A Lesson in University Privatization

Check out Amy Goodman's interview of Bob Samuels, president of the University of California, American Federation of Teachers, on Democracy Now:

UC President Yudof, blames everything on the CA state budget cuts. Gov. Schwartzenegger did cut the UC's budget allocation by 20%, or $650 million (from $3.25 billion to $2.6 billion), but the state allocation is only about 15% of the total UC budget.

"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."

"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."

THIS is how president Yudoff frames it, ""When it comes to the university's core support, we have only two main sources - taxpayer dollars from the state and student fees. Even with deep administrative cuts, when one goes down, the other almost inevitably must go up."

"I think [Yudof's] main strategy is basically to blame the state for everything, while they try to privatize the university...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 [President Yudoff] 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.”

"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."

"UC lost over $23 billion in investments in the last two years...It invested heavily in toxic assets and in real estate..it followed the Yale model of investing...and gained a lot of money."

"The $23 billion [that was lost] 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 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."

"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...Next year we will have the lowest rate of students who go directly from high school to college in the entire country."

BEYOND JUST THE UC's:

"What happened in 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."

"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."

"Universities, in some ways, are just kind of fronts for investment banks and investments. 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 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."

CHECK out his blog to learn more about how an increase in student fees will not go towards undergraduate instruction or services...about how students will have to pay more for less, or just drop out and try to find a job where their are few to be found.