The decline and fall of the UC system

"It's always difficult to make predictions," Yogi Berra used to say, "especially about the future." But in the case of the UC system, all the information is there, for anyone who cares to look:

The furloughs will be extended at least another year. There is no reason to think that the budgetary situation at UC will be significantly different in 2010-11. In fact it will be worse, as the federal stimulus funds expire and the state shows no signs of economic recovery (also thanks to layoffs and furloughs at the various state agencies and universities). The only options that would avoid extended furloughs at UC is if the state were to re-examine his priorities and shift some resources from, say, the Department of Corrections to higher ed, or if UC took seriously the idea of sharing revenue from the Medical Centers and other profitable units. Fat chance.

The privatization process will accelerate. This will mean higher fees for students, higher student/faculty ratios, increased reliance on private donors and industry partnerships, renewed efforts to recruit from a dwindling supply of affluent out-of-state students.  Emphasis will be on the revenue-producing units, such as the Medical Centers (which already have been spared the brunt of the budget crisis). At the same time, there will be increased erosion of shared governance, as a bloated and arrogant administration decides to keep ignoring the voice of the faculty (and staff, and students, and parents, ...). We have already commented on the issues facing such a "hybrid" model and the inherent tensions that would prevent its implementation across the board at all the ten campuses.

UCRP will switch from the DB to the DC model. One of the reasons why faculty were willing to put up with salaries hovering around 85% of those at comparable institutions was the outstanding UC Retirement Plan with its defined benefit model. (Never mind that private brokers had been circling in the water for a long time.) With the wave of upcoming retirements the defined benefit model will be more and more costly to the university, and there is increasing talk of switching to a defined contribution model. The most senior faculty, of course, will know this and will anticipate any planned retirement not to see their benefits slashed, thereby contributing to the accelerated decline of the university.

UC will get smaller. Smaller in faculty and students. Students will be driven away by the higher fees, especially middle class students with limited access to financial aid. Already Cal State schools and Community Colleges are seeing significant upticks in applications. Similarly the faculty will be driven away by extended furloughs, a less attractive defined contribution retirement system, and the general loss of prestige of UC. Central administration is said to welcome a reduction of 10% to 15% in the number of faculty system-wide, with peaks if 20% in some units. They might just get their way.

The UC system will break up. Ultimately the different campus will not be able to undergo these processes at the same rate. Berkeley and UCLA will be allowed to set their own tuition, and will increasingly rely on the alumni base and their limited endowments. They will fully embrace the Michigan model, but will have to compete with the privates (USC, Stanford) and each other for a limited number of tuition paying students. The remaining eight campuses, unable to raise tuition (for market reasons) will gradually be assimilated, whether de jure or de facto, into the Cal State system.