Presentation on the State of Public Higher Education in California

Chancellor George R. Blumenthal

Innovating From a Crisis Conference

June 7, 2010

London, England

Welcome.

Thank you, Robin. And thanks to The Royal Society's Foundation for Higher Education for the opportunity to be with you today. It is an honor and a pleasure.

I'll talk today about two things: The system of public higher education in California that was introduced 50 years ago this spring. And the history of my campus, the University of California, Santa Cruz, which opened in 1965.

As you'll see, the trajectory of my campus is intertwined with the fortunes of the state, which has been both good and bad over the years.

But before I get started, I want to warn you about one thing: This story is a mystery. Like an Agatha Christie story, it's filled with suspense. Because we don't yet know how it will end.

We are at a pivotal point, but Miss Marple hasn't yet appeared to straighten it all out for us yet.

With that, let's begin.

Public Higher Education in California

The University of California is one part of a three-part system of public higher education in California. The Master Plan was adopted by the state Legislature 50 years ago this spring. It's a brilliant plan that has been copied by other countries, including China.

Under the Master Plan, the University of California educates the top 12.5 percent of high school graduates in the state. UC is distinct because of our research mission. We also offer doctoral programs.

The California State University system accepts the top one-third of high school graduates. Cal State offers professional programs, teacher credentialing, and nursing.

Last but definitely not least, our California Community Colleges accept anyone who wants to pursue higher education. These schools offer two-year transfer opportunities for students who want to move on to UC or a CSU campus to earn a four-year degree.

The Master Plan ensured that California students at all levels could pursue higher learning.

That's a key point: The state expressed a firm belief that higher education at all levels was a benefit. It also stated that the state would fully fund that benefit. It was a vision that embraced access and affordability.

The University of California

That's the big picture of higher education in California.

Within that, the University of California was identified as a research university with a public service mission.

Through programs and partnerships, UC takes research results and scientific discoveries and turns them into practical knowledge that benefits the state and nation. Notable UC patents include the hepatitis-B vaccine, Magnetic Resonance Imaging, the nicotine patch, and a wide variety of new types of fruits and vegetables, including strawberries, citrus, and asparagus.

Our success is evident by other measures, as well: Fifty-six UC faculty and research affiliates have won 57 Nobel Prizes, including 24 prizes since 1995. This year, the University of California dominated elections to the National Academy of Sciences with 22 scientists and engineers named to the prestigious institution--twice as many as all other U.S. public universities combined. (The NAS acts as an official science and technology adviser to the federal government.)

At the core, our mission is teaching, research, and public service. Today, we have 228,000 students.

UC Santa Cruz - distinctive undergraduate education

Within the UC system, UC Santa Cruz is one of 10 UC campuses. Nine offer undergraduate programs; UC San Francisco is a teaching hospital.

UC Santa Cruz opened in 1965. The City of Santa Cruz lobbied hard to land the campus. (UC Regents toured two sites for what would become UC Santa Cruz. It was a very hot day in Santa Clara County; when the group came over the mountains to the cool ocean breezes of Santa Cruz, the deal was done!)

Ours is a stunning campus, with towering redwoods, expansive meadows, and architecture that complements our setting overlooking the Monterey Bay and the Pacific Ocean. Forbes magazine just named UC Santa Cruz one of the world's most beautiful college campuses.

UC Santa Cruz is made up of 10 residential colleges. It was founded on the Oxford/Cambridge model. (When I arrived in 1972, it seemed like all the senior professors had English accents.)

Our founders were focused on providing undergraduate education in an intimate college-based environment. Instead of grades, students received "narrative evaluations."

The bold experiment was extraordinarily well-received: By the late 1960s, UCSC was the most popular campus in the UC system with at least ten applicants for every opening.

A decade later, society had changed dramatically: Students had become more career-oriented. They wanted grades. Our applications plummeted, and campus leaders were forced to regroup.

Today, as we approach our 50th year, UC Santa Cruz has carved out a distinctive role in the UC system as a research powerhouse with an uncommon commitment to undergraduate education.

Ours is a relatively short history, and yet we have evolved a lot.

Upward trajectory for more than a decade

UC Santa Cruz is one of the youngest UC campuses, but we are making a mark: US News and World Report placed us among the top 30 public universities in the nation.

Our excellence spans the disciplines, and we are national leaders in several areas: In astronomy and astrophysics, we operate the Keck Telescope, and one of our faculty members, who just shared the 2010 Kavli Prize in Astrophysics, is designing the new 30-meter telescope.

In bioinformatics, our scientists produced the first draft of the complete human genome, piecing together results from all over the globe, and they made it available to the world.

In linguistics, our scholars are developing an interactive language program for astronauts.

Our Economics Department was recently ranked sixth in the world for research in international finance.

Our computer gaming major was the first in the UC system.

And in earth sciences, one of our professors explained reversal of the Earth's magnetic field seen in the geologic record.

Some of our program strengths relate directly to our Monterey Bay region: In ocean sciences, our facilities on the bluffs offer researchers access to a unique seawater system that expands the boundaries of marine exploration.

We've pioneered organic farming of strawberries, apples, artichoke and other crops. Thanks to a program rooted in the work of Englishman Alan Chadwick. He introduced French-intensive gardening to UCSC in the earliest days of the campus.

And the community would not be the same without Shakespeare Santa Cruz, a beloved theater company that mounts shows under the redwoods every summer.

Today we have about 16,750 students: About 15,250 undergrads and 1,500 graduate students. Thirty-seven percent of our undergraduates will be the first in their families to graduate from college.

The campus was originally planned to accommodate 27,000 students, but our growth has been curtailed because of budget constraints. Which brings me to the next part of my talk.

Magnitude of state divestment in UC

I've talked about the State of California's visionary plan for higher education. My own campus is proof of what's possible.

Here's the sobering part: The state of California is fundamentally divesting in higher education.

After boldly setting down a path that has powered innovation and helped create one of the largest economies in the world, the state of California has reversed course.

Adjusted for inflation, average state funding per UC student has dropped 54 percent since 1991. We have half as much state money to spend per student as in 1990.

The last two years have been devastating. The scope of budget cuts has forced grave changes.

Under the Master Plan, the university was intended to be free. That's why we don't charge "tuition." We charge students "educational fees." Those fees have gone up steadily over the years-32 percent last year alone. They now exceed $10,000 a year.

In addition: 1,900 employees have lost their jobs in the last two years, and additional layoffs loom. This year, all UC employees were subject to salary cuts of 4 to 10 percent. And that's on top of low faculty salaries, which lag the market by 10 to 15 percent. At UCSC, many faculty positions have gone unfilled.

Finally, campuses have had to cut academic programs, and that is having ripple effects in the classroom: Students are having trouble getting the classes they need.

At UCSC, we have chosen not to make cuts across the board; only one-third of our budget cuts have impacted academic programs. At the same time, the campus is not a museum. We are consolidating some programs, and eliminating others, and we are encouraging departments to be more efficient in course offerings.

Access and affordability

All of which begs a critical question: How do we meet the needs of California?

Our mandate from the state is to provide access to any student who would benefit from education, regardless of their ability to pay.

The university's Blue and Gold Opportunity Plan does guarantee that students with family income at or below the median pay no fees. It's our middle-class families who are really feeling the squeeze these days.

I am a firm believer in free public higher education. We have strayed far from that vision.

And yet, we know the state needs what we offer: A 2009 study by the Public Policy Institute of California predicts a shortfall of 1 million college graduates by the year 2025.

These are the challenges facing us today.

What are we doing?

What are we doing?

Systemwide, UC has launched the "UC for California" advocacy campaign that has attracted nearly 300,000 supporters who are writing letters, making phone calls, and lobbying elected officials on behalf of the university. This is an unprecedented effort.

Is it having an impact? Governor Schwarzenegger has pledged to veto any budget that includes cuts to higher education.

Is that realistic given a $21 billion shortfall? We'll see. Legislators are facing very difficult decisions.

UC is overhauling financial and administrative practices to streamline operations and reduce expenses.

But we also recognize that the landscape has fundamentally changed, and there is no going back. Which is why we are reassessing our systemwide operation from the ground up.

The UC Commission on the Future was established last summer to examine the issues of access, quality, and affordability in this new budget context.

As co-chair of the Size and Shape Working Group, I can tell you that commission members are asking tough questions, many of which are controversial, even unpopular, such as:

. Increasing the number and proportion of non-resident undergraduates.

. Offering three-year undergraduate degree programs.

. Establishing an eleventh "all-virtual" campus.

. Avoiding the duplication of programs, facilities, and professional schools by adopting a systemwide approach that would subordinate individual campus goals.

. Charging differential fees by campus.

. Establishing a continual and steep trajectory of fee increases that will essentially privatize the University of California.

Since becoming chancellor of UC Santa Cruz, I have urged that the formula by which funds are dispersed to the campuses be reviewed. I'm gratified that the Size and Shape Working Group has agreed to take up that issue. It is perhaps too local an issue to discuss today, but for those of you from multi-campus institutions, it might be a topic for conversation later.

The university system is in a tough spot. Right now, we have 15,000 unfunded students, because even after the state stopped providing per-student funding earlier this decade, we honored our commitment to the people of California. But now we're in a bind.

Cal State University did the same thing, until they reached 40,000 unfunded students. Their decision to limit enrollment to the students they had support for subsequently impacted UC, which saw a sudden uptick in applications.

Other high school seniors have decided to look beyond California for college.

For all these reasons, students are uneasy. Fee hikes sparked student protests across the state.

Faculty, too, are anxious. At UCSC, we have lost some stars to private colleges and universities.

We know our best and brightest will continue to be courted by other suitors. And we will lose some of those battles. That is a very real--and certainly the most profound--threat to UC's excellence.

Fortunately, at UC Santa Cruz, our research programs are sufficiently mature that extramurally funded research now funds 34 percent of campus direct expenditures on instruction, research, and academic programs.

UC Santa Cruz also received $30 million of federal "stimulus funds" that cushioned the blow of budget cuts this year.

We are preparing to launch our first-ever comprehensive fundraising campaign.

Private fundraising isn't something we've done well over the years. The upside of that is I believe there is untapped potential out there.

We are also building ties in Silicon Valley. We are the UC campus of Silicon Valley, and I believe those ties are critical to the future of our campus. Not just for our 12-year-old School of Engineering. We are currently executing the single largest university research contract ever issued by NASA.

Other opportunities are out there.

Finally, I co-chair the Silicon Valley Higher Education Roundtable, which is a partnership of regional community colleges, California State University-San Jose, and UC Santa Cruz.

Which brings us full circle, back to the three-pronged system of higher education in California.

Competition and collaboration

The Silicon Valley Higher Education Roundtable-what we call the "SilVER group"-is one of two regional collaborations I'm proud to be part of. The other is the Monterey Bay Educational Consortium (MBEC), which I co-chair with Dianne Harrison.

Both of these groups consist of educational leaders who are committed to bringing more nontraditional students into higher education.

We are working together to create seamless opportunities for students to move from community colleges to a Cal State or UC campus. We are doing outreach to high school students-and, in some cases, to much younger schoolchildren-to help them prepare for college.

This is a very high priority of mine, and as president of the Silicon Valley group, I am unabashed about introducing some of MBEC's ideas into Santa Clara County. This collaborative effort makes sense. And yet it is fairly new.

Similar initiatives are emerging in our relationship with Santa Cruz. Our campus is the county's biggest employer, and we want to be a better neighbor. We have launched partnerships to foster more entrepreneurship in the area, to cut down greenhouse gas emissions, and to stimulate innovation.

Which brings me to my final observations, which are about competition and collaboration.

We are in a new era of forced competition, driven in large part by the state's withdrawal of support for higher education in California.

We don't relish the idea of competing for students and fending off suitors for our top faculty, but we will.

Just as we are learning to lobby and advocate for UC in Sacramento.

Just as we are generating external support for research.

Just as we are raising private funds for scholarships and campus programs.

We see the writing on the wall. State support will never be what it was. The university is changing. We are partnering in new ways with our sister institutions. It is ironic that it took this funding crisis to spur these collaborations, out of which many good things will come.

Will we emerge undamaged? No. Too much has already been lost.

Even our beloved Shakespeare Santa Cruz theater company was saved only by a last-minute, emergency fundraising effort last year--a national effort patterned after the Obama presidential campaign's internet fundraising.

In closing

In closing, there's no question that California's system of public education, from K-12 through UC's graduate programs, helped power California's emergence as a global leader--of industry, innovation, culture, and the arts.

Clearly, we're at a crossroads.

Will we lose sight of the Master Plan and become fully privatized?

Is there some as-yet undiscovered innovation that will allow us to resume our path to greatness?

Or is there a third option?

There is more and more talk lately about the role of the federal government. The federal government established the public land-grant universities, and there is discussion now that it should step up and protect our public research universities.

I suggest that this may be essential if the United States wants to remain globally competitive.

So we shall see.

As I said at the beginning, we don't know yet how the story will end.

Thank you for listening. I look forward to hearing from our other speakers and to our discussion later today.