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

September 8, 2010 |  1:03 pm


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