Reforging American public higher education

Until then, excellence and access had been seen as opposing goals. The California Master Plan addressed them both at once and on a grand scale. At the base of the system were community colleges offering two-year programmes in every district in the state, free of charge. Above were the campuses of the California State University, with programmes up to Masters level, though providing little research and no doctoral places. At the top were the University of California (UC) campuses led by the science giants UC Berkeley and UCLA.

Access for all

California was the first ever system to guarantee universal access to higher education. It combined this with exclusive UCs, with concentrated research dollars, that housed the top 12.5 per cent of school leavers. It was at one and the same time steeply hierarchical, open and democratic – emblematic of the American approach to higher education.

Upward mobility was to be facilitated in two ways. First, with top students of all social backgrounds to choose from, the UCs could admit a high proportion of students from low income and first generation higher education families. Second, there was meant be substantial upward transfer from community colleges to state universities and the UCs.

The Master Plan functioned very well for the first 25 years but its longer term legacy was highly uneven. On one hand, the elite public research universities became brilliantly successful. Three UC campuses – Berkeley, UCLA, UC San Diego – are now in the top 14 of the research-based Shanghai Ranking of World Universities (ARWU). Seven UCs are in the ARWU top 100. On the other hand, the access mission foundered because the state could no longer support the necessary level of funding and the system hierarchy was too steep. In short, in a country becoming more unequal, excellence did much better than access.

Reductions in state funding

The Master Plan rested on the willingness of state and federal taxpayers to guarantee uniformly good public schools and strong higher education. The Californian tax revolt, with Proposition 13 (1978) and after, signified a middle class no longer willing to include immigrant families from south of the border in the common good approach. This shift was cemented by the 1981-89 Reagan government’s tax reductions, cuts to public programmes and fostering of income inequality in the workplaces. Massive reductions in state education funding in the 2008-09 recession showed that without a decisive change in the fiscal settings both excellence and access were compromised.

UC leaders cannot fully compete with Stanford and the University of California for top-end talent. Berkeley and the other UCs continue to accept a high proportion of students from low income families but it is a drop in the ocean of inequality. Tuition fees are rising in community colleges, which turn away 250,000 students each year. Upward transfer function works better in middle class than poorer districts and is retarded by low completion in both the state university and community colleges. Similar problems afflict public education in other states. Where does California, and American public higher education, go from here?

Mortgage-style loans: a potential solution

The Obama administration wants to abolish tuition fees. This could worsen the chronic problems of state fiscal incapacity and college poverty. A better solution is federal tuition funding using income contingent loans (ICL), successful in both the UK and Australia.

Mortgage-style student loans in the US are bad for access and equity. Graduates from poorer backgrounds find it more difficult to obtain work adequate to sustain repayments, and women earn less on average than men. This affects participation in both groups. The cost of default, carried by government, is escalating.

An ICL system has minimal deterrent effect at the point of entry and minimal socio-economic bias. Students handle no money. Government-backed loans cover tuition at the point of enrolment. The loans are repaid later through income tax on a percentage of income basis. Graduates who work for low pay or leave the workforce for extended periods may not repay in full. Government funds both non-repayment and sub-commercial interest rates, so that the public subsidises equality of opportunity, not loans companies. Subsidies are tweaked by altering the interest rate on debt, the income threshold for repayment, and the percentage of income repaid. Government imposes a standard rate to restrain costs and in the US would subsidise high private sector tuition only up to the standard level.

ICL would overcome the inability of the states to fund public higher education. It would allow California to upgrade many of its two-year diplomas to four-year degrees, which have more bang in the labour markets, and grow its number of doctoral research universities, bringing advanced higher education to more than 12.5 per cent of young people.

ICL could only be managed on a federal basis. It would be grounded in federal income taxation, the repayment mechanism, and would replace the current loans underwritten by Washington. This means taking on the student loan companies, a task almost as difficult as Obama’s health care reform, but it is within reach of a determined administration.

This blog is based on Simon Marginson’s book The dream is over: the crisis of Clark Kerr’s California idea of higher education (University of California Press and the UC Berkeley Center for Studies in Higher Education) which can be accessed free online.