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Tough Times Tough Choices
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In preparation for what may come, UCLA Chancellor Albert Carnesale has implemented a partial hiring freeze on staff and asked that the campus — which will enroll some 4,200 freshmen in Fall 2002 — begin planning for possible reductions in resources as high as 8 percent over the next two years.

To learn more about what UCLA confronts as it strives to compete effectively in the marketplace of higher education during a time of severe budgetary shortfalls, UCLA Magazine Senior Writer Marina Dundjerski '94 talked with Chancellor Carnesale.

Q: At a time when California, like so many other states, is facing a budget deficit, where does the University of California fit into the picture?
A: For some time now, the resources available to private universities have been growing faster than the resources available to public universities. There's always been a gap; public universities have always done more with less. But that gap grew with the expansion of private endowments, particularly in the 1990s, while public universities' tuition and state funding did not rise nearly as rapidly.
The principal challenge for us, in light of that gap, is to be able to compete for the very best people — faculty, students and staff.

Q: What is fueling this gap?
A: There are several ways to look at it. Let's start with tuition. Tuition at a first-rank private university is about $25,000 a year. Our fees are about $4,000 a year. We also receive about $9,000 per student from the state. But $9,000 plus $4,000 is $13,000, which is about half of what a private university collects in tuition. Second, the best private universities have very large endowments. At UCLA, we have a large endowment compared to other public universities, but certainly not when compared to elite private universities. Our endowment is on the order of one-tenth of Harvard's endowment [valued at $1.8 billion at the end of Fiscal Year 2001], and we have twice as many students as Harvard has. So the state contribution is crucial, and now we're faced not only with funding that is not increasing at a rate comparable to the privates, but that might not grow at all, or possibly even shrink.

Q: You have asked the campus to begin planning for a budget reduction. Why is that necessary now?
A: We are preparing for the possibility of substantial decreases in state funding. As painful as that would be, it is important for us to plan for it and determine how we might absorb those cuts in ways that cause the least damage to the quality of education, research and service at UCLA.

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