UC Approves Tuition Increases

MAUREEN CAVANAUGH: This is K P B S midday edition. I'm Maureen Cavanaugh. The University of California regions has just approved a substantial multi-year tuition increase. The plan is to raise tuition five percent at U C schools every year for the next five years. Protests over those increases have gotten heated in the last few days outside of the regents meeting hall in San Francisco. Student protesters got into shoving matches with police and a glass door was shattered but despite the anger, the plan is generating some California legislators to say it's really a ploy by the regents to get more state funding for higher education. To start out I would like to welcome KPBS educator reporter Matt Bowler to give us some background on the story. Hi, Matt MATT BOWLER: Hi, Maureen. MAUREEN CAVANAUGH: The plan approved this morning by the regents is, like I said, five percent increase at the U C schools for each of the next five years. Give us an idea of how much that will raise the actual amount of money students have to pay. MATT BOWLER: It's a little bit like credit card interest in a way. Five percent on top of five percent next year, and then five percent on top of those two five percent. Example - this year student’s tuition for a year is 13,000 dollars. Next year it's going to be 13,995 which isn't that significant. Hit year two and it's 14,663. In year three 15,000 and up exponentially from there. MAUREEN CAVANAUGH: It hits almost 17 thousand dollars by the end of the five-year period, right. MATT BOWLER: It does. And many people will remember back in '07 tuition was just right around seven thousand dollars at the U C system and it's been going up steadily since then. Compare that to the C S U system which was just under three thousand dollars. MAUREEN CAVANAUGH: Now, U C president Janet Napolitano pushed for this increase; what is her argument for raising tuition? MATT BOWLER: She says if we set these rates now it will eliminate some of the vulnerability in the tuition setting process that they won't need to make as dramatic leaps in the future because they will be able to plan for their finances. But she also goes on to say if the state is able to give the U C system more money maybe they will be able to reduce the tuition raises; however, she goes on to kind of contradict herself in a way by saying these tradition raises they've approved don't actually keep up with inflation so they are not as significant as they think they could potentially need. MAUREEN CAVANAUGH: MAUREEN CAVANAUGH: There have been some elected officials in the state including notably governor Jerry Brown which out strongly against this plan, some rumblings that the U S C system is trying to hold the legislature hostage when it comes to how much funding there is for higher equation, tell us about that. MATT BOWLER: Jerry Brown says a lot of this money comes from prop 30 as the money meal it isn't what the U C system wants. It's still significant and they should work harder to find a way to keep the U C system more affordable. A lot of students here I've been talking to also pointing out how many of the U C chancellors have been receiving raises most notably an L A times article last September how the regents okayed raising the chancellors salaries up to 20 percent, so there has been a lot of conflict there. MAUREEN CAVANAUGH: Now the rate hike has been approved, Matt, when does it go into effect? MATT BOWLER: As I understand it goes into effect next year, so next year students are going to pay 13,965 dollars in tuition. Out of state students will pay significantly higher amount than that. MAUREEN CAVANAUGH: I've been speaking with K P B S educator reporter Matt Bowler. Matt, thanks a lot. MATT BOWLER: Thank you. MAUREEN CAVANAUGH: Joining me now are my guests Jacob Jackson, research fellow with the Public Policy Institute California. Jacob, welcome to the show. MATT BOWLER: Thank you. MAUREEN CAVANAUGH: And Kerry Traylor is college consultant in San Diego's North County with College Strategy Experts. Kerry, welcome. KERRY TRAYLOR: Thank you for having me Maureen. MAUREEN CAVANAUGH: Now, Jacob the Public Policy Institute released a report just last week on tuition hikes on all of California's public universities; how much did you find out about how much tuition has gone up? JACOB JACKSON: We found tuition over the past 20 years has more than tripled at the U C and C S U. And more recently we've found that following the deep budget cuts by the state in the four years between 2008 and 2011, the average fees and tuition at U Cs increased from about eight thousand dollars to about 13 thousand dollars or about a 64 percent increase. At that same time, ,the C S U there was about a 70 percent increase from about 38 hundred dollars a year to about 65 hundred dollars a year however since 2011 tuition has remained flat. MAUREEN CAVANAUGH: Now, because there was a freeze put in 2011; is that correct. JACOB JACKSON: Correct. MAUREEN CAVANAUGH: Okay, the reasons for the increase -- you mentioned state cutbacks, is that state budget cuts and cutbacks; is that the only reason that these tuition rates have gone up so dramatically? JACOB JACKSON: Research suggests between 2008 and 2012 the state appropriations to the U C and C S U fell by about two billion dollars or about 30 percent. And the state is currently supporting a 30 year low in per students’ subsidies to our four year universities. And California has decided to make up for those cuts with raises in tuition at the C S U and the U Cs. MAUREEN CAVANAUGH: Now, some have pointed out expenditures at this publish institutions are raising we just heard from Matt Bowler complainant about salaries getting 20 percent boost or so in executive salaries at the C U system; what did your report find out about that? JACOB JACKSON: Generally we found expenditures at the university haven't changed much with the resent tuition increases. Costs have shifted from one area to another and fortunately we need a lot more fine grain data to tell exactly how universities spend their money, but from what we can tell instructional costs which make up a large bulk of a university's finances haven't increased at all, so it hasn't gone toward paying faculty or staff a lot more. Administrative costs haven't changed much either. The one area where we did see increase was students’ services and that would cover students’ organizations, counseling, things like that. There has been a small increase, but none of these increases add up to the increase in tuition leading us to suggest it's most likely from decreased spending from the state. MAUREEN CAVANAUGH: Again as Matt Bowler was telling us it wasn't prop 30 that half set sales increase that many Californians vetted for several years ago, wasn't that supposed to avoid tuition increases? JACOB JACKSON: Proposition 30 was supposed to keep further, deeper cuts from happening to higher education. Also to restore some of the funding that was already cut. Reducing the need for the universities to raise tuition. I think there are disagreements about how much of the cut funding prop 30 was supposed to restore. The governor thinks he's giving the U C what they deserve and the U C seemed to think they deserve more of the prop 30 money. MAUREEN CAVANAUGH: Now Kerry Traylor, the increases approved today will push tuition up in a five-year span. If they remain the way they are to nearly 17 thousand dollars, where does the tuition of almost 17 thousand dollars put U Cs in relation to private universities? KERRY TRAYLOR: You know, Maureen just mentioning the 17 thousand dollar tuition cost is unfortunately misleading, with all due respect, because tuition alone represents less than half the full cost of attending a U C. Families look at this roughly 17 thousand dollar tuition sticker price and think that is all that they will pay when in fact the all in cost of attending a U C is now going to average very closely to 40 thousand initially and as much as 60 thousand after five years, it sounds like to me. And worse what students and parents don't understand until it is too late is that the U Cs give the vast majority of aid in the form of loan at rates of four point six six percent for students loans and seven point two one percent for parent loans and this is at a time when families are earning only about two percent on their money market funds. Let’s also be very clear students are only allowed to take 27,000 dollars in federally guaranteed loans over four years which is not even enough to pay for one year of the all in cost at a U C. More over the U C (CHECK AUDIO) college and universities fail to be transparent about the fact they do not actually meet 100 percent of families demonstrating financial need as calculated by the federal financial -- MAUREEN CAVANAUGH: Well Kerry, let me stop you there and let me go back to my question then. The figures that you've given us are quite astounding. Where does that put the California's University of California schools in relation to private universities with this tuition increase? KERRY TRAYLOR: Right. So to compare these costs U C costs with private schools the fact is that private colleges and universities give away a lot more free money than public schools including the U C's do. That's why private schools can often cost a great deal less than the all in cost of a U C despite on the fact, on the face of it, private schools look more expensive. MAUREEN CAVANAUGH: I see. KERRY TRAYLOR: But families don't know this until it's too late and they are seduced by the fact they think the U C's are the cheaper schools. I have personal as well as professional experience with this. My daughter got half rides at Boston college and North Eastern and a 188,000 dollar scholarship at TU lane whereas at a regents scholar at Berkley she was only offered 2500 dollars scholarship money and that's very typical for the families that I work with here in my office. MAUREEN CAVANAUGH: Jacob Jackson, how have tuition increases affected California students? JACOB JACKSON: In the most resent set of tuition increases from to 2008 to 2011 studied these and we found that, first, most students don't pay full tuition for going to college, grants and scholarships, financial aid that students do not have to pay back often lower the cost of college for students. Grants and scholarships can come from the federal government, state government institutional and private sources. And in fact grants and scholarships, over half of the students at U C pay no tuition at all. Now to the point the total cost of college is a lot more than tuition, that is definitely the case. We know college includes books, room, and board other educational expenditures, but our study found that a student’s net price, which is the total price of college the over 30 thousand dollars, that it cost to go to a U C right now minus the grants and scholarships the money that students don't have to pay back that they receive from federal, state, and institutional private sources has remained constant for families making under 110,000 dollars on average from during these tuition increases from 2008 to 2011. MAUREEN CAVANAUGH: So in essence what you're saying, your study found if a family makes less than one 110,000 dollars that the tuition increases haven't impacted students actually all that much. They may in the short term but not in the long term. JACOB JOHNSON: That's right. There are a couple groups really impacted by these tuition increases those, families making over 110,000 dollars. Their total price went up. Their net price went up as well and their net tuition went up. Another group is a group that either doesn't apply for financial aid even they are eligible or doesn't receive financial aid because they are not eligible. So students that don't apply for financial aid for financial aid their costs rose a lot as well potentially at the same rate as tuition. MAUREEN CAVANAUGH: Kerry, we're already seeing students who either, their family makes too much money or they're onto graduate school, they are burdened with huge students loans - from what you see, how is that affecting how young adults are actually being able to start their careers and start their independent lives? KERRY TRAYLOR: Right. That's a very good question. I think this has been somewhat well documented in the media, student loan burdens are certainly having a very negative affect on students’ future prospects. In fact, the New York Times and others have noted how the housing recovery is actually being hampered by educational debt, the number one source of consumer debt in this country, outpaces consumer credit card debt. I feel sometimes like Dr. Seuss, the Lorax - instead of speaking for the trees, I'm speaking for the parents and students out there that can't get a reasonably priced education. And Jerry brown and state assembly speaking Tony Atkins obviously agree with me. I had a conversation just recently in my office with a San Diego physician who told me she had hired a young doctor in her office just this spring who was over half a million dollars in debt for her under graduate studies in medical school and can't get a car loan, can't buy a home and her credit rating has really been affected. MAUREEN CAVANAUGH: Let me ask you -- I'll ask you to keep it short, Kerry, we're almost out of time; are some already beginning to question if going to college is worth the cost? KERRY TRAYLOR: I get asked this question all of the time and there are some statistics that suggest college is still worth the investment and I would point to the per research foundation on this I think it really depends on what the student plans to do with their college investment. When college costs as much as the hope diamond you have to look at return on investment. And some career fields provide a high return on investment and others don't. There is a very good website in this regard called pay scale.com. But I would note that the U S News and World Report annual ranking of the best colleges and universities in America which is what everyone talks about, does not take output measures like salaries of graduates into account. MAUREEN CAVANAUGH: Okay. I'm going to end it there. Thanks to both my guests. I want to thank so much Jacob Jackson with the Public Policy Institute California and Kerry Traylor with College Strategy Expert. Thank you both very much. JACOB JACKSON: Thanks. KERRY TRAYLOR: Thanks.