Are Public Universities Becoming Bastions of Privilege?

In 2000, 90 percent of UC Berkeley freshmen came from California; by 2012, it was down to 71 percent. Why?

Demonstrators struggle with police with a barricade in front of a closed off building on the University of California, Berkeley on the Berkeley, Calif., campus, Friday,. Nov. 20, 2009, during a demonstration against university fee hikes and layoffs.

Is a state university still fulfilling its mission if it enrolls nearly as many out-of-state students as in-state ones? Is a public university fulfilling its mission if it’s reducing the number of seats for low-income students while increasing spots for wealthier ones?

These questions are increasingly being asked in many states around the country—and for good reason. Stung by sharp budget cuts, public universities in numerous states are increasingly seeking alternative revenue sources: namely, affluent out-of-state and international students who can afford to pay the higher tuition rates charged of them.

To investigate this trend, I recently looked at U.S. Department of Education data to see how enrollments shifted at more than 400 U.S. public colleges and universities between 2000 and 2012. I found that about 60 percent of these schools saw the percentage of their in-state freshmen population decline during this time period. Nearly one-fifth of the institutions saw a drop of 10 percentage points or more. And 11 schools experienced a reduction of at least 20 percentage points.

Out-of-state and international students make up at least 40 percent of the freshmen class at flagship universities in 18 states, up from 10 states in 2000. They comprise less than 20 percent of the flagships’ entering classes in only eight states, down from in 16 states in 2000.

This trend is alarming in light of a recent study conducted by researchers at the Universities of Arizona, Michigan, and Missouri about public research universities. Comparing data that the U.S. Department of Education collects from colleges on the enrollment of federal-grant recipients, underrepresented minorities, and nonresident students, the researchers found that when a public research university enrolls more out-of-state students, the fewer seats it has left for low-income and minority students. In other words, by bringing in more and more wealthy nonresident students to make up for state budget cuts, these public universities are increasingly becoming bastions of privilege.

Related: College, federal financial aid increasingly benefits the rich

What can be done to counteract this trend? The Iowa Board of Regents has offered an intriguing proposal. Under a plan that the board approved last June, 60 percent of the funding that the University of Iowa, Iowa State University, and the University of Northern Iowa receive each year would be based on the number of in-state students they enroll annually.

Graphic: Davin McHenry

The plan is squarely aimed at the University of Iowa, which receives the most state funding each year despite the fact that nearly half of its undergraduates come from other states and countries. (These students pay tuition and fees of about $27,000, which is more than three times what in-state students are charged). According to the data I examined, the university saw the percentage of its in-state freshmen population drop by 13 percentage points between 2000 and 2012, to 47 percent.

If the state legislature approves the plan without increasing the overall pot of available funds, the University of Iowa would lose about $13 million in state funding, with nearly equal shares going to the two other state universities, which enroll more in-state students.

But that’s a big if, as the proposal has kicked up a storm of controversy in the state. The president of the University of Iowa, Sally Mason, has endorsed the plan, but some supporters of the school have been lobbying against it. Among them is Len Hadley, a former CEO of Maytag and the University of Iowa’s representative on the Board of Trustees taskforce that proposed the plan. “This whole discussion was largely a cover for the real strategy, which was redistribution,” Hadley, who was the sole taskforce member to vote against the proposal, told an Iowa House subcommittee in February. “It is a way to take money away from [the University of] Iowa and give it to the other schools and make it sound really good.”

Related: Student subsidies of classmates’ tuition add to anger over rising college costs

Iowa’s private college leaders have also been up in arms. They worry that the plan will force the state’s public universities to compete more aggressively with them for in-state students.

The proposal’s supporters dismiss these concerns. “If we do compete, I don’t think that’s bad,” Steven Leath, Iowa State University’s president, said in an interview with the Iowa City Press-Citizen in February. “This is the United States of America. I don’t see anything wrong with competition. In fact, the competition you see is a direct benefit to the consumers.”

It appears that the proposal’s opponents are winning the day, as state legislators, besieged by these powerful constituencies, seem skeptical of the plan.

Still, even if the proposal fails, it has at least momentarily led the University of Iowa to refocus its attention on students from Iowa. According to Inside Higher Ed, the school “is blitzing the state with a heavy marketing and recruitment effort for next fall’s class.” And the university has recently expanded the need-based and merit-based scholarships it offers to in-state students.

Another way for states to counteract this trend would be to cap the share of out-of-state students that their public universities can enroll. In North Carolina, for example, the UNC system has for three decades limited the share of out-of-state freshmen each of its institutions can enroll to 18 percent. There has been heated debate in recent years in California over whether the state should impose an out-of-state enrollment cap on the University of California (UC) system. To help make up for billions of dollars of state budget cuts during the recession, the UC schools have increasingly looked to out-of-state and international students who can afford to pay the higher rates charged of these students ($36,000 in tuition and fees, as opposed to $13,000 for in-state students, at UC Berkeley in 2014-15).

Back in 2000, 90 percent of freshmen at UC Berkeley came from California. By 2012, that proportion had dropped to 71 percent. Similarly, UCLA experienced a 23-percentage-point decline in the share of in-state freshmen over that period of time, down to 72 percent in 2012. The surge in out-of state and international students at these schools has stoked fears that even stellar California students are being crowded out of the UC system. Responding to such concerns, Gov. Jerry Brown has proposed restricting the UC schools from increasing nonresident enrollment beyond their current percentages. UC President Janet Napolitano has agreed to freeze out-of-state enrollment at Berkeley and UCLA, but not at other UC campuses.

Related: Colleges that pledged to help poor families have been doing the opposite, new figures show

Capping the enrollment of nonresident students at public universities makes sense. But states should not be let off the hook. At the same time they apply these caps, states should agree to boost spending on these institutions. Hopefully, with additional money from the states, wealthy out-of-state and international students will become at least a little bit less appealing.

Public universities need to be reminded about who their true constituency is: the taxpayers who help fund their operations. Because left to their own devices, they will almost always chase the money—even if that means leaving in-state students, and especially the less affluent and historically underrepresented, behind.

[Cross-posted at The Hechinger Report]

Stephen Burd

Stephen Burd is a senior policy analyst in the Education Policy Program at the New America Foundation.