Budget Crisis in Higher Ed: A Model From UC Berkeley

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Budget Crisis in Higher Ed: A Model From UC Berkeley

The ubiquitous budget crisis in higher ed. The University of California at Berkeley is recognized as one of the top public universities in the nation, but lately, it has been making headlines for another reason–its growing budget deficit. To patch holes in its budget, UC Berkeley has been accepting a high number of out-of-state applicants, who pay almost three times higher tuition than in-state students. Naturally, this is not a long-term solution. It restricts access to in-state students. Chancellor Nicholas Dirks recently announced several dramatic changes to decrease the projected $150 million debt they will have accrued by the end of this year.

Causes of the Budget Crisis in Higher Ed

Since the 2008 recession, most states have reduced spending on higher education. UC Berkeley now receives about 13% of its revenue from the state, while in the 1980’s the state comprised about half of their annual budget. This dramatic reduction in state funding is reflected in other UC system schools, and indeed in most states around the country. Amidst this perpetual funding crisis, things have been particularly hard for UC system schools. Decreased state funding has been coupled with a statewide tuition freeze implemented in 2011. It’s not all bad news, however. The plan developed by Chancellor Nicholas Dirks to deal with the crisis can serve as a model to other public universities across the nation who find themselves in a similar situation.

Coming Adjustments for UC Berkeley

Chancellor Dirks has announced that the school will have to adjust to a “new normal,” when it comes to its operating budget. He expresses positivity about initiatives to raise revenue and self-reliance for the university, but also acknowledges that some changes will be “painful.” He and other faculty are consulting with all concerned parties to determine the best way to tighten the budget while maintaining a high commitment to academic excellence. That said, the school can expect substantial changes in the coming months.

While specifics have yet to be released, Dirks has outlined his priorities:

  • Eliminating redundancies within the university
  • Evaluating the duties of administration and faculty to decrease overlap
  • Merging and rearranging academic departments
  • Raising money through alumni support
  • Restructuring the curriculum to offer more online courses

Easier said than done, right?

**Updated budget crisis situation for UC Berkely.

Institutional Change with The Change Leader

Do you have a budget crisis in Higher Ed? The Change Leader works with higher education chancellors, presidents, and boards of trustees to develop and implement strategies that achieve meaningful change. We bring in stakeholders at all levels—faculty and administration—to develop a shared value system and achieve buy-in for necessary (and unpopular) changes. For everything from accreditation to governance to strategy to leadership development, we’ve got you covered with our team of higher education consultants and our full list of services

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