Out of Control Policy Blog

Higher Education Reality Check: California Rally Edition

On this "Day of Action" for higher education with students marching and sitting and what not, let's consider once again the case of higher education in California.

A small positive unintended consequence of all these budget cuts are less subsidies to rich kids in California. In California as is true of the national trend reported by the College Board, as costs go up students have been paying less because of generous government subsidies. The San Jose Mercury News reports on how this is working in California:

 Demonstrations will erupt across California today as students protest the soaring cost of education — but the fury overlooks the fact that fee increases actually help poorer students by providing more money for financial aid.

The state of California is no longer subsidizing every college student's education. Instead, students whose families earn at least $70,000 per year are footing more of the bill, making it possible for students whose families earn less to pay no tuition at all.

The new "high tuition, high aid" model represents a profound shift that has taken root as California universities make good on a promise to accommodate every qualified student — even as the state faces year after year of billion-dollar deficits. Many experts say that without new taxes, there's no going back to free school for everyone.

However, higher income students in California are still receiving generous subsidies:

Fees at UC next year will top $11,000, while CSU's fees will be $4,827, the result of both systems raising fees 32 percent over one year. Increases in tax credits and Cal Grant programs will help some middle-income students with family incomes below $180,000, according to UC and CSU.

And California schools are still a real bargain. The Berkeley/Stanford comparison from the Mercury News sums it up nicely:

University students now pay about one-third of the cost of their education. Community college students pay one-tenth.

"When students protest, they are protesting on behalf of low-income students — and I don't think that is justified," said William G. Tierney, professor of higher education at the University of Southern California and director of the university's Center for Higher Education Policy Analysis.

"If Stanford and Berkeley are equivalent institutions, and Stanford tuition is $50,000, why are we discounting Berkeley?" he said. "We need to make sure that those who cannot afford to go to the university have the money to go — so the lower-income and middle class should be supported by grants and loans."

"I see no justification whatsoever for giving money away to those who can afford to go to an institution that is equivalent to Stanford. It's crazy to me. We have parents who spend $20,000 a year in private high school so they can get into a good UC," he said. "We should not be subsidizing people who can afford to pay. That is bad tax policy."

For decades, California's public education was underpriced as a result of generous state support, said senior research fellow John Aubrey Douglass of UC-Berkeley's Center for Studies in Higher Education.

Lisa Snell is Director of Education


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