Financial Crisis and Picking a Program

[rising_star]

I was going to post this on the thread about the but decided to expand it and post it here so it wouldn't get lost.

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You know, I've given this a lot of thought in the past few days. Instead of thinking about the UCs as a whole, think about your (prospective) department. What is its financial situation and outlook? Because the common theme of the last 18 months has been differential--rather than across the board--cuts, which means some departments lose 2% and others lose 10%. Obviously, it matters which of those categories your potential program is in. I would call your prospective advisor and the DGS and ask them to speak with you frankly and candidly about the budget situation and the outlook for the next five years. Then, talk to a few current graduate students and see how they feel about the department's situation. If your prospective dept is anything like mine, everyone you talk with will be honest with you because they don't want to screw you over.

What the UCs and other state schools are doing is smart. In all likelihood, it will be at least a decade before the state is in a position to fund the universities at the FY 2005 levels (which actually for many schools were not as good as pre-2001 recession levels). And this isn't just in California, but also in NY, FL, AZ, GA, etc. So, the universities, in a way, are playing the hand they've been dealt. They need revenue and, if you can't get it from the state, you have limited options: raise tuition, raise fees, or find some really wealthy donors and fast. Most universities can't do the latter so they're doing a combination of the first two. The neoliberal university model is being rammed down their throats and not everyone is happy about it.

Public universities in particular are in a perilous situation since many of them are using federal stimulus funds to plug gaps in the budget. If you're talking about a large state university, there's probably ~$30 million in the operating budget that came from stimulus funds and would otherwise have to be cut. The elephant in the room is what is going to happen once those funds are no longer available (FY2012 for most schools). Universities are leveraging tuition, fees, and enrollment to try and put themselves in the best financial situation they can both now and in the long term. The alternative is the Florida State University approach of using stimulus funds to pay for the union-required 1 year buyout of tenured faculty whose departments/positions are being eliminated. Their university president has said they are doing this specifically so they will be in a stronger financial position once stimulus funds run out. Only time will tell if their decision is right but, in the short-term, it means that respected departments with low undergraduate enrollment are being shuttered and top-notch faculty are losing their jobs. There was an article in Science magazine about that in either December or January.

Now, if I were a prospective student, I would pay attention to what the student fees are projected to be for next year, what they are for this year, and what they were for last year. If the trend is massive increases, then it's likely that you will see increases while you are there. Why pay attention to fees? Because tuition waivers/remission only cover tuition. At almost every university, graduate students are responsible for covering the student fees associated with tuition. These can range from $100 to $900 a semester, or more possibly. I personally consider fee increases a pay cut since my only income is my TA stipend. So, unless you plan to take out loans, you need to consider what the student fees are and then adjust the annual stipend amount according. That is, if your department offers you a stipend of $15,000 and the university's fees are $400/semester, then your pre-tax income is only going to be $14,200. While the fees for next year may not be available, there are probably some press releases out there about proposed increases. Current grad students, the grad program secretary, and/or the DGS may be aware of these and can let you know what the proposals are. Some of them are scary. At my university, the proposal is to raise student fees from ~$400/year to ~$1400/year, which means that, if they pass, I will be making $1000 less next year. To say that that doesn't worry me would be to lie.

The other thing you should ask about is whether they anticipate being able to keep TA stipends the same or if they may decrease. Decrease? Yes! This is happening on my campus right now as departments try to keep their promises. You can't have your budget cut and fund the same number of students without paying them all a little bit less. It sucks but that's what it is. So ask. Don't expect a cost-of-living, or any other, increase these days. Your goal is to have your paychecks have the same amount each month and each year that you're there. (And yes, I do realize that you make less each year due to inflation. That's the way it is right now, folks.)

I hope this helps someone!

[coyabean]

Good stuff. A few questions and comments:

1. Re: keeping up with news releases about your Uni's plans might I suggest setting up google alerts? That's what I've done. I get an email digest of all the news about the schools on my list. It is very enlightening. Some of it -- like budget cuts -- isn't exactly going to be on the Uni's website.

2. Can your TA stipend be reduced if your letter states the amount and length of term? Like mine says something along the lines of "annual stipend of $17,500 for five years not inclusive of any additional fellowship awards." Can they change that?

3. Any feedback on differences between private and public? Would you say now is a good time to privilege private schools in our decision making process?

[sebastiaan]

Thank you for taking the time to write this. I got accepted at UC Berkeley and I really want to go, but I am really concern about the financial crisis, especially because I don´t have any money and I will be depending on them. I feel that the UC system is big, but according to my professor it is crushing. I just received the financial offer from Brown, and I know that Berkeley won´t be able to be close to Brown.

It is going to be a very hard decision.

Good luck to everyone!

Seba

[rising_star]

2. Can your TA stipend be reduced if your letter states the amount and length of term? Like mine says something along the lines of "annual stipend of $17,500 for five years not inclusive of any additional fellowship awards." Can they change that?

Usually, there's fine print with such an offer that leaves them ability to change awards either for more money or less. Also, there's usually fine print that says something like "contingent on satisfactory academic progress and the availability of funds". So in a nutshell, yes, they can change the terms, unless you sign a five-year contract on your first day. Here at my university, we sign contracts for each semester so they can always change the terms (my department doesn't but other departments have dramatically changed things between last year and this one).

3. Any feedback on differences between private and public? Would you say now is a good time to privilege private schools in our decision making process?

Well, I can't say for sure that I would privilege private schools. They are having their own difficulties, since their endowments are down and often there are restrictions on how they can spend the money that's left. They are by no means immune and, some of them also benefited from stimulus money I think. Public schools have previously used state revenues to fund part of their expenses, which they may not be able to do any longer given the financial constraints that states are facing. Honestly, I would still privilege getting the best education possible because that's going to stick with you longer than having to pay to print or whatever.