Is UC’s Aa1 bond rating now a higher priority for the Regents than its instructional quality?
This is not a question most students would think to ask: how would they know about UC’s bond rating and how it might be influencing decisions and priorities? In their press release VPs Taylor and Lenz ignore my question about UC’s bond rating: they simply repeat UC’s oft-stated position that the reason for tuition increases is that the state has cut instructional funds. This reason is plausible because tuition revenues could be used for instruction. The problem is, as the bond documents indicate, that tuition does not have to be used for instruction. It can be used for construction, and has been pledged as collateral for bonds used to pay for construction. Until we see documentary evidence to the contrary, we may also assume that it is among the revenue sources used to pay debt service on bonds. The plain fact is that tuition increases give the Regents an opportunity to borrow more for construction by increasing the pledged collateral. This effect of tuition on collateral is automatic;
