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UCLA's Anderson School wants to end reliance on state funding


UCLA’s Anderson School of Management is seeking to end any reliance on state funds under a controversial proposal that would be the first such shift to self-sufficiency in the cash-strapped UC system and could provide a model for other programs seeking more freedom to increase tuition rates and faculty salaries.

Anderson, a graduate school that offers master's and doctorate degrees in business programs, wants to wean itself of most state funds by 2015 and to replace that $5.6 million a year with additional private donations and tuition levels closer to that of private schools. Annual tuition for California residents in a full-time master's program would rise over time from $41,000 now to more than $50,000, including a $5,000 discount for in-state students, according to the proposal.

Cuts in state funding in recent years and continuing uncertainty about such money are driving the proposal, which must receive approval from UC headquarters and UCLA faculty. The plan’s supporters say the status quo is hurting the school’s ability to compete with private schools for top business faculty, who are among the most highly paid in academia nationwide.

"We’ve got to change the way we operate if we are to continue being what we are," Anderson’s dean, Judy D. Olian, said in an interview. "State support has declined so significantly that we’ve asked ourselves what is the best model to sustain the excellence of the school and the excellence of what we can do in this region."

Some critics contend that Olian’s plan is another step toward privatizing the University of California and is based on risky assumptions about private fund-raising. Olian and her supporters say that is not the case and that Anderson will remain fully under UCLA’s academic governance and policies, including tenure and pension rules. They add that the rest of UCLA will benefit because money Anderson otherwise would receive from the state could be diverted to help support such departments as English and math, which have heavy undergraduate enrollments and fewer opportunities for private fund-raising.

"There is a kind of win-win," Olian said.

Business schools at two other state universities, the University of Michigan and the University of Virginia, already have adopted similar steps with success, and others are considering it, experts say.

Those schools "want to control their own destiny," according to Jerry E. Trapnell, executive vice president of the Assn. to Advance Collegiate Schools of Business, the main accrediting agency for business schools. Beyond more stability and freedom in funding, they want to respond more nimbly to market demands for new classes and programs "without having to be heavily compromised by the bureaucracy that the larger institution would demand." The biggest challenge, he said, is to ensure enough financial aid and to maintain the income and ethnic diversity that are hallmarks of public institutions.

Within UC, several other business and law schools could be candidates for similar changes in the future, but adoption would not be widespread, officials said, because of limits on what students in many programs would be willing to pay and the difficulties in tapping alumni pockets in such fields as, say, social work or chemistry.

Although noting that he expects the Anderson plan to generate strong debate on campus, UCLA Chancellor Gene Block, who previously was provost at the University of Virginia, said he "fully" supports Olian’s proposal as an innovative response to the state budget crisis. He said it maintains the mission of a public university while redirecting state funds from Anderson "to chronically underfunded undergraduate programs elsewhere on campus."

But approval is not a sure thing. UC President Mark G. Yudof said he had not seen the detailed proposal yet and could not comment on it. Yudof wants the UC Board of Regents to review "something of this magnitude," he said in a statement released through a spokesman.

-- Larry Gordon

Photo: Students leave class at Entrepreneurs Hall at the UCLA Anderson School of Management. Credit: Gary Friedman / Los Angeles Times

Comments () | Archives (28)

If it wants to thrive, it had better sever ties to the state, which has proven time and again it is incapable of handling business to success.

The parents of all those bright Asian students should be able to invest in their futures -- not to stereotype. The rest can make do with a Cal State education, which is very good. You get out of college what you put into it; it's not osmosys or cutting/pasting papers off the Internet -- it's a lot of hard work and not everyone can hack it.

Wouldn't this make the Anderson School a private school?

they might want to end being bias to the the left and liberals that are hurting America

This begs the question why would state institutions like UCLA even have a business program. Let the businesses teach students how to make $ like all those big biz that file Chapter 11 and have us taxpayers bail them out.

What makes anyone think that if Anderson no longer received state funds that they would then be spent on other UCLA departments? The state legislature has a long history of merely reducing the overall allotment to the receiving entity and using the money elsewhere in the budget.

This idea makes me ill. The people in the UC system have completely lost the dream behind the creation of the University of CALIFORNIA.

Whatever Anderson is now, it was primarily built over the years on the backs and taxes of the citizens of the State of California for the purpose of educating the best and brightest California students.

Bloated after years of higher education costs vastly outstripping the increase in cost of living, and shamefully unwilling to live within their means, the UC is looking for revenue wherever they can find it. They want more out-of-state students who pay more (taking spots from California students), and now want to charge even in-state students rates comparable to private institutions.

Here is a basic economics lesson that you think people at Anderson would understand: you can't have it all. Instead of making personal pride, top salaries, and desire to be high in the US News rankings the central motivators for your planning, how about creating a b-school program that provides top California students a competent education at a more affordable cost?

Today you made me feel ashamed to be a UCLA grad ('77).

From the picture on the front page, it's clear that Dean Olian can't even use her bookcase properly. Did you just move in and toss your books in the case from a cardboard box? How about you orient them properly and reclaim all that wasted space. I wonder how much more waste is occurring on the Dean's watch. Bookcases are just the symbolic tip of the iceberg; it's systemic.

One presumes that as they intend to pay their own way, they will purchase or lease back the buildings they occupy? Fully fund their employee pensions, and not rely on PERS or any state matching? Pay residuals to the UC system for the "brand" the state has nurtured prior to their decision to go independent?

I applaud this decision. As a double-Bruin I can tell you that the State of California is shooting itself in the foot by investing more in prisons and social welfare programs than the real future of this State - education, business, and technology. I'm not saying I don't care about all the causes that are out there, but you have to prioritize. When everything is important nothing is important.

We should applaud the School's courage in saying "Enough is enough" and deciding to take a chance and not be saddled by the ineptitude of the State's politicians and failed policies.

I for one am encouraged to donate more because I know now that at least anything I donate to the School won't get diverted into some magic State-run slush fund.

The alternative is that all public schools, including UCLA Anderson - continue to be underfunded, leaving students with two choices: pay more for a degree that is held in less and less esteem or pay more to go to a private school. Either way students and society lose.

Reagan just about destroyed the UC system, and Schwartzenegger has exacerbated the decline. Republicans seem to hate education, and, even more, students.

Too many liberals for them, I guess,

The Marshall school at USC is completely private if I'm not mistaken.

If I was a UCLA Anderson alum I would want the school to do what is best to protect the perceived value of my degree. I suspect the Anderson alums support this direction.

I don't see that the Dean has a choice in the matter.

Dear Wendy,

You definitely gets the complete idiot of the day award.

You stereotype so openly and then say "not to stereotype". Intelligence comes in all shapes, sizes, colors, races, ethnicities, nationalities, religions, sexual orientations and genders you complete idiotic racist.

Next you misspell osmosis. I doubt you can even begin to describe osmosis, so it's laughable that you try to refer to it in your complete idiotic racist comment.

Not Asian enough for the UC system but graduated from Stanford perfectly fine

Why does this have to be approved by the faculty? I thought they were only employees of the school. Tenure seems to be the problem here.
Tenure should be abolished in every school in this country. Tenured professors
are the scouge of our entire school system, because they can do anything they want to do to our children.
They should be judged on their abilities to teach, and each year your state education board should test them verbally, written, and research their character, whether they are private or not., and if they aren't doing the job of teaching our children show them the door.
Tenure amounts to nothing more than guaranteeing jobs for life, and the only people in this country who should have that is SCOTUS.
Some of our professors are sworn communist, and many of them teach that communism is good to our children, who haven't been out in the world long enough to form their own opinions. When my children reach the age to attend a higher learning facility, and some professor tries to brainwash them into thinking communism, socialism, liberalism, or any of the other isms they like to use, I will wring that professors neck. I would suggest to other parents to keep a close eye on your kids professors. So many of them have ulterior motives when they do their brainwashing on our children. You should tell your kids that before they leave your house for the dorms.

The State of California (aka the Legislature and Governor's office) have to ask themselves what is the true role of UC. As things now stand, the State has no obligation to fund UC nor does UC have any obligation to educate any Californian if the State does not fund it. Why? Because the Master Plan of Higher Education is just a "gentlemen's agreement", not state law like the laws that fund k-12 (and even then, the State has already "borrowed" from the k-12 system). UC has already sent notice, by increasing out-of-state admittances in UCB and UCLA, that it will privatize if funding for undergraduate education continues to dwindle. Is the electorate in agreement with this game of chicken? Are they even aware of it? Or, worse, do they care?

Since the Anderson School is primarily a graduate program and receives no state funds to defray the costs of teaching MBAs and PhDs, the school feels compelled to go private because it would give it independence in regards to salaries and other things, as mentioned. I do agree with Linda that if Anderson goes private, a rigorous examination of the physical plant cost must be undertaken. Also, if pensions of the gold-plated new faculty are administered by UCRS, then the school must fully fund those equally sizable pensions and the rest of UC's future retirees must not underwrite these crew of "first among equals." I wonder how the Academic Senate will vote on this, despite the "full" support of Chancellor Block.

BTW, if Anderson does this, do not be surprised if the Medical Centers go next. After all, the Medical Centers are the money-makers in any UC campus and I am sure that they would looooove to control their own funds. Why should any of their income go to support, say, the humanities or the social sciences?

totally cool with me, First have them pay off the Construction costs the state paid to build the school. Second evict them from the UCLA Campus completely so they can achieve this privatization they so desperately want. third, order the removeal of the UCLA part of the anderson school and start a new business school on UCLA's Campus.

Another DDI question.
What is more important having a Degree from UCLA’s Anderson School of Management or the type of person that has a MBA from the Anderson School of Management at UCLA?

To Judy D. Olian,

My father always said never buy a suit on the same day that you saw it. Give it a few days and mull it over. Revisit the purchase and see what you think about it then. 9 times out of 10 I left the knew it was a mistake.

Nothing like locking out those without the financial means to succeed.

Education is becoming more and more out of reach financially for the masses. Soon, only the rich (and a few of the truly gifted) will be able to afford the level of of education it takes to make a decent living.

Not surprising really, the last thing a government wants is an educated populace.

Hey Brendon - in 1977 prof's could actually buy a house in this town - not a chance these days.

I entered UCLA as an undergraduate in the mid-70s. At that time the Anderson School was merely the Graduate School of Management, or GSM, housed in a very 60s-style nondescript building. One could easily predict what would become of the school upon first seeing the new facilities that have been standing for a mere 20 years or thereabouts. It was built with big bucks and big ambitions.

Starting out as a truly public university which in the 50s offered open enrollment to anyone who wanted to attend, then maturing quickly to become a world-class university competing for the best and brightest students, not just from within California, UCLA now enjoys a formidable reputation. Still, there seems to be some within the UCLA community believing that there is a greater piece of the pie out there, if only the constraints of the state of California could be cast off.

I think this plan is hiding behind the excuse that it is doing itself and UCLA a great big favor by freeing itself from state funding. This is rather a cynical scheme to go out on its own and swim with the big fish while still profiting from its UCLA affiliation. I would rather see the Anderson School pack up and leave UCLA altogether. They could build a new sprawling campus somewhere in the South Bay, near the ocean. They could thereby attract the vainest of candidates to their programs by offering a learning environment within walking distance of the volleyball courts. Of course they would not have the benefit of the affiliation with UCLA. As someone has said before, you can't have your cake and eat it.

Is it finally time for the UC system to go private?

I remember reading something 20 or 30 years ago that it (UC) would be better served as a private institution (before the state destroys it).

The Cal State system can better serve the remainder of the students (it also would have access to the money allocated to UC system). Maybe the efficiency would rise.

No! They should not do this! A public university should receive public funding (and only public funding). I am very much against these so-called public-private partnerships. Furthermore, $41,000 a year is outrageous. I remember when California's public universities were the envy of the nation; and, they were tuition-free.

Not really sure what John 3:29's comment is about ... all of USC is completely private, dude. It's a private university.

As a UC staff employee in a UC professional school that easily could go private, this makes all of the sense in the world. The article already said that all pension costs and such would be handled with the faculty and staff remaining as UC employees - they are just now paying for those employees separate and apart from any state monies. What's wrong with that? It's still UCLA; just the funding scheme changes. I agree that the Legislature will have to keep its hands off of the "saved" funds so that they can be reallocated as they should be. Frankly, at this point, the entire UC system should just go private with the pittance that he State now "allocates" in defiance of the Master Plan. These higher ed cuts will come home to roost when no one in this state can attend a CSU or UC unless they are rich - there goes an entire population of otherwise talented students who will miss the opportunity. UC can raise enough to provide excellent financial aid to avoid this, still privatize, and be done with dealing with the State. And, Arnie has tried consistently to keep funding for higher ed - it's not the Republicans - it's the Democratic legislature that can't stop itself from spending to try to save the world and taxing anyone who earns more than $10 a day as "rich" that's caused these massive budget problems. I'm a Trojan - believe me - losing what UC and CSU have to offer with these crazy cuts is not worth it to CA, long term. Privitize it, lease the land back from the state, and be done with the Legislature and their meddling. I'm sure that USC would be happy to lend expertise in how to do this (I mean this seriously, not as a Trojan jabbing at the UC) as I'm sure would Stanford, Harvard, and others. UC is rapidly declining and our state will pay dearly in the end....

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