By
Patrick Murphy, Kevin Cook, Talib Jabbar
California has recently increased its investment in higher education after many years of reducing state support. At the same time, the state’s four-year public systems, the University of California (UC) and California State University (CSU), are currently poised to raise tuition for the first time in several years. If the past is any indication, intense discussions lie ahead about the need for additional higher education resources.
We offer a constructive starting point for those discussions by introducing a straightforward and objective assessment of institutional costs. We rely on a measure that connects institutional costs to the number of degrees UC and CSU produce. This measure provides a clear understanding of trends in California’s institutional costs and allows comparisons with colleges and universities in other states. It also offers higher education institutions the opportunity to demonstrate progress toward their goals in an accessible, transparent way.
Applying this measure to California’s public four-year institutions, we find that:
- Institutional costs per degree across UC and CSU fell significantly—17 percent—from 1987 to 2013. This is an important savings in a state that will need to amp up its number of college graduates to meet future economic demand.
- At UC, the cost per degree fell 6 percent over the period—from $116,000 to $109,000. UC’s institutional costs in 2013 were lower than a comparison group that included both public and private institutions across the nation. But UC’s costs were higher than a national comparison group of public schools only.
- At CSU, the cost fell 33 percent—from $67,000 to $45,000. CSU’s 2013 costs were lower than both types of comparison groups—one that included public schools only and one that included both public and private institutions.
We recommend that policymakers and higher education leaders use the cost per degree measure as a way to frame higher education finance discussions. It provides a consistent, reliable, and objective measure of institutional costs and performance. For the measure to be most effective, accurate data reporting will be essential. We also recommend the reintroduction of a state-level higher education authority to add validity to the process of gauging institutional performance. Using the measure within a larger framework of agreed-upon goals would go a long way toward improving higher education finance policy in California.
