Saturday, November 21, 2009

The End of the University of California System

On Friday, November 20, Amy Goodman of Democracy Now reported on the student protests throughout california. (exert below)

According to Bob Samuels (president of the University of California, American Federation of Teachers. (He runs the blog Changing Universities) money is being funneled into the compensation of the star faculty and the star administrators, because in the UC system there’s over 3,000 people who make over $200,000. And many of them make $400,000, $500,000. 

Apparently, the University of California has been used by Republican appointees to the UC Board of Regents as a slush fund to finance private business interests. By investing the UC Pension fund in 'sub-prime' student loans and housing stock, they have shifted billions into the private sector. Current UC President, Mark Yudof, appointed from University of Texas in march 2008, with a compensation package worth $750,000 per year, says that the UC System is starving for money and must raise student tuition by 32% next year, even as the UC System loans out hundreds of millions to the State at 7% interest, and raises administrator salaries across the board. As long as we let Senior Vice Presidents from Wachovia Bank run our university we are bound to fail.

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AMY GOODMAN: Bob Samuels, just explain the situation right now. Why are these student hikes? What’s the justification for the 32 percent increase in student fees?
BOB SAMUELS: Well, President Yudof, the president of the University of California system, says that because of state cut to the UC budget from 20 percent of the state contribution, which is—the state only contributes about—contributes only about 15 percent of the total budget, but because of that cut, they say they have to raise student fees. And our argument has been that this is actually a record year of revenue for the UC system, and the problem is they just don’t want to spend the money on instruction. So what they’re doing instead—
AMY GOODMAN: How could it be a record year?
BOB SAMUELS: They brought in a lot of money from the federal stimulus money. They had a record year in their research grants. They had a record year in medical profits. Most of their money is brought in by selling parking, housing and medical services throughout California. So they had a record year in that revenue. They had a record year in grants. And so, actually, last year they ended up getting more money than before from the state, because they got the federal stimulus money.
AMY GOODMAN: And so, what is the justification then? Explain further where that money goes.
BOB SAMUELS: Well, you know, the university says that it’s poor, that it can’t spend money from its other areas on students, on instructions, and so it has to basically—what it’s doing now is laying off hundreds of faculty members, especially the non-tenured lecturers, and it’s increasing class size.
And money is being funneled into the compensation of the star faculty and the star administrators, because in the UC system there’s over 3,000 people who make over $200,000. And many of them make $400,000, $500,000. A lot of them are mostly administrators and staff, and so the university has—basically has fewer and fewer faculty, more and more students and more and more administrators.
And so, what’s going to happen is it takes students longer to graduate. They can’t get the classes they need. And I teach required writing classes at UCLA, and they just laid off our entire department. And we have required classes, so we don’t know what they’re going to do. And the dean of our division told us the university simply does not have money for undergraduate education.
AMY GOODMAN: Doesn’t have money for undergraduate education. But what about the administration, the money that goes into the non-teaching staffs at the university throughout the system? And we’re talking about three basic tiers, right?
AMY GOODMAN: Explain that.
BOB SAMUELS: Well, in California, we have the University of California, and some of the schools are UCLA, UC Berkeley. We have the CSU system. And then we have the community college—
AMY GOODMAN: And the CSU system is…?
BOB SAMUELS: The California State University system. And then we have the community college system. And the way it’s supposed to work is there’s a master plan, and the top students are supposed to go to the University of California. It’s the top ten percent of California students. And then another large group is supposed to go to the California State Universities. And then everyone else is supposed to go to the community college.
What’s going now is California right now has the second lowest rate of students who go directly from high school to a four-year university. It’s the only—only Mississippi has fewer students. And what we’re afraid is with these fee increases, what they’re talking about doing is raising the fees and basically lowering enrollment and increasing the amount of out-of-state students. So California next year will be—have the lowest rate of students who go directly from high school to college in the entire country.
AMY GOODMAN: And the issue of the non-teaching staffs, the administration?
BOB SAMUELS: That the administration keeps on expanding and growing. They keep on hiring more and more administrators. We’re not exactly sure what they do. And our joke at University of California is, when two administrators walk into a room, three always walk out. So we never know exactly what they do, but there’s just more and more of them.
AMY GOODMAN: So what kind of cuts are they suffering, the administrators?
BOB SAMUELS: The administrators are cutting—are virtually no cuts. In fact, the same meeting, when they decided to raise student fees, they voted on millions of dollars of increased salaries and special bonuses to administrators and to the highest-paid people. And so, there has been several compensation scandals in the UC system. And what they discovered is the UC has secret packages that it gives a lot of its administrators and athletic coaches and some of its star faculty, a small percentage, and that it makes these secret deals, it breaks its own rules, and that money continually floats to the top of the university. So while we think the universities are often these progressive institutions, they often are run like large corporations. And that’s one of our concerns.
One of the stories I want to talk about is just that UC lost over $23 billion in investments in the last two years. And one reason why it lost so much money is that it invested heavily in toxic assets and in real estate. And it followed the Yale model of investing in these high-risk assets, and at first it gained a lot of money. And what’s happening across the country are universities, especially the private universities, they’re losing so much money in their endowments that they’re having to raise, once again, their tuition and also cut classes, cut faculty, and especially the non-tenure track faculty are the most vulnerable. And at the UC system, the non-tenure track faculty teach over 50 percent of the classes, and those are the ones that they’re laying off and that they’re firing. And they’re also basically reducing the salaries of the workers and also increasing their workload. At the same time, they’re refusing to negotiate with the unions.
AMY GOODMAN: What is President Yudof’s strategy?
BOB SAMUELS: I think his main strategy is basically to blame the state for everything, while they try to privatize the university. And a very telling moment came. After the UC’s budget was cut by the state, the UC turned around and lent $200 million to the state. And people said, how can you lend $200 million to the state while you’re giving faculty furloughs and while you’re raising student fees and while you’re cutting classes? And he said, “When we lend money to the state, we make a profit from interest. But when we spend money just on teachers’ salaries, that money just disappears.” So, from his perspective, instruction is a losing proposition, and the university should just try to get out of the business of basically teaching students and hiring faculty.
AMY GOODMAN: You’ve talked about a great deal of money being lost.
BOB SAMUELS: Right. Well, that money, the $23 billion, is mostly in the pension fund and its endowment and its short-term investments. And so, that’s really a long-term problem. And the UC still has a $20 billion budget. It had more money brought into the system last year than any year before. It doesn’t have to raise student fees. It doesn’t have to fire faculty. It doesn’t have to cut courses. They’re talking about eliminating minors and majors. They’re talking about moving classes online. They’re doing these drastic things. And what we’re seeing is just basically undergraduate students are subsidizing research, they’re subsidizing administrators, they’re subsidizing things that have nothing to do with undergraduate instruction.
AMY GOODMAN: Bob Samuels, the implications of what’s happening here in California for the rest of the country?
BOB SAMUELS: Well, basically, what we’re seeing, especially at the major prestigious universities, is more and more—only upper middle class, upper class students can go to them. And they’re privatizing these institutions. And the institutions—what happened about 1980 was that states started to cut their funding of higher education, and so universities looked for other ways of making money, and so they concentrated on raising funds and doing research, and especially research funded by corporations and the federal government. And so, basically now at a lot of universities, instruction only represents about ten percent of the budget, and so it’s a minor aspect of the universities.
And most people don’t know that, that universities, in some ways, are just kind of fronts for investment banks and investments, because at the University of California, the regents, who are the main financial overseers of the university, are appointed by the governor for twelve-year terms. And most of the regents now are Republicans, who not only have voted against taxes and have not only tried to defund higher education—and they’re the ones in charge in many ways—but they’re also business people chosen by Republican governors. And those—and they are real estate people, they’re investment bankers. The new head of the—the chair of the UC Regents is the former head of Wachovia, and he actually—they sold subprime student loans, right? And they profit from the student loans. And also, they pushed the UC into investing heavily into mortgage-backed securities and into real estate right when those were tanking.
And so, I really think that the Board of Regents basically is forcing the UC or motivating the UC to make a lot of incredibly bad investments, and when the investments turn bad, then they try to take it out on the students, on the faculty and the workers.
AMY GOODMAN: I want to just end with this USA Today latest study of compensation, revealing that at least twenty-five college head football coaches make $2 million or more this season, slightly more than double the number two years ago.
BOB SAMUELS: The UC Berkeley faculty last week voted a resolution to stop subsidizing the athletic department. Apparently UC Berkeley has been paying, subsidizing out of student fees, $3 million to $4 million a year. What most people don’t know is most athletic departments lose money, and the big departments lose a lot of money. And student fees often go to paying for athletic departments. And also, we found out that student fees go as collateral to—for construction bonds.
AMY GOODMAN: We’re going to end with Zen Dochterman.
Just a correction: I said that fifty-two students were arrested at Campbell Hall at UCLA. It was actually at UC Davis, at University of California, Davis, when they refused to leave the administration building.
Zen Dochterman, what are the plans now?
ZEN DOCHTERMAN: Well, first of all, I just wanted to reiterate a lot of what Bob Samuels said, is that students are fighting not just these 32 percent fee increases, but they are fighting the links of the university to the larger economic system as a whole. We are fighting the privatization of the university and the effects that has. We’re fighting the re-segregation of the university and the way in which these fee hikes also exclude people of color and working-class people from attending higher education, and that public education is supposed to have a universal—a universal scope. But what we’re seeing is an antagonism between that mission and everything that is going on.
So I think what is important for many of us is to recognize that we are part of a larger international student movement that sprung up in places as far away as Vienna and Heidelberg, and Berkeley also, of course, and London, and that really what we need to be focusing on is not so much the issue of fee hikes and layoffs, which are also important, but really that the universities need to belong to the students and the workers who work there.
And so, I would say that the next sort of step for many of us will be talking to our departments, talking to our unions. And many of us have also been working with people in the unions at the UC, such as AFSCME, the UAW, UPTE, so talking more with the unions, more with the student groups, more with our departments, and even more with our friends, and organizing.
We also have a big day coming up, March 4th, which is a public education system-wide day of protest. There have been many thoughts about what kinds of actions there might be on that day, going everything—
AMY GOODMAN: March 4th?
ZEN DOCHTERMAN: —going to everything from system-wide shutdowns of campuses, also going to tuition—tuition strike. So there are many things being talked about now, but we can definitely say that March 4th will be the next sort of November 18th and 19th in the—not just at the UC, but at the public education—
AMY GOODMAN: Well, Zen Dochterman, I want to thank you very much for being with us, UCLA graduate student, on the phone with us. And Bob Samuels, president of the University of California American Federation of Teachers, runs that blog called “Changing Universities.”

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