For years, the University of California has claimed financial hardship, a narrative used to win favorable treatment in the state budget process, and to justify a hiring freeze, layoffs of frontline workers, and tuition hikes on students and their families.
But a clear, independent look at the numbers shows a very different reality. UC is not struggling. It is thriving, and its priorities need to change.
In the new research brief, “Assessing & Understanding the Strength of University of California’s Financial Position,” analysts reviewed years of UC’s notoriously opaque financial statements, investment holdings, acquisitions, payroll records and other resources to develop a comprehensive picture of the university’s actual financial position.
The results told a very different story than the one UC often presents to the Legislature, students and its frontline workers.
For example, the report details how in fiscal year 2025, UC reported $5.5 billion in surplus revenue, even as it reduced staffing, strained essential services, imposed a new round of tuition hikes, and went on a buying spree of new facilities while hiring more high-priced administrators.
Strong investment returns and operating gains at medical centers erased billions in pension liabilities, while unrestricted cash reserves have grown to nearly $24.5 billion.
Over the past decade, UC’s revenues, investment holdings, state appropriations and — not coincidentally — the average pay of its wealthiest executives, have each more than doubled. Its medical center revenues have risen by 167%.
These findings expose a stark contradiction. UC executives continue to claim financial distress while one of the wealthiest public university systems in the nation quietly posts billions of dollars in surpluses.
But that prosperity has not reached the people who make the university run.
For example, frontline patient care and service workers — including custodians, food service workers, groundskeepers and patient care technicians — have been working for more than a year without a contract.
On average, they have seen their real wages fall by 6% since 2017, even as inflation climbed 36%. Increasingly priced out of housing markets near their jobs, many have been forced to resort to multihour commutes, sleeping in their cars or even in homeless shelters.
The problem is most acute at UC Santa Barbara where post-COVID-19 pandemic data from Zillow showed median rents increasing at a faster clip than any other county housing a UC campus.
Research from 2024 revealed that the median wage of UCSB’s more than 500 career service workers was only half of what it would need to be for the average worker to be able to afford a one-bedroom apartment near campus.
In fact, the study showed every single UCSB service worker would qualify for housing vouchers from the Housing and Urban Development Department, if only enough vouchers were available to meet demand in California’s high-cost coastal communities. As you know, there aren’t.
Students face equally unsustainable circumstances. Tuition for California residents has increased nearly 40% over the past decade, and even more for out-of-state students.
Meanwhile, nearly 48% of UC undergraduates reported food insecurity in 2024, the highest level since UC began tracking basic needs.
Housing shortages remain severe. As of fall of 2024, UC could house only 41% of its students — and less than a third of students at UCSB. As UC expands, that housing gap is only getting bigger.
UC’s financial statements may look strong, but the lived experience of workers and students tells a different story.
This is not financial distress. It is a distribution problem. It is about UC choosing to prioritize expansion, acquisitions and executive compensation at the expense of affordability, staffing stability and basic services.
UC relies on billions of taxpayer dollars every year. In exchange, we expect it will fulfill a core public mission as an engine of social and economic mobility, as California’s second largest employer, third largest health-care delivery system, and as a national center of innovation and research excellence.
UC students and patients are its most important customers. Its frontline workers — the people who answer the call button in hospitals, clean classrooms and research labs, and maintain campuses throughout the state — are essential.
Yet all are struggling with rising costs are asked to sacrifice while a system flush with billions of dollars expands executive ranks, grows physical assets and stockpiles reserves.
That is not evidence of a public institution exercising fiscal responsibility. It is evidence of a moral failure.
The UC that Californians deserve must invest in people first. That means fair wages for workers, affordable education for students, and a renewed commitment to public education and public health.
UC has the financial strength to do better. The question now is whether its leadership will choose to do so.