The Privatization of Our Public Universities

Soon millions of parents will be writing tuition checks for their children at public universities, believing that they are paying much less than the actual cost of an undergraduate education.

Tuition at these public institutions has been going up quickly in the past decade, reversing the long-held public policy that tax monies should pay for most of the tuition and the rest of the expenses of public higher education. Quietly year by year, privatization of a public good has been growing.

Public undergraduate tuition at schools such as the University of California has almost reached a level beyond which parents may be starting to subsidize teacher research and related graduate education. This is the argument made by a retired professor of physics (UC Berkeley), Charles Schwartz.

First a word about the remarkable Charles Schwartz. For over a decade this scientist has volunteered thousands of hours pouring over the gigantic multi-billion-dollar budgets of the University of California; most recently he alleged secret, poor management of pension and endowment funds.

University budgets have few faculty, student or alumni overseers. For one thing they are very complex to understand; for another, the critical breakdown details are either not there or are considered confidential.

Professor Schwartz, knowing and caring more than anyone else outside of officialdom, has become the learned hair shirt of the University Administration. He has pointed out many deficiencies in the annual budget at public meetings with University officials and on his extraordinary website (https://ist-socrates.berkeley.edu/~schwrtz/). The University reaction, with few exceptions, has been to ignore his protestations or to dismiss his figures as attempting to disaggregate the cost of education in a way that will be of little value.

Dr. Schwartz disagrees, in his usual meticulous manner, with a 16 page paper (posted at https://socrates.berkeley.edu/%7Eschwrtz/UndergradCost.html ). He calculates the actual expenditure for undergraduate education at the University of California as averaging $6,648 per student with the parents-students paying 95% of that cost. By contrast, the University officials say the average cost of such an education is $15,810 per student.

He explains the discrepancy due to his disaggregating undergraduate education from the whole bundle of academic functions, which includes other levels of education plus faculty research. Unlike for graduate education, he says there is very little connection between faculty research and undergraduate education.

So why should anyone care about this, asks Professor Schwartz? Because the state subsidy for UC undergraduate education is almost entirely replaced by what students or their families are paying for tuition. And if student fees continue to rise, as is widely expected, then tuition checks will start subsidizing faculty research and related graduate programs. In short, public university student tuition may start becoming like private universities where cross-subsidies have been long standing.

After establishing his methodology, Dr. Schwartz lists several anticipated objections and methodically responds to them. He then argues that student tuition should not be permitted to rise above the actual cost of their undergraduate education. Otherwise the undergraduate subsidy begins. "Such a forced subsidization," he asserts, "is something that deserves a most serious debate as a matter of public policy." He believes his research methodology "should be applicable to any major [public] research university."

Dr. Schwartz worries about an emerging vicious circle. As undergraduate student tuition charges continue their annual increase, qualified lower income students may not be able to afford them. With the shift to admitting more students from more affluent families, the state legislatures may reduce their state funding, which in turn will accelerate the increase in student tuition. He calls this "a transition - the privatization of undergraduate education at the Public Universities," leading to greater class stratification and reduced class mobility.

University administrators at Berkeley and elsewhere are not about to change the bundled accounting system used by their financial managers. But Professor Schwartz says there should be an open and honest debate about these choices. "Our duty," he adds, "is to not allow it to remain hidden."