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By Tim Hunt

Regents wrestling with tuition increase tomorrow

Uploaded: Nov 18, 2014

The University of California regents will face up to a challenge tomorrow—do they directly deal with students and Governor Brown—or do they continue to roll the dice on finances?
Soaring tuition and fees during the recession left many students and parents both frustrated and, often in substantial debt. The new U.C. President, former New Mexico Governor and Homeland security chief, Janet Napolitano, and her leadership group have proposed a five-year plan for 5 percent increases each year. Tuition could increase from $12,192 to $15,564 annually--compare that with tuition at top tier private universities that tops $40k per year.
That's not an easy pill to swallow, but it has the advantage of being predictable for students and parents. Our neighbors' three children followed their parents to the University of Illinois—they paid out-of-state tuition, but paid the same amount in the fourth year as the first and were virtually guaranteed to finish in four years,
By contrast, in California, tuition and fees ran into double-digit increases not that many years ago until the governor cut a deal with additional funding to freeze tuition for three years. That was good news for students, but did not deal with increasing costs.
The various UC campuses that are highly desirable (Berkeley and UCLA) have embarked on strategies to increase the percentage of out-of-state or international students to 20 percent—leaving lower paying residents to struggle to find a placement. Among the cost drivers is health care employees and for retirees that the university pays (that's the struggle that retired Lawrence Livermore lab employees have been fighting for several years since management of the lab was taken over by a private sector consortium).
The governor has made it clear that he is unwilling to commit more state resources to the UC system—same goes for the state universities. The state share of the budget has dropped steadily, although the bureaucracy has grown substantially—a trend not limited to California state universities—it is true almost across the board.
Not surprisingly, it ties directly to the federal government entrance into the high education financing business more than 25 years ago. Since then, the cost of higher education has soared more than the cost of health care—Ouch. The gentle touch that government destroys the market. It's even worst since the Democrat-dominated Congress and President Obama nationalized the student loan program—it's now the largest liability on the federal balance sheet.
There's little question that the state's three-tiered higher education system has been a major driver in the knowledge economy in California. Investing in our own students, as opposed to those from out-of-state or international students—makes sense economically. If the rate increase helps achieve that option—go for it—the tuition and fees for a resident at a top-level UC remain an incredible bargain—if students take serious academics instead of that variety of "?. Studies" that only lead to academic jobs with little relationship to the economy.
The University of Texas has put together a chart showing earnings deriving from various degrees. At 10 years after graduation (according to a report in the Wall Street Journal) electrical engineers are earning an average of $110,000 while business graduates are earning $85,000 and English majors are earning in the high $50,000s. Report didn't list majors such as ethnic or gender studies.
Incidentally, the Obama Administration and others are trying to help students determine before entering the higher education system whether their major will pay for itself. (As an aside: I remember nearly choking when the USC president told parents that they regarded the under-graduate degree—which sufficed for most of us—as the entry level to the master's programs. My cynical thought immediately was that it was a guaranteed way to extract more dollars.)
For freshmen headed into amorphous "?.studies" or sociology, psychology, history, English, etc., ---there ought to be a clear-headed discussion about where does this lead. That's not the question with hard sciences, computer science, engineering and biological sciences that lead to employment.
Way too much of the student debt was piled up pursuing degrees with limited—if any—employment opportunities.
As one of my former editors and bosses observed nearly 30 years ago, it was consumer fraud by higher education. The same remains true today.