UCLA Should Enroll More “Foreigners”

When you produce a high quality product, you can raise price without losing your market share.   The Los Angeles Times reports that demand for the UCs remains sky high.  Here are the data for the entering class of 2012. I believe that UCLA’s student class should have 40% out of state students. This would increase intellectual diversity, raise extra revenue and improve classroom average performance.    With the extra revenue, UCLA could subsidize tuition further for the needy. 

Out-of-state students

Author: Matthew E. Kahn

Professor of Economics at UCLA.

16 thoughts on “UCLA Should Enroll More “Foreigners””

  1. Having gone to a big state school, I can tell you that – at least when and where I went – the time needed to establish residency and qualify for in-state tuition was roughly one year. That is to say, any Freshman paying out-of-state tuition was a fool if they didn’t make arrangements to pay in-state tuition as a Sophomore, having by that time spent roughly a year resident in the state. Ignoring international students (who I think cannot establish in-state residency as easily) for the sake of argument, your 40% out-of-state target would therefore require that out-of-state students comprise 160% of the Freshman class (assuming departure from the university isn’t affected by whether the student starts as an out-of-state student, and assuming the mean time before departure is four years, whether by graduation or by dropping out).

    I think you may find 160% to be an unfeasible target. Still, there is hope: if you massively boost the dropout rate, especially for students who begin their careers with out-of-state status, the budgetary math becomes a lot prettier. Some for-profit colleges have adopted a similar strategy, where they try to extract as much money as possible from students in the form of federal loans and grants, then encourage the students to drop out. It’s an evil strategy, but it does make the budget look better.

    It’s also worth noting that at those public universities for which I’ve seen the numbers offer their students an in-state tuition discount that is massively larger than the per-student funding they receive from the state budget. This imbalance may be the real problem.

  2. Also, I know, like, and enormously respect some people who’ve taught or still teach at some of the smaller U of C and Cal State schools (Northridge, Riverside, some others), and so I am aware of at least some of the surprisingly strong educational opportunities these schools offer. Even so, I have a fairly hard time imagining Cal State Merced establishing a national reputation and drawing a greatly larger proportion of students from out-of-state to the San Joaquin Valley, or Cal State Riverside drawing them to Riverside county. I just don’t think people are going to move many hundreds of miles to attend smaller, less famous schools that are still a two hour drive from any place they’ve ever heard of before. Berkeley already has ten times more out-of-state students than these less-well-known schools; to achieve your targets, should it aim for twenty times more? Thirty times? For a student body that’s nearly 90% out-of-state, matching the US population?

  3. Er, Cal State Riverside should have been U C Riverside. And with that, I’ll settle down and stop spamming the thread.

  4. If I understand the UC finances correctly — and I may well not — the out-of-state students pay full freight while it is state funding that subsidizes in-state students, thus the move to decrease in-state admissions.

    Is there room to simply greatly increase overall admissions? I don’t spend much time in Westwood, but I hear it’s crowded, so if you give more seats to non-Californians, you’ll be using the extra revenue to help needy Californians go where exactly?

  5. Warren, your first post really only addresses one of Andy’s arguments, and even then, I think it exaggerates greatly. While some of the students might qualify for in-state tuition after one year, far from all of them will. Lots of students go back to their parents between freshman and sophomore years, which would disrupt the process. There are also lots of states that make it a lot harder to qualify. At the University of Michigan, you practically have to buy a house to establish residency. When I was a student here 25 years ago, at least, Minnesota was also harder, though much easier than Michigan. In general, those states that make it easy to establish residency have very few students paying out-of-state tuition rates. At Minnesota, it’s well under 10%, once you take into account the reciprocity arrangements with Wisconsin and the Dakotas. I’m sure that, if the out-of-state population grows on campus, residency will become harder to establish.

    But, as I said, that wasn’t Andy’s only point: “This would increase intellectual diversity, raise extra revenue and improve classroom average performance.” Now, I can’t say much about improved classroom performance, but I think that the diversity argument is a very real one. I might shoot for a lower target than 40%, but Berkeley is the only campus that comes close. (Though, I don’t see the Sunnydale campus listed, and that probably has a much higher rate of non-resident students, though most of them are probably undocumented.) The diversity added by out-of-state students doesn’t diminish after their freshman year.

  6. Bruce,

    If I understand the UC finances correctly — and I may well not — the out-of-state students pay full freight while it is state funding that subsidizes in-state students, thus the move to decrease in-state admissions.

    According to the 2008-9 figures (the first I found, here), UC Berkeley’s numbers are as follows:
    Revenues: $1.29 billion. 28.3% came from from state funding, or about $365 million.
    Berkeley had 25,540 undergraduates and 10,300 graduate students that year.
    In-state tuition was $13,360, exclusive of housing and all other expenses. Out-of-state students paid another $22,878.

    If we interpreted the state funding as consisting entirely of subsidies to in-state undergraduates, and we take the number in the original post that 70% of undergraduates at Berkeley are from in-state, we get state funding of $20,400 per in-state undergraduate. That’s pretty close (within about 10%) to the difference between in-state and out-of-state tuition ($22,878) – so your understanding would be nearly accurate (though I know other states are worse, and I’d not be surprised if California’s gotten worse in the last couple of years, and some graduate students pay tuition, etcetera). Of course, that understanding only nearly hold true if we stick with the assumption that every penny of the state funding provided to its most famous university is accounted for by the subsidy given to in-state undergraduate tuition. Which is quite an assumption.

  7. It’s useful, I think, to consider who the ‘we’ is, here. Is ‘we’ the UCLA? Thinking of the interests of that institution, yes, out-of-state pays better. And for me, as a Berkeley grad living out-of-state, it’s attractive to think that my kid could follow me there without having to compete with those pesky Californians who think they have rights to the place, simply by my kicking in out of state tuition for him. But if you think ‘we’ is Californians as a sort of a family, working together to educate our children, then why should these out-of-state kids get to waltz in and take places from our kids, in an institution we built in a hundred years, just by offering more money. I think the ‘we’ for Matthew Kahn is UCLA faculty, who with such a policy would get to teach smarty-pants New York and Connecticut and Florida kids who were supporting UCLA in the style to which it is accustomed. All very fun, but what about the poor schlub who is assistant manager of a Safeway in Manteca and has been paying taxes for 25 years and wants his kid to attend? Oughtn’t his interests be the primary ones for UCLA to serve?

  8. It is worth noting that even out-of-state students are heavily subsidized by taxpayers

  9. When public universities think of themselves as offering a “quality product” to customers instead of a public service to citizens and society, you know the end of taxpayer support is near.

  10. Re: Out-of-state residents becoming in-state residents

    Most state schools have rules in place that do not count time as a student towards the residency requirement. I’m pretty sure that UC has those rules, and I know the Cal State system has them. That is, if you come to UCLA as a freshman from Connecticut, say, your freshman year doesn’t count towards establishing residency. To establish California residency for tuition purposes, you have to drop out of school and work for year. Do that, get a California Driver’s License, register your auto (if any) in California and register to vote there and you’ve established residence for tuition purposes.

    If you skip any of that (especially the register to vote and supporting yourself for a year), you’re at the mercy of the school’s Registrar’s Office. Those folks are friendly but usually sticklers for the rules.

  11. @ Mark Paul

    Gov. Kasich in Ohio is looking at converting the entire Ohio public higher ed system over to a Charter School format. From what I’ve seen of the proposals, it looks like a mechanism to reduce public contributions while maintaining control.

    The figures on the UC budget shows that State funding is under 1/3 of the budget. At what point does the University move from being a public university to being a public-assisted university? If you contribute less than 1/3 of someone’s budget, should you maintain complete control over it?

  12. To Mark:

    No, when states themselves refuse to provide enough support to top notch and very popular public institutions, and essentially tell them, “You’re on your own, now!” then you know public education is near its end. You have your causes around backwards: the state is forcing the UC’s hand, not vice versa.

    If a state wants a flagship public university, it needs to pay for it. Then people can complain to the University that their pricing is unfair. But until then, no – if California put a referendum on the ballot raising taxes the smallest amount to pay for the UCs, we all know it would be voted down in a heartbeat.

    So the school can either take a hit in its quality in the name of some sort of idealism, or maintain its ability to produce cutting-edge research and raise tuition. I imagine the latter would end up helping a much larger group of people in the medium- and long-terms.

  13. Mark,

    My only hesitation about increasing the number of out-of-state students is that it is getting more and more difficult for residents to get that first rate education that UCLA and others do offer. The role of state schools, even Berkeley and UCLA should (IMO) be to educate California residents – competing with Stanford and other private schools should be secondary (not gone, but not primary). I hate comparisons with the “wonderful” past, but if I recall correctly, the tuition at University of Wisconsin when I graduated high school was on the order of $50 for a resident (per semester,not credit hour). It may not have been that low, but it wasn’t the primary concern for any Wisconsin resident who would go to UW and had a B average. I do think that having non-residents added to the mix is a good thing certainly. Oh well, since Reagan(as gov.), it has become increasingly more difficult to be educated. It frightens me that if I hadn’t been lucky, being relatively gifted, I wouldn’t be able to be educated in this country now, much less have a BFA and then a solid graduate degree in psychology. I finished my education owing nothing, seems like offering that to all residents is way ahead of increasing out-of-state student population.

  14. I’m with Brad on the ‘lost paradise’ comment above. I paid $212.50 per quarter at Berkeley, and graduated with a hundred dollars to my name and no debt. I could do anything! No monthly payments, the world was my oyster. Now, my older friend Foy went to Louisiana State University when Long was governor, and HE paid $12 a semester. It’s all good. I have a general feeling that there was a lot more ability to repair mistakes, more second chances. I thrashed around in college for six years, changing thoughts about what to study, etc. Harder to do when a year costs $20000 or more. It’s a lot to ask of an 18-year-old, that s/he know where s/he wants to end up.

  15. “We teach – educating students at all levels, from undergraduate to the most advanced graduate level. Undergraduate programs are available to all eligible California high-school graduates and community college transfer students who wish to attend the University of California.”

    It’s true that the state has “forced UC’s hand.” It’s also true that Berkeley and UCLA have embraced “privatization” (in the words of an ex-chancellor at a fundraising talk), that they see their mission as competing with Stanford and Harvard for status, as much as educating students and doing research that benefits the state.

  16. Are the schools enrolling more students? If not, isn’t increasing the out of state component decreasing the number of Californians getting a UC education?

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