that donors could influence business school policy under the new system. But at the same time, UCLA told the panel that it has $19 million in pledges lined up -- if the M.B.A. program drops state support. "[D]onors are already trying to influence the school," the report said.

What Does the State Get?

The faculty report also challenges the idea that giving up state appropriations for more freedom going ahead is necessarily a fair tradeoff. It would be one thing, the report said, for the university to start programs from scratch without state support. But when a program like UCLA's M.B.A. becomes more independent there is not just the question of appropriations going forward, it said. The state's "past investment" matters too, the faculty report said, because Californians created the conditions under which a program can now seek more autonomy.

One way UCLA might meet this obligation would be to pledge a specific share of revenues to support financial aid for needy Californians, the report said.

"Any conversion policy should protect program access and affordability for California residents," the report said. "A state-supported program that proposes to convert to self-supporting status has, by definition, benefited from the historical use of resources supplied in part by California taxpayers."

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