FINANCING the UNIVERSITY -- PART 8

by Charles Schwartz, Professor Emeritus, University of California, Berkeley
schwartz@physics.berkeley.edu                            February 13, 2005

>>This series is available on the internet at http://socrates.berkeley.edu/~schwrtz

Misinformation from On High

We note several recent examples of false and misleading statements by high University officials talking about important topics concerning the future of the University of California.


Where is the University Going ?

     At the January 19 meeting of the UC Board of Regents, President Robert C. Dynes announced the formation of a “UC Long Range Guidance Team”, composed of selected administrators and regents, which is to “help focus our discussions of the last several months around long-range planning.” At the end of September, members of the Board attended a special retreat (held far away from ordinary people’s eyes) on developing a vision and a plan for UC’s future; and this January meeting included special presentations on “The California Master Plan for Higher Education” and on “The Importance of Graduate Education to the State of California.”

     My selective observations, reported below, may leave one with a queasy feeling about the competence, or about the intentions, of the people leading that effort.

Chancellor Carnesale

     Albert Carnesale, Chancellor at UCLA, made a presentation to the regents’ Committee on Educational Policy that started out with the “Private Support Program” on his campus and then went into a broader discussion about financing. He showed one slide which claimed there was a “Fee Gap,” amounting to $10,000, because UCLA receives about $20,000 per student (state funding plus student fees) while at comparison private universities the students pay tuition of about $30,000 per year. From my seat at the back of the auditorium I shouted out that this was nonsense; and was summarily warned by a police officer that I must not interrupt the proceedings or I would be removed.

     The nonsense in Carnesale’s presentation of those numbers is easily seen. We all know that the elite private universities have a practice of limiting undergraduate enrollments, while the public universities are open to all qualified students. They are exclusive, we are inclusive. It is UC’s great and true claim that it provides a high quality education to a mass population. Looked at financially: At the private institutions the cost of providing education is spread over a relatively small number of students while at the public universities the cost is spread over a larger number of students. Thus the cost-per-student should be lower at UCLA than, say, at Harvard.

     To put this comparison into quantitative terms, we should multiply Carnesale’s numbers by the relevant student-faculty ratios. According to official University data, UC has a student-faculty ratio of 18.7 while its comparison private institutions have a student-faculty ratio of 10.4 (see page 91 of the Regents’ Budget).

     Thus, starting with Carnesale’s numbers, we calculate that, on average, UC spends $20,000 x 18.7 = $374,000 per faculty member; while the private universities spend $30,000 x 10.4 = $312,000 per faculty member. These numbers are understood to cover not only faculty salaries but also the cost of support staff and institutional overhead, all necessary for the professors to carry out their functions.

     So, a corrected interpretation of Carnesale’s numbers is that UC is overspending on its core academic functions by 20%, compared to Harvard, Stanford, Yale, M.I.T.; and this is at a time when it is also acknowledged that faculty salaries at UC are 8-10% behind those at comparison institutions. This says that UC is carrying an excessive cost burden amounting to about 30%, when compared to the best private universities. I must ask Chancellor Carnesale to explain this alarming discrepancy; and I must reject his idea that this is a gap that should be filled by further raising student fees. That is indeed nonsense!

     I note that Chancellor Carnesale is one of the members appointed by President Dynes to the University’s new Long Range Guidance Team.

[Chancellor Carnesale originally presented his analysis, and proposed large increases in UC student fees, at a talk to Town Hall Los Angeles on October 7, 2004; and I found a transcript of his speech on the web site
http://www.ucla.edu/chancellor/university/univ_04townhall_6.html ]

Vice President Hershman

     During that January 19 discussion of the Master Plan, Larry Hershman (UC’s Vice President for Budget), answering a question from Regent Richard Blum (who is Chair of the Committee on Finance), stated that the core academic budget for the University was about $15,000 per student, with about $9,000 of that coming from the State and the rest from student fees. This $15,000 figure differs from Carnesale’s figure of $20,000; but let me defer that discrepancy – I want to talk here about a more fundamental controversy.

     In my previous paper (Part 7 of this series) I reported a calculation of the actual amount UC spends, per year, for its entire program of undergraduate education; and my answer was: $6,648 per student, barely more than the level of fees those students are now charged. I say that undergraduate students at UC are now paying for 95% of the actual cost of their education; Hershman says that students at UC now pay for only 30% of the average cost of their education. Whom should you believe?

     My paper, Part 7, was reported on in student newspapers on a few UC campuses and a spokesperson from the UC President’s Office was quoted in response. I then wrote to President Dynes (December 8, 2004):

This is a request for collegial consultation over a new controversy that has arisen on financial realities related to Student Fees at this University. ...
A story about [my paper] appeared in UCLA’s Daily Bruin newspaper, last Friday. In that published story, a spokesperson for your Office questioned the validity of my calculations with various remarks, such as: “He assumes a lot of data because he doesn’t have access to a lot of it.” This is a troublesome comment since my report contains specific references to official UC data sources. A similar story appeared in today’s issue of The California Aggie from UC Davis, with similar unfounded critiques from your spokesperson.

If knowledgeable members of your staff doubt the validity of my analysis or of the data I used, I would most eagerly wish to meet with them for a thorough discussion of all relevant details. This is the way we scientists (and other academics) seek to resolve such disputes. I ask that you designate the appropriate expert(s) from your Office to meet with me on this subject.

I should add that a few weeks ago I wrote to the office of your Budget Director, V.P. Larry Hershman, asking for details on how he had determined the result that UC students now pay only 30% of the cost of their education - as proclaimed in documents presented to the most recent Regents’ meeting. Although I phrased that request with reference to the California Public Records Act, I have received no response whatsoever. This question, also, needs to be part of our collegial consultation. ...

     Although I have not been invited to discuss this matter with any official, I did receive a letter from Vice President Hershman. The full contents of that letter are posted at  http://socrates.berkeley.edu/~schwrtz/HershmanLetter.html ; and I will here summarize the most relevant parts. He confirms the number I had attributed to him – $15,810 as “the cost to educate a General Campus student” (that means outside of the Health Sciences) – and he explicitly acknowledges that, “The University does not attempt ... to differentiate the costs of educating undergraduate and graduate students.” They bundle together the costs of both types of programs, even though the one (graduate level education) is much more expensive, per capita, than the other (undergraduate education). But most people – probably including many of the regents – are unlikely to be aware of how they are being misled by such Enronic accounting.

     However, even that admission by Hershman does not serve to explain the huge discrepancy between his cost figure ($15,810) and mine ($6,648). I am quite sure that his figure includes, in addition, a large portion of the cost of faculty research activity; but he has yet to provide me the numbers I have requested from him, which would help to resolve this big question.

     In his letter to me, Hershman also says, “I have concluded that any attempt to disaggregate the cost of education [i.e., separate out the undergraduate program] will be based upon questionable assumptions and that any resultant numbers will be of little value.” It is most interesting, however, that he offers not one single instance where he can find a fault, or even a quibble, with my calculation, which was presented in considerable detail. I take this silence as significant confirmation of my work.

     Vice President Hershman is also a member of the new Long Range Guidance Team; and so, too, is the gullible Regent Blum.

Chancellor Birgeneau

     Robert Birgeneau, Chancellor at UC Berkeley, has given a quite different number for the cost of education. According to an editorial in the San Francisco Chronicle (December 16, 2004): “Birgenau says that the cost at UC Berkeley is about $27,000 (for both undergraduate and graduate students).”

     Hershman says $15,810; Carnesale says $20,000; Birgeneau says $27,000. It becomes hard to believe any of them, even without my critique.

     I did write to my Chancellor after reading that. I politely told him that his number was erroneous and asked to meet with him to discuss these matters. He never responded.

     Chancellor Birgeneau is not listed as a member of President Dynes’ new Long Range Guidance Team. Maybe it is because he is relatively new to UC. (Or maybe it is because he has made the remarkable public statement that he is opposed to privatizing this great public university.)

Provost Greenwood

     Marci Greenwood, UC’s Provost and Senior Vice President - Academic Affairs, gave the regents a presentation on “The Importance of Graduate Education to California and the University of California” and her focus was on the Ph.D. program. The central theme of her presentation was that UC’s ratio of graduate students to undergraduate students was too low and that this imperiled our “quality.”

     That line of argument, while not new, is, in my opinion, a very dubious proposition. If you look at the elite private research universities, you find that their ratio of graduate students to undergraduate students is very much larger than it is at UC. That fact is easily understood by the following observations:

• The elite private research universities have collected a cadre of faculty with outstanding reputations as researchers, so they are able to gain more research funding from government and other sources, and they are thus able to take on larger numbers of students in their research (Ph.D.) programs.

• The elite private research universities rely upon an extreme elitist image to justify the exorbitant tuitions they charge to undergraduate students; that is, they keep the number of undergraduate students deliberately small.
Therefore, their ratio of graduate students to undergraduate students is very large – and this has nothing to do with the quality of either educational program.

     However, my primary criticism of Greenwood’s presentation is that she left out some important facts of which, by my observation, many if not most of the regents (and much of the public as well) are ignorant. Let me offer, here, a very brief tutorial on Greenwood’s omissions, primarily designed to illustrate how different the graduate program is from the undergraduate program.
1a) Undergraduate students are selected from applicants on a statewide or campus-wide basis.

1b) Graduate students, seeking to enter a Ph.D. program, are screened and selected by the faculty in the Department to which they apply.

2a) The number of undergraduates admitted does not depend (except for the anomalous year 2004) on UC’s financial situation.

2b) The number of graduate students admitted by each department in any year depends critically on financial considerations: how much money do the department’s faculty have available to support those graduate students, in terms of fellowships (from endowment funds or from external funding sources) and research assistantships (paid by research contracts and grants from external sources.) Occasionally, the faculty may consider job market prospects for Ph.D.s in their field in deciding how many new students to take on.

3) Undergraduate students pay the university (call it fees or tuition) for their education, while graduate students (in Ph.D. programs) are paid by the university to join the program.

     Except for point 2a, these are characteristics of all first rate research universities, both public and private. These facts are no secret to any faculty member or administrator; but many on governance boards, in legislatures, and in the public are kept uninformed about these basic facts – which are essential for any intelligent planning (financing) for the future of higher education.

     Provost Greenwood is a Co-Chair of the new Long Range Guidance Team.

Regent Hopkinson

     Judith Hopkinson, a UC Regent since 1999, has established herself as a very intelligent, very studious and outspoken person on the Board. During this discussion on January 19 of graduate education at UC, she made the comment that, considering the importance of the student-faculty ratio in preserving quality at the University, “You can’t have more graduate students if you don’t have more faculty.”

     From my seat in the back, I said out loud, “You have that backwards.” Several regents at the table turned and looked at me with dumbfounded expressions. So let me here explain this criticism.

     “Student-faculty ratio” has become a kind of mantra in the University’s budget pitch to Sacramento. The latest issue of The Regents’ Budget mentions this phrase 27 times, mostly as a measure calling for more funds in order to maintain “quality.” In one of my earlier papers (Part 1 of this series) I presented a detailed discussion of the sense, and the nonsense, attributable to Student-Faculty Ratios as a meaningful measure of quality. This turns out to be another cardinal issue where one must separate undergraduate programs from graduate programs.

     Previous analysis (see Part 1) showed that according to available data, the most prestigious research universities/campuses had the highest ratio of graduate students-to-faculty. This completely contradicts the usual notion that lower student-faculty ratios imply greater quality of education (the teacher can give more personal attention to each student.) This contradictory fact can be understood when one recalls the fact (2b) of my earlier brief tutorial: faculty with a higher research reputation will be able to garner larger research contracts/grants and thus have more money to take on more graduate students. Yes, in many academic disciplines, the building of research empires stands out.

     So Regent Hopkinson did have it backwards: more graduate students does not require more faculty; it mainly requires more money coming in to support them. But I am willing to say that she was just another victim of the long-standing miseducation that the UC administration has delivered. Right after that meeting, I mailed her a copy of my earlier paper explaining this subtle issue. I hope she read it and learned something useful; but I rarely get any response from regents to my numerous critiques.

     Regent Hopkinson is also a member of the new Long Range Guidance Team.

Summary

     What I see is a pervasive habit on the part of top UC administrators to betray this institution’s motto – “Let there be light” – and, instead, to follow the method of mushroom cultivation: Keep them in the dark and ...

     The main lesson of this report is: For intelligent analysis and future planning one must have numbers for faculty, students and dollars that make a clear separation between the undergraduate program, graduate programs and faculty research.

     (With this now in mind, we can revisit the discussion around Chancellor Carnesale’s mistaken claim. Instead of using the bundled student-faculty ratio, as given by Vice President Hershman in the Budget, we should use the ratio for undergraduates only – since they are the main fee/tuition payers. In fact, this alternative calculation leaves the Chancellor facing an even larger discrepancy in terms of the overspending which we noted earlier.)

Footnote: President Dynes’ Long Range Guidance Team includes more than five members of the Board of Regents. I wonder, therefore, whether meetings of this group will be announced and open to the public, following the state’s Open Meetings Law.


They Do It at Harvard, Too

     In my pursuit of truth in UC official statements and numbers, I occasionally look at data from other leading universities. Harvard has a nice internet web site, on which I found some interesting information.

     A page on Harvard University’s web site, titled “Harvard at a Glance,” lists Undergraduate Cost, for academic year 2004-05, as follows: $27,448 Tuition; $ 9,260 Room and board; $ 3,172 Fees; and $39,880 Total.

     The next bit of information is: Financial Aid, for academic year 2004-05,
“$28,000 average undergraduate aid package”

     That amount of financial aid (70% of total cost, on average) seemed very large. So then I sought further data.

     Another one of their web pages, Harvard’s "Fact Book," gave detailed data on Student Financial Assistance for FY 2003. These numbers are for Harvard College:
GRANTS - $ 79.2 million; LOANS - $ 19.0 million; EMPLOYMENT - $ 5.5 million;
GRAND TOTAL - $103.7 million.

     Elsewhere I learned that there were 6,649 students in the College that year, giving an average amount of Financial Assistance = $15,600 per student. This number is very far from the $28,000 given in the first cited reference.

     I wrote to Harvard’s president, presented this data and asked, Can you please explain to me this large apparent discrepancy? Getting no reply there, I wrote again to another Harvard office and received some information that explained the discrepancy: only about 2/3 of Harvard undergraduates get any financial aid at all. Therefore I replied: their information on the Harvard at a Glance page “is seriously misleading”; and, “Don’t you want to fix that?” I’m waiting to see how Veritas works in such situations.


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