At Public Universities: Less for More

The New York Times

November 1, 2009

By PAUL FAIN

SUSAN LI’S senior year at the University of California, Los Angeles, was fast approaching, and she was running out of time. She needed at least three classes to qualify for financial aid. But a week before classes began, she had registered for only one course.

“They’re not offering the classes I need,” said Ms. Li, a history major. “I don’t know what I’m going to do.”

In her first two attempts to register, she hadn’t been able to get her outstanding general-ed requirements or any advanced classes in her major. Classes were full, or not being offered this term. If she can’t complete what she needs to graduate, Ms. Li doubts she can afford a fifth year. She has taken out $8,000 in loans each year.

“Hopefully something will open up,” she said, and after scanning the registration Web site each day something did: two Asian-American studies electives, neither of which would move her closer to completing her major.

The university is facing a $131 million budget shortfall this year, and Ms. Li is among the many students who are feeling the pinch. U.C.L.A. has eliminated 165 courses, a full 10 percent reduction. Even in recent years, Ms. Li says, she has had to sit on the steps in crowded lecture halls. She was one of several hundred students who gathered at Bruin Plaza as the school year began to protest cutbacks and a tuition and fee increase of $1,170, with a planned $1,344 bump next year.

While U.C.L.A.’s money woes are extreme, they are familiar to many flagship universities. The University of Arizona, the University of Wisconsin and the University of Florida are among many that are scrambling because states are kicking in shrinking portions of their budgets.

In this particularly hard year, in which university endowments have been hammered along with state coffers, federal stimulus money has helped most avoid worst-case scenarios. The 10-campus University of California system, for example, has received $716 million in stimulus funds to offset its $1 billion gap. But that money is a temporary fix. A quip circulating among college presidents: The stimulus isn’t a bridge; it’s a short pier.

This fall, flagships still had to cut costs and raise tuition, most by 6.5 percent or more. And virtually all of the nation’s top public universities are likely to push through large increases in coming years.

“The students are at a point of rebellion, because they’re paying more and getting less,” says Jane V. Wellman, executive director of the Delta Project on Postsecondary Education Costs, Productivity and Accountability.

Universities have reached deep in their pockets to protect vulnerable students from tuition increases. Mark G. Yudof, president of the University of California, defends his university’s record in preserving financial aid, noting that families with incomes under $60,000 pay not one penny of their fees. “The real crunch,” he says, is helping families that make roughly $100,000. “The most at risk at this time really are going to be the middle class.”

Public universities have historically been underpriced: average in-state tuition is $7,020 this year. A re-evaluation had to happen, says David E. Shulenburger, vice president for academic affairs at the Association of Public and Land-Grant Universities, because the benefit has been to higher income families. “You can’t justify that subsidy for wealthier students,” he says. The trend, accelerated by the economic shakeup, is from cheap to what he calls “moderate” tuition rates, at least by private-school standards.

Mr. Shulenburger sees the tuition increases as part of a larger movement toward privatization of the most desirable flagships. With state contributions largely flat or down over the last 15 years, and enrollments and costs up, many top flagships are turning to nonpublic sources for money and, in some cases, accepting larger numbers of out-of-state students, who often pay twice the tuition of residents.

At the same time, applications are pouring in from students shut out by the stratospheric cost of private colleges. That’s generally a good thing. Flagships are attracting more wealthy and better-prepared students. Yet as the counterargument goes, a flagship’s traditional mission is to educate its own, especially a state’s low- and middle-income students. The evolution under way is putting some flagships out of reach for the students who were typically enrolled even a decade ago. Each year, the quality of students as well as the budget model skews closer to that of elite private universities.

Mr. Yudof calls the state an “unreliable partner.” It accounts for half as much financing per student as 20 years ago. Yet in a recent commentary for The Chronicle of Higher Education, he drew the line: “We will not privatize the university. We will continue to enroll students from all economic strata. We will not go the way of other states and rely on a vast expansion of nonresident enrollment.” Still, the university is expected to admit more out-of-state students next fall.

Faculty layoffs and hiring freezes notwithstanding, Mr. Yudof believes that the university, long regarded as one of the country’s leading publics, still offers a top-notch education. “We have a lot of room to descend,” he says. But he is well aware that the university faces a potential slide into mediocrity. At U.C.L.A., class size has increased by 20 percent over three years. He says it cannot sustain more years of forced downsizing.“We’re not over the edge, but we’re at the edge,” he says. “Something has to change.”

THE PRIVATE PUBLIC

The University of Michigan belongs to an enviable class of nationally prestigious public universities; many of its undergraduates picked it over the Ivy League.

Thirty years ago, the university began going through the convulsions other public universities are now experiencing. Today, it is largely protected from Michigan’s plummeting economy. Only 7 percent of its budget is provided by the state.

The transformation of the University of Michigan’s finances began with Harold T. Shapiro. In the mid-1970s, Mr. Shapiro, then a professor of economics and public policy at the university, studied Michigan’s economy and predicted that the state would lose tax income compared with the rest of the country in coming decades. He was right.

While the state trimmed a third of its support for the university in the 1980s, Mr. Shapiro, as the university’s president, worked to build a more secure budget base. Michigan increased private fund-raising and developed a tuition structure that took advantage of a growing number of out-of-state students, who now pay $36,163 a year in tuition and fees — about the same as Princeton.

James J. Duderstadt was Michigan’s provost during its transformation, and later served as its president. With an out-of-state mix of 35 percent, he acknowledges that Michigan looks less like a state university. “Folks from out of state are attending a private institution,” he says.

It’s likely, actually, that most Princetonians pay less than an out-of-state Michigan student. While Michigan’s aid packages are generous, no public can match the deep coffers of an Ivy League university. Forty-five percent of out-of-state undergraduates at Michigan are affluent enough not to qualify for financial aid, compared with 20 percent of residents.

Still, Mr. Duderstadt says, the university fulfills its public mandate by helping to drive the state’s economy and continuing to educate Michigan’s top students. While lawmakers still grumble about the large number of students from other states, the university, he says, didn’t have alternatives. Earlier this year, state lawmakers studied the idea of taking privatization to the next level, by eliminating annual state funding. The university remains public, for now.

Some flagships have gone far in severing ties with states. Five years ago, Virginia’s four top public universities began negotiating a charter status that granted them broad autonomy, including the freedom to set tuition rates. Tuition and fees at the University of Virginia are now almost $10,000 for an entering resident, and $32,000 for a nonresident.

At Virginia, most students can handle the steep price tags. In the 2006 census, the national median household income was $48,200, while the median graduating student at U.Va. reported a family income of $94,000. For those struggling to pay, the university bumped up aid.

Experts say more universities will follow the lead of Michigan and Virginia, receiving less public money and increasing tuition, private fund-raising and financial aid. Last month, the University of Massachusetts, Amherst, announced plans to double out-of-state enrollment, to nearly 30 percent, and mobilize more private donors.

Another recent convert is the University of Wisconsin, Madison, a lakeside campus with Big Ten sports that draws 35 percent of its students from beyond the state’s borders. Wisconsin’s high percentage of nonresidents makes sense because the number of new high school graduates is projected to fall over the next decade in Wisconsin and several other Northern states.

Years of state cuts means a larger portion of the university’s budget comes from tuition and fees, which it increased by 10 percent this year.

Mr. Shulenburger at the Association of Public Land Grant Universities cautions universities on the allure of out-of-state enrollment, because, he says, few can match the appeal of a Michigan or Wisconsin. There is a limited pool of out-of-state students, he says, and universities “will begin raiding ourselves pretty quickly.”

With a state economy in shambles, the University of Arizona was granted a waiver on its out-of-state enrollment cap, to go as high as 40 percent from an already high 30 percent. Robert N. Shelton, the university’s president, says he has yet to take advantage of that wiggle room, mostly because of a huge increase in applicants from Arizona.

Currently, only 10 percent of students at Rutgers’s New Brunswick campus come from outside New Jersey. The university could easily increase that number by tapping nearby New York and Pennsylvania.

“The temptation for us to recruit more out-of-state students is very, very strong,” says Douglas S. Greenberg, executive dean of the university’s School of Arts and Sciences. State residents pay about $12,000 in tuition and fees, which is high for a public university. Out-of-state students pay almost twice that.

Each nonresident means one less slot for a New Jersey resident. Mr. Greenberg says that leaves Rutgers with two options: get bigger or increase tuition even more. Neither would be easy. Enrollment has topped 37,000 at the main campus in New Brunswick, a record. For the second consecutive year, the university has placed undergraduates in a Crowne Plaza hotel because of a lack of on-campus housing. This year there are 500. They ride shuttle buses for the five-mile trip to campus and were asked to pack light and leave posters at home. The upside: Housekeeping cleans rooms once a week, there’s a television in every room and students can use the fitness center and swimming pools.

Mr. Greenberg says Rutgers, like most flagships, is wrestling with the gradual trend toward privatization. “Every time tuition goes up, we increase the possibility that we become more like a private university,” he says. This year, the State Legislature allowed Rutgers to increase tuition by only 3 percent, and the state is spending less on academic scholarships — though financial aid applications are up 27 percent. University officials say they have filled gaps by raising money from private sources.

THE STUDENT BODY: UP, UP, UP

More than half of the seniors from Stuyvesant, New York City’s most competitive public high school, apply to Binghamton, often called the jewel of the State University of New York, which has no flagship. For this fall, Binghamton University received 28,970 applications — 15 percent more than 2007 — to fill about 2,100 freshman spots.

Binghamton is not alone. Many flagships report big increases in the number of applicants, including good students transferring from private colleges, often for financial reasons. As a result, average SAT scores and grade-point averages have jumped.

The Westminster Schools, an elite high school in Atlanta, has sent a growing number of graduates to the University of Georgia. Of 200 last year, 41 headed to its Athens campus, double the number of a few years ago.

Nancy T. Beane, a college counselor at Westminster for 17 years, says some of its most-qualified students are choosing Georgia over Vanderbilt, Stanford and Ivy League universities. Part of the appeal is low tuition and the state’s generous Hope Scholarship — merit money awarded to about 97 percent of U.Ga.’s undergraduates. Until about five years ago, she says, some parents were surprised by the caliber of students at the University of Georgia. Not anymore.

While all this is generally a good thing, it means stiffer competition. Flagships are grappling with questions about who they are supposed to serve. Until recently, high school students with decent grades and SAT scores could reasonably expect to attend a top public university. The trickle-down tendency in admissions is affecting colleges further down in the pecking order.

One challenge is that a relatively small pool of minorities score 1300 on the SAT’s verbal and math sections. So universities have had to work harder to preserve the pipeline of low-income and minority students.

Take Florida. The University of Central Florida, now the state’s largest university, serves roughly the same demographic the University of Florida did 15 years ago. That’s partly because the University of Florida accepts far fewer good students, sticking mostly to great ones. It is attracting students who also apply to Duke and Emory and other expensive private institutions.

Virtually all in-state students admitted at the university qualify for a generous state merit grant called Bright Futures, financed by the state lottery. And though tuition and fees rose by 15 percent this fall, it’s still just $4,373, which is among the nation’s cheapest.

But promising low-income students need convincing, and admissions officials travel to up to 15 Florida high schools in urban neighborhoods each year. Each school’s counselors select the 50 top students they hope can compete, and the university spends a half day with them, answering questions and helping them fill out applications.

“Our admissions officers are out there holding hands or whatever it takes,” says Zina L. Evans, the associate provost for enrollment management and executive director of admissions.

THE PUBLIC DRAW

Public universities have assets that privates do not. They offer powerhouse sports programs, bustling campuses and more diverse student bodies.

Lauren Ciolek went to a large public high school in Freehold, N.J. She applied to Rutgers in 2007 but picked Lehigh University, a private institution in Pennsylvania.

Ms. Ciolek wasn’t happy at Lehigh, which she says was far less diverse than her high school. So she transferred to Rutgers this fall, where, she says, she’s no longer “in a bubble.”

Rutgers has seen an uptick in New Jersey residents like Ms. Ciolek, who transferred back home after first attending private universities in Pennsylvania and Maryland. This fall, 3,100 students transferred in, an 8 percent increase from last year.

Officials say that part of the appeal is that Rutgers serves a broad range of students.

But public universities are straining to find qualified minority applicants, and to provide enough financial aid for that disproportionately low-income group as the budget crisis takes its toll. For now, they’re ponying up the money to keep them part of the mix.

Courtney O. McAnuff, Rutgers’s vice president for enrollment management, worries about the future. “I don’t know how much longer we’ll be able to do it,” he says. ■

Paul Fain is a senior reporter for The Chronicle of Higher Education.