UC dependence on high out-of-state enrollment fees is promoting inequality

Top University of California administrators made headlines in August when they declined the offer by state legislators to provide the system an additional $25 million. The offer was contingent on the university accepting another 5000 in-state resident students.

Stephen Handel, associate vice president for undergraduate admissions, told legislators at a hearing of the Assembly Education Finance and Higher Education Committee that UC complies with all state requirements for admitting California students. But about the multi-million offer, he said, “We’ll get back to you very soon.”

In the university’s calculation, an extra $25 million doesn’t compare to the high fees paid by out-of-state students that UC has become dependent upon. In-state residents pay $12,192. The system gets $36,840 per non-resident student — $24,700 more. If the university enrolled 5,000 more in-state students, as the legislators wanted, it would lose the extra $123.5 million those same spots generate from out-of-state students.

“UC clearly has a separate and unequal funding model based on race and class, and this situation only promises to get worse.”

    — Bob Samuels, UC-AFT President

This year alone, UC will offer to enroll an additional 2,453 out-of-state students, while offers to in-state students will decrease by 1,039. Over 25 percent of new students enrolling at Berkeley, Los Angeles, Davis, and San Diego pay out-of-state tuition. Those campuses become overfunded, while the others remain underfunded.

That, according to Robert Samuels, president of UC-AFT, who also testified at the August 25 hearing, is increasing inequality among the campuses, and decreasing diversity at the flagship campuses.

“In part, this is caused by a change in the way the university handles funds,” he said. Up to seven years ago, tuition was paid to the Office of the President, which doled it out to campuses using an opaque system. After a state audit in 2009, the administration started allowing each campus to keep the tuition paid by its students. “The idea was that the money generated on campus would stay on campus, and state funds would even out the disparities,” Samuels said. “The result is a very unequal system.”

Four flagship campuses attract students from around the world — Berkeley, Los Angeles, San Diego and Davis. Berkeley enrolled about three times as many non-residents in 2012 as it did in 2000; UCLA enrolled about eight times as many.

Last year Berkeley took in $40 million from enrolling 1,762 non-residents, and UCLA $41 million from 1,805. Santa Barbara got $11 million from 670 out-of-state students, and Riverside got only $7 million from 328.

“As the state auditor pointed out in 2009, the campuses receiving the lowest per student funding were also the campuses with the most underrepresented minority students,” Samuels adds. “Those campuses — Riverside, Merced, Santa Barbara, Santa Cruz — will continue to receive the lowest level of revenue, and the campuses with the wealthiest students will receive the most funding.”

Sixteen percent of Berkeley students are from underrepresented minorities, while Riverside has 41 percent. At Merced, serving San Joaquin Valley’s rural and farm worker families, 61 percent of the students receive Pell Grants and, in 2012-13, had no out-of-state students. “UC clearly has a separate and unequal funding model based on race and class, and this situation only promises to get worse,” Samuels concludes.

UC-AFT has a plan for overcoming growing inequality. “The state should offer $10,000 per student instead of $5,000, combined with enrollment targets or a cap on out-of-state enrollment,” Samuels explains. “Campuses with high funding should shift more funds to other campuses — this would reduce the incentive to boost out-of-state enrollment and open more spaces for residents.”

While Samuels believes the Legislature is interested in dealing with this issue, its power is limited by the university’s autonomy. “Providing part of UC’s budget is virtually their only leverage — this time they tried to do it on the cheap,” he says. “But, increased state funding tied to limits on out-of-state enrollment is the answer.”

— By David Bacon, CFT Reporter