For many years, and for several Chancellors, the orthodoxy in California Hall has been that rising tuition can be socially progressive if it is coupled with “return to aid” grants and other forms of financial assistance for low-income families. When tuition was low, the argument goes, taxpayers were subsidizing the education of white, middle-class Californians. Now, they insist, a combination of fund-raising and higher tuition allows the University to redistribute, taking from the rich to give to the poor. The outcome of this policy, they believe, is a student population that is not only more diverse but graduates with substantially less debt than those at other universities.
The problem with this argument is that it is simply wrong. Colleen Lye and I pointed this out back in 2015 when we stumbled across some intriguing data. On the surface, that data seemed to provide good news. It showed that back in 2011/12, students from families with an annual household income of less than $50,000 graduated with a debt of around $16,500, compared to a debt of around $19,000 for students whose annual parental income was more than $140,000. When considered as a proportion of household income, however, the debt burden of those low-income students was much higher: nearly 70%, as opposed to 55% for those from households earning over $140,000.
The claim of the administration then was that the more fund-raising they did, and the better their financial aid model became, the lower the debt burden of low-income families would become. That turns out to be wrong as well, at least according to the most recent update from 2015/16. That data shows that debt levels as a proportion of parental income remain around 70% for those earning less than $50k, though the debt ratios have fallen dramatically for families earning more than $80k–down to 25% for household incomes of $140K plus.
It appears that the Middle Class Scholarship Program, introduced in 2015 for families earning less than $150,000, is working much better than the Blue and Gold Opportunity Program, which waives tuition costs for those whose parental income is less than $80,000. But why? Why do poor students get relatively poorer or, if you prefer, richer in debt, even if they are relieved of tuition costs? There are two issues. The first is the escalating total cost of attendance, driven by housing, food and health insurance, for which there is no financial aid. The second is the compulsory self-help payment or Expected Family Contribution that all parents have to pay and is calculated on the basis of their income and assets. The average parental debt is now $19,597, and the campus does not include this in their calculation of student debt. One can only imagine (as the campus does not have this data) that debt levels are highest for low income families earning less than $50,000 a year.
It seems likely that the “self-help” requirement, coupled with the rising cost of attendance, may disincentivize the very low-income students in whose name higher tuition is often justified. Even if we regard an undergraduate degree as an investment in a futures market of potential income for the student after graduation, it is clear that those from low-income families have to take on a substantially greater risk to enter this futures market than do those from higher income brackets.
Seen in this light, the introduction of ‘cohort tuition’ proposal by the Regents, where students would be guaranteed the same tuition for five years to help families financially plan, should give us pause. In all probability, it will do little to help low-income students. For them, tuition is not the issue; it is rather the self-help contribution and the total cost of attendance.
Higher tuition and more fund-raising, then, are exacerbating the very problems they are meant to fix. The only real solution is what BFA has long campaigned for: a reinvestment in all levels of public higher education, through properly redistributive taxation.
James Vernon for the Berkeley Faculty Association