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UCLA's MBA Program Wants To Give Up State Funds

Aug 21, 2012
Originally published on August 22, 2012 9:01 am



The business school at UCLA wants to go into business for itself. The Anderson School of Management is part of a public university. Of course, it's in California and the school's leaders find that being part of public education in California right now is a little maddening. Budget battles and state budget cuts have become normal.

Will Stone reports on what the school wants to do instead.

WILL STONE, BYLINE: Like many students at the end of summer, Michael Malenitza is thinking about his own budget for the upcoming year - and, most of all, tuition. He's also thinking about his school's budget and how the MBAs might be better off without state funding.

MICHAEL MALENITZA: What I think everyone is in agreement on - faculty, students, administration here - is that the benefit that we receive from the small amount of state funding that we get is not as great as the cost.

STONE: Malenitza, the president of the student association at Anderson, says he and others take for granted the rising price of tuition. But it's the lack of predictability of state funding that hurts students and the school.

MALENITZA: Whenever you rely on state funding you're kind of at the mercy of the state to decide how much they're going to allocate towards you, which makes it very, very difficult for the school to anticipate and prepare for what tuition is going to need to be, and it just makes it very difficult to plan ahead.

STONE: This is one of the main reasons that Malenitza supports the school's efforts to be self-supporting, as the administration calls it. UC funding is erratic and leads to a kind of guessing game for students, who generally don't know the price of tuition until only weeks before the beginning of classes.

Right now, Anderson receives about 6 percent of its $107 million budget from the state. The school recently submitted a proposal to the UC President's Office. In it, they opt to forego that money and set their own tuition, keeping all the revenue generated from it.

AVANIDHAR SUBRAHMANYAM: This seems to be inconsistent with the culture of the public mission.

STONE: Avanidhar Subrahmanyam has been teaching at Anderson for over 20 years. He says the proposal doesn't ensure Anderson will retain the characteristics of a public school.

SUBRAHMANYAM: You'd be the renegade school saying that we're going to be private, you guys just do the public mission, we're not interested. That seems to be the message being sent.

JOE SCHWIETERMAN: Anderson's tuition for the upcoming year is about $48,000 for California residents. The proposed change sees that going up to $52,000 the first year the school moves away from state money. That's still less than what many private universities charge for an MBA. But privatize is a loaded word in this debate, and one the administration is quick to distance itself from.

SCOTT WAUGH: It's not privatization. It's not changing the public nature of the school.

STONE: That's Scott Waugh, the executive vice chancellor and provost at UCLA. Waugh says that if the proposal goes through, Anderson will still be subject to the UC System rules. However, some critics worry this move to financial independence lets the state off the hook. To that concern Waugh says...

WAUGH: Quite frankly, they'd probably applaud us for trying to do everything we can with the meager state funding we have and stretching that funding to go as far as it can.

STONE: The University of Virginia's business school underwent a similar conversion in the early 2000s. UCLA is looking at the financial success of that self-supporting program when thinking about its own.

To make up for the lost state money, the school says private donors have pledged about $19 million under the condition that Anderson adopts this new model.

Scott Jaschik is editor for He says greater reliance on private funding does introduce a key issue for public universities.

SCOTT JASCHIK: When you are raising private dollars you're focused on what's of interest to the donors. And that may be different, in some cases, from the broader interests of the state, which are theoretically represented by the legislature.

STONE: Some see Anderson as a bellwether for how other publicly funded graduate programs, like law and medical schools, might cope with future cuts.

The University of California's president is now working with the Board of Regents to decide whether to approve the proposal.

For NPR News, I'm Will Stone. Transcript provided by NPR, Copyright NPR.