HIGHER EDUCATION, STATE DISINVESTMENT,

AND NEED-BASED FINANCIAL AID

Cal 68December 9, 2017

Robert J. Birgeneau

State disinvestment is putting public higher education at risk

State Support52%

1981 82

State Support10%

2011 12

Decline in Berkeleys State Funding

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52

48

Sales

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Sales

State52

Other48

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8.2

3.2

Column2

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Column1Column2

8.2

2nd Qtr3.2

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Berkeley State Funding 201112

$590M compact with governor but only $240M received.

$350M shortfall Salary/benefits of 4,000 staff

State Support

Federal Research Funding

Philanthropy*

Tuition Federal Research Funding

Philanthropy*

Tuition

State Support

*Includes private gifts and investment income

Our Primary Sources of Funding Have Changed

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146447

250809

378081

497000

2003

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2003

Tuition146447

Philanthropy*250809

Federal Research Funding378081

State Support497000

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255000

482246

491204

501299

2012

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2012

State Support255000

Tuition482246

Philanthropy*491204

Federal Research Funding501299

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Chart1

Sheet1

2003

Tuition146447

Philanthropy*250809

Federal Research Funding378081

State Support497000

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The Lincoln Project

U.S. Public Research Universities: Recommitting to Lincolns Vision,

an Educational Compact for the 21st Century

Mary Sue ColemanCo-ChairPresident

Association of American Universities

Robert J. BirgeneauCo-Chair

Silverman Professor of Physics, MSE,and Public Policy

University of California, Berkeley

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Reports and Recommendations

www.amacad.org/Lincoln

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AFFORDING THE DREAM:Student Debt and State Need-Based Grant Aid

for Public University Students

CSHE.4.17, February 2017

Charlie Eaton, Sheisha Kulkarni, Robert Birgeneau, Henry Brady, and Michael Hout

Stanford University UC Berkeley New York University

Share of Full Time First-Year Students Receiving Pell Grants

Actual Net Price for Low-Income Students and State Aid

Low-Income Student Loan Defaults and State Aid by Research

UC Berkeley Financial Challenges

1. 14% pension contribution since 2008

2. Health care

3. Rebenching

$125M extra cost

$75M cost increase since 2008

$40M loss

Total: $240M annual cost burden

UC Berkeley Financial Challenges, cont.

4. Out of state/international students

5. Tuition frozen for 6 years beginning 2011

$100M increase in revenue since 2011

$100M annual lost income $50M lost financial aid = $3,000 increasein debt for low-income students

Conclusions1. There is a dire need for increased state-funded need-based

financial aid in all but a few states.

2. ~80 percent of graduates from public universities have debt under $30,000

3. Low-income students are twice as likely to attend public universities with little or no research

4. Loan default rates are ~10 percent at top public research universities and ~35 percent at non-research public universities.

HIGHER EDUCATION, STATE DISINVESTMENT, AND NEED-BASED FINANCIAL AIDSlide Number 2Berkeley State Funding 201112Slide Number 4The Lincoln ProjectReports and RecommendationsSlide Number 7Slide Number 8Slide Number 9Share of Full Time First-Year Students Receiving Pell GrantsSlide Number 11Slide Number 12Actual Net Price for Low-Income Students and State AidLow-Income Student Loan Defaults and State Aid by ResearchUC Berkeley Financial ChallengesUC Berkeley Financial Challenges, cont.Conclusions