You have also recognized that financing higher education through increased personal debt is a growing problem for many students. That’s why you argue that UC tuition increases will not deter attendance provided that the Blue and Gold program, which relieves families from paying tuition, is available to a wider income band. Much of the press and the public seem to have bought your claim that higher tuition can actually make UC more accessible by extending UC’s Blue and Gold program to families with annual incomes of up to $80,000. But the high tuition burden still falls disproportionately on those just above this cut-off, so you mitigate this obvious problem by giving students a one-year reprieve on tuition increases if they are otherwise eligible for aid and if they come from families with incomes of $120K or less, after which they will simply have to borrow more. You then claim that higher tuition would leave the majority of UC students (55%) with undiminished or improved access. This claim is based on two assumptions: first, that the incomes of UC graduates will continue to grow -- and to grow much faster, than those of other Californians, much as they did during the high tech boom; and, second, that Blue and Gold means that most UC students on financial aid will need to borrow less in order to attend.Again, go read the whole thing.
According to your own, internal, financial aid studies, both of these assumptions are false. The first assumption is false because the income of UC graduates has not increased at all for the past ten years, and neither has the willingness of most students who borrow to take on greater debt. As a consequence of their growing debt-resistance, UC has a growing middle income access problem -- it seems that students in the income band that takes on the greatest proportional debt are also transferring down within the Master Plan scheme -- and that 70% of Community College transfer students now go to for-profit institutions. So, we now have a Master Plan that seems to operate in reverse.
The second assumption is false because raising the Blue and Gold income cap from $60K to $70K, and now to a proposed level of $80K, is not fully paid for by the 33% return-to-aid generated by higher tuition, which the public, has been led to believe. It is, rather, funded—and much more so as the cap goes up—by increasing the amount that all students are expected to provide as “self-help” (their “loan/work expectation”). This higher amount will then be subtracted from their total “financial need” before aid packages are awarded.
Your Financial Aid Directors have therefore criticized Blue and Gold as a “a political plan, not a practical plan” for improving middle income access,  because, as the Blue and Gold eligibility increases, the 63% of UC students now on financial aid would each receive smaller aid packages, and thus be expected to earn or borrow more for their education. So, yes, the “full financial need” of students will be funded, but the definition of “full financial need” will be changed so that all students currently eligible for financial aid, including those from very poor families, will be expected to pay more. No wonder UC is expecting to lose middle income students, despite Blue and Gold. And no wonder you are changing UC’s admissions policy to replace those students with out-of-state students who now pay more to attend less prestigious universities in other states that do not have anything resembling the California Higher Education Master Plan.
In June 2010 you asked your financial aid staff to report on the “middle income problem” in the aftermath of last year’s student protests against tuition increases. They studied the possibility of raising the Blue and Gold cap to families with incomes of $120K. This promise of discounted tuition would have provided 8000 additional students an average fee offset of $4.4K, but it would have cost $37M in new financial aid funds or in reductions to the aid packages of existing recipients. But you were not willing to use $37M of the funds Governor Schwarzenegger unexpectedly restored (or any other funds at your disposal) to mitigate last year’s fee increases for these students -- and the UC Education Finance Model (EFM) Steering Committee was reluctant to proceed with what amounted to a public relations gimmick that added no new funds to financial aid, and would be paid for by reducing packages for existing recipients. They eventually compromised with you on a “Blue and Gold” guarantee of $80K that will require them to take much less out of student aid packages than the amount necessary to fund a $120K cap on Blue and Gold, which would have made a much bigger political splash. The June financial aid study also presented a more radical alternative that would have capped the parental contribution at 10% for family incomes up to $120K. That approach would have cost $120M and benefitted 20,000 students by an average of $5.9K. But it was not in the cards if you were looking for a public relations pitch that would give the appearance of greater middle income access to UC while costing it nothing, even as tuition goes up. That’s what your November 8 letter really does.
Monday, November 15, 2010
Bob Meister's back with a new article that rips apart Yudof's "Blue and Gold" plan. Enjoy the whole thing. Here we've posted just the part dealing with B&G.