by Charles Schwartz, Professor Emeritus, University of California, Berkeley                         October 17, 2005

>>This series is available on the internet at

It is Necessary to Disaggregate

     Official briefings given to the UC Regents – as background for upcoming budget priorities - need to be criticized because some crucial data combines undergraduate education with other academic missions in a very misleading way. Here I discuss one issue – The Cost of Instruction – in some detail.  I also find occasion to report several clumsy misstatements by our University President.


     At the September 21, 2005, meeting of the UC Regents two vice presidents of the University (Bruce Darling and Larry Hershman) led a two-hour discussion titled “Update of the Long Range Planning Indicators”, in which they presented lots of data and evaluations focused on the questions of how well, or how poorly, the University is faring under the current fiscal climate of the state. Several regents commented that they were tired of hearing such reports of bad news and they wanted to hear some plans for how UC will cope with these problems. The answer they got was that the President’s Office would be bringing specific budgetary proposals to the Board in November and this presentation was to lay the groundwork for that event.

     I found a significant problem in that some of the data those vice presidents presented as key numbers in measuring the state of UC could be very misleading because they lumped together quantities that are best understood when they are disaggregated.  Two such issues are: The portions of UC’s academic budget provided by State funds and by Student fees; and The Student-to-Faculty ratio.

     In both of these cases one gets very different numbers, and thus a very different picture of the University, when one separates undergraduate education from the other components (graduate education and faculty research) rather than bundling them all together. In this paper I shall detail this criticism for the first item.

The Cost of Instruction

     Vice President Hershman showed a bar graph titled “State Budget Cuts Create Gap of $2,520 per UC Student”. This showed “Cost of Instruction (in 2005-06 Dollars)” at five-year intervals beginning in 1985-86.  For the current year (2005-06) the bar showed these component sources of funds for the Cost of Instruction:

State General Funds:   $9,460 (per student)
UC General Funds:     $1,970
Student Fees:               $5,070

Thus, he shows a total Cost of Instruction this year at $16,500 per student, with Student Fees paying for only about 30% of that total cost. (You may find this graph at page 34 of the powerpoint file available at
Hershman showed this same graph twice, to emphasize how important this is.)

     Many people would naively be led to believe that this $16,500 per student is the University’s cost for undergraduate instruction. That is not true. The very title given to this data – “The Cost of Instruction” – is grossly misleading.  A more honest title would be “The Cost of Instruction and Research”, since it is based upon what they call the “I&R Budget.” In earlier correspondence with Vice President Hershman he explained what his calculation covers: it is the cost of undergraduate education plus the cost of graduate education plus the cost of departmental research (that is, faculty members’ individual research activity, as separate from externally financed research projects) along with the appropriate support and overhead expenditures.

     If you want to know how much of this bundled cost is really the cost of undergraduate instruction alone, you have to engage in some informed analysis of University accounting data to disaggregate the different components.  I have carried out such a calculation, using data from an earlier UC survey of Faculty Time-Use to inform the analysis of Activity-Based Costing.  My result is that, this year, the actual annual expenditure for Undergraduate Education at UC averages about $6,850 per student; and the current level of resident student fees is at 100% of that cost!

     That result of mine is very surprising; and it is quite controversial (see below for one reaction). I have written about this calculation in previous papers of this series; and I have also written a lengthy (academic style) paper going through the details of the methodology and the calculation, as well as discussing the implications of this result:

President Dynes Speaks on this Issue

     An extensive interview with UC President Robert Dynes was published in the San Francisco Chronicle on Sunday, September 25, 2005, and this topic came up.

   Q: The university says that it costs more than $15,000 to educate undergraduate students and that the state is underwriting much of that cost. But Professor Charles Schwartz calculates that the actual cost is closer to the $6,000 that undergraduates are paying in tuition. Schwartz is saying that the state is basically subsidizing [only] graduate students and the faculty.
    A: It is not true. The concern is that people like to think about separating the cost of educating undergraduates and the cost of educating graduate students. What's not folded in there is having undergraduates in research laboratories. I'm actually deeply concerned about graduate support and that we haven't paid enough attention to finding support for graduate fellowships to keep us competitive. We are not subsidizing. Charlie Schwartz just isn't right.

     When I first read that I thought it dopey to claim that my analysis is invalid because I neglected “having undergraduates in research laboratories.”  But, since he is the President of our great University, maybe he does know something more than I do; so I looked into this topic more closely. Undergraduate students are widely involved in research programs run by UC faculty members; it is a terrific experience for the students; but the relevant question here is, What does it cost the University?

     At Berkeley, the main program is called URAP - Undergraduate Research Apprentice Program. Students, once accepted, get academic credit at the rate of 1 unit for each 3 hours-per-week of commitment to carrying out work assigned by the supervising professor. They are not paid. That is free labor to advance the professor’s research program, in exchange for interesting experience and a nice addition to the student’s resume.  This is a great deal all around. But I see no cost to the University here.

     Elsewhere, I find some undergraduate research programs that provide funding from government agencies and private foundations (McNair, Beckman, …); and, yes, there are some such programs that appear to have modest funding provided by individual academic departments. I assume that such expenditures are incorporated in the University’s accounting records under the Instruction category (I can find no such specific references in either the Instruction or Research accounting categories) and thus these would have been included in my calculation of the cost of undergraduate education at UC.  If President Dynes has any information that would correct or improve my calculations on this point (or on any other point), I would be most happy to hear about it.

     There is one other important aspect of undergraduate research activity: it is usually undertaken through an Independent Study course for which the student signs up; and thus the professor in charge does spend some time in this form of teaching.  That component of faculty work is explicitly taken into account in the Faculty Time-Use Survey which provides crucial input data in my analysis.  (See Tables 2b and 2c of my paper cited above.)

     Dynes, in the above quoted interview, goes on to say that he is deeply concerned about getting enough financial support for graduate students; and this is in connection with the cost/fee level for educating undergraduates.  But then he says, “We are not subsidizing. Charlie Schwartz just isn’t right.” He contradicts himself.

President Dynes Speaks on Other Issues

     Robert C. Dynes has been President of the University of California for two years now. His academic background is as an experimental physicist; and so I would expect him to be competent at logic and the use of quantitative measures. Here are a couple of items from his public statements that cause me to wince.

a) At another point in that SF Chronicle interview with President Dynes we find this:

    Q: Dean Christopher Edley at UC Berkeley's law school says that even with increased fees he can't do it. He needs to reach outside. He's essentially talking about privatization. Do you have to do something similar university-wide?
    A: I'm not talking about privatization. We are a public institution. I wouldn't be in this public institution if I didn't believe in public education.

However, at the July meeting of the Board of Regents there was extensive debate over increasing fees at the professional schools of Law, Business, etc.  Here is part of Dynes’ statement at that time.

There was a group of you [regents] who were arguing for the quasi-privatization of the professional schools, allowing each of the professional schools to float to their own level, whatever that level was, and compete with their competition …  Some of what you are seeing here is an incremental step in that direction: allowing some of the schools to make some choices as to whether they want to raise fees and put that back into the school to deliver services and deliver educational products that would make them more competitive with those schools that they think they are competitive with.

So, he was talking about privatization, but candidly only to a different audience.

b) In the midst of a discussion of long range planning issues, this last January, one regent asked: What percentage of the University’s bills are paid for by the state, and have we made any projections about where that number is going to?  The President of our University answered, “It is almost linear, Regent Moores, and it goes asymptotically to zero.” I wrote to President Dynes asking him to provide the data to substantiate that doomsday scenario, but he did not answer me; and the most official data I have seen (Dynes’ letter to the regents 3/11/05) contradicts his description.

     I have noticed some other Dynes misstatements; but I think you get the point of how the exigencies of office can turn an acute scientist into an obtuse bureaucrat.