President Janet Napolitano
Remarks to the Board of Regents
November 19, 2014
UC President Janet Napolitano's remarks to the Board of Regents at its November 2014 meeting, as prepared for delivery:
Thank you, Chair Varner.
Later this morning, during the Committee on Long-Range Planning, the Board will vote on a Long-Term Stability Plan for Tuition and Financial Aid.
This is a plan that is integral not only to the stability, but also to the vitality, of the University of California.
One year ago, at my first meeting as UC President, I said this:
Tuition cuts right to the heart of accessibility and affordability—two of the university’s guiding stars. We need to figure out, in the real world in which we live, how to bring clarity to, and reduce volatility in, the tuition-setting process.
I said that I wanted any tuition increases to be as low as possible, and as predictable as possible. And in the environment of state funding in which UC currently operates, this plan meets that bar.
I think it is important to discuss the environment of state funding.
In the course of just the last few years, the University of California has experienced massive state disinvestment. Nearly $1 billion in state funding was slashed from the University’s budget. As the study issued by the PPIC this past Friday describes, state funding per student has dropped more than 50% since 2007-2008. State support for UC students remains near the lowest it has been in more than thirty years.
How has the University managed in the face of these reductions?
We have managed through $660 million in cuts to administration and development of new revenue; consolidation of activities like procurement; and, unfortunately, reductions in faculty and staff. While our commitment to cost-cutting continues—and you’ll hear more about it this morning—the plain fact is that tuition must now be back on the table.
For the last year, my team and I have worked to create a tuition and financial plan that is as predictable as possible, and as affordable as possible. We did so while engaging with a wide variety of stakeholders—from students to faculty, from staff to government leaders.
This plan brings clarity to the tuition and financial aid process for our students and their families. It eliminates the need for a massive tuition increase in the future. It allows our campus leaders and the faculty to know on a multi-year basis what their budgets are likely to be so that they, in turn, can better plan for the future.
Under the proposal, before students apply or enroll at UC, they should be able to sit down with their families and see how much UC will cost, what financial aid is available, and what kind of education they will receive for what they are spending.
This plan also embraces transparency. It depends on three funding sources. One, state funding. Two, tuition. And three, as I mentioned, the University’s continued efforts to achieve efficiencies, savings, and alternative revenue streams.
On the financial aid front, this plan ensures that we can continue our robust return-to-aid policy. More than half of UC undergraduates, those from low-income families, currently pay no tuition at all, and almost half of UC undergraduates graduate with zero student loan debt. Students who come from middle-income families that make between $80,000 and $150,000 a year receive an average of $8,000 in grants and scholarships.
This plan will allow UC to continue its national leadership on financial aid. At a University where 42% of our more than 180,000 undergraduates come from low-income families, further strengthening our vigorous financial aid program is paramount.
Under this plan, one-third of all tuition dollars will go to financial aid. And we will work with all of the University’s financial aid officers to provide students and families with the comprehensive tuition and financial aid information they need.
When it comes to enrolling more California students, this plan will allow us to do so. It will give the University funding for 5,000 additional California resident undergraduates, with growth at every campus. This fall, applications to UC appear to be running at a record pace—again. UC has long stood as a beacon of hope for young Californians. This plan ensures UC will stay that way.
Critically, this plan also guarantees additional investment in academic and research excellence.
The University is an amazingly resilient place. Despite the level of public disinvestment, its research and academic reputation have been largely sustained. Entire swaths of the California economy—from biotechnology to the wine industry—have sprung from UC research. UC graduates lead the creativity and innovation activities upon which California prides itself.
With this plan we can invest in faculty. This means we can increase course selection, speed time to graduation, and better support graduate education as well as undergraduate education.
But, we cannot continue to do these things without additional revenue.
This plan anticipates continued maximization of the University’s finances. We will continue to streamline spending, and eliminate waste, wherever possible. This was one of my first priorities when I assumed the UC Presidency, and it has remained a top priority.
We already have done much on this front. As I already stated, the University has saved more than $660 million under the umbrella of its Working Smarter Initiative. And this plan depends on UC continuing to do its part through maximized efficiencies, cost savings, and alternative revenue streams to cover one-third of the funding gap we face.
We also will continue to make improvements to the academic delivery model. We have expanded access to high-demand entry-level courses. We have encouraged students to enroll in summer coursework. We have employed predictive analytics so that advisors and administrators can intervene, early on, with students who need extra help. And all ten UC campuses have extended and are innovating online learning.
The University of California is the premier public research university in the world. We need to continue exploring how better to educate today’s students, and also the students not yet born.
In putting forth this five-year plan, I considered and rejected certain alternatives. These included:
Different ways of imposing tuition;
Increased enrollment of international and out-of-state students;
A cap—or actual decrease—on California enrollment;
Reducing our commitment to financial aid;
And reductions in faculty and course offerings that would make it more difficult for students to graduate in four years.
All of these are bad for the students, bad for the University, and by extension, bad for California.
Universities, fundamentally, are societies within societies. We often talk about higher education institutions in business language, but they are more complex, more vital than the business terminology suggests.
UC is populated by people who come to the University to have their lives transformed. Nobody on the ground is creating widgets—they are creating wonders. The relationships between professors and undergraduates, graduate students and advisors, doctors and residents; these are life-changing and life-shaping phenomena.
So let’s speak plainly as we work through this budget process. We are not talking about the operations of a tire factory, or a start-up. We are talking about a vigorous and important society within our greater society. And if the society that is the University of California flourishes, then so, too, will our greater society flourish.
Accessibility, affordability, and academic excellence—these are the University of California’s constant stars. And sound stewardship demands that we make the necessary choices to keep UC on a course true to the path these stars provide. This plan, in my view, does just that.
Chair Varner, this concludes my remarks.