Cal Grants to the Rescue
VIEWPOINT
by James L. Doti
The percentage of high school students in California enrolling in colleges and universities around the state dropped from 56.6% in 1996 to 49% in 2000. Rather than being met with disappointment, this news almost was seen as welcome, since it suggested a declining demand for higher education that will lessen the pressure on California’s strained public coffers.
The governor’s budget proposal for 2003-04 contains no additional allocation for the University of California or California State University systems. It also is assumed in the budget that freshmen admissions will be reduced at the UCs and CSUs, with the overflow redirected to California Community Colleges. But the CCC are experiencing their own budgetary constraints. Class cancellations at the CCC, for example, led to a 5.2% drop in enrollment from fall 2002 to fall 2003.
Sharply escalating fees and recent recommendations to tighten admission requirements also are indicative of attempts to constrain enrollment.
These measures, which largely appear to be motivated by the state’s lean financial situation, may lead to the self-fulfilling prophecy that fewer California students receive post-secondary education. But do short-run budgetary pressures justify such an outcome?
Current socio-economic forces strongly suggest that a greater,rather than a constant or declining,percentage of high school graduates should be going on to college.
Not only do the higher incomes earned by those receiving a college degree create a strong incentive, but the forces of an increasingly competitive global economy mean that the income differential between those who receive a degree and those who don’t will widen even more in the future. Low-cost labor abundantly available in developing nations strongly suggests that blue-collar manufacturing jobs in California will continue to decline.
California’s future depends more than ever before on building “human capital.” It’s clear that a critical challenge facing our state is how to facilitate and expand college access without breaking the bank.
A change in the way we finance higher education could offer a solution.
Currently, full-time CCC students pay mandatory fees of $540, roughly one-quarter of the average amount charged in other states. CSU students pay average fees of $2,572, less than half the average fees of $5,272 paid to attend similar public colleges in other states. At the UC level, even with the sharp increase in rates over the last few years, average fees of $5,530 are still 20% lower than the average fees of $6,873 for a comparable set of state universities.
Subsidizing students living in California at a significantly higher level than other states may seem, at first glance, like enlightened public policy. But it isn’t.
Each of California’s three public higher education systems charges the same fees to all students, regardless of their incomes. A great many students from higher-income families are given incentives to attend in-state public schools, filling up available slots. Those relatively low fees, however, are still too high for many students from lower-income families. California’s pricing policy locks out those students least able to afford a college education: minority, immigrant and first-generation college-bound, which represent a growing proportion of our high school graduates.
A better strategy would be to increase the fees charged to attend a CCC, CSU or UC so that students pay, on average, the same amount they would pay to attend a comparable public college or university in other states. The additional revenue generated could then be given back in the form of expanded California scholarship and financial aid grants (Cal Grants) to students who qualify academically and demonstrate financial need.
A rough calculation suggests that increasing fees as outlined above would result in additional annual revenue of about $2.6 billion. This amount then could be used to fund more and higher levels of Cal Grants. These scholarships could be awarded in various increments all the way up to 100% of tuition for the most needy students.
Let’s say, for example, 80% of the $2.6 billion or roughly $2 billion in additional revenue generated by the fee hike is allocated to students in a way to bring down the net fees paid but not to the point where those students pay nothing. The remaining 20 percent, about $600 million, can be allocated to the most needy students to reduce the fees they pay to attend a CCC, CSU or UC institution to zero.
My estimates suggest that allocating 20%, or $600 million, of the fee increases to the most needy students would make it possible for 17% (170,000) of CCC students, 7% (21,000) of CSU students and 5% (7,600) of UC students to pay no fees at all.
Students who could afford the higher fees would be likely to pay them,it’s still a great deal. But now, qualified students who previously couldn’t afford the cost of higher education will be able to attend our state’s public colleges and universities. All this can be done without increasing taxes or placing any more pressure on the already over burdened state coffers.
Will it work? Absolutely. The reason I can be so confident is that we already have Cal Grants at public as well as private California colleges and universities, and they work pretty much as I’ve outlined above.
Many students who couldn’t afford to attend a private college or university now can do so because of the state’s enlightened policy of Cal Grants. I know quite a few of these deserving and worthy students, since I’m president of one of those universities. Please note, however, that this new proposal is not a self-serving one that will help my favorite institution, Chapman University. It basically takes a plan that has benefited the privates and applies it to the publics.
We simply need more Cal Grants, and this plan outlines a way we can do so that is just, fair and equitable.
Doti is an economist and president of Chapman University.
