Two years ago, University of California President Mark G. Yudof called for an annual, comprehensive assessment of performance across the UC system in meeting core goals reflecting teaching, research and public service missions. Upon completion of the first accountability report in 2009, he said, "I believe that we should be held accountable by parents, by students, by taxpayers, by employees, by the Legislature. People deserve an honest answer to the question of how you're doing, and it needs to be backed up by data."
The second University of California Annual Accountability Report indicates that the long-term decline in state funding for higher education is putting UC educational quality, access, affordability and diversity at risk. While it's too soon to assess the full impact of the state funding cuts of the past two years, the report — to be presented to the Board of Regents on Wednesday, May 19, by UC Vice Provost Daniel Greenstein — highlights nine trends:
1. Enrollment. At a time when the number of eligible California high school graduates reached record highs, the total number of new students declined in 2009, reflecting a policy decision in 2008-09 to begin reducing the number of undergraduate students for whom no state funds were being made available (estimated in 2008-09 at close to 15,000 undergraduates). Freshman enrollments were curtailed by 2,300 for fall 2009 and 1,500 for fall 2010, more than offsetting the planned growth of 500 additional community college transfers in each of those years.
2. Affordability. The total cost of an undergraduate education in 2008-09 did not increase for independent students and for students from families earning less than $60,000 per year. This testifies to the strength of the University's financial aid program. The proportion of UC undergraduates who graduated with student loan debt also remained relatively stable at around 52 percent, as did the level of inflation-adjusted cumulative average debt that students incurred. In the next few years, the data on undergraduates may begin to reveal the impact of the steep fee increases that totaled 32 percent for 2009-10 and 2010-11 combined. If they do, they may resemble some professional degree programs where steep fee increases over the past decade very evidently have impacted the affordability of these programs. Beginning in 1994, fees over and above those paid by undergraduates were introduced for selected professional degree programs. Professional degree fees have risen dramatically in recent years, especially for medicine, law and business. And they have been extended to other programs such as public health, public policy and social welfare. Average indebtedness has grown among professional degree students in response, by as much as 10 percent per year among students studying for law, medicine, education and health degrees other than medicine. Additionally, the number of professional degree students graduating with debt has grown.
3. Teaching and learning. New survey data gathered every two years demonstrates that undergraduates have a high degree of satisfaction with their UC experience. The student-faculty ratio (a proxy for either a university's investment in instruction or a measure of the average availability of faculty members for a student) has been relatively stable at UC since 1994. This stability, however, obscures underlying changes in the overall composition of the faculty, including a reduction in the proportion of ladder-rank faculty. Also of concern are data revealed by two indicators that are new to this year's report: one showing just how much credit toward an undergraduate degree is earned in large classes and another showing growth in the proportion of instruction that is taken on by faculty who are not on permanent appointments and, as such, not as engaged in research. Contact with research and the people who conduct it is a hallmark of a UC education. It is too soon to know what impact budget cuts will have on the composition of UC faculty; however, the University anticipates that class sizes are likely to increase.
4. Student success. Four-year completion rates continue to improve for undergraduates who enter the University as freshmen. The proportion graduating in four years has increased from 42 percent for freshmen entering in 1996 to 60 percent for freshmen entering in 2005. But the data are not yet available for students affected by the recent severe budget cuts. These cuts produce countervailing pressures. Steep fee increases can provide incentive to students to finish their undergraduate degrees as quickly as possible. However, as fewer classes are made available, progress toward degree completion could be slowed.
5. Research. The University's research enterprise continues robustly. It persists at the top end of indices that rank universities worldwide and that adopt methodologies emphasizing research outputs. UC also routinely accounts for 9 percent of the research expenditures made by all U.S. universities. When 2009-10 data on research expenditures become available, it is likely to reveal continued, even expanded, growth due in large part to the University's success in attracting more than $800 million of American Recovery and Reinvestment Act (ARRA) funding that was devoted to research and flowed to universities through federal and other funding agencies awarding multi-year grants in 2009-10. In addition, the University produces a large number of the nation's most eminent scholars. In 2009 and 2010, the prestigious National Academy of Sciences admitted 144 new members, 66 of them from public universities. More than half of those admitted from public universities (39) were from the University of California.
6. Recruitment and retention of faculty and staff. The University remains concerned about its ability to recruit and retain its world-class faculty and the staff who support them in instruction, research, patient health care, student services and the many other enterprises in which they and the University are involved. Data from the 2009 total remuneration study (a survey that took into account all forms of compensation including salaries and benefits) demonstrate that with the exception of service workers, UC's total compensation is below market (4 to 7 percent below market for its faculty and up to 14 percent for some of its staff). At the same time, its work force is aging: Fifty-four percent of its faculty and 35 percent of its staff are over the age of 50. Accordingly, UC will need to emphasize faculty and staff renewal at a time when it is at a considerable competitive disadvantage in the marketplace with regard to the salaries it offers.
7. Financial responses. The report demonstrates how the University has steadily expanded its reliance on non-state funding while continuing its multi-year quest to achieve cost efficiencies. Student fee increases and the University's successes in attracting research grant funding are two examples. The report also documents that the amount of funds generated by auxiliary services and endowment funding has grown. But the report is careful to manage expectations about how far reliance on non-state funding can stretch. While the University's revenues are large - more than $20 billion in 2009 — the majority are generated by research grants and contracts and auxiliary services (a category that includes hospitals and medical centers as well as parking garages and student housing and dining services). Student fees and state funding are largely responsible for covering core academic costs, which include faculty salaries, libraries, instructional technologies, student services and other academic support services. And while state and fee funds may be supplemented from other sources, non-state and non-fee funds are typically restricted to specific purposes for which they are designated and would need in any event to grow in an unprecedented fashion before noticeably making up for the diminution in state funds. Endowment funds, for example, would need to grow by more than 250 percent in order for the interest paid upon them to make up for the cuts meted out by the state in 2008-09 alone.
8. Diversity. The University is especially challenged here. African Americans, American Indians and Chicano/Latinos are less well represented among the University's students, faculty and staff than they are in the state as a whole, and women are less well represented than men in faculty and senior management positions. As the September 2009 Accountability Sub-Report on Diversity demonstrated, degree completion rates are lower for students from particular populations (African-American and Chicano/Latino males, for example) than for white or Asian students, and the University needs to pay more attention to this area (www.universityofcalifornia.edu/accountability). While there is considerable variation across campuses and across disciplines and evidence of real progress in selected areas, a great deal more remains to be done in order to realize the commitment renewed by the Board of Regents in 2007 to support diversity and equal opportunity and to promote a culture of tolerance, inclusiveness and respect on each campus. Progress needs to be made within the legal limitations of Proposition 209, which eliminated considerations of race, ethnicity and gender in admissions and hiring, and in the context of severe budget cuts that have required the University to curtail enrollments, reduce the number of new faculty hires, eliminate staff positions and increase student fees. This report, coupled with an annual accountability sub-report on diversity, will track the University's progress, its continuing challenges and the impact of its new initiatives (such as "Project You Can," a fundraising initiative that seeks to raise $1 billion in private support for student aid) on diversity. It also will incorporate new measures as they are developed to gain a better understanding of the hurdles faced by women and underrepresented minority groups and the actions that may help to reduce those hurdles.
9. Health. UC's health sciences and services programs attract almost half of all private support the University receives, account for just under half of the federally funded research and development expenditures annually at UC, and are responsible for leading-edge research in treatment, patient care and patient safety. Crucially, they also train 60 percent of California's M.D.s. The medical centers constitute the fourth-largest health care delivery system in California. They record about 3.8 million outpatient visits and 850,000 inpatient days every year, and deal with cases that are far more complex than those seen by the average hospital. They play an important role treating the state's low-income patients and, owing to the quality and sophistication of their care, they treat patients transferred from other hospitals that have exhausted all efforts and consider UC medical centers to be hospitals of last resort. The UC medical centers are financially self supporting and accounted for 28 percent of the University's total revenues in 2008-09. Their future financial vitality, as noted in the January 2010 Health Sciences and Services Accountability Sub-Report, will continue to be challenged by a changing health care environment and looming capital and employee pension needs.
The full report is available as part of the accountability section of the UC website, www.universityofcalifornia.edu/accountability/.