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Affordability and access in public higher education
Keeping public universities affordable: 'We have to start now'

Harvard University's dramatic announcement in December that it would extend financial aid to "middle-class" students — by Harvard's reckoning, those from families with incomes from $120,000 to $180,000 — sparked a nationwide teach-in on the economics of higher education. When first Yale and then Princeton followed with similar plans of their own, one question became unavoidable: What can be done by public universities — which educate the vast majority of America's undergraduates but lack the endowments and other resources available to private institutions — to keep higher education affordable for families with incomes below six figures?

Chancellor Robert Birgeneau has been seeking answers to this question since taking the helm at Berkeley in 2004. In the wake of Harvard's announcement he’s been among the most vocal — and visible — advocates for action on behalf of students from low- and moderate-income families. He spoke with the Berkeleyan about the issue in his California Hall office.

Q. The rising cost of a college education has been much in the news lately, but the issue was on your radar screen long before Harvard’s announcement. How and when did you become concerned about affordability at Berkeley and beyond?
A. This goes back about three years. When I first came here as chancellor and looked at all of our accessibility data, I found them quite impressive — the extraordinarily large number of students we have from financially disadvantaged backgrounds and, in particular, the number of students that have Pell Grants compared with those at Michigan, Yale, and schools of similar rank. I consider this to be a really significant success at Berkeley.

Then, of course, we started looking at budgets and addressing some of the challenges of providing access to low-income students into the future. We projected that the self-help level [the amount a student is expected to contribute from work and borrowing] would grow substantially over the next decade and beyond. At Berkeley we’ve managed to keep the self-help level from skyrocketing by careful cost controls over the past three years, but you can only control costs so much. That’s not a permanent solution.

About a year ago we redid the projections just for Berkeley, and those projections implied that the self-help level was going to increase rapidly if we didn’t do something immediately.

Q. You’re the chair of the UC Affordability Work­group, which was established by Provost Rory Hume in October. So it seems your concerns are shared by others at the highest levels of the system.


Chancellor Birgeneau: "We do not have a crisis now, but there is a crisis in front of us, and so reality will catch up to perception. We cannot wait for that to happen." (Peg Skorpinski photo)
A. Before these most recent projections I had relaxed a little bit, because we had managed to moderate the growth of the self-help level. It turns out that simultaneous with my renewed concerns, [Board of Regents Chair] Dick Blum became very concerned as well, and, like me, he was skeptical that freezing student fees was going to be an appropriate strategy, in spite of its political popularity. So he asked Rory to set up a committee that would look at the challenge of accessibility for the entire system. It has been quite educational.

The workgroup has done a wide variety of projections for the system as a whole, based on quite specific financial assumptions. One interesting fact I learned is that the average self-help level for the whole system is close to $9,200, whereas ours is closer to $8,000. That’s for two reasons. One, [Vice Chancellor for Student Affairs] Harry LeGrande and his staff have done extremely well at managing costs. Two, Berkeley has a moderate endowment for financial aid for undergraduates, and it is overwhelmingly committed to needs-based aid. Specifically, 87 percent of our financial aid from endowment is needs-based. That is by far the highest percentage in the UC system. At Berkeley, to the extent that we have such resources, the focus is on providing them to poor students. So our success in keeping the self-help level down, relative to the UC system, has been due to a combination of efficiencies and resources — we have more resources and we direct a larger percentage to accessibility.

If we take the $9,200 self-help number for the system, and assume a 6 percent fee increase on average, which looks politically realistic, that projects to a self-help level of $16,700 for our students in another 10 years.

Q. You referred to skepticism that freezing fees would help poor students afford a UC education. Yet freezing fees has become a rallying cry for UC students, who complain of substantial increases year after year.
A. The single most complicated fact for people to understand is that freezing fees actually increases student debt — it’s so counterintuitive.

Q. That’s because fees pay for financial aid?
A. Correct. Now, that’s with the existing financial-aid system. Currently, when fees increase, 33 percent of those funds go back into financial aid, what we call “return-to-aid.” If you freeze fees, you freeze the return-to-aid. We’ve projected the self-help level in 2017 to be $16,700 if fees increase 6 percent a year; if you freeze fees, the self-help level will be $18,300, because both the return-to-aid funds and Cal grants [which cover fees for recipients] remain stagnant while non-tuition expenses — housing, health insurance, etc. — keep going up.

Of course, it doesn’t mean that the state couldn’t change the system. But as things are, if you freeze fees, you increase student debt.

Read the full interview in the Berkeleyan