UC Berkeley's gift to middle-class families: a cap on college costs

UC Berkeley's plan, similar to tuition caps at elite private institutions, is the first such initiative at a public university. It will cap costs at 15 percent of household income for families earning between $80,000 and $140,000.

The University of California at Berkeley is sending an early holiday gift to middle-class families struggling to send their offspring to America’s top-ranked public institution of higher education.

As of fall 2012, the flagship campus in the UC system will cap the amount that families with annual incomes between $80,000 and $140,000 must pay at 15 percent of household income.

The MCAP (for Middle-Class Access Plan) is the first such initiative at a public university. Several top-tier private schools such as Harvard, Princeton, and Wellesley College have either capped tuition at 10 percent of income for families earning under $200,000 or limited the amount of student debt at graduation to less than $15,000.

Unveiling the plan at a press conference, Berkeley’s chancellor, Robert Birgeneau, noted that the move is in recognition of California’s high cost of living and the challenges mid-range families face as they price out of aid available to the poorest students, not to mention the significant tuition increases of recent years.

“Berkeley has an outstanding record of providing access through financial aid for students. As a result, our undergraduates leave college with among the lowest levels of student debt in the country,” said Mr. Birgeneau. But, he added, while a strong commitment to financial aid has led to both an increasing number of lower-income students on the Berkeley campus and a reduction in their costs, “we see early signs that middle-income families who cannot access existing assistance programs are straining to meet college costs.”

As a public institution, he adds, “we feel strongly that we need to sustain and expand access across the socio-economic spectrum.”

The additional aid will be raised in part from increased philanthropy and higher numbers of out-of-state students, who pay an additional $22,878 per year. This is on top of the estimated $32,000 for resident students. The 15 percent cap is available to out-of-state students, but will not apply to the nonresident surcharge.

“This is a game-changer,” says Terry Hartle, senior vice president at the American Council on Education, a trade association representing some 2,000 public and private colleges and universities.

Such a public commitment to this hard-hit sector, he says, “will force other leading public institutions to step up to the plate.” Not all will be able to make the same commitment, he notes, because public universities rely on state legislatures for the majority of their funds, “and most state budgets are hard-hit and cutting back, particularly in the past two years.”

The major higher educational institutions are intensely competitive for the top students, he notes. So, while he says he hasn’t yet fielded calls from any college presidents, “I imagine more than a few are gritting their teeth and saying this is something we can’t ignore.”

While the large, public, and elite private schools typically have more resources to commit to such overtures, small and medium-size institutions are also keenly aware of the demand to address the needs of the middle-income family, says Debra Townsley, president of William Peace University in Raleigh, N.C. The school just reduced its 2012-13 tuition by 7.73 percent.

“We’ve been talking about this for years,” she says, but notes that the demands have increased as the economy has worsened.

“The very wealthy and the very poor have access to higher education,” she says, “but it is very difficult for the middle-income families to qualify for the kinds of aid available to the lowest-income families.”

She notes that many smaller schools will not be able to match the UC Berkeley offer, but she adds, “colleges and universities all over the country are searching hard for ways to respond and are doing what they can within their own constraints.”