Research universities

Lost Trust

There are two main narratives battling to define the current crisis at the University of California. While the California situation is an extreme example of what is happening to public higher education these days nationally, these dueling narratives can be found in many other states as well.

On the one hand, President Mark Yudof and the Board of Regents want everyone to blame all of the university's problems on the state. According to the administration’s narrative, the simple issue is that the state has defunded higher education, and due to a $1.2 billion cut from the state, the only thing the campuses can do is raise tuition (which we in California call fees), cut courses, lay off workers, increase class size, furlough faculty members, and demand that the state increases the university’s funding by $913 million.

The counter narrative, articulated mostly by the unions and the students, is that the university just had a record year of revenue, and the system does not have to raise fees or cut services. Instead, the counter discourse argues that the profit-making units should share their profits, and money earmarked for instruction should actually be used for educational purposes. While unions and students also insist that full state funding should be restored, they recognize that most of the state reductions were made up by federal recovery money ($716 million), fee increases (43 percent -- 9.3 percent in September, 16 percent in January, and another 16 percent next September) and cost saving measures that have already been undertaken.

A close analysis of the university's own audited financial statements (see page 52 of this document) for the fiscal year ending June 30, 2009 shows that in every major category of the budget -— research, medical profits, extension programs, and even state appropriations — the university increased its revenue. Thus, even though President Yudof declared a fiscal emergency during the summer of 2009 and was granted emergency powers to impose an austerity plan that included across the board salary reductions, it turns out that the university was never in better fiscal health. In fact, the university’s finances were doing so well that after the state reduced the university’s funding, the university turned around and lent the state $200 million.

When reporters asked Yudof how he could lend the state money at the same time he was cutting salaries, reducing enrollment, and laying off non-tenured faculty, he responded that when the university lends money to the state, it turns a profit, but when the university spends money on teachers’ salaries, the money just disappears. According to this logic, the university should just get out of the education business and concentrate on generating high bond ratings.

What many people do not know is that this emphasis on pleasing bond raters in order to gain a better interest rate drives many of the decisions of private and public universities today. For example, it was recently discovered that one reason why the university continues to raise tuition each year is that it has promised its bond issuers to use student fees as collateral for construction bonds. In this credit default swap, students take out high-interest loans to pay for their increased tuition, while the university gets low-interest bonds to build more buildings. Moreover, the bond raters have recently praised the university for having such a diverse revenue stream and for holding such a high level of unrestricted funds that can be used for any purpose.

When Yudof is questioned about the fungible nature of the university's $20 billion operating budget, he usually responds by arguing that almost all of the funds are restricted, and only money from student fees and state funds can be used to close the budget deficit. However, much of the university's money is only restricted by its priorities, and Yudof himself has admitted that the university needs to protect its reserves and help grow the profitable aspects of the university.

Yudof’s protection of the profit-centered units was highlighted when many of the highest earners in the university system were able to remove themselves from his furlough plan. First the people funded out of external grants were exempted, and then the medical faculty, some of whom make over $800,000 a year, were able to fight off any salary reductions. Meanwhile workers making less than $40,000 were having their pay reduced and non-tenured faculty were being laid off. The result of this process is the increased growth of income inequality in a system where already in 2008, 3,600 employees made over $200,000 for a collective pay of $1 billion.

Even with the revelation that many of the top earners are administrators and that there are now more administrators in the UC system than faculty members, many tenured professors have sided with the administration because it is much easier to attack the state for all of the UC’s problems. By blaming the state and the anti-tax Republicans, there is a clear enemy and an easy narrative. Moreover, by placing the onus of responsibility on the state, the university does not have to look at its own internal problems. However, if the faculty continue to buy Yudof’s narrative, there will be no way of fighting the continual increase in administrative costs and the further privatization of the university. This double move of corporatization and administrative growth should be a concern of all faculty members across the United States.

Yudof’s latest gambit is to ask the state, which he knows is facing a $21 billion deficit, to increase the university’s funding by $913 million. Everyone knows that the state cannot provide this money, and so when the state does not meet Yudof’s request, he will feel justified to make another round of fee increases and budget cuts. In this version of the shock doctrine, a fake crisis motivates people to give power to a centralized authority and to privatize a public good, while wages are decreased and profits are kept by a small group of power elites.

It is time for the faculty to stand up and join with the students and the unions to resist. Moreover, the university's lack of shared governance and budget transparency is but a symptom of the national move to strip faculty of any power and to shift control to an administrative class that sees higher education institutions as investment banks dedicated to pleasing the bond raters. Only the faculty can make education the priority at these institutions.

Author/s: 
Bob Samuels
Author's email: 
info@insidehighered.com

Bob Samuels is president of the University Council - American Federation of Teachers, which represents lecturers and librarians at the University of California. He teaches at UCLA and writes the blog Changing Universities.

The University vs. Liberal Education

It has by now become received wisdom: college students today are less interested in traditional subjects, and have become more professionally oriented. They’ve voted with their feet, choosing business, pre-med, and engineering majors over German, art history, or comparative literature. Clearly, it’s in the zeitgeist. Unfortunately for humanities professors, however, lower enrollment can translate into the elimination of entire departments: just ask German professors at the University of Southern California. But what’s to be done? The client is king, and students are our clients in higher education. The only problem with this logic is that universities in fact bear a considerable responsibility for the brain drain away from the humanities. By raising the cost of education to stratospheric levels, we oblige students to seek a higher return on their investment. It is this sort of economic calculation, I suggest, and not some alleged generational change, that is driving students in droves towards preprofessional degrees.

The rising cost of undergraduate education, especially at elite private institutions, has understandably become in these unforgiving economic times a target of much angst. Particularly jarring, for critics, is the increase in expenses related to administrative support: the percentage of staff who do not teach at Williams College – 70! – is routinely portrayed as thick layer of glut, ready-made for the chopping block.

I happen to disagree with most of these critics. Having gone to a public university in Europe, I am incessantly amazed by the advising, counseling, curricular opportunities, and overall support that students receive at Stanford University, where I teach. I remain profoundly jealous of their education, which I believe is second to none. At the same time, I am not blind to the source of this charmed life. It’s frightfully expensive to employ the staff needed to run the overseas programs, writing centers, freshman seminars, extracurricular activities, summer school, etc., that help make Stanford the university it is. I do not doubt administrators when they say that the average cost per student exceeds the already obscene tuition fees charged.

While the skyrocketing cost of college education is no doubt inexplicable from the outside (why should tuitions increase at a pace far faster than inflation?), the answer, from the inside, appears fairly humdrum. Put simply, universities are engaged in an arms race: they compete to bring the best-armed students to their campuses. This means incessantly inventing new programs. Stanford offers freshman seminars? Harvard will too! Yale has highly rated residential education? Penn must improve! Top schools similarly compete for faculty academostars, luring them not only with high salaries and other perks, but also a reduced teaching load. The price for such celebrity academics, of course, gets passed on to the student. This arms race at the top – and liberal arts colleges seem to suffer from the same educational-industrial complex – thus drives the cost of attending the Ivies way up. And when students have to pay 40 grand to attend Cornell, other colleges and universities must raise their tuitions as well, to stay in competition.

The exponential rise of tuition costs is not, therefore, the result of some nefarious plot. Most professors (alas) are not lining their pockets, and the salaries of top administrators are still dwarfed by those of CEOs in the private sector. The money raised by higher tuitions does actually provide students with more services and opportunities. To repeat: I am unceasingly jealous of my students at Stanford. But there is a hidden cost: once students (or their parents) are called upon to deliver their pound of flesh, they fall under a huge amount of pressure to make that investment pay.

I cannot help contrasting this situation with my own experience as a student, at a public university in Switzerland. I paid the equivalent of $35 a semester in tuition; halfway through my studies, the price was raised, after much protest, to $300. It was a fairly bare-bones experience: our professors were world class, but there was zero support for students. We had no advisers, no writing center, no extracurricular activities, no dorm – we didn’t even have a graduation ceremony. Because the cost was so low, however, we had remarkable freedom – freedom to take as many seminars as we wanted, to space out our exams, to try out new subjects, and more generally, to take as long as we wanted. I spent six years as an undergraduate, the norm at the time (although you could technically graduate in four).

European universities are now in a different sort of financial crisis, and I doubt we have many administrative or curricular lessons to learn from them. But they do remind us that the cost of an education can act as a filter for intellectual choices. Students will be far less willing to take risks when they’re paying a fortune to enroll. It’s not the zeitgeist: it’s common sense.

The irony, of course, is that a B.A. in French or classics provides students with many of the qualities that employers most commonly request, such as critical thinking, cultural proficiency, and good writing and communication skills. A solid liberal education is just as beneficial for the vast majority of professions; in addition, it prepares for a life well-lived, and not just for a career. But if universities continue to charge as much as they do, they will progressively steer students away from the very subjects that, until recently, constituted the very core of the university.

There is no easy or obvious remedy for this situation. It is hard to imagine an incoming university president at a leading institution, say, pledging to halve tuition. Of course, at institutions with large enough endowments to offer generous financial aid packages, a considerable percentage of students do not even pay full tuition. But these institutions can probably be counted on two hands; the vast majority of colleges and universities depend heavily on tuition to fund instructors and staff, sustain campus buildings, pay heating bills, etc. Some have suggested cutting back on athletic facilities or other extracurricular programs, yet in many cases the funding for these expenditures comes from targeted donations.

Until the tuition imbalance stabilizes – and eventually Congress may well intervene to ensure that it does – humanities departments need to act more aggressively to ensure their survival. Increasing the turnout of majors may be beyond our reach, but we perhaps need to rethink the relationship between research and teaching. Do highly specialized courses offered by individual departments provide the best kind of background in the humanities for students headed for careers in law, engineering, finance, or science? Or do we need to offer more cross-disciplinary courses, ideally team-taught by faculty from different departments, on core questions and topics in the humanities? The bulk of our teaching is geared toward majors and graduate students. If we do not want to be the victims of the next recession (or, if it lasts long enough, the current one), we also need to target those students who feel they do no longer have the luxury of specializing in a humanistic subject.

Author/s: 
Dan Edelstein
Author's email: 
info@insidehighered.com

Dan Edelstein is assistant professor of French at Stanford University.

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