(Meister 2009) They pledged your tuition to Wall Street


Meister, Bob. They pledged your tuition to Wall Street: an open letter to UC students. Davis, California, USA: Keep California’s Promise; 2009 Oct 11. Available from: http://keepcaliforniaspromise.org/383/they-pledged-your-tuition. Accessed 2012 Mar 2. Archived by WebCite at http://www.webcitation.org/65rs6e5CI; PDF version archived by WebCite at http://www.webcitation.org/65rsDv80H. Also available, together with related documents, from http://www.cucfa.org/news/tuition_bonds.php.

Bob Meister, president of the Council of University of California (UC) Faculty Associations, exposes claims of financial exigency by UC administrators as a smokescreen for a shift from taxpayer financing of the UC system to debt financing backed by the collateralized expectation of future tuition increases. The new approach is doubly debt-financed: not only does the UC system itself accumulate debt to pay for capital-intensive construction projects, but students and their families are often forced to borrow to cover rapid increases in tuition. Debt financing leads to a preference for tuition revenue, which can be used both to service existing debt and as collateral for new debt, over state revenue from taxation, which cannot be used in these ways.

 

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