The Budget Cuts and the Privatization of the University of California

A version of this article was recently published in the UCSC Disorientation Guide. We repost it here because we found it to be a very useful resource: a history of the UC from the perspective of austerity that collects and synthesizes a lot of otherwise dispersed data. Give it a read, and check out the rest of the disorientation guide as well.

As you go from class to overcrowded class this fall, you’ll want to forget that tuition last year was around $1,800 less than you’re paying now. Continuing a 30-year trend, the UC Board of Regents gathered in cigar and gin-soaked boardrooms over the summer to raise our tuition by 17.6% and lay down plans for further increases in January, or maybe just raise tuition 81% over the next 4 years. (Hey, overcrowding at least improves your chances of getting lucky; tuition hikes on the other hand, just increase the probability of working a shitty job in college and plenty of debt after). The UC Office of the President (UCOP) never tires of reminding us that tuition increases are the recession’s fault or scolding us that Californians are just unwilling to spend on education in hard times; this is a strange excuse though, since state funding has been decreasing while tuition has been skyrocketing since the early 1990s. Even while UCOP continues to whine about how poor it is and how unfortunate it is that they need to raise tuition, it’s offering the state of California a billion dollar loan from UC financial reserves. As it happens, in 9 of the past 10 years tuition was raised – well before the 2008 recession began; UCOP’s insistence on the necessity of this recent series of tuition increases has so many logical fallacies that if it were an assignment, it’d get an F (assuming, of course, that the overburdened TA grading it even had time to pay attention to it). Tuition hikes and budget cuts – at all levels of California higher education – are part of the decades-long process whereby the richest assholes in California (and the greater US) intend to make private what few institutions remain in public hands.

Even if you slept through math in high school, UC tuition increases aren’t difficult to calculate – just add a few zeros every few decades: since 1975 tuition has gone up 1,923% or, if you’d prefer to adjust for inflation, 392% (from $700 to over $12,000 per year)! Minimum wage in California, by contrast, when adjusted for inflation, has stayed roughly the same for the last 40 years, while the median family income has continued to fall since 1973. Most people in California make less money today, yet pay much more for education: for families struggling to pay rent, mortgages, car payments, etc., education becomes a luxury good. To make matters worse, financial aid packages meant to help low to middle income students attend the UC, heavily depend on students working part-time in an economy with a staggeringly high unemployment rate and very low entry- level wages; furthermore, it relies on students taking out thousands in loans that, most economic experts agree, will lock us into debt for the rest of our lives. Indeed, many economists believe that student loans will be the next credit bubble to burst, perhaps wreaking more destruction than the recession of 2008. Because there aren’t enough jobs for everyone who graduates, student loan default rates are nearing 10% – but, unlike other loans there’s no way out for student borrowers. Sallie Mae and Bank of America can take your paychecks and your children’s paychecks until they get back all their Benjamins, and then some.

As the pinnacle of public higher ed., UC students should also know that what happens at the UC level is magnified in the CSUs and Community Colleges. CSUs estimate that over 10,000 students have been denied admission this year because of budget cuts; at the same time they’re not repairing facilities, replacing library books, or rehiring lecturers. California Community College systems, however, have been hit the hardest: it’s estimated that 670,000 students who would normally go to Community College this year will be turned away. CCs are facing nearly $400 million in budget cuts this year and will have to cut several thousand classes to make up for budget shortfalls. Given that unemployment for thoseaged 18-24 is over 17%, it’s clear that the cuts to public education will continue to have a devastating affect on an entire generation. California Community Colleges serve over 3 million students, many of those students going on to four-year colleges after they get their Associates degrees. (It seems almost plausible that state leaders actually hope many of these 670,000 end up in prison: as the CSU Chancellor, Charles Reed, said, “It’s outrageous that the prison system budget is larger than UC and Cal State put together.”)

I. AUSTERITY

If you paid attention to the news at all this summer, you likely heard about the budget crises for California and the Federal Government. State legislators, by a twisted interpretation of their constituent’s needs, have not tried to raise revenue, but are instead cutting UC funding for 2011 by $650 million (and tax shortfalls by November are almost guaranteed to cut another $100 million from the UC budget for this year). Community Colleges, like the UC, will also see further midyear multi-million dollar cuts, as tax revenue continues to stay low. During all of this, UCOP’s response was no doubt similar to yours, when you were four: they whine, don’t get what they want, and then take it out on us. For you, these state shortfalls mean that tuition will have to be increased in the middle of the school year – and you’ll be responsible for making up the difference. The recession has hurt: during the 1970-71 school year, the state allocated 7% of its budget for the UC, and it’s sharply declined since then. However, state shortfalls are not simply a result of the present recession; they’ve given the UC Regents a nice story to tell you as they shred quality education and let old UC’s facilities decay while haphazardly building new ones. It’s all built on our rising tuition.

UC Santa Cruz as a Case Study

Workers everywhere on campus – in your dining halls, cleaning your toilets, or trying to find you financial aid – are expected to take on greater workloads despite having their total workforce whittled down through lay-offs and reduced hours. Since 2007, around 100 of 550 UCSC clerical workers have been laid off, and about 4,200 throughout the UC overall. Custodial workers have been laid off left and right, leading to double or sometimes triple the workload for remaining workers. Around half of the service workers are now facing a doubling of their health insurance costs if the UC gets its way. As whole departments are laid off, like the campus printing services, the university ends up contracting out the work, which typically means exploiting non-unionized contractors with lower wages or no benefits. Teaching Assistants (TAs) fear that the 2% wage increases per year they were forced to settle on during their last contract negotiations with the university won’t even keep up with inflation. And it’s increasingly difficult for graduate students to get TAships as a result of increasing section sizes, less funding, and a trend to adopt “cost-saving” technology like online homework submissions, ultimately leading to a less effective educational experience for their students.

Unfortunately, many workers have adopted the logic that by working hard and at a faster pace they might save their jobs. On an individual level, workers end up burning themselves out, or worse yet quitting, resulting in vacant positions administrators refuse to fill; for unions, it creates divisions and animosity amongst workers because some see their difficult situation as a result of the allegedly necessary budget cuts. Rats in the dining hall have been the main beneficiary of these cuts, not students. Further still, these same workers often hold grudges against co-workers who are perceived as unwilling to tighten their belts – this is a centuries old union-busting tactic of divide and conquer.

As class sizes grow, the pool of lecturers has shrunk. Since 2009, around a third of lecturers at UCSC have either been laid off or have received cuts so severe that they can no longer support themselves simply by teaching here. Those lucky enough to find work end up getting a greater workload for less pay than the full time faculty, and it’s only getting worse. Lecturers receive little warning before being laid off and are often times being rehired at a moment’s notice when admin realize they don’t have anyone to teach vital courses; this is a serious problem if you’re trying to figure out how to make ends meet. It would be foolish to think that this doesn’t affect how they teach and how much you’ll enjoy taking their classes.

The UC has watched many of its famous faculty flee for other institutions in the past several years. This year, 2011, salary increases are on offer to the faculty. And while there have been some major cuts at the administrative level at UC, there is still an enormous, non-teaching, administrative class in the system, one that has grown along with tuition payments – more than 3,250 admins at the UC make more than $250,000 while they lecture us about the need to tighten belts. Our new buildings are products of “bond” sales that utilize our rising tuition payments as collateral for unscrupulous creditors (see below). And everyday the indebtedness of our generation grows, as we’re burdened with the conditions set down by creditors, and burdened with debts that are never forgiven in bankruptcy. Tuition hikes now seem to be the “natural” way to deal with the crisis; tuition hikes will increasingly underwrite the maintenance and improvement of the university. UCOP wants us to think there’s no alternative. We know there is another way. We have to educate ourselves about our own history so we can act to change it.

II. A Little Matter Called Tuition

In 1960, the UC published a “masterplan” to guarantee access to higher education for all Californians regardless of economic background. Although it never achieved these utopian ideals, the cost of a UC education for students was considerably lower in the 60’s and 70’s. In fact, in order to reflect the largely egalitarian nature of the original 1960 masterplan, tuition was excluded from the UC’s funding sources; in its place, some student fees were introduced to help cover the cost of student services and financial aid. In the 90’s this changed when student fees were reassigned to the general UC operating budget during a period of immense fee increases. Revenue generated by students could be used for a whole slew of things, including construction projects. Finally, in 2009 the Regents caved under pressure and decided to rename “fees” to “tuition.”

The gradual transformation of “fees to tuition” wasn’t merely symbolic; it normalized the idea that students as individual consumers should be more involved in purchasing their education – the idea being to encourage direct state funding to wither away. Instead funding for the university would increasingly rely on federal and private student loans. This alone is reprehensible, considering that higher education benefits society as a whole, and has been an important means through which historically oppressed communities have empowered themselves. For every dollar that California spends on higher education, it gets a return of $3 in revenue. More significantly, this transformation allowed the regents to completely change the priorities of the university to suit their desires. In 2003, the regents voted to allow tuition (among other things) to back bonds the UC took out to fund capital projects – in other words, to fund construction. Furthermore, the text accompanying this new UC code restricts the UC from doing anything that might impair or diminish the security of UC bonds! This means that the UC’s highest budgetary priority is to maintain its stellar bond rating, not education; it does this by pledging your tuition as collateral for the bonds, and because the Regents can raise tuition at will, UC bond ratings will always be stellar.

This may leave you scratching your head wondering why they did this. Well, the short answer is that relying on tuition PRIVATIZES the university, and this in turn allows construction companies to make lucrative deals with the UC, as well as allow research partnerships with large corporations to help subsidize the cost of such “scientific endeavors.”

III. PRIVATIZATION: what the hell is that?

In his famous account of the public sphere, historian and philosopher Jurgen Habermas points out that the origins of the modern term “private” are found in the military: as in, a soldier who is not immune from the law. While it is no longer 11 BC, it’s worth remembering that public and private remain linked by who the law allows to benefit from work; as we’ve lost public goods and collective, societal wealth, the investor and creditor class, the elites of society, have gained enormously as a direct result. The United States today is a country of increasing inequality because the elite are allowed to make the law work for them.

At its most basic level, PRIVATIZATION simply means taking things that are publicly owned and making them private: “run it like a business” is their battle cry. Following a severe recession in 1973, the libertarian right convinced policy makers at nearly all levels of government that public ownership is terrible and that taxes are the worst thing to happen since the Ford Pinto. When people say that the UC is being privatized, they’re referring to a process that has several faces.

• All of the land that the UCs, Cal States and CCs are on, including the facilities on them, are publicly owned. Much of the equipment and funds that are used in higher education are also publicly owned. Many of the biology, chemistry, physics and engineering labs produce knowledge by using these public resources, but much of that research and profit ends up in the hands of PRIVATE corporations. This also happens a lot in the Humanities and Social Sciences, as when someone publishes their work or helps design proprietary knowledge (like textbooks). But it’s the “hard” sciences that produce knowledge that’s connected to “technology” and profit. The truth is, private ownership of public work happens in every single department of every single campus. It’s done in the name of “public-private partnerships,” but the public only “benefits” if it becomes a consumer of these products.

• It’s not just knowledge that’s being privatized: the land itself, or as is more often the case, the buildings, are being privatized too. Private construction companies make massive profits building structures to be used by companies like British Petroleum, along with several Silicon Valley firms and even some banks. These facilities are not for the general public or even student use. Similarly, construction companies hired to do the building – often behind schedule and way over budget – are also financially tied to several of the regents, like Dick Blum, and are awarded ridiculous contracts.prevention program among the top priorities of the university administration; all of this in order to attract potential students and their money.

• Most importantly, for us as students anyway, is that federal and state money is being laundered and privatized through our student tuition. This year, for the first time in the history of the UC, student tuition will be higher than state funding for the UC. Much of these increased costs will be paid for with PELL GRANTS, CAL GRANTS and STUDENT LOANS, and all are government funds that must be taken out in higher amounts to cover the rocket-like rise of education costs. Student tuition, unlike direct state funding, can be used to guarantee the UCs credit rating, to invest in the stock market and to engage in predatory market behavior (think of Oliver Stone’s movies on Wall Street). Every time tuition goes up, both the government and students give more money to UC money managers so they can play the stock market (and they have a pretty poor record in this regard). This gives several private investment firms, who manage the UC’s funds, billions in public and private money to enrich themselves. There is little risk for the UC’s private investors because, if anything goes bad in the market, the Regents can raise tuition to cover the losses. It’s we students – whose loans will remain with us for decades – who make it possible for these shenanigans to take place.

• Finally, privatization aims to make it increasingly difficult to get a public education, forcing poorer and older students into the waiting arms of the for-profit university. University of Phoenix, ITT Tech and Heald College are among the most well known of these institutions, but there are several others. From a very young age, everyone is told that to succeed in life, you need to go to college; as that imperative becomes more difficult (remember those 670,000 students turned away from Community College), students must turn to for-profits. UC students should be concerned because at least two of our Regents hold controlling stakes in at least two for-profit schools. Every time they vote to raise fees and cut budgets, they’re effectively forcing more students to go to these places. For-profits make most of their money from federal student aid and student loans – however, over 11% of students at for-profits default on their loans and only around 10% of students ever graduate from a for-profit school.

Given all of this, what is there to do? You could, as many do, put your head down and hope that, if you work really hard, concentrate on studying, don’t fuck around on Xbox, you will get a job when your four years are up. You could hope this job is not at Walmart. You could hope you don’t have to live with your parents when you graduate or that in some inexplicable way, there will suddenly be good jobs and hot tubs for UC grads in four years. You can hope, with millions of others around the world, that things will work out for you because you’re awesome. You can think to yourself that there is nothing that can be done, that the Regents and UCOP know more than students (and faculty), that it is pure coincidence that several Regents and administrators are getting very wealthy at the expense of California students. OR, YOU CAN TAKE A SIDE AND join the millions of students from around the world – from places as diverse as Puerto Rico, Greece, Chile, England and Austria – who are, BOTH IN AND THROUGH THE STRUGGLE, finding ways to educate themselves about their role in the world. Join thousands of students in California this year who will be in study groups and picket lines, sit-ins and strikes. LIKE millions the world over, they too have decided to stop wishing upon stars, choosing instead to create the world they live in.