Mark Yudof, President of the University of California
Mark Yudof, President of the University of California - 
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Jeremy Hobson: Higher tution fees were the reason for last week's big protests in London. Well by now you've probably seen that picture of Prince Charles and Camilla getting hassled by protesters as they drove through town.

Here in the U.S., there haven't yet been protests on that scale, but universities are facing the same kinds of budgetary challenges. The recession has been hard enough for private universities like NYU and the University of Chicago. But public universities are tied to those suffering state budgets. So staying competitive can be even harder.

We're going to dig into this further now with Mark Yudof, the President of the University of California. Mr. Yudof, thanks so much for joining us.

Mark Yudof: Well thank you. Thank you for inviting me.

Hobson: Obviously the tough spot for a public university is that the mission is to offer an education of top quality at an affordable cost. And at the same time you want to make sure that you have the money to spend on faculty to remain competitive with private institutions. How do you fulfill both of those goals without either making drastic cuts or raising tuition?

Yudof: We have raised our fees, tuition to other people to roughly $12,000. We are still below a number of other prominent public universities. But the really important thing is not just what you charge but who you teach. So what we've done is we've tried to modulate the system to make sure that if you are making under $80,000, you are not paying anything. We really do need to do something about faculty salaries in particular. But I don't know what to say -- I'm a believer in markets. If you want the best people you need to pay for it. And you're paying for people who not only transmit knowledge but create knowledge.

Hobson: Do the politicians at the state level, the one's who are controlling the purse strings, do they understand how important it is to stay competitive with the big private institutions?

Yudof: I think some of them do understand but I would say most of them don't. There's always the danger that you will be treated as just one more state agency and we are different. Our place in bringing California back is critically important. I mean, we will create the jobs and the new products. We're responsible in part, obviously for Silicon Valley, for the agricultural revolution. It seems to me those are the types of things that will bring California back. We are not going to be the low-tax state. We are not going to be the low-regulatory state. We have to be smarter; we just have to be smarter and being smarter involves higher education.

Hobson: Do you think that it makes sense for any parts of a University to go private, to get away from the woes of the state?

Yudof: I don't think it makes sense. We're a consummately California institution. The people of this state have paid for it over a hundred years. They've sent their children and their grandchildren. I can't guarantee that the tuition doesn't go up but I think we have to preserve the access and preserve the quality and we need to figure out formulas to do that. We are not going to throw in the towel and say, "We're a private institution." I don't think that works for this university.

Hobson: Mark Yudof, President of the University of California. Thanks for your time this morning.

Yudof: Thank you sir.

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