Remaking the University

By Michael Meranze

The unfolding summer has made it clearer than ever that the Regents have many plans but no sustainable vision for the future of UC. The plans are direct enough: administrative centralization, staff cuts, increasing tuition for students, a faith-based commitment to a second-tier of online UC education and a lowering of staff and faculty benefits.

It is equally clear that those in charge at Oakland and on the Board have set themselves apart and against those who teach undergraduate and graduate students—let alone the staff who keeps the University working from day to day. Indeed, they are remarkably uninterested in the experience of faculty, staff, and students. They are happy to stay in their own echo chamber, blissfully removed from the everyday life of the University and secure in their knowledge of what the future will bring.

Their first bold step is management centralization. Under the innocuous sounding phrase of “administrative best practices” UCOP is pushing ahead with plans to impose as much uniformity as possible on the System. UCOP’s leaders insist that centralization and uniformity will save hundreds of millions of dollars (admittedly over time). Improving software and simplifying administration are things we can all support. Yet, as Chris has discussed, UCOP’s push for control ignores the reality that in many cases the best approach to administering the University depends on local knowledge and experience. Moreover, the sort of top-down command system that UCOP is proposing was rejected by corporate theorists back in the 1970s and 1980s.

At the same time, the Regents have decided that Christopher Edley’s cyber-fantasy is the future of higher education. The Regents’ embrace of the Edley plan smacks less of considered thought than of desperation. Even Edley admits that there are no examples of online undergraduate education working the way that he insists that it will. (10) But based on a vague slideshow the Regents forge ahead. Sherry Lansing proclaimed that online education “should be one of our highest priorities. We cannot wait.” Bonnie Reiss announced that “It’s the future,” while Richard Blum opined that UC “can’t keep teaching the way we did 200 years ago” as if anyone is doing so.

The Regents proceed on faith; in their enthusiasm they don’t raise the important issues. Yet there are significant unanswered questions even about the economics of the proposal. Edley claims that it will only cost 20M to set up and will generate 180M in revenue each year but with its usual lack of transparency UCOP has neither provided any public business plan nor any actual justification for these claims. (11) He also insists—based on data from UCOP—that by 2020 we would need close to 2 billion more dollars to handle enrollment growth on campuses (assuming no increase in any revenue during the entire decade).

The Research Funding Work Group reported that the University could gain 300M each year in better negotiated grant reimbursements. Why is there no discussion of putting that 3B to work on the campuses to handle increased student populations? How many staff members could be hired with Edley’s 20M in initial infrastructure? What would the ongoing costs of creating classes, dealing with property rights, providing computers etc come to? None of these issues were addressed by the Regents or Edley.

Both Edley and the Regents claim that they are concerned with social justice. But these claims ring hollow when they systematically raise fees on students and constantly increase the demands on ever smaller numbers of staff members who labor on under the diffuse threat of being fired. The protestations ring even more false when they hijack the language of an agricultural labor movement while seeking to implement a plan that depends on ever increasing numbers of graduate student workers—despite the fact that they are in effect creating an even larger class of casual and underpaid workers.

Strikingly, UCOP and the Regents appear to be following the failed playbook of educational reformers in the K-12 sector. As Diane Ravitch’s The Death and Life of the Great American School System demonstrates, the fetishism of new technologies of testing and teaching, the worship of market driven solutions, the notion that centralization and the powerful executive could right all wrongs, and deference to philanthropic donors and interests who claimed to reinvent education all combined to narrow the education offered to children (in order to make it fit the technologies of testing and the theories of the reformers), demoralize the teaching force, divert attention from more serious social needs.

Among the most dramatic and disruptive of these failures took place in San Diego under the leadership of a former Clinton administration attorney convinced—despite his lack of experience in the field—that he knew better than those who taught the students. Apparently ideas rejected by the corporate world can only survive among the administrators of educational institutions—where they now can narrow the creativity of the young as they once limited the work experience of the adult.

In their understandable concern over finances, the Regents forget the broader notion of their public trust. No serious effort is made towards discussing their commitments to the State of California or of California’s commitment to its citizens’ education. The Regents barely give lip service to the effort to work to reinvigorate California’s public investments as part of a longer-term strategy to undo the social damage of the last few decades. Instead we are faced with a repeat of the 1990s when hope was placed on the use of information technology as a magic bullet.  A far deeper and more open discussion of education is called-for.

Both UCOP and the Regents are engaged in a sideshow. Their initiatives fail to address either the heart of the University or to propose real answers to the challenges that face us all. The most vital parts of undergraduate classroom teaching (the labs and the seminars, the tutorials and the effort to listen and respond in the moment orally) cannot be transferred easily to chat rooms or online assignments. Online tools are a tremendous resource in blended courses; standing alone they cannot build a community of scholars and learners. These things should be nurtured and financed—not pushed aside as archaic. Edley reportedly commented that what students would lose in not attending campuses would be their access to “beer bashes.” There is no report that the Regents objected to this characterization of the undergraduate experience.

There are signs that the Regents’ echo chamber may not be as secure as they and UCOP would like to believe. Questions about Regent Blum have migrated from the alternative press to the LA Times. The San Francisco Chronicle has taken up the call for greater administrative transparency. Arnold actually signed the law offering protection to UC whistle-blowers (after vetoing it for several years). The Sacramento Bee recognized that the Regents may have violated state law in refusing to allow an independent filmmaker to record their proceedings.

Of course, no one can expect to change the climate overnight or that the Regents and UCOP will suddenly begin to listen to our arguments. These will be long-term projects of uncertain success. But if the UC leadership will not address the question of what education should mean today we will need to continue to do it ourselves. We need to press alternative ideas of what UC can provide our students and the State. We need to insist on the priority of the educational process. People out there are listening.

One year ago this week, the UC Regents approved furloughs for state-supported UC employees, emergency powers for President Yudof, and looked ahead to the fee hikes that would be coming at the November meeting.  The Chancellor's dramatic testimony of cuts to campus operations at the July meeting shocked the Regents and caused Regent Chair Russell Gould to form the Commission on the Future, whose working groups were just recently dissolved.  In parallel with UCOF, the President's Post-Employment Benefits Task Force, formed in June 2009, has spent the past year considering major reductions in employment benefits. One year later, UC has poorer employees, poorer faculty, and poorer students.

A bad year would be made bearable if we could see planning with a reasonable chance of leading to recovery.  But where is this planning?
UCOP and the Regents have no plans for achieving the recovery in state funding that is the campus's only chance for the restoration of UC's former secret formula of mass access to great quality.  UCOP has created a statewide expectation for huge savings through unified administrative systems ($500 million) and for better indirect cost recovery ($350 million) that their long track record suggests will not be realized.

The only result of a year's activity that the Regents will consider this week is the approval of an "Undergraduate Online Instruction Pilot Project."  This project has no realistic chance of producing budgetary savings on anything close to the scale of what UC has lost.  Nor is it the kind of high-quality access that people still expect from a democratic society, as is made clear by medicore press for the UC online plan and growing hostility to the high default rates and broken promises of the for-profit sector that lives off government money without delivering the educational goods.  So why is online education UCOP's flagship project one year into the UC state of emergency?

Much of the answer is that UCOP has turned its back on the collective wisdom of the UC system and cut itself off from grassroots knowledge.  Major stakeholders are treated as outsiders (unions, whose members are rabbalized during public comment period at Regents meetings but are never put on the meeting agenda), or ignored with impunity (the Academic Senate, whose leaders' extraordinary pledge of allegiance to President Yudof in opposition to assistance from the AAUP signaled to the president that he had nothing to fear from them).  Even the chancellors are requiredd by by-law to be seen and not heard at Regents meetings, which continues to generate Regental ignorance of campus conditions. The process has been incarnated in the repeated comments of top officials that UC employees impede progress rather than create it.

The cost of this strategy is levied not only against UC as a whole but against the quality of the thinking of its main leaders. That is clear in moments like President Yudof's interview with Inside Higher Ed, which comes at the two-year mark in his presidency.  President Yudof presents himself as salesman-in-chief, and is unable to credit his critics with seeking coherent alternatives to charging more for less.  He sounds defensive and isolated,  and neither of these conditions are conducive to creative solutions.

We received a comment about the impact on campus atmosphere of this kind of leadership.

There seems to be a large amount of academic detachment going on, at least among the academics.  There seems to be an acceptance that business types have taken over higher education and as long as their grants keep going until they are ready to retire they aren't going to get too involved.  There will be little outbursts of resistance and then someone higher up on the food chain has a little talk with them and the resistance dies down.  I believe what calms people is that they are told that despite what they are hearing about all this "change," their own department will somehow be spared.  That is what has happened to chairs and deans I know who once seemed ready to resist but who have been assured that most academic departments won't be affected yet, so they have quieted down.   The campus restructuring process seems to be shrouded in secrecy, and I suspect they don't want to be open about who will lose their jobs because they are not yet ready to lay them off and they don't want a bunch of vacant positions.

Staff are extremely demoralized and afraid to speak up for fear of losing their jobs.  I've spoken out enough times that some people are starting to give me a wide berth because I am obviously not being a "team player."  Which tells me it's time to move on, if there was anywhere to move on to.  In reality I will grit my teeth along with the rest and hope I land somewhere that will be safe and bearable for the next 5 years.  Two managers I know are on the verge of retiring and they have a gleam in their eyes, unlike the rest of us.All this is understandable, but also unnecessary.  It would not be happening in an organization with a healthy culture and the ability to pull together in a time of crisis.

This demoralization is also unaffordable, in an institution that is trying to right itself. The state of California needs us now more than ever.   We, the UC: we need to remember that we have not failed, we have not lost.  We will keep speaking out, honored from above or not.  We will keep sharing our ideas and pushing to make things better and carrying the university forward.

I thank all of you who have been doing exactly this for years.  Your efforts have made UC a place that people still believe in -- as a cornerstone of the better future California they have every right to expect.

The Delta Project's new report, "Trends in Higher Education Spending, 1998-2008," has data to fuel a dozen major debates about higher education policy. One finding is particularly relevant to the much-discussed proposal to get UC into the on-line education business.

The interest among senior managers in on-line education was wedded in public comments to the belief that UC was weighed down by the costs of academic personnel, which was used to explain the need for pay cuts. On-line ed was thought capable of reducing these.  The Delta report shows that all types of institutions already spent less on instruction in 2008 than they had 10 years before. For public research univresities, this meant a small drop from 62.8% to 61.7% of the total (Figure 9).  Efficiencies are always possible, but instruction isn't the place where costs have grown.

No less interesting is how overly-administrative UC is when compared to its peers.

UCOP's own study showed that three categories of administrative personnel - professional support staff, managers and senior professionals, and senior managers - constitute fully three quarters of UC's payroll. By contrast, the average for public research universities is 37%, adding student services, academic, and institutional support rolled together. Last December,  Ákos Róna-Tas showed that the growth of senior management has greatly outstripped that of ladder rank faculty. Methodologies vary, but the findings do not.

Were UCOP serious about cost savings, it would have spent this year trying to reengineer UC administration.  It's still not to late to start.

The Finance Committee of the Regents will consider an item at their July 14th meeting called "Adoption of Resolution Regarding Administrative Efficiencies" (F2).  At first glance, it is guaranteed to increase the president's executive authority, but is unlikely to increase UC efficiency.

The resolution has the following features:

• It is the first item associated with the UC Commission on the Future (UCOF)  to be considered by the Regents.
• It was not a UCOF working group recommendation, but comes from one of the Expanded Recommendations inserted by UCOP into the documents for UCOF's fifth meeting in June (page 68, Recommendation 9).
• It starts with harmless "whereas" clauses about the value of administrative efficiency. Then, in Whereas 5, asserts that "the Regents consider administrative commonality and consolidation a requirement for reaching the efficiency objective."
  
• On the basis of this equation of efficiency with commonality and consolidation, it grants the President the power to approve and disapprove "all new or substantially revised campus administrative systems to ensure commonality and best practices across all locations" (Resolved clause 2).  Resolved clause 3 grants him veto power over any internal variation in the system. 
• The burden of proof is on the campuses to show that local campus needs are best served by customized systems.  The judge and jury would be the president.
• Having granted executive authority to the president, the 4th Resolved clause calls on the president to "employ the shared governance model."

This resolution empowers the president to centralize administrative systems, to centralize them around the presidency, and to select and reject directly proposed changes in administrative systems on the campuses. 

The resolution is a step backward.  It rests on a key management fallacy. The fallacy is that "commonality and consolidation" in themselves increase efficiency.  In reality,  centralization in most cases reduces efficiency in administrative systems. Centralization increases the number of layers of management, increases the authority of the supervisory layers over the conduct of the local activity, and reduces the control of front-line employees over the work they themselves perform.  Hierarchy, mediation and complexity reduce what we can call epistemological or communicative efficiency - information has to travel through more layers, becomes separated from practice, and gets distorted in the transmission process.  Executives become information poor even as they remain authority-rich, and the operational outcomes have been regularity critiqued in the management literature both before and after management classics like In Search of Excellence and Built to Last showed that long-term, sustainable, organizational success requires the engineering of administrative systems to reflect the deep intelligence of actual employee practice, liberated by non-authoritiarian managers to improve continuously. (Ironically, in the 1980s and 1990s, such classics were trying to make corporations into "learning organizations" that resembled universities.)

UC had its own upwelling of "Built to Last" analysis in 2007-08, and the current resolution is also at odds with these previous evaluations of UCOP practice. These include Regent Richard Blum's critical memo of August 2007 ("We Must be Strategically Dynamic"), and various consultancy reports, which, according to a UCPB overview that I helped draft, encouraged UCOP to be less secretive, more interactive, more supportive and more coordinative of campus initiatives rather than closed, top-down, and unilaterally directive. Administrative inefficiency was the problem, and network coordination was the solution - not centralization and standard practice.

One concrete UC example of the value of decentralization is the Office of Technology Transfer.  The UCOP office of that name used to handle everything related to tech transfer on the campuses from its central Oakland location -- all contract and grants compliance as well as patent licensing, industry research sponsorships, and so on.  A faculty inventor at UCSB would know her contracts and grants officer from the grant application process, and would have a network of colleagues in her field and specfic contacts in particular companies.  If Professor Rodriguez, let's call her, had an invention to disclose, the local C&G person would send it up to Oakland for processing.  Oakland decided whether the disclosure was worthy of a patent application, not Santa Barbara, and how the patent would be prosecuted.  If Prof. Rodriguez received a patent and knew a company with an interest in licensing this invention, it was again Oakland that would proceed or not, negotiate the terms, and decide the university's position, in effect controlling the outcome of the negotiation.  Both Prof. Rodriguez and the UCSB C&G officer were bystanders in a centralized process.

Though OTT had and still has a valuable compliance role, as well as experience and insight to contribute, the campuses argued that its distance from the inventor, local industry, professional networks, and so on caused it to make many mistakes. Just as importantly, OTT was more expensive to run than were the local offices.  One by one, the campuses achieved relative independence for their OTT offices. The decentralization of technology transfer and industry alliances away from UCOP has increased effectiveness and lowered costs.  It has not eliminated OTT input. It has made that input more reciprocal and interactive -- more intelligent, in other words, in part because it is now less unilaterially authoritative.

This doesn't prove that what worked for TT will work for all administrative systems.  That is in fact my point. You need to find out whether the problem is insufficient centralization for a specific function before you "solve" it with more centralization.

There certainly are exceptions to the value of decentralization is when a very high percentage of a system's functions really are in common. But one needs to have empirical data to decide how many of UC's admin functions really are common, and if so, which ones.  Are 85% of UC's functions common, or 15%? I think it is closer to 15% --  I don't even think payroll can be standardized, given what I learned about the extraordinary divergence of campus pay practices when I sat on the Salary Scales Working Group a few years ago.  But this needs to be determined, and the specific systems that would really be improved by centralization need to be specified.

The president's resolution would be plausible to me if it resolved to:

• use the resources of the president's office to identify those systems that really are common to UC, and would be imporoved through standardization and uniformity.
• authorize the campuses to engage each other directly to find their preferred solutions, and to offer a UCOP endorsement of any obtained consensus
• facilitate all campus-specific customized solutions that optimize local efficiency and leverage local knowledge as long as they do not thereby reduce the efficiency of the overall system.

Is it too late for the campus administrations to get the F2 resolution modified into something that will actually help the campuses work better?

by Sharon Farmer
History, UC Santa Barbara


At its April, 2010 meeting, the Systemwide Academic Council of the UC Faculty Senate endorsed a revised version of a pilot project on online learning that had been brought forward by the UC Office of the President and endorsed by the Faculty Senate’s University Committee on Educational Policy.  In its April endorsement, the Academic Council emphasized that it would not support the use of existing university funds to develop the pilot, and that the purpose of the pilot program was to endeavor to find out how, under what circumstances, and if, quality online learning could fit the education goals and mission of the University of California. 
In the latest round of recommendations from the UC Commission on the Future, a set of “Expanded Recommendations,” which appears to have been written not by the working groups of the commission, but by the Office of the President itself, includes two recommendations (recommendations 6 and 7) concerning online learning.  The authors of these two proposals attempt to draw legitimacy for their recommendations from the Academic Council’s April endorsement for the pilot project, but the language of these 2 recommendations betrays a set of goals that are fundamentally at odds with the spirit of the Academic Council’s endorsement and with the educational mission of the University of California.    
The recommendations speak of funding the pilot through “investors” who would realize their profits once the pilot courses are implemented – not only as courses that would enhance the education of  UC’s students, but as marketable products that would be sold to third party institutions and non-UC consumers.
Funding the pilot through private “investment” would create a serious conflict of interest with the stated goals of the pilot program: if the pilot were to demonstrate that in most cases online learning does not deliver educational results that are equal in quality to face-to-face learning as it is experienced in UC classrooms, investors would still clamor for a financial return on their investment, and thus the administration would have a strong incentive to  “market” the product, despite the reservations of the professors of record or the objections of the Academic Senate and its representative committees.    Indeed if, as these recommendations seem to suggest, control of these online educational  “products” ends up at some central location, rather than on campuses and in departments, where the control of the curriculum belongs, the incentive to generate revenue streams rather than uphold the quality of the UC education will be all the greater. For these reasons, UC faculty need to strenuously object both to a funding model of the online pilot program that is based on investment in future revenue-generating online courses, and to relinquishing control of the products of our educational labor to the Office of the President or any other central body.
Further reason for concern lies in the vision of the teaching and learning processes that seems to have generated much of the language in these two proposals.  The idea that our courses can be “canned” and then marketed to third parties displays a fundamental misunderstanding of how professors in tier 1 research universities differ from instructors in, say, junior colleges: most of us begin to revise our lectures and courses as soon as we deliver them, because we are -- or are supposed to be -- constantly on top of the newest literature, constantly challenging the existing literature with our own newest research.  Similarly, this language betrays a misguided notion that once a course has been “created” online it can be infinitely expanded – either through the use of “GSIs” (Graduate Student Instructors) or through an online capacity to make the professor him or herself infinitely available to unlimited numbers of students.  This vision seems to forget that explaining complex ideas, stimulating student debate,  giving feedback on analytical assignments and critiquing student  ideas is time consuming labor – but it constitutes the most important aspect of a learning process that fosters analytical thinking rather than rote memorization.  Moreover, even when we allocate these responsibilities to graduate student instructors, we, the instructors of record, spend a great deal of time training the graduate student instructors to both deliver the content of our courses and to practice pedagogical methods that foster the growth of analytical thinking.
The authors of these two proposals attempt to sell the idea of online learning by appealing to our public mission to support and sustain an accessible and affordable quality higher education:
“Elite higher education increasingly means not only distinctively excellent but also exclusive and exclusionary.  An aspect of our public mission, however, is to make access to excellence inclusive despite myriad challenges…..
I prefer, however, to turn this logic on its head: in today’s society, in which K-12 educational institutions are more segregated than they were in the 1960s, and when differences of household income are more pronounced than at any period since the 1920s, the brick and mortar classrooms of public universities provide some of the rare environments in which individuals actually have a chance to enter into dialogue with, and perhaps even befriend, people whose family incomes and ethnic backgrounds are substantially different from their own.   The face-to-face dialogues and experiences that take place in the classrooms of our public universities constitute some of the major opportunities for fostering  social transformation that our society can offer.  We can’t afford to relinquish that potential by encouraging either our most privileged or our most economically challenged students to substitute an online education – and all of the social isolation that it entails – for a face-to-face education.
The proposal that UC’s online courses could be distilled into marketable products suggests that UCOPs principle motivation for developing such courses is a desire to generate revenue for the university and its private investors rather than a desire to improve the quality of the UC education or to make it more accessible to California’s qualified high school graduates.  It also represents a fundamental misunderstanding of the kind of teaching that we, as tier one research professors, expect of ourselves, and the kind of critical thinking that we are supposed to promote among the top 12% of California's high school graduates.

By Michael Meranze

July has come again and we are without a state budget. While this fact is no great surprise, the summer of 2010 will not be simply business as usual for UC, California, or the United States. Indeed, one doesn’t have to be a Cassandra to recognize that decisions made this summer will haunt us for a long time. At the state and federal levels Democrats in disarray have demonstrated little ability to construct a political platform that could mobilize popular support while energized and organized Republicans have made it clear that they are willing to sacrifice the interests of the population in pursuit of ideology and corporate profits. On the international level mass hysteria about short-term deficits promise to drag the world economy back into another recession if not worse. And on the local level the University’s leadership (both in Oakland and on the Board of Regents) is primed to accelerate UC’s transformation into an increasingly feeble copy of an already crisis-ridden economic order of increased hierarchy, indebtedness, labor intensification, and the destruction of any sense of common purposes or commitments.
The situation in California is depressingly familiar. Despite being one of the world’s wealthiest economies, California has, for several decades now, turned its back on the accomplishments of the 1950s and 1960s. Instead its governing class has produced policies that have dramatically increased economic and social inequality, starved the social safety net, re-inscribed racial distinctions and segregation while cutting the corporate contribution to state revenue nearly in half and developing an overall tax structure that is regressive in practice.

In addition, as part of Proposition 13 and the initiatives for term limits, California’s budget process is designed to fail. Both the budget and any tax increases demand a 2/3 majority thereby allowing the Governor and his radical Republican allies to set the framework of the budget process. They, in turn, have made it clear that they will refuse tax increases but will happily cut off social services to the poor, the young, the elderly, and the sick. The imposition of term limits has left us with legislators less able to develop institutional and legislative knowledge and more dependent on party aides and lobbyists.

The State Republicans have framed the present situation as an immediate budget crisis of 19 Billion dollars—refusing to distinguish between current shortfalls that must be addressed and long-term debt repayments that can be spread over time. Facing all of this, the state’s Democrats will attempt to cobble together a budget that will cut services without destroying them. Public employees (and especially their unions) will again be cast as the sources of budget difficulties while Meg Whitman will declare her ability to root out what she fantasizes as outlandish government waste and Jerry Brown will fail to take a public stand in favor of the importance of government investment in people and the future. Limited by the State’s inability to issue currency, and Republican unwillingness to tax the beneficiaries of California’s growing inequality, the state seems headed towards a summer of discontent and the further shredding of the social compact.

But this year, California’s budgetary drama is a microcosm of a much larger problem. As states across the nation are gripped by their own budgetary shortfalls and dependent on federal stimulus money to stay afloat, Washington has become gripped by its own deficit frenzy. Either reasoning blindly from the Greek situation, or simply using it as a smokescreen for long-desired policy goals, deficit hawks and the rearguard of the effort to save the US from the New Deal have gained the upper hand amongst the policy-makers and pundits in the nation’s capital.

Republicans and conservative Democrats have decided that cutting federal spending to bring down future deficits is more important than preventing the nation’s economy from falling back into recession or depression. The repeated failure to pass an extension of unemployment benefits is only the clearest evidence of a collective madness.

The Obama administration, while showing some signs of understanding the foolishness of this policy, has shown little will to effectively fight for it (it doesn’t concern saving the banks after all). Working people, it seems, must pay more and more for less and less so that the Wall Street can be preserved and the Wars fought. Social security is once more back in the cross-fires given Washington's refusal to confront the fact that whatever problems there are in the social security trust fund are due to its having been raided to pay for the Bush tax cuts and the expansion of our military presence across the world. Even having witnessed the massive meltdown of the stock market the federal government seems unable to resist turning more and more of our futures over to the wizards of finance capital.

As a result the stimulus funds that states have been counting on will dry up, no more will be forthcoming, and the federal deficit mania will be pushed down upon states across the nation who will cut their services even further. The already anemic economic recovery likely will collapse.

In Europe the drive for austerity is even fiercer. The EU has decided to tackle its various organizational and currency problems by dramatically reducing social investment, driving down social support, and demanding give backs from workers and students. In Britain, higher education faces millions in funding reductions while the doors of universities are being closed to thousands of students.

Of course, California’s educational sector is already suffering from a Republican driven will to austerity. The State already ranks near the bottom in state funding for K-12 pupils, the community colleges are being asked to serve more students with less resources, CSU has laid off faculty and raised fees, and UC has already raised fees, imposed furloughs, instituted cutbacks, and laid off staff. Even if UCOP’s optimism about the proposed partial back-fill of state funds is proved justified, the University is set to raise student fees even further this year.

In this context, the vapidity of UCOP’s analysis of the future becomes even clearer. President Yudof’s argument for the necessity of the “hybrid” university, after all, depends on a very specific historical argument. For Yudof, the decline in state support for higher education was driven primarily by changing demographics, in particular the “graying of America.” Yudof saw an inevitable loss of interest in funding the education of the young and moreover, he argued, the growing value of a college education meant that state legislators viewed it less as a social investment than as a private investment—if college education was worth so much to individuals then they should bear the burden through fees, tuition, or debt. By casting the decline as an effect of demographics and individual benefit, Yudof in effect ruled out the question of politics. The result was to naturalize—or to use a language that some of the older of us might remember to “reify”—a particular set of political decisions and political values. If you start from the position that the decline in state funding was “natural” then there is little point in attempting to work with others to change the basic calculus.

But that calculus has brought us to the present crisis. Conservatives have effectively persuaded Americans to forget the successes of the social democratic states of the mid-20th century; business groups have deployed anecdotes to create a mythology of businesses fleeing California to greener pastures, and politicians and administrators have succeeded in ignoring the connection between funding and educational success. But there are signs that these assertions are past their sell-by date. In California to speak only of the local, there is abundant evidence that Californians, if not its Republican party, are willing to increase taxes in order to support education and social services. It is not too late to speak out against the effort to transform the present into a new Dickensian world.

Where will UCOP and the Regents stand in all of this? Will they rush to blur the distinction between Universities and for-profit schools or will they allow the Senate to actually evaluate the new online programs? Will they push forward with their ideas to depend more on lower-paid GSIs and Lecturers or will they shelve the notion that they should encourage Senate Faculty to buy out their teaching time through grants? Will they continue to claim that fee increases can be managed with financial aid or will they make clear the burdens placed on students through increased fees? Will they praise the Governor despite his devastating efforts to shred the social network or will they work in common with the entire educational, indeed social service, sector to reveal the human costs of Arnold’s budget?

I love steadily declining educational resources as much as the next person, and very much enjoyed this report just out today, which shows that California after years of striving now has successfully achieved the worst schools in the nation, 44th in this, 46, in that, 50 in librarians pet student - all numbers that make us special.  We are also 50th in class size, having the most students per teacher in the United States.  In 2009-10, California classes were 50% larger than the national average.

California higher ed is now following the Way of its K-12.  The most reliable path to a bad education is a sudden, massive increase in the number of students per instructor.  UC is stepping up here. Unpublished data from several campuses showed increases in the number of large lectures in the previous downturn.  The numbers aren't in for 2009-10, but tales of class size increases are legion.  One department in my division at UCSB tried all of the following experiments this year:

* The new departmental 10 lecture course
* The departmental 15 lecture course without sections
* New large lecture courses with half the normal ratio of TA's
* 38-student courses expanded to 70-90 students with a reader
* "Hybrid" graduate/undergraduate seminars
10 used to be small groups for 1st year students, to give them the kind of detailed feedback that would set them up well as college writers.  15 used to have sections and now it doesn't. Other courses have half the sections while still others double or triple in size. Let CA high schools be our destiny.

When I was a graduate instructor at Cornell University, I had one section of 17 engineering students each semester.  The semester writing requirement was 30 pages over about 12 weeks.   Each student wrote an essay each week, and the total number of pages was for most students closer to 60 by the time the term was done. Each student received a marked-up essay back from me after the weekend, getting 200-300 comments over the course of the term.  I still get email from Cornell engineers from that period  thanking me because they have remained among the best writers and communicators in any workplace they've been in since.  This was not because I was such a brilliant writing teacher -- I was learning on the job -- but because elite schools provide the conditions to instill elite-level skills.

The UC Idea was mass access to this elite quality.  That is what is being taken away.  A typical UC teaching assistant already has 50 students a quarter in the humanities, and 75 in the social sciences. If a lecture is taught with half its TA load, each TA will have 100 students.  A reader is not paid even to show up to lectures, and will have in the above case 50-70 papers to grade.  The loss for educational attainment should be obvious to all.  Though everyone is trying to mitigate such loss, the decline in outcomes are not being estimated with any precision.

In keeping with reductions in instructional services, departmental offices have got to go - at least for the humanities.  Why should individual departments have offices for staff working for that department, its faculty and its students?  Why not create large staff pools organized by building and given names like "Humanities South Administrative Support Center"?  Faculty will grumble for a while, and write emails about why the printer has be one floor below in the Phelps Humanities Administrative Support Center.  But they will get used to it and go back to their work.  There was a temporarily outbreak of email around the question of whether faculty should post on their office doors a sign that said something like "private office" in order to ward off the large numbers of wandering undergraduates who, unable to get into classes, may stalk the halls trying to find a professor to talk to, or, failing that, rest in an Administrative Support Center.  "Private" signs were finally discouraged.

These stories prompted an email to me from someone who has been through this before:

Wow, this reminds me of the good old days of the Dwinelle cluster.  The Dean's office waited until a manager said that she was going to be moving away, then, knowing there would be a vacancy, sprung it on us.  It was also very top down.  They talked it up and implied that as we staff would be taking on more duties our pay would be adjusted accordingly.  Then they left us to do the very difficult work of creating systems that worked for multiple departments without destroying departmental traditions, physically moving our offices (twice) and establishing relationships with a new set of faculty who had no input into our hiring.  All that for not a penny more and they resisted reclassifying us for an additional 6 months.  They put a vastly unqualified personal favorite of the dean in charge of our clustered unit.  The faculty and staff fought this tooth and nail, except for those who became convinced that their personal star was hitched to this clustering.  It made for an ugly, stressful scene for several years.

Here is something people should watch for: people who analyze staff positions from up on high tend to want to simplify what staff actually do in order to make the reorganization easier to theorize about.  So, while in my old job I had been 75% Student Affairs, 25% department library supervisor, in the new regime I was "only" 100% Student Affairs for 3 departments.  Ultimately I became library supervisor for the 3 small department libraries.  I did web design for all departments, set up database tracking systems for all departments.  All things requiring knowledge and effort and all things that didn't fit into their calculations.  The Dwinelle clustering was built on the theory that fewer people could accomplish more if they spent more time on similar processes.  I have asked people in the Dean's office how that eventually turned out and they said, as each department came to them and told them that it was impossible to accomplish what was required of them without more staff, that the staffing of all the clustered departments eventually came back up to the original levels.  You can't make work disappear to any significant amount just by shifting around people.  Plus there is a steady stream of new work being handed down to the academic departments by the central departments.  Once you get done paring staff down the the bare minimum, there is nobody left with any time for the new work.

Staff have been outraged by the recent Bain report because it looked only at payroll titles and declared that there were a bunch of "supervisors" on campus who were only supervising 2 or 3 people.  The report made it look like these people did nothing else but sit in their offices and make daily rounds to make sure their 3 employees were doing all the work.  Again they have simplified what people do and left out the complexities of each job and the fact that "supervisors" spend the vast majority of their time processing things alongside their fellow staff.

I've been concerned that Berkeley faculty have not spoken out publicly about this misconception.  I'm concerned on the Berkeley front that faculty will be effectively separated from staff by being told that their future salaries will suffer if they keep their staff.  I guess, at this point, if I were asked to accept a future cluster rather than be laid off in these miserable times, I would say "bring on the clustering and I'll do my best to make it work."  But it's guaranteed to cause a huge amount of disruption in the near future and may not achieve any where near the savings that the higher ups expect.

Just a few more years and I can retire to write another "Moo", western version and maybe get rich.  Meanwhile, good luck with your clustering.  If anyone wants advice on how to cope, there are people at Berkeley who could offer some.

The California state legislature is set to adjourn without a budget. UC officials remain guardedly optimistic that last year's "one-time" cut of $305 million will be restored.  Regent Chair Russell Gould informed the Commission on the Future two weeks ago that "the state is listening."  The Conference Committee documents on the state's education sectors still show a split between the Assembly and the Senate on sources and conditions of this backfill,  on a partial buy-out of the Governor's 15% fee hike, and on striking legislative language blocking state funding of employer contributions to the pension (pp 31-37). And these items have not yet gotten close to a full vote.

Judging from our mail,  faculty and staff are less optimistic than are Regent Gould and other senior managers.  The following is a particularly vivid reminder of the gap between the experience of Regents' meetings and the experiences occurring on the campuses.
Hi Chris,

The (fairly obvious) scenario I fear is the following:

1) Schwarzenegger's $300 M for UC in his revised budget will disappear in Sacramento negotiations, presented as it was as directly at the expense of California's poor and dependent populations

2) Moreover, as you have suggested, the legislators will take UC CFO Peter Taylor's proposal seriously concerning UC's ability to save $500 M through efficiency measures and will therefore see even less of a need to restore the 20% cut to the 2009-10 budget.

3) the Gould Commission proposals, replaced in large part by UCOP's supplemental proposals, will go to the Regents in July.  Under the influence of ongoing budgetary confusion, the Regents will proceed to ignore the better proposals and to decide very brutal cuts across the board with no reconsideration of implementing a revised furlough program to soften the cuts.

4) By late summer, each campus will face 15% cuts (or higher) to academic core operating budgets and within each campus, many depts. will face the prospect of a drop in quality in grad and undergrad programs from which it will take many years to recover. One possible outcome: these dire circumstances will force campuses to raid "rainy day funds" and "profit centers" to make in through the year 2010-11, resulting in smaller (5%? 7.5%?) cuts.

5) Meanwhile, civil war will break out between campuses over ICR, UCOP "taxes," etc. radicalizing the push by UCB, UCLA, and UCSD to go it alone and to try to adopt the flawed Michigan model.

Among the useful material in the Daily Planet story on Regent Richard C. Blum's significant investment stakes in the for-profit higher ed sector, note especially the description of Blum Capital's investment behaviors, particularly its price arbitrage at crucial moments. I'll comment later this week on what this tells us about the relations between two distinct functions known as investing and discovering.

For more on the overall issue of the relation between public duty and private interest, in addition to  Michael's and Catherine's discussions and links below, also see:

A favorable bio-story from 2003, with passing reference to Blum Capital's stake in a UBS-related defense contractor.

A critical five-part series on Blum's investments and social impacts in the Anderson Valley Advertiser.

Google Finance metrics on two of the companies noted to be part of Blum Capital's portfolio: Career Education Corporation and ITT Educational Services, Inc.  You can use the "related companies" function to compare the financials of these firms to others in their sector.

See this chart for CEO compensation in the sub-prime higher ed sector -- produced as part of an ongoing Congressional investigation.

There's also "Subprime Goes to College," an attack offered in Congressional testimony of the dependence of the sector on unsustainable student debt (not to mention federal funding). The attack is authored by a hedge-fund manager named Steven Eisman. He is helping his short position in subprime education companies such as those held by Blum Capital, but he offers useful data and a condensed summary of common complaints about the overall industry.

Catherine Liu’s call to remove Richard Blum from the Board of Regents points to structural questions that confront anyone concerned with reforming the University. As Catherine reminds us, Blum’s companies hold nearly a billion dollars worth of stock in for-profit, online educational companies that, reportedly, have received millions of dollars of UC investments. Of course, as no one needs reminding, President Yudof, Dean Edley, and Regent Gould are all pushing for an expansion of online education—an act that would establish greater legitimacy for the for-profit educational sector at the moment of rising scrutiny of its business practices, educational quality, and reliance on public funds. Indeed, as Catherine Cole has recently pointed out, rising student fees and an accelerated UC commitment to the notion of online education cannot but help legitimate a for-profit education sector that, while dependent on large amounts of public funds in effect diverted from public universities, has been subject to little oversight of its educational commitments or quality.

Given the lack of a clear business model for UCOP’s proposed expansion into online education, and the general opacity of UC’s investment decision-making process, the relationship between Blum’s holding, UCs investments, and the UCOP’s online frenzy call out for some public explanation. At the very least Regent Blum needs to respond to the reports and explain why his dual role does not constitute a conflict of interest.

But the issue goes beyond Richard Blum. As Bob Samuels has argued UC lost 23 Billion dollars in investments over the past several years, (investments largely related to UCRP) and continues to accrue debt far beyond its actual revenues. These losses and debts put the future of UC at risk. Indeed, the restart of employer contributions for UCRP will cause funds to be taken out of divisions and departments and, without resumption of state responsibility for UCRP contributions those withdrawals will become increasingly severe in the future. UCOP (or at least its leadership) have blamed the contribution holiday and the recent collapse of the stock market for these problems. They have refused to examine the role of their own investment decisions and their reliance on money managers for the disastrous transformation of UCRP’s condition. Again, a serious and open examination of these investments and the way that UCOP has relied on out-of-house money managers is the least that is owed to the University community.

These issues point to the continued lack of accountability—on the part of either the President’s office or the Board Regents—to the University and its citizens. The Board and the President treat the rest of the University—faculty, staff, students—as interlopers in their business. They are happy to hear our voices when we speak in praise but push them aside when questions are asked. But the consistent failures on the part of the Board to protect state funding, their apparent commitment to risky financial investment strategies, and their seeming unwillingness to take seriously what at the least appear to be disturbing conflicts of interest, call out for reform.

Regent Blum owes us an accounting: the University rests on open debate of freely disclosed evidence, he needs to adhere to these standards in disclosing and explaining investments that on their face seem to show a lack of confidence in, and support for, the public sector he helps lead but in whose competition he invests. The Committee on Investments owes us an audit. The Board of Regents and President Yudof owe us greater responsiveness, openness, and most importantly a revamped organization that represents the University rather than governs it from afar.

Frontline has a great segment on for profit education. Today the Senate is holding a hearing on a report drafted by Senator Tom Harkin on the for profit education sector. Steven Eisman, former hedge fund manager and critic of subprime mortgages says that we are on the 'cusp of a new social disaster.'

Bloomberg reports that "The five largest publicly traded for- profit companies received 77 percent of their revenue from federal financial aid programs in 2009, up from 63 percent in 2002, the report said." Richard Blum is a smart investor.

But where is the conflict of interest between Blum's savvy investment in the for profit education bubble and his service as UC Regent?

Today on NPR, the profit education industry defended itself by asserting that it provided education to critically underserved populations. Perhaps thousands of CA students who couldn't get into Cal State or UC's because of budget cuts and enrollment contraction could pick up a degree at one of Blum's for profit universities?

Blum's Capital Partners is the DOMINANT shareholder in two of the largest for profit higher corporations, Career Education Corporation and ITT Educational Services, Inc, both under Senate investigation and cited by Harkin's report.

These companies have learned how to suck taxpayer money into diploma mills that turn handsome profits for their investors while saddling their "students" with crippling debt.

Berkeley Daily delivers a story about Richard Blum that is a MUST read. Please take the time to do so. I know it's summer and we are all distracted, but we MUST organize to dump Richard Blum as UC Regent. He has made many fortunes investing in diploma mills, private, for profit universities that hard sell their degrees to desperate, working class and veteran students. These private institutions suck up federal grants and treat their students like atm's to the federal student loan serve. Please read this article and let's organize and act. I also heard UC Regent and CA Secretary of Education Bonnie Reiss speak at an event in Providence during which she demonstrated less than zero understanding of education or its function in a democratic society. The Regents serve twelve year terms. Let's subject them to thorough scrutiny and oust the ones, like Blum who are out and out corrupt and the ones like Reiss who are destructively ignorant.

By Michael Meranze

UCOP’s “expanded recommendations” to UCOF envision the University as an increasingly centralized, hierarchical, routinized, and disconnected set of programs. In keeping with the managerial ideology that is their default answer to any set of problems, UCOP has proposed that the problem facing UC is an inefficient, and insufficiently disciplined, faculty and staff; as a result what the university needs is a more powerful center. “I do not know of any organization that achieves budget discipline from the bottom up,” Chris Edley informs us in the expanded recommendations, “We need to be sufficiently top-down to get the job done.” (ex.recs, 94) From the vantage point of UCOP—as with their political analogs Governor Schwarzenegger and Meg Whitman--the key to success is routing out “waste” among, and imposing discipline upon, the little people. Despite their own problematic track record of leadership and direction, they want to impose a new vision on the institution. How does UCOP view the faculty and staff and how do they imagine the University’s future?

The sense that it is the archaic nature and attitudes of the classroom, the faculty, and the staff that lies at the heart of UC’s problems runs throughout the “expanded recommendations.” Recommendations 1 and 2 call for greater centralized oversight of teaching loads, course sizes, and greater power to close programs. Despite acknowledging that programs are not “widgets” that should be added or subtracted lightly, Recommendation 3 proposes streamlining the process to get self-supporting and extension programs approved—thereby increasing the pressure for programs to develop in response to funding not intellectual necessity. The list could go on. These changes are primarily justified in terms of “through-put” and “out-put,” “marketing” and “enrollment management.” The effort is to transform the University so that it can be monitored through computer programs. What matters are those things that can be translated into managerial language and the empty efficiency of streamlining. Research and teaching appear, and perhaps are in the minds of UCOP, an afterthought.

Both UCOP and its allies avoid confronting their vacuity of their models by denigrating the faculty and the staff. Yudof is relatively circumspect in this—although his famous comments about “being manager of a cemetery” did not endear him to those who work for the University. Peter Taylor seems to think that the reason there hasn’t been administrative change has been local resistance. As he told the Chronicle of Higher Education, "The hard part isn't identifying the opportunities . . . It's driving the cultural change that will have to take place." Of course he forgot to mention that these efficiencies had been proposed for years and UCOP had failed to administer them. Edley loves to cast himself as a bold thinker hamstrung by a conservative faculty. As he is reported to have commented recently, “The biggest obstacle [to online education] is our academic senate. They revel in the comfort of denial and the conservatism of greatness. They have never read a newspaper—they’re in denial. The state isn’t going to pay. Faith-based fundraising is not a business plan.” But in reality what is it that UCOP is proposing?

One of UCOP’s major departures, of course, is online education. Both Toby and Catherine have already provided evaluations of the pedagogical and financial implications of UCOP’s online initiatives. I won’t belabor those points.

But I do want to point to another aspect of their program. Expanded Recommendation 7 calls for the immediate establishment of system-wide planning for expanded online courses—even before the pilot program has been established, organized, run, and evaluated. Despite the rhetoric of rigor there is to be none. UCOP wants the program no matter what the faculty decides.

But what exactly is the rush? The only thing that it would accomplish with any certainty would be to displace funds and attention from alternative approaches to online tools. Indeed, it is difficult not to think that the real reason for the rush is that the proponents of accelerated online education at UC worry that the pedagogically based exploration and use of online resources that goes on everyday at UC is in fact more effective and educationally sound than what they are proposing. Like Tim Pawlenty, their ally in the promotion of online education, UCOP seems to view the actual classroom and classroom instruction as an impediment to college education.

Even the “social justice” claims of online access ignore the project's implications for the work of the institution. Edley admits that his model depends on increasing the number of GSI’s at a point when the academic job market is shrinking due to the long-standing administrative preference for lower-paid temporary faculty. The University would thus be in the position of deliberately expanding the pool of graduate students to teach online courses even though it knows that their employment prospects are declining. Put another way, social justice concerns only address consumers not workers. Those who actually work at the University are ignored so long as UCOP can claim that someone is consuming something.

If the online initiative makes it appear as if UCOP is moving in a bold, new, direction, the repetitive claims for centralized supervision suggest that the University is suffering primarily from a lack of “hard-nosed” oversight. But does anyone honestly believe that the political problems of the University stem more from the presence of unnamed “weak programs” than from the remarkable string of administrative scandals that have rocked the University over the last decade? While some steps have been taken to respond to those problems is there evidence that the scandals have been taken to heart? It is hard to see when UCOP continuously justifies increased salaries for administrators because they have assumed new duties while expecting staff and faculty to take on new duties (due to cutbacks) while suffering furlough reductions. Or take the Research Funding Work Group's identification of hundreds of millions of dollars lost each year because of insufficient ICR. Are we really to believe that it is the responsibility of individual faculty, staff, or lab workers to negotiate proper ICR? Or has it been UCOP which has passively allowed the underfunding to go on for years? UCOP would like to manage everyone else even though it has been unable to manage itself.

UCOP has also failed to justify public funding in an effective manner. Take President Yudof’s now infamous comparison of our successful businesses and our academic programs. This distinction bungles the reality of the matter. UCOP should insist over and over again that the state receives a huge immediate return on its investment in UC as 3 billion is leveraged into 20 billion of economic activity—and that the dynamism of that investment depends not only on the “businesses” but on the entirely of the University. What Yudof fails to argue—perhaps because he can’t see it—is that the “successful businesses” are dependent on the core programs. They are dependent on the cross-subsidization that occurs, they are dependent on the links between the medical centers and the campuses, and they are dependent on the quality of education and students that are drawn by the faculty and that draw faculty as well. They are dependent, in other words, on the intellectual and educational dynamism of the University.

Budget transparency would help establish this case—but of course budget transparency is anathema to Oakland. UCOP would prefer to disconnect UC even further from the state (as in expanded recommendation 8 calling for more external funding of faculty salaries) than seriously attend to the actual benefits (for the university and the public) of state funding. They would rather claim success with grant money than give an accurate picture of the actual interconnectedness of the intellectual life of the University.

The UCOF work groups failed to provide a systematic and unifying set of recommendations not because the work groups weren’t up to the task but because the UCOF project was flawed. UCOF assumed that the answer to UC's problems was to give more power to the structures that had failed the university in the first place. UCOF assumed that the managerial model promoted by UCOP was sound and the University’s difficulties were rooted in the leftover practices of a bygone age. But none of those assumptions can be sustained.

Coverage of UC this week included a story in the Sacramento Bee on how the University's stated poverty hasn't prevented it from raising salaries at the top. The Los Angeles Times decided that the leading idea from the Monday meeting of the Commission on the Future meeting was changing the term "fee" to the term "tuition."  UCOP has spent much of this crisis year pitching on-line education, but this idea got attention only in its coverage of itself.  It's pretty obvious that on-line ed will have only a marginal, incremental effect on UC's very large educational and financial problems, and it should now be given back to the people who already know something about how it works.

The big financial story was the size of the shortfalls in UC's coverage of its research costs. We've often covered this issue (around UCOF's recs, from a lab perspective, as a pay equity issue, in its administrative details, etc.)  The theme has been that research doesn't make money, but costs money.   A 2003 Senate report demonstrated this, the Council on Governmental Relations has long had non-circulating data on the subject.  Urban legend has convinced generations of scientists that through their grants they were the university's major breadwinners.  For reasons best known to themselves, research administrators let them think this, though they have always known that gross income was accompanied by net loses, and presented that data to each other at professional conferences.  See a particularly good primer, this one from UCSB, that states, "It is less well known that the university provides about 25% of the actual cost of facilities and administrative support for extramurally funded research, over and above what it collects in indirect cost return."

The crisis has for some reason finally caused this news to erupt out of UCOP.   The  size of the loses is remarkable. "UC receives about $3.5 billion a year in research grants and about $780 million to cover indirect expenses such as paying the electricity bill in labs and other facilities. But the actual indirect costs are about $1.5 billion, a $720 million shortfall."  This is a huge number, and it also means that UC provides 48% of the actual costs of facilities and administrative support over and above reimbursements.  Obviously this internal support for research is unsustainable.

Getting the money back is important, but will be easier said than done. Gerald Barnett and I, writing in the Chronicle of Higher Education, suggested a blanket, short-term increase in federal indirect cost recovery rates while real costs get sorted out.  The odds of this happening are rather low. The political question is even more awkward.  Two weeks ago, UCOP said it could cut $500 million in expenses with administrative reforms. Now it turns out it's been losing another $750 million a year in research costs it didn't pursue. This undermines UCOP's right to lecture the campuses about their alleged inefficiencies, weakens public confidence in UCOP's managerial abilities, and gives the legislature no reason to increase state appropriations.  Sure enough, the leg split on the restoration of the one-time $305 million cut, with the relevant Senate committee agreeing only if state revenues are $2 billion greater than the forecast in the May Revise (p 32).

The good news is that the media is starting to realize that UC's businesses aren't doing much for UC education.  In its story, "UC: Millions Lost in Research Costs from Grants,"  (on its way to becoming the title of all UC news titles of the future - "UC: Millions-Billions Lost"), the authors note,
As state funding declines, UC is relying more heavily on private sources of funding such as research grants and hospital fees. Those income sources fuel the university system's medical and research enterprises, and aren't used to pay for basic undergraduate education, which relies on student fees and the state's general fund. Sorry, that was from the negative Sac Bee story about UC's high end salaries.   But it raises the possibility that the public will increasingly realize the value of direct public funding of the campuses themselves -- if they can be sure education, including research, is what the money will go for.

To inspire such confidence, UCOP will have to be much more straightforward.  On ICR, that would mean saying, "we took losses for two reasons.  First, we did it as a service to our faculty and to the state, because unless we paid indirect costs lots of great research wouldn't get done. Secondly, we took loses because our sponsors forced us to, from federal agencies who short us and require matching payments on some kinds of grants, to industry, which expects the public to subsidize high-risk research. It was great while it lasted, but we can't afford it anymore  We'll have a new proposal for cost recovery in a month."

The UC Commission on the Future is having its fifth meeting tomorrow, June 14, for its second consideration of formal recommendations.  UCOP has performed a studio cut on the original material, which has the virtue of greater clarity.  Note in particular (page references are internal to the Meeting Materials):

•  "Selected Working Group First Round Recommendations."    (p 20) 

We are told that the other First Round recommendations are not thus rejected, but won't be discussed June 14.  There is some lack of clarity here.

• "Expanded recommendations" (p 68). These have been recently added by UCOP.

These new UCOP recommendations have not been reviewed by the Senate, and there has been some drama about this over the past week.  The upshot seems to be that "nothing will be decided at this meeting."

• Senate Chair Harry Powell's summary of the Academic Senate's review of the UCOF First Round recommendations (p 102).
• Proposed Commision Recommendation from the Academic Council  (p 109)
• Council of Vice Chancellors (COVC) Recommendations to UCOF (p 113).

The main idea that has emerged from UCOP for managing UC downsizing is on-line instruction. See Tobias Higbie's analysis.

I offer a brief overview of the financial recommendations.

Catherine Cole explores some of the complications and potential conflicts of interest of the online iniative.

by Catherine M. Cole

On June 11, UCOP made public a set of "expanded recommendations" to the UC Commission on the Future which is to meet on Monday, June 14. The cornerstone of these eleventh-hour additions seems to be items number 6 and 7 of the expanded recommendations which propose an "expedited Pilot Project" for lower division online education:

"Eventually, there will be online credit-bearing courses and B.A. degrees in the so-called quality sector. (emphasis added) That much seems certain. The questions are: Who will develop and deploy the first successful model, when will they do it, and can it be at a scale sufficient to make a meaningful difference in access to higher education. The Commission's proposed answers are: UC should be first, as soon as possible,and our ambitions should err on the side of boldness.

"We must plan assuming an indefinite period of serious financial pressures. Moreover, with or without revisions to the Master Plan, there will be growing political, economic and social demands for undergraduate spaces. Access to excellence is already too limited, and the future will be worse absent a combination of transformation and innovation - in both how we deliver on our mission and how we fund it."

You, like me, might be wondering what exactly is the "quality sector"? Sector of what? And what sectors besides "quality" are there? I am going to venture a guess that what is being discussed here is the educational industry which includes the rapidly growing market for online, for-profit higher education, aka "degree mills." I don't know what the sectors other than "quality" are called. For the time being, let's imagine two sectors: "quality" and "dreck."

Here are some disparate facts. Do we dare connect the dots?

--Federal aid to for-profit colleges jumped to from $4.6 billion in 2000 to $26.5 billion last year according to the Education Department.

--For-profit colleges can receive up to 90 percent of their revenue from federal grants and loans.

--According to the Chronicle of Higher Education, the proportion of students who borrowed at public two-year institutions and private, nonprofit four-year institutions stayed about the same between 2003-2008 (between 49.5%-53%), and at public four-year colleges grew slightly. However, "at for-profit institutions, 91.6 percent of students borrowed in 2007-8, up from 79.5 percent in 2003-4."

--Students attending for-profit schools are defaulting on their federal loans at a higher rate than those at traditional schools, according to the Dept. of Education. From the Chronicle of Higher Ed:

"Students at for-profit colleges receive 19 percent of federal student aid, which includes Stafford and Perkins Loans as well as Pell Grants for low-income students. During the 2007-8 academic year, students at more than 2,000 proprietary colleges received more than $16-billion in loans, grants, and campus-based federal aid.

"Four years into repayment, 23.3 percent of students at those colleges were defaulting on their federal loans-a higher rate than students at either public colleges, where 9.5 percent were defaulting, or private ones, where 6.5 percent were in default."

--The Department of Education is seeking to protect taxpayers from loan defaults and to stop students from taking on debt for degrees that don't pay off with higher incomes. New rules from the DOE were supposed to have gone into effect next week, but....

--As of June 11, 2010 (Friday), the Obama administration is delaying the release of a new loan rule. This rule would disqualify the major providers of for-profit education from being able to accept student loans. In response to news of this delay, stock values rallied.

--For-profit colleges say they are key to President Obama meeting his goal of having the world's highest number of college graduates by 2020.

----Blum Capital (of UC Regent Richard Blum) has significant fiscal holdings in the for-profit universities ITT Educational Services Inc. and Career Education Corp who benefit from Obama's delay.

--In 2009 the University of California Board of Regents, of which Blum is a member, voted to increase student registration fees (roughly the Univ. of California equivalent of tuition) by 32%. Shortly thereafter, Blum Capital Partners purchased additional stock in ITT Tech, a for-profit educational institution. Some contend that these events suggest a conflict of interest on Blum's part.

--The UC Commission on the Future meets on June 14 to discuss, among other ideas, several recommendations that were suddenly submitted on Friday outside of the committee review process. Online education is one of the biggest elements targeted for big, bold new initiatives. This would supposedly put those of us in the so called "quality sector" (UC) into a growing market that seems otherwise dominated by the "dreck sector" (University of Phoenix).

--Walmart's recent initiative for online, for-profit education is partnering with a company called "American Public Education." No, American Public Education isn't the federal model of funding for high quality public universities pitched to the Obama administration by the UC Berkeley administration last Fall. American Public Education is rather a fairly dowdy and unknown for-profit university that offers online training to the military. The company has now become the darling of Walmart. Yes, the "American Public University" moniker would seem to be treading on the "brand" identity of the not-for-profit and genuinely public higher education offered by institutions like UC. (Such confusion of identity is, by the way, typical of those 419 email scams from Nigeria that often come from the widow of some vaguely recognizable African leader who needs to deposit several million dollars in your bank account, if only you could send your personal financial details...)

--Of the Walmart/American Public University partnership, Jolene L. Knapp, executive director for the Society for College and University Planning, said this week: "Many in the traditional higher education world will decry this partnership".... "But many, many changes are coming to postsecondary education. This is just one."

--If I were an investor in for-profit, low quality, online universities, my interests would be served by:

a) Having the cost of attending a public university rise so that many who formerly could attend are priced out and need to seek alternate means of accreditation. (check--accomplished with 32% fee increase last year at the UC)

b) Having the lines dividing the "quality sector" from the "dreck sector" become very confused and blurred. (Check. If the new recommendations introduced by UCOP to the Commission of the Future on Monday are accepted, this second objective will be served--not just with online education, but also with expanded, fast-tracked new professional degrees; freezing the growth of the traditional, face-to-face high quality education we have been known for to date; shorter time-to-degree; greater utilization of extension classes, etc.)

c) Having online education be embraced and legitimized by traditional institutions in the "quality sector" of higher education so that the Obama administration keeps the federal loan dollars flowing. (Check. Get the Commission on the Future of the UC to embrace online education, and legitimation will be enhanced.)

For more on for-profit education and its use of online teaching, shady funding schemes, and substandard educational standards, see this Frontline special "College, Inc" which aired in early May 2010. As the website says, "Even in lean times, the $400 billion business of higher education is booming. Nowhere is this more true than in one of the fastest-growing -- and most controversial -- sectors of the industry: for-profit colleges and universities that cater to non-traditional students, often confer degrees over the Internet, and, along the way, successfully capture billions of federal financial aid dollars."

Remember the mantra coming from UCOP on this: "Our ambitions should err on the side of boldness." These are not words we have otherwise heard for a while now at the University of California.

So, friends, this is the Ghost of Christmas...I mean, er...UC Future. You may recall from Dickens, the Ghost of Christmas Yet to Come was the most fearsome ghost of all.

But other ways of viewing this future are possible. Some are arguing that if the UC embraces online education, this will be the "Phoenix"-like resuscitation (if you'll forgive the pun) of the dreams and values expressed in Kerr's Master Plan for Higher Education.

The proselytizers of UC online education certainly do foreground social justice issues. UCB Dean Christopher Edley says that online education and a cybercampus will serve the poor and underprivileged who will have access to UC's excellence without having to leave their homes. Such students would be physically located far from faculty and fellow students. Yet such "social justice" framings of educational access for the poor and underprivileged should give us pause. History has taught us that a separate education is rarely an equal one.

It may be that online education is the way of the future, and we must either get on board of be left behind with no money. But here are two worthy questions: If all members of the Board of Regents and top UC administrators were forced to divest themselves of any financial holdings in for-profit universities, a) would the UC still be exploring online classes?, and b) if so, would we be pursuing this new "delivery model" in the same way?

Most of the UCOF  recommendations summarize common sense that has been around for years (seek administrative efficiencies . . .)  If they are proposed as solutions, one wants to identify the problem that they seek to solve. 

The Commission was created after the Regents at their July 2009 heard testimony from all of the chancellors that suggested decline on the campuses was fairly far along.  The responses of the Regents made it clear that, at least for those that spoke, this came as a real surprise. In evaluating the new UCOF materials, you may want to look at our list of the problems the Chancellors' identified, and decide the extent to which the current recommendations address them.


The same goes for comparing the recommendations to the analysis offered by the Commission's most knowledgeable guest, Jane Wellman of the Delta Project (my notes on her testimony are here, and a backgrounder on her research is here).  Do the recommendations address UC problems in this national framework?


There is nothing new in the financial or budgetary recommendations.  It is unfortunately still largely captured in my comments on First Round recs, on the continuing embrace of the high-tuition model. High tuition is clearly the path of mental least resistance.  But since 7% annual increases bring in-state tuition to about $21,000 per year by 2020, and 10% will bring it to $28,000, it is irresponsible for UC officials to continue never to discuss in public the declining political support that high tuition has and will continue to create.  In other words, is the first funding recommendation - the multi-year advocacy campaign to raise public support - undermined by the tuition-raising fiscal solution? I can't have confidence in a planning process that doesn't at least take the question seriously. 

Be that as it may, note the norm established by the UCOP budget slides that start the June 14 materials.  Slide 9 shows UC closing the budget gap.  How? The (mislabeled?) slide 8 establishes a 3% annual general fund increase standard, yielding an additional $790 million - about $120 million less than the need to close the gap this year - over a period of ten years. Slide 8 establishes a base of 7% annual fee increases.  Slide 8 also throws in an additional $200 million in annual revenues from an unrestricted endowment. At a 3% payout this would require that UC raise a new endowment of $6.6 billion in the next ten years, and that its fundraising go from about 98% restricted to 100% unrestricted, starting now.  This scenario is completely unrealistic.  The scenario for state GF increases is a self-fulfilling admission of defeat.

These slides frame the supposed UCOF break with conventional UC wisdom with the core of that conventional wisdom --  the existing funding model, in which familiar 7-10% tuition increases coexist with decline in educational resources.

The recommendations that would change how UC works are those from the COVC (p 113), and they should be read very carefully.

by Tobias Higbie
UCLA History Department

What follows is a quick review and analysis of the proposals for expanded online education reflected in the "expanded recommendations" section of the UCOF materials prepared for the June 14 Commission meeting.  Recommendations 6 and 7 are on pages 86-91.  Unlike the previous calls for an 11th "Cyber Campus," these proposals call for conversion of existing UC classes/students to the online platform.

The recommendations show the hand of UCB Law School Dean Christopher Edley, especially in their frequent reach-for-the-stars rhetorical flourishes.  They assert the inevitability of online courses and degrees in "the so-called quality sector," and propose that UC aim to be the first to do so and that "our ambitions should err on the side of boldness."

Beyond this, the proposals are mostly familiar if you've been following the issue.  There will be a pilot program to develop 25-40 online undergraduate courses focusing on high-enrollment courses with high demand from community college students hoping to transfer into the UC system.  There will be a Request for Proposals from UC faculty "with stellar teaching records" who will then get course buy-outs and other support to develop the online material.  Ultimately, the courses will be taught by graduate student instructors.

Recommendation 6 calls for an acceleration of this pilot project.  Recommendation 7 calls for planning coordinated system-wide delivery of online instruction with the frequently stated caveat that this happens only if the pilot project shows that these courses can be equal in quality to regular face-to-face UC courses.  Of course the report has already declared that success in the "quality sector" is inevitable.  So, hey, not to worry, right?

A few highlights:

* They already have a plan: "UCOP Academic Planning has developed a detailed, step-by-step, draft strategy for leveraging online instruction to expand access to UC-quality courses and degrees and generate revenues through online instruction, returning revenue to support core research and teaching."  The Council of Vice Chancellors contribution to the meeting materials asks the Regents to direct the President to have the courses up and running by academic year 2013.  If you have yet to see it, the UCB School of Information is hosting the planning materials.

* One possible strategy is to peel off departments willing to partner with the University Extension (UNEX): "there would be advantages to using UNEX as the organizational base for the online instruction program, and exploring joint branding of degrees with the individual campuses."  This seems to be a way to get around campus Senate opposition.

* The push for semester scheduling across the system is linked in part to online education.  You can only get the economies of scale if all 10 campuses are on the same schedule:  "A coordinated or systemwide approach will be more cost effective in delivering educational programs which, owing to their reliance on rapidly evolving information technologies and on high-touch interaction with potential applicants as well as with enrolled students, requires scale that is not currently available and very difficult to build on a campus-by-campus basis."  The COVC report calls for system-wide semester calendar by 2014. 

* The bold vision is at least in part related to the need to convince "donors" (which may mean "investors"):  "On the other hand, a clear vision of a University-wide effort that aggressively pursues opportunities inherent in online education would likely mobilize support from potential donors, the Legislature and the general public."  Then there is the odd statement: "some portion of the Program may be funded as an unsecured loan to be repaid if a follow-on project at scale yields net revenue."  This seems to suggest they've already had discussions about this.  But with whom?

* The recommendations are vague on the form and ownership of intellectual property in the courses.  Courseware will be "'open' in some fashion."  Revenue comes not from selling the material, but "delivering" it with credit and with an instructor.

To summarize then, it seems the pilot project will move forward ASAP and planning for system-wide online courses will run in tandem with the pilot.  But what happens if the pilot shows that online courses are not equal in quality to current courses?  That question misses the point.  The purpose of the pilot is not so much to see *if* online classes are just as good, but to demonstrate that they are.  At the end of the pilot, the advocates of expanded online courses will be able to point to a rigorous vetting process that has certified that their product is in the "quality sector."

Personally, I don't think quality is the stumbling block (although they could screw it up).  With enough money they will be able to develop highly interactive online materials that might even be superior to current classrooms.  At least in my brief experience at UCLA I've noticed spotty wireless connections, insufficient classroom technologies generally, and too many rooms with peeling paint and bolted-down chairs. Compared to those classrooms, online learning might be rather refreshing.

I think financing and long-term business model are going to be a bigger problems. This is likely to be both more expensive and less profitable than they imagine/claim.  If so, it will divert existing resources to a bold new project that will not deliver access or cost savings.  So strategically, I think faculty should demand a more detailed business plan (both for the pilot and the system-wide roll out).  Who are the donors?  More importantly, who are the "investors" or creditors (if there are to be any)?  What kind of deal they're getting for their investment/loans?  How will individual campuses be compensated if courses are on a system-wide platform?  Given the lack of budget transparency within the UC, I don't imagine the advocates of this plan are ready to answer these questions.

The graphic below follows on those of two previous posts (one on UC's corrosive compromises, another on a better budget strategy.) It correlates declining state revenues with a general campus enrollment growth of 33% over the decade (from about 173,000 to about 230,000 students).
We are used to hearing that state funding has fallen 50% since 1990.  When we correct for enrollment, we see that state funding fell by 44% in constant dollars just in the past decade.  State funds have fallen almost 20% since Arnold Schwarzenegger's first budget in 2004-05, or 25% if the partial restoration in his May Revise does not survive the budget process.  The chart shows that during the boom years of the middle part of the decade, the state budget kept UC's per-student state revenues flat.

Because state funds support sponsored research as well as instruction, state cuts pull money out of research. But the most immediate casualty is instruction, particularly for undergraduate students.  For example, recent data from UC San Diego shows that the revenues supporting Academic Affairs are 85% comprised of student tuition and state funds.  Cuts in state funds are only partially made up by tuition hikes (the 32% hike for 2008-10 netted a 2% restoration of core funds), so the result is reduced educational capacity -- at a moment when California faces an educational attainment emergency.

This situation is truly appalling.  None of UC's announced proposals this year come close to addressing it.  The UC Commission on the Future is meeting on Monday.  Which of its recommendations address the problem in a concrete way?

By Michael Meranze

UCOP’s continuing insistence that the state is, and will continue to be, an “unreliable partner” has placed them in lock-step with the very forces that are committed to reducing the importance of public commitments to our common life--indeed to reducing our common life itself. Aligning themselves with the Governor and his perception of the state of the State has meant that the Regents and UCOP can do little but watch the University deteriorate while it is transformed into an unrecognizable and no longer public university.

Of course, UCOP’s belief that California is now an “unreliable partner” has its roots in real difficulties. The state has reduced its investment in higher education dramatically and the political system is profoundly dysfunctional. We are all familiar with the various causes and symptoms: the 2/3 requirement for passing a budget (in place since 1933); the limits on property taxes (with a resultant shift to income and sales taxes) and the 2/3 requirement for any tax increase put into place by Proposition 13, the increased spending on corrections, the capture—by well-financed corporate interests—of the initiative process, the devaluation of experienced political leaders that both triggered and resulted from term limits, the constant shuffling of appointed positions between termed-out politicians, and the increasingly anti-governmental and reactionary nature of the Republican party. As a result, UC’s leadership can no longer operate as if there is a consensus in support of higher education held by the state’s political leadership.

But UCOP has drawn precisely the wrong conclusions from this situation. Instead of working to promote a new commitment to public investment (which they know they need) they have instead embraced political actors and strategies that have failed UC time and again. Let’s take President Yudof’s famous “unreliable partner” statement. Yudof noted that he “was impressed by the honesty of Mike Genest, California's state director of finance, who agreed with me — in public — that the state has become an unreliable partner.” But Genest is not some apolitical technocrat. Instead he is a committed political figure with a committed political agenda—to downsize the state government by convincing the public that state funds do not serve the vast majority. As Genest notably claimed in an interview, “Government doesn’t provide services to rich people .... It doesn’t even really provide services to the middle class.” Genest and the Governor he served (Genest resigned late last year) have been driving the effort to reduce Government support for the poor and lessen the contributions of the wealthy to the common good. They want the government to be an unreliable partner.

Popular mythology aside, California’s Republican Party has not been a friend of the University for a long time—if ever. The numbers are clear. Arnold and his then Finance Director Donna Arduin (brought in to find ways to downsize the government as she had in Florida) pressed UC and CSU to agree to the Higher Education Compact that locked in underfunding of the University. UC leaders then watched as the Governor unilaterally broke the Compact in 2008 and then further reduced spending in 2009 and 2010.

Despite rhetoric to the contrary Arnold has been committed to the proposition that the state and social services need to be as minimal as possible. Republicans in government, not “the state of California,” have starved the public sector (and not simply Higher Education) since the 1990s. Indeed, Gray Davis was the only recent Governor who did not starve the system. By accepting the perspective of a Governor who has done more than any Governor in memory to undermine the public sector and by blaming the state in general, the Regents and UCOP have alienated potential Democratic supporters in the Legislature and made the decline of public education appear all but inevitable.

Governor Schwarzenegger insists that cuts are the answer to the budget crisis and proclaims that we have spent our way into this mess. But as even the LAO admits, state spending over the last decade has not kept up with inflation and population growth and Arnold’s proposals would lower per capital state spending in real dollars to a level not seen since the mid-1990s. (5,7) Nor do these data address the long-standing shift of California’s tax structure away from corporate taxes onto income taxes and the effectively regressive nature of the income and capital gains taxes.

Genest’s comments made clear that Arnold’s administration believes that only the poor benefit from government services and that their job is to make sure that the wealthy do not have to pay for too many of those services. When UCOP and the Regents act as if fee increases and administrative efficiencies can compensate for the loss of state income they not only reinforce the image that government investment is a luxury that we can do without but they provide institutional cover for the Republican’s wide-ranging efforts to strip away social services from the citizens of the state.

In truth, the Governor’s proposal to increase funding for the University (which received predictable and lavish thanks from UCOP) merely replaced some of the funds that he had cut from higher education over the years. To make matters worse, Governor Schwarzenegger’s May Revision set higher education against the needs of the poor and sick. It is hard to see this gambit as anything but a calculated ploy to force Democrats to support cuts either to higher education or to the needy. The Governor will thereby promote the notion that it is the poor who stand in the way of middle-class opportunity and security--thereby solidifying a notion that the public realm is a danger to the middle-class.

Now I understand perfectly well that no UC administration is going to publicly break with the Governor. He sits on the Board of Regents and has tremendous power over the institution. But that does not mean that the administration needs to parrot his ideological distortions of the state’s budget and economy.

Instead of echoing an ideology designed to impose austerity on the poor as a way to protect the privileges of the wealth, UCOP needs to place the centrality of public support for UC and UC’s importance to the public at the heart of their public campaign for the University. Instead of assuming that the public believes that higher education is a pointless superfluity when it doesn’t directly produce commodities, UC’s leadership must insist over and over again that if we fail to provide a high-quality public education to the young of the state we will be condemning the future.

Of course, given the structure of California politics and the ideological commitments of California’s Republican Party such advocacy will not succeed without resistance nor will it work wonders overnight. Indeed there is no guarantee of its success. But we can be sure of one thing: the Regents and UCOP will be unable to defend higher education so long as they simply repeat the failed policy of echoing Governor Schwarzenegger’s destructive understanding of California’s future. So long as they do so they will simply provide political cover for an effort to entrench deeper hierarchies in California and sacrifice the young and the poor for the sake of wealth and power. And UC will be sacrificed as well.