For many higher education institutions, like the University of California (UC), the fiscal losses are growing as the health emergency extends, precipitating the need for a tuition increase. As reported in a December 12 Los Angeles Times article:
Systemwide, UC took a $2.7-billion financial hit between March and October — about 6.5% of its $41.6-billion operating budget, mainly from lost income from medical centers, housing and dining, and added costs for coronavirus testing, tracing, personal protective equipment, deep cleaning and the move to online instruction.
Los Angeles Times, December 12, 2020
Additionally, given the loss of state tax revenues, UC leaders expect a
$300.8-million proposed state budget cut this year
Los Angeles Times, December 12, 2020
Thus, as discussed in Fiscal Reckoning Dead Ahead and Educational Investing Quagmire, public university officials, like the UC administrators, will contend with both tuition revenue declines and state subsidy decreases. (Notably, pre-March 2020, average state subsidies for higher education were still less than 2009, having not recovered from the last economic downturn during The Great Financial Crisis).
As a result:
Chancellors and senior leaders at five of the nine UC undergraduate campuses told The Times that the staggering financial hit to their operations triggered by the coronavirus crisis and a $300.8-million proposed state budget cut this year have underscored the pressing need to open talks about tuition rates — which regents have increased just once for California students since 2011.
Los Angeles Times, December 12, 2020
While no formal proposals to increase tuition have been discussed by the UC Regents, the statewide board who decides if the $12,570 UC in-state resident tuition will be raised, current and potential UC students would be prudent to prepare for tuition increases as early as Fall 2022. Additionally, as fiscal deficits grow, students would be smart to plan for reduced student support services, like career advising, as well a diminished quality of their education, if staff and faculty layoffs are necessary.
Given students’ current dismay about their college educations, discussions about tuition increases may be ill-timed, yet necessary. The question is: will students continue to pay more for college believing that a college degree is necessary for economic prosperity? As more young college graduates move home, are underemployed (working jobs that don’t require a college degree) and possibly saddled with student debt, delaying their household formation, like marriage or buying a house, will demand for a college education remain steady?
Image from UCSD Memes for Sleep Deprived Teens
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