Spare an Education?

As Cal and other public colleges grow pricier, financial aid fails to close the gap.

UC Berkeley used to be a true bargain, but those days are gone. The price of an education from Cal and the Bay Area’s other public universities has been rising faster than that of their national peers. These cost increases have outstripped both inflation and financial aid, burdening many undergraduates with more debt than ever before.

This spike in tuition follows a century of nearly free education at Berkeley, ever since California Governor Harry Haight signed its charter in 1868 and the school quickly became the West’s best public university. In 1962, the New York Times Magazine proclaimed, “The University of California, pride of an education-conscious state, has solved the great problem of combining size with excellence.” At the time, Cal’s annual student fees still had not yet breached the $100 mark, a nominal price easily covered by a part-time job. A student working twenty hours per week could even graduate several thousand dollars in the black. But now, nearly half of Berkeley students graduate in debt.

California’s educational crown jewel still looms large in reputation among public research universities — but so does its term bill. Between academic year 2000-01 and 2006-07, Cal’s undergraduate sticker price jumped 64 percent — a greater rate of increase than local private colleges and many comparable public schools. Even after adjusting for inflation, the cost of attending Cal still leapt by a whopping 40 percent.

“We are pricing students out of college,” says Murray Haberman, director of the California Postsecondary Education Commission. “If we don’t put more money into higher ed, we could see a very negative impact on the state’s economy, because we will have a less-educated citizenry.”

The structure of the university’s budget and the state’s waning commitment to higher education is at the root of the fee increases, Haberman notes. Unlike K-12 education and community colleges, higher education is not legally guaranteed state funding. Only two other parts of the budget are similarly discretionary: corrections and state payroll. And when it’s time to slash budgets, higher ed is the easiest target. State lawmakers prefer to cut college funding because they know the money can be recouped by raising student fees. State fee revenue has rocketed to $3 billion, Haberman says, from $132 million in 1975. “They have balanced the books on the backs of students,” he says.

Although public higher education has become less affordable across the nation, the situation in California is worse than elsewhere. According to the National Center for Public Policy and Higher Education’s 2006 Report Card on Higher Education, California garnered an index score of just 42 out of 100 for “Family Ability to Pay at Public Four-Year Colleges.” Utah, Hawaii, and Idaho, the best-performing states in this category, scored 85, 75, and 74, respectively. California is ranked 38th among the 50 states.

Cal is pricey even when compared to other prestigious public universities. US News and World Report named UC Berkeley the top public university for 2007. But the joint runners-up, University of Michigan at Ann Arbor and University of Virginia, were a bargain by comparison. While Cal and Michigan cost about the same in 2000, their difference has since blossomed into a $2,700 gap, while Virginia students now pay nearly $6,000 less than their Berkeley counterparts.

And while Cal still appears cheap next to private Bay Area schools such as Stanford and Santa Clara, even that gap is closing. The cost of attending the latter schools rose 34 and 47 percent respectively since 2000, while Cal’s total rose 64 percent.

If there is good news, it’s that the average Cal student received more than twice the financial aid last year than in 2000. Even so, the aid increase didn’t match the rise in attendance costs. What’s more, the average student now comes from a slightly lower-income background, meaning that even as costs increase, families are less able to pay.

How, then, are Cal students paying for college? Working more than ever, for one. During the past academic year, the average student took in 37 percent more in federal and state work-study income than in 2000-01 (adjusted for inflation), and worked more hours per week.

Berkeley’s financial aid office has done an admirable job of converting loans to scholarships and grants and attracting federal Pell grants for the lowest-income students. But neither these efforts nor the rising work-study income have kept pace with the costs. Student debt has increased 24 percent since 2000 — last year, the average Cal undergrad was in hock for $7,690.

“This is very contrary to the fundamental principles of the Master Plan for Higher Education,” Haberman says, referring to the guidelines lawmakers adopted in 1960 committing the state to affordable and accessible public higher education. “This is real bad, overall, for society.” The increasing debt loads and a predicted drop in high school graduation rates may lead to a “precipitous” decline in college enrollment, he warns.

The fee hikes will prove particularly problematic for the state university system, because it lacks the funds to recruit top students, Haberman says. Local state universities remain far cheaper than Cal, according to College Board data, but cost increases there also are outpacing inflation and financial aid. At San Francisco State, total charges have jumped $3,000 between 2000 and 2007, while average student aid increased only $500. This trend is apparent throughout the CSU system.

Debtwise, however, SF State is improving. Students there are actually borrowing less than in 2000, and are earning three times as much in work-study. Consequently, the average student debt has fallen a full fifth, down to $6,822 for the last school year.

SF State remains on the expensive side, however, costing roughly $2,000 more per year than schools such as Florida State and Texas A&M. But if debt is king in this credit-driven nation, SF State can be proud, as its loan cutbacks have left students with less debt than either school.

Although Haberman’s California Postsecondary Education Commission recently issued a report requesting a five-year freeze on student fees, he admits there is little hope of affordability returning any time soon. “That won’t happen this year,” he says. In 2004, Governor Arnold Schwarzenegger entered into a compact with the UCs and CSUs that lets them raise student fees by as much as 10 percent in any given year until the compact expires in 2011. “It’s a very strong chance that fees will increase until then.”

So much for 1960s idealism.

Higher education costs keep rising:Click here to see a table comparing costs at other state university systems.
To compare costs, aid, and student indebtedness for local colleges and their out-of-state counterparts, the Express analyzed a national educational survey known as the Common Data Set for fall 2000 through spring 2007. The cost totals include in-state tuition, required fees, and room and board. Financial aid comprises federal, state, and outside grants; scholarship, tuition waivers, and athletic awards. Average indebtedness includes average student indebtedness and also loans incurred by the parents of students.

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