Big test looms for California voters, universities

Under the state's pioneering master plan for higher education, signed into law in 1960, the top 12.5 percent of graduating high-school students in the state are guaranteed entry to the well-respected University of California system. The California State University system is open to the top third, while community colleges accept all comers, including adults. The plan hugely expanded higher education in California and also led to the emergence of world-class institutions such as UC Berkeley and UCLA.

It also tied the universities' fortunes to those of the state, however. In good times that was fine, but more recently, public universities in California have been hit hard by the state's fiscal woes. Declining state support has forced the UC system to slash costs and to raise average tuition fees by 50percent in three years. CSU fees have risen by 47 percent in the same period.

“The historical model has broken down,” UC President Mark Yudof said.

The proportion of high-school graduates progressing to UC or CSU has fallen from 22 percent to 18 percent in the past five years, according to Hans Johnson at the Public Policy Institute of California.

The extra fee revenue is not enough to compensate for the decline in state funding, and so both UC and CSU have aimed to reduce enrollment numbers. UC must still offer places to all eligible students but deters some through ruses such as restricting access to popular campuses, such as UCLA or Berkeley, in favor of out-of-the-way campuses in places like Merced.

It is an altogether different story for some of California's private institutions, which tend to charge far higher tuition fees. Stanford University, under President John Hennessy, who sits on the boards of Google and Cisco, has strengthened its links with the go-getters of Silicon Valley and raised a record-breaking $6.2 billion in five years.

The University of Southern California, once mocked by detractors as the University of Spoiled Children, is also thriving. It is aiming to raise $6 billion by 2018 and already has some chunky gifts in the bag. It has more international students on its books than any other American university and, after the recent launch of the USC Schwarzenegger Institute for State and Global Policy, one particularly notable foreign-born professor.

With 22,000 people on its payroll, USC is the biggest private-sector employer in Los Angeles. A proposal to redevelop the Village, a shabby retail area next to the main campus, into a shiny complex with student housing and new shops, should create 12,000 more jobs in USC's poorish district in south Los Angeles, if the university gets its way. The City Council is due to issue a planning verdict soon.

“We have taken on a broader role,” said Thomas Sayles, senior vice president for university relations. “We want to be a civic leader.”

Yet private institutions such as USC cannot simply pick up the slack left by the public ones. First, even with generous aid packages, they cannot hope to match the public universities in access for students from poor or what are sometimes called “nontraditional” backgrounds. Second, even taken collectively, private universities do not operate on the same scale. A big majority of enrolled students attend public institutions.

“There is no private solution to this issue,” said Patrick Callan, president of the San Jose-based Higher Education Policy Institute. “There must be a public solution.”

The problem, though, is growing. Johnson points out that, for the first time in the history of modern California, the state's best-educated citizens are the 50-somethings rather than the 20-somethings or 30-somethings. Previous waves of immigration also raise demographic challenges as a bulge of Latinos reaches college age.

UC's decline can be exaggerated. Some of its campuses continue to perform well in national rankings, it has significant nonstate revenue sources and it has a strong research record.

“We're hardly at death's door,” Yudof said.

A big moment will come in November, when Californians vote on a tax measure.

If it is approved — and the polls are tight — UC and CSU will freeze tuition fees for the first time in years. If it fails, they will have to cope with a sudden drop of $250 million in state support.

Yudof calls it a “defining moment” for California.

From the Economist magazine.