Despite the looming California budget crisis, the UC regents are currently weighing a plan to build a $2 billion endowment to supplement financial aid for poor and middle class students.
The proposed plan implies a move away from the traditional model of public higher education finance -- in which state funds are used to keep tuition low for all students. With this idea, the UC is heading toward the price structure that elite private institutions like Harvard and Yale utilize -- in which generous financial aid offers offset high tuition prices. UC tuition levels are already high compared to most US public universities. Under the proposed plan, affluent students would pay even more in tuition, while students whose parents make $100,000 or less would be eligible for aid.
From a human capital perspective this sounds like an egalitarian move. For students, the returns to an investment in UC education are high. So why should the state subsized those human capital investments -- particularly for student who can afford to pay the full freight? But from a cultural capital perspective, it doesn't sound like such a hot idea. While students from highly educated families understand "the rules of the game" and can navigate the process of applying for financial aid, students whose families don't have higher education experience may not know about financial aid opportunities. Even if many of these students qualify for aid, high tuition prices may scare them away from the UC.