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I asked a friend who recently completed a PhD about this, and he was pretty scathing about the UC system; he gave the same explanation as the OP. TLDR: the rea

I asked a friend who recently completed a PhD about this, and he was pretty scathing about the UC system; he gave the same explanation as the OP. TLDR: the reason the universities do this fake tuition fee plus rebate combination is basically money laundering; their grant money can be spent on paying for students, but not on capex like building new campuses. So by artificially inflating their top-line tuition fee spend, and then clawing most of it back in the form of a rebate, they are able to repurpose grant money for other expenses. The problem with this situation is that it's actually not in the universities' interests to help grad students; their best play is to let grad students get ground into the dust a bit more and then point at how awful the Trump administration is, knowing that the Republicans will get the blame. In a sense, the worse it goes for students, the better, as it increases the likelihood of a concession that enables the universities to continue their money laundering. However hard it is to be a grad student in the US, there's still a lot of competition for each one of those low-paying grad student spots, so even if demand for those jobs goes down a lot, the seats will still be filled.

dragonwriter 9y ago
> However hard it is to be a grad student in the US, there's still a lot of competition for each one of those low-paying grad student spots, so even if demand for those jobs goes down a lot, the seats will still be filled. Yes, but grad students aren't fungible commodities; if the best grad students with the best choices don't want to go to US schools, it will impact the quality of research, the ability to attract top talent at other levels, the ability to attract funding, and the ability to generate value through research (patents, etc.), as well as the quality of graduates and their future income potential, which affects things like likely future growth of endowments. Your analysis of the Universities’ interest is correct, in terms of financial interest, only in the shortest possible term, which might be key for the kind of for-profit public firms that live and die by the next quarterly report, but most universities aren't like that.
- theptip 9y ago
  > most universities aren't like that. I hope you are right, but I'm not so sure. We'll see I suppose.
  - dragonwriter 9y ago
    The structural incentives are different, as they are mostly private or state-established quasi-private nonprofits; they don't answer to shareholders who buy and sell continuously and especially based on quarterly reports.

dragonwriter 9y ago

> However hard it is to be a grad student in the US, there's still a lot of competition for each one of those low-paying grad student spots, so even if demand for those jobs goes down a lot, the seats will still be filled. Yes, but grad students aren't fungible commodities; if the best grad students with the best choices don't want to go to US schools, it will impact the quality of research, the ability to attract top talent at other levels, the ability to attract funding, and the ability to generate value through research (patents, etc.), as well as the quality of graduates and their future income potential, which affects things like likely future growth of endowments. Your analysis of the Universities’ interest is correct, in terms of financial interest, only in the shortest possible term, which might be key for the kind of for-profit public firms that live and die by the next quarterly report, but most universities aren't like that.

theptip 9y ago
> most universities aren't like that. I hope you are right, but I'm not so sure. We'll see I suppose.
- dragonwriter 9y ago
  The structural incentives are different, as they are mostly private or state-established quasi-private nonprofits; they don't answer to shareholders who buy and sell continuously and especially based on quarterly reports.