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Attending college includes a slew of expenses beyond tuition: housing, transportation, food and books. But there is an even higher price that students, families and the state of California are paying right now – the cost of broken promises.
Every year, our public universities turn away tens of thousands of qualified students, yet economic forecasts predict that by 2030 California will be short 1.1 million workers holding a bachelor’s degree. The absence of a long-term financing strategy for higher education has contributed to this degree gap and threatens California’s future economic prosperity.
The current system for financing California’s public universities is unpredictable, unsustainable and fails to fully account for student needs. Without a new strategy, California risks undermining the state’s economy and widening the gaps between “the haves and the have-nots” into chasms we cannot bridge. The economic benefits of stabilizing and expanding higher education funding make it potentially the most cost-effective, middle-class-building initiative that the state could undertake.
The California State University and the University of California is funded through an unpredictable see-saw between state support and tuition. That means that in bad times budgets are balanced by shortchanging students, tuition skyrockets and institutions reduce the number of students admitted. In good times, we see increases in state appropriations and tuition are held steady, yet there still isn’t room for all qualified students. This boom-bust dynamic burdens families, locks students out of opportunity and makes planning tough for institutions and the state.
Other aspects of the higher education finance system are equally unsustainable: growing liabilities linked to employee and health benefits, rigid academic cost structures that prevent universities from reallocating funds where needed most and a lack of consistent metrics for decision-making and accountability.
We must overhaul this broken system, putting student access, success and equity at the center. We must learn from the recent past and accommodate California students first rather than high-paying, out-of-state students at the expense of residents. And, in order to succeed, we will need strong leadership from the state and from our systems of higher education. We will need those higher education systems to be aligned, collaborative and innovative, finding ways to work smarter and better together to serve students.
A critical step toward long-term planning and stability is adopting multiyear budgets. Predictability would enable better decision-making about resource allocation. With fewer abrupt yearly changes, we could invest thoughtfully in ways to improve student success.
Likewise, families should be able to plan. Instead of putting tuition at the mercy of a volatile economy, moderate and predictable increases should be tied to a cost of living index and set for each incoming cohort of students.
The state could explore a stabilization fund to be accessed in a severe economic downturn, protecting students from unexpected tuition increases and allowing for enrollment growth. The funds could be restricted in exchange for meeting certain accountability and efficiency metrics such as cost reductions and improved time to degree, which would help increase capacity.
It’s time for a bold, new approach to how we finance our systems of higher education and the time to tackle the issue is now, before we confront the next inevitable economic downturn. Whatever the details, a new system should be based on what many families already do: set budgets, save money and plan for the future. We cannot allow our lowest-income families to bear the consequences of bad state budgeting.
California has made a pact with its students: Work hard and there will be a place for you in college. More students are doing their part and are ready to earn degrees. We cannot keep changing the rules on them because of our failure to plan. By keeping the path to college open for all students, we can ensure a more vibrant future for everyone.