Will the United States think big again?
It was the era of the civil rights movement and the Racial Discrimination Act, and the beginning of the second wave of feminism that swept across the world in the 1970s; the decade of John F Kennedy’s New Frontier and Lyndon B Johnson’s Great Society; when Americans and Russians vied with each other to be the first into space and the US landed men on the moon. And it was an era of great boldness, public commitment and lasting achievement in higher education.
The high point in higher education was at the beginning of the decade, with the Master Plan for Higher Education in California.
The Master Plan was led by University of California President Clark Kerr, author of the sharpest analysis of the American university (The Uses of the University, 1963), the former chancellor of University of California Berkeley (1952-57) and multi-campus University of California president (1958-67), who was later dismissed by California’s governor Ronald Reagan (1967-75) for being ‘soft’ on student protesters at Berkeley.
California was the golden state: richest, most populous and most innovative. The Master Plan design generated the world’s most influential system of public higher education.
The attraction of the California Master Plan was the manner in which it combined two antinomies that until then had been always seen in opposition to each other: access and excellence.
The Master Plan’s system design was that of a tapering pyramid. At the base were the mass community colleges, located like schools in every district in the state. Above them were the state teachers colleges, which became the campuses of the California State University or CSU, offering courses up to masters level but denied their aspirations for research and doctoral programmes. At the top were the ‘multiversity’ campuses of the University of California or UC, led by Berkeley and UCLA.
The trick of the Master Plan was to broaden the base providing access to all in the mostly two-year community college programmes, while maintaining the UC campuses as exclusive and concentrating research dollars there. Only the highest achieving 12.5% of the school leaver cohort could enter the UCs.
The guarantee of universal access to lower status programmes now seems commonplace, but at the time it was revolutionary (a two-year diploma had more bang in the state labour markets in 1960 than in 2016). The Master Plan was America thinking big, a concept and an outcome that was as remarkable in its way as the NASA programme.
At the same time, the Master Plan did not overturn the social order. Nor was it intended to do so. The Master Plan aligned a stratified public higher education system to the social hierarchy of families and the economic hierarchy of the labour market, which no doubt helped it to secure social consensus. It was steeply hierarchical, while also being open and offering everyone a start in higher education.
Upward mobility was provided by a strong access orientation in the UC system – with high achievers of all social backgrounds to choose, a high proportion of those admitted by the university were from poor backgrounds and first-generation higher education families, a bias which continues to this day – and by the upward transfer function, from community colleges, to state universities and the UCs.
But the division of labour between the research-intensive UCs, the state colleges or universities, and community colleges was strictly policed. There would be no indirect upward mobility by lifting the status of whole institutions and sub-sectors, in the manner of academic drift.
Legacy of the Master Plan
Looking back, the long-term legacy of the plan has been uneven. The excellence mission has been stunningly successful, almost up to the present.
UC Berkeley, UCLA, UC San Diego and the others are notable, not only for research achievements – there are three UC campuses in the Shanghai Academic Ranking of World Universities or ARWU top 14 research universities and seven UCs in the ARWU top 100, and in 2011-14 Berkeley produced the world’s fifth-largest number of high-citation science papers.
However, for the access mission it has been a sadder story.
In hindsight the limitations of the plan are apparent. The upward transfer function always worked better in California’s middle-class districts than in poorer districts and faltered overall, handicapped by low completion rates in both the CSUs and the community colleges.
Two-year diplomas have lost most of their standing. Most importantly, the plan depended on a continued state consensus about taxpayer financing of both good-quality secondary schooling across the state and the costs of expansion of higher education.
Kerr and his contemporaries expected the Master Plan would apply for 20 years. It lasted longer, but by 1990 the foundations were eroding. The tax revolt in California, beginning with Proposition 13 in 1978, fundamentally undermined the ability of the state to finance higher education. The tax revolt signified a middle class no longer willing to support access to all, including the immigrants who were moving into California from south of the border.
The new era was bedded down by the national tax cuts, reductions in the role of government and growing inequality instigated by Reagan as national president (1981-89). A second Master Plan never happened, the cuts to public funding bit steadily deeper, and the state coordinating authority for post-secondary education was eventually abolished, a casualty of exceptional cuts to state budgets in the wake of the 2008-09 recession.
While the highpoint (or rather low point) of the California tax revolt has passed, within the present fiscal settings there is simply no prospect of the California state government, or any other state government, funding public education at the level needed to sustain access and excellence simultaneously.
Yet public higher education, not the Ivy League or the small liberal arts sector, has been key to the contribution of higher education to American society and economy, enrolling three quarters of students and conducting most of the research.
In the immediate aftermath of the recession budget cuts, faculty at Berkeley were asked to take a pay ‘furlough’ and UC leaders began to talk about their inability to compete with Stanford University and the University of Southern California for top-end research talent. Berkeley has an endowment less than 20% of Stanford’s.
Berkeley and the other UCs can expand revenues by growing foreign and out-of-state students, who pay tuition at higher rates than California students, but this threatens to reduce the scope for equity admissions, and growth has its limits. It is hard to imagine the state restoring even its 2008 tuition subsidy.
After 15 years of the steady erosion of funding at the lower levels of the California system, the 2008-09 recession dealt the final blow to the 1960 guarantee of universal access. The community colleges and the California State University both turn down applicants because of insufficient funds.
It is estimated that unmet demand in California affects 250,000 potential students, and the rising cost of tuition is an increasing problem for low-paid and unemployed families. The public schools are also in crisis, with high school completion as low as 50% in poor Los Angeles suburbs. Participation in higher education in California, highest in the nation in 1960, is in the bottom five of the 50 states.
Where does public financing go from here?
Where does California – and American public higher education – go from here? Can the values embodied in Kerr’s vision be renewed in Master Plan two – perhaps while expanding the doctoral sub-sector to reach more than 12.5% of young people, and lifting two-year diplomas to three- or four-year degrees? Where is the money going to come from?
Other countries are reaching excellence and equity goals simultaneously, much as the 1960 Master Plan imagined – for example Nordic Europe, the Netherlands, Korea and Taiwan, and at levels of near universal participation across the whole society. Comparative analysis confirms that in abstract, it can be done.
Can California and America think big again?
The ultimate solution is for the United States to regain a positive notion of government and education for the common good, and implement that in policy. This needs a sea change in the political economy – above all, an end to blind faith in the justice of market forces, steps to reduce income inequality, which is now at its highest level in American history, and the rebuilding of the common taxation system.
As Thomas Piketty remarks in Capital in the Twenty-first Century, “taxation is perhaps the most important of all political issues. Without taxes, society has no common destiny, and collective action is impossible.”
The sea change in the political economy will not happen soon enough to grapple with the problem of state fiscal incapacity and the funding of public higher education. The solution to the crisis of access in the community colleges is not to abolish all tuition as the Barack Obama administration has suggested. Without an expanded tax base this would worsen chronic problems of institutional poverty and state fiscal incapacity.
The solution is a federal system of higher education tuition funding that is grounded in income-contingent student loans, along the lines of England and Australia.
Income-contingent loans could only be introduced on a federal basis. Not only is an income-contingent loan scheme too big for any one American state, and not only is it necessarily linked to income taxation (the repayment mechanism) which is a federal matter, it would have to replace the present federal government-backed time-based commercial student loans.
Under the US student loans system, whose cost is rapidly escalating, graduates from poorer backgrounds who find it difficult to obtain jobs good enough to sustain repayments are in jeopardy. Women earn less on average than men and face greater difficulties. These are deterrents to participation. Default is ultimately carried by government.
What is needed is a tuition loans regime that works across a range of tuition charges but has minimal deterrent effect at the point of entry, and minimal socio-economic bias: that is, a regime in which no student from any background is blocked on financial grounds.
In an income-contingent loans system, students pay tuition at the point of enrolment using government-backed loans, with the transaction taking place between institutions and government. Students handle no money. The loans are repaid through the tax system on a percentage of income basis. Repayment begins when income reaches a threshold level. Prior to that, the graduate carries the debt without the obligation to repay, though the debt slowly increases on the basis of sub-commercial interest charges.
Not all graduates repay their loans, particularly those who work for low rates of pay, and those who spend long periods outside the workforce. Government carries the cost of sub-commercial interest rates and non-repayment of part of the debt. In this manner public subsidies are used to support access and equality of opportunity, rather than to compensate loans companies.
For government, the extent of public subsidy can be tweaked by altering the terms governing the loans, including the interest rate on debt, the income threshold for repayment, and the rate of repayment (the percentage of income). Government would need to impose a ceiling on the scheme, particularly in the private sector.
For students and families, the tuition regime functions like free education at the point of entry, and repayment through the tax system is less painful than commercial loan repayments. The only category of students unduly affected in England have been part-time working students.
Simon Marginson is director of the ESRC/HEFCE Centre for Global Higher Education at the UCL Institute of Education in London, UK. This article summarises the conclusions of his book The Dream is Over: The crisis of Clark Kerr’s California idea of higher education, recently published by University of California Press. The book can be accessed free of charge at this link.