March 29--The University of California has hurt local students by admitting so many out-of-state applicants to its campuses and should be reined in with tough restrictions, according to a sharply critical state audit released Tuesday.
The audit recommends stricter entrance requirements for nonresident students, a cap on their enrollment and greater recruiting efforts of Californians -- particularly African Americans, Latinos and other underrepresented minorities.
The audit was requested more than a year ago by Assemblyman Mike Gipson (D-Carson), who has expressed concerns that the tripling of nonresident students since the fall of 2007 has hurt Californians -- especially minorities. Students from other states and countries have grown to 13% of the system's total undergraduate enrollment, up from about 4% eight years ago.
The audit found that resident enrollment increased by only 10% over the last 10 years while out-of-state students rose by 432%. Nonresidents benefited from lowered admission standards, while California students increasingly were turned away from their campus of choice, the audit found.
"Over the past several years, the university has undermined its commitment to residents in an effort to increase its revenue by recruiting and enrolling nonresidents," the audit said, adding that UC practices have particularly hindered minorities.
"Because of the significant harm to residents and their families resulting from the university's actions, we believe that legislative intervention, as outlined in the report, is necessary to ensure that a university education once again becomes attainable and affordable for all California residents who are qualified and desire to attend," state auditor Elaine Howle said in a letter released with the audit.
Gipson said he would immediately work with fellow legislators to push for such actions as a cap on nonresident students and a public hearing on the audit results.
"My reaction is utter disgust," he said. "I'm going to use a harsh word, and the word is discrimination. We are disenfranchising California students."
But UC President Janet Napolitano denounced the audit's conclusions, saying they were "disappointingly prebaked" and ignored the massive amount of data that university staff spent hundreds of thousands of hours collecting and presenting. She said that an unprecedented cut in state support for the 10-campus system -- amounting to one-third of its budget -- prompted the effort to recruit more nonresident students, who pay higher tuition.
"To suggest from the outset that UC decisions regarding admissions were designed to 'disadvantage Californians,' as opposed to mitigate the impact of a 33% budget cut, is a rush to judgment that is both unfair and unwarranted," she said in a March 8 letter included in the audit.
UC officials insist that nonresident students don't displace Californians. Instead, they say, the $23,000 in additional tuition that nonresidents pay each year has allowed UC to enroll thousands more California students than the system could otherwise afford. For the current academic year, tuition and fees for in-state students is $13,800, compared with $38,108 for students from out of state.
Without the extra money from out-of-state students, Californians could have faced an additional $2,500 in tuition -- a 20% boost, Napolitano said. Tuition and fees have doubled since the 2008 recession, but have stayed flat -- except for one fee increase -- since 2011-12 as part of an agreement between Napolitano and Gov. Jerry Brown for more than $3 billion in new funding over four years.
In a separate deal, UC agreed to admit 5,000 more California students for the fall 2016 term in exchange for $25 million more and a continued lid on tuition increases.
"Providing adequate state funding is the best way to increase the number of California students enrolled at UC," said a special report on admissions and finances released Tuesday by university officials.
The report made the case that UC policies "overwhelmingly favor" California residents over nonresidents. The system guarantees admission to at least one campus for all eligible California applicants -- those in the top 9% of their high school class who maintained at least a 3.0 grade-point average while taking a battery of English, math, science, foreign language and other required classes. No such guarantee is offered to nonresidents.
Californians are also admitted at higher rates, with 71% accepted to at least one campus of choice compared to 55% for nonresidents. And, the report said, Californians are eligible for much more financial aid, including access to three state scholarship and grant programs that have helped more than half of UC's undergraduates to enroll without paying any tuition or fees.
Howle, however, said that UC has failed to provide evidence of their key claims. As one example, she said, UC officials have not shown how they used the additional $728 million in nonresident tuition specifically to support more California students.
"They never called into question any of the facts in the report; they just don't like our conclusions," Howle said. "But our conclusions are based on the facts."
Hans Johnson, a senior fellow at the nonpartisan Public Policy Institute of California, said UC's decision to enroll more nonresident students in the face of dramatic budget cuts was defensible.
But he said he favored reducing their numbers, as they now make up more than 20% of undergraduates at the most popular campuses, UCLA and UC Berkeley.
With fewer nonresident students, he said, more Californians could win admission to their top campus choices. Today, thousands of qualified students who are turned away from their selected campus are offered a seat at UC Merced, even if they did not apply there.
Gipson and others have raised concerns about that practice because those referred to UC Merced are disproportionately Latino and African American.
But with fewer out-of-state students, UC would need to make up the financial loss with more state dollars or higher tuition and fees, Johnson said. In his view, higher tuition should be considered, so long as financial aid for low-income students increases accordingly.
The state finance department, however, has said that UC also needs to control its costs. The audit recommends a biennial cost study and a review of how to reduce $13 billion spent on staff salaries in 2014-15.
UC officials said they have reduced costs aggressively and will continue to seek new ways to do so.
Gipson also asked that the audit investigate UC's progress in equalizing funding per student across campuses. An earlier audit from 2011 found that the four undergraduate campuses with more underrepresented minorities received about $3,600 less per student, on average, than the five campuses with fewer minorities.
UC explained at the time that campuses with more graduate students and health sciences programs -- such as UCLA, UC Berkeley and UC Davis -- were more costly to run. But officials have since revised their formulas and expect state dollars will be equitably distributed by the 2016-17 school year.
Asked to review the compensation paid to UC's top executives, auditors found that salaries of campus chancellors were comparatively low. But they said that officials could have done more to reduce costs before hiking tuition or admitting more nonresidents, such as placing employees on furlough.
Napolitano said UC employees should be lauded for their "remarkable feat" in keeping campus quality high despite the intense budget challenges of the last several years.
"We know that out-of-state enrollment is a sensitive point, and it should be," she said. "But this report is just wrong. It shouldn't overlook the fact that the university continued to increase in-state enrollment and continued to provide a world-class education with some of the most highly ranked academic programs in the world and the country."
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