Showing posts with label corruption. Show all posts
Showing posts with label corruption. Show all posts

Tuesday, September 13, 2011

The Budget Cuts and the Privatization of the University of California

A version of this article was recently published in the UCSC Disorientation Guide. We repost it here because we found it to be a very useful resource: a history of the UC from the perspective of austerity that collects and synthesizes a lot of otherwise dispersed data. Give it a read, and check out the rest of the disorientation guide as well.

As you go from class to overcrowded class this fall, you’ll want to forget that tuition last year was around $1,800 less than you’re paying now. Continuing a 30-year trend, the UC Board of Regents gathered in cigar and gin-soaked boardrooms over the summer to raise our tuition by 17.6% and lay down plans for further increases in January, or maybe just raise tuition 81% over the next 4 years. (Hey, overcrowding at least improves your chances of getting lucky; tuition hikes on the other hand, just increase the probability of working a shitty job in college and plenty of debt after). The UC Office of the President (UCOP) never tires of reminding us that tuition increases are the recession’s fault or scolding us that Californians are just unwilling to spend on education in hard times; this is a strange excuse though, since state funding has been decreasing while tuition has been skyrocketing since the early 1990s. Even while UCOP continues to whine about how poor it is and how unfortunate it is that they need to raise tuition, it’s offering the state of California a billion dollar loan from UC financial reserves. As it happens, in 9 of the past 10 years tuition was raised – well before the 2008 recession began; UCOP’s insistence on the necessity of this recent series of tuition increases has so many logical fallacies that if it were an assignment, it’d get an F (assuming, of course, that the overburdened TA grading it even had time to pay attention to it). Tuition hikes and budget cuts – at all levels of California higher education – are part of the decades-long process whereby the richest assholes in California (and the greater US) intend to make private what few institutions remain in public hands.

Even if you slept through math in high school, UC tuition increases aren’t difficult to calculate – just add a few zeros every few decades: since 1975 tuition has gone up 1,923% or, if you’d prefer to adjust for inflation, 392% (from $700 to over $12,000 per year)! Minimum wage in California, by contrast, when adjusted for inflation, has stayed roughly the same for the last 40 years, while the median family income has continued to fall since 1973. Most people in California make less money today, yet pay much more for education: for families struggling to pay rent, mortgages, car payments, etc., education becomes a luxury good. To make matters worse, financial aid packages meant to help low to middle income students attend the UC, heavily depend on students working part-time in an economy with a staggeringly high unemployment rate and very low entry- level wages; furthermore, it relies on students taking out thousands in loans that, most economic experts agree, will lock us into debt for the rest of our lives. Indeed, many economists believe that student loans will be the next credit bubble to burst, perhaps wreaking more destruction than the recession of 2008. Because there aren’t enough jobs for everyone who graduates, student loan default rates are nearing 10% – but, unlike other loans there’s no way out for student borrowers. Sallie Mae and Bank of America can take your paychecks and your children’s paychecks until they get back all their Benjamins, and then some.

As the pinnacle of public higher ed., UC students should also know that what happens at the UC level is magnified in the CSUs and Community Colleges. CSUs estimate that over 10,000 students have been denied admission this year because of budget cuts; at the same time they’re not repairing facilities, replacing library books, or rehiring lecturers. California Community College systems, however, have been hit the hardest: it’s estimated that 670,000 students who would normally go to Community College this year will be turned away. CCs are facing nearly $400 million in budget cuts this year and will have to cut several thousand classes to make up for budget shortfalls. Given that unemployment for thoseaged 18-24 is over 17%, it’s clear that the cuts to public education will continue to have a devastating affect on an entire generation. California Community Colleges serve over 3 million students, many of those students going on to four-year colleges after they get their Associates degrees. (It seems almost plausible that state leaders actually hope many of these 670,000 end up in prison: as the CSU Chancellor, Charles Reed, said, “It’s outrageous that the prison system budget is larger than UC and Cal State put together.”)

I. AUSTERITY

If you paid attention to the news at all this summer, you likely heard about the budget crises for California and the Federal Government. State legislators, by a twisted interpretation of their constituent’s needs, have not tried to raise revenue, but are instead cutting UC funding for 2011 by $650 million (and tax shortfalls by November are almost guaranteed to cut another $100 million from the UC budget for this year). Community Colleges, like the UC, will also see further midyear multi-million dollar cuts, as tax revenue continues to stay low. During all of this, UCOP’s response was no doubt similar to yours, when you were four: they whine, don’t get what they want, and then take it out on us. For you, these state shortfalls mean that tuition will have to be increased in the middle of the school year – and you’ll be responsible for making up the difference. The recession has hurt: during the 1970-71 school year, the state allocated 7% of its budget for the UC, and it’s sharply declined since then. However, state shortfalls are not simply a result of the present recession; they’ve given the UC Regents a nice story to tell you as they shred quality education and let old UC’s facilities decay while haphazardly building new ones. It’s all built on our rising tuition.

Thursday, June 23, 2011

UC Regents and For-Profit Education

The UC regents are, how can we put this, totally corrupt. Take Richard Blum, one of the most prominent regents and the husband of U.S. Senator Dianne Feinstein. Among the shady holdings that he suspiciously directs the UC to invest in are two of the country's largest for-profit universities, Career Education Corporation and ITT Educational Services. As investigative reporter Peter Bryne wrote last year in his detailed exposé,
As someone who oversees investment policy decisions for UC’s $63 billion portfolio, and as the largest shareholder in two for-profit corporate-run universities (in which UC invests), Mr. Blum had a unique perspective to share. He advised public universities to attract business-oriented students with clever advertisements, just as vocational schools do. “It’s like anything else,” he told the crowd. “It’s how you market it.”

Marketing strategy aside, Mr. Blum has taken on two seemingly disparate roles— one as an advocate for a nonprofit university, and the other as an owner of two for-profit educational corporations. As a regent, Mr. Blum has approved cost-cutting policies for UC that appear to have enhanced the profitability of his vocational schools. And in 2007, Mr. Blum’s spouse, Sen. Dianne Feinstein (D-CA), wrote federal legislation that benefited the for-profit college industry.

For several years, Mr. Blum’s firm, Blum Capital Partners, has been the dominant shareholder in two of the nation’s largest for-profit universities, Career Education Corporation and ITT Educational Services. As of May, firm’s combined holdings in the two chain schools was $923 million—nearly $1 billion. As Blum Capital Partners’ ownership stake has enlarged over time, so have those made by UC investment managers, who have invested a total of $53 million in public funds into the two educational corporations.
Today we hear about another regent venturing into the for-profit arena. The San Francisco Chronicle reports that chairperson Sherry Lansing (who we profiled here) is joining forces with millionaire Republican entrepreneur Steve Poizner and the sports and talent agency Creative Artists Agency in a for-profit project called the Encore Career Institute. Backed by Silicon Valley venture capitalists (full Board of Directors here), Encore will offer a curriculum specially designed for unemployed Baby Boomers to help them "rewire" instead of "retire." (Like that's going to help them find a job in this economy.) And get this -- courses will be designed by and taught through UCLA Extension. The certificate program will cost between $5,000 and $10,000.
Lansing, the former CEO of Paramount Pictures, originated the idea and approached Poizner for help as he left his post as state insurance commissioner this year. Her goal, Poizner said, was to "deliver some of the fantastic intellectual property that UC has" to students in the state and the world, with Boomers as a key market.
The public university is being retooled, quite literally transformed into an appendage of private capital. And the ones responsible for it are managing both.

[Update, Tuesday 6/28 8:39am]: The Chronicle of Higher Education's brief take is here. Key quote comes from Cathy Sandeen, the dean of UCLA Extension: "In order to take what we’re doing and expand it dramatically, we will need to partner with a private entity."

Thursday, May 19, 2011

Meet Sherry Lansing, the New Chair of the UC Regents

At the most recent UC Regents' meeting, which took place over the past two days, Sherry Lansing was elected to be the new chair of the board, replacing outgoing and two-time chair Russell Gould. So who is Sherry Lansing? The Daily Cal reports:
Prior to her appointment to the board, Lansing was a high school math and science teacher in Los Angeles.
Aw, that's so sweet. She's really just like one of us. She's truly the "middle-class" regent we've been looking for to protect us from these budget cuts!
She also ran her own production company and most recently was the chairman and CEO of Paramount Pictures.
... oh. Well, okay, she was the CEO, but movies are fun though, right? Everybody loves movies. She was involved in the production of Forrest Gump! Maybe she's not one of these corporate assholes who make up the rest of the board. Why don't we check in with our good friend and investigative reporter Peter Byrne, to see what he has to say about Regent Lansing:
Since September 2006, Regent Lansing (who is not on the investment committee) has been a member of the board of directors of Qualcomm Inc., for which she receives an annual director’s fee of $135,000, plus stock options. According to her economic disclosure statement, Ms. Lansing owns “more than $1 million” in Qualcomm stock options (no upper limit is specified). In 2009, Qualcomm paid her $485,252. Documents released by the UC Treasurer show that, after Ms. Lansing joined the Qualcomm board, UC quadrupled its investment in Qualcomm to $397 million. Ms. Lansing told us that she did not instruct the treasurer or members of the investment committee to buy Qualcomm stock.
Hmmmm. Okay, well, at least we should give Lansing a chance to explain herself and her positions to us, you know, in her own words:
"I'm honored to serve as chairman during these difficult economic times," Lansing said in a statement. "To meet our challenges, we have to look for cost savings as well as other sources of revenue. But as we face these financial struggles, one thing we will never, ever sacrifice is the quality of a UC education."
Two quick thoughts on the commitment to "never, ever sacrifice . . . the quality of a UC education." First, online education. Nuf said. Second, we keep coming back to this quote from Mark Yudof (not only UC President but also himself a member of the board of regents), which does a nice job of contextualizing what this talk about "quality" really refers to. In a statement after the January Regents' meeting, Yudof made the following comment:
Yudof said the university has long operated on three "compass points" -- access, affordability and excellence.

"We are moving dangerously close to having to say: pick two of the three. That’s my view, and the excellence is nonnegotiable," he said. "We are going to have to look at access and affordability."
If "quality" and "excellence" are as commensurable as they sound, then Lansing's statement suggests that Yudof's "compass points" continue to shrink: the plan is no longer to pick two of the three, but to focus on one.