Here is an experiment with ChatGPT Deep Research. Let me know if you find errors.
Overview
Diversity,
Equity, and Inclusion (DEI) initiatives have become a significant part of
California’s public higher education landscape. Over the past decade, the
University of California (UC), California State University (CSU), and
California Community Colleges (CCC) have invested substantial resources in DEI
offices, staff, and programs aimed at fostering inclusive campuses and closing
achievement gaps. This analysis examines the costs of these DEI efforts
and the benefits they may yield in terms of student retention,
graduation outcomes, institutional finances, and broader economic impacts. We
focus on the last ten years of DEI programming across all three systems,
providing a high-level cost/benefit evaluation supported by available data.
Costs of DEI Initiatives in UC, CSU, and CCC
Direct Expenditures on DEI: California’s
public universities have built extensive DEI infrastructures. All 10 UC
campuses and all 23 CSU campuses maintain DEI offices or administrators, and
the CCC system has funded equity initiatives at its 116 colleges. Table 1
summarizes selected DEI-related expenditures in these systems over the past
decade:
|
Institution/Program |
Description |
Annual or Total Cost |
Timeframe |
|
UC Berkeley – Division of Equity & Inclusion |
Central DEI division with ~152 staff[1]. Includes programming, student support, etc. |
$36 million per year[1] |
~2021 (recent annual budget) |
|
UC San Diego – Equity, Diversity & Inclusion Office |
Campus EDI administrative office and programs[2]. |
$5.8 million[2] |
FY 2021–22 budget |
|
UC San Francisco – Office of Diversity & Outreach |
Campus DEI office focusing on health sciences campus climate[3]. |
$7.4 million[3] |
FY 2020–21 budget |
|
CSU System – DEI Initiatives (Systemwide) |
System-level funding for DEI activities; includes implementation of
the Ethnic Studies course requirement. |
$28 million in one year[4] (incl. $18M for Ethnic Studies) |
FY 2021–22 |
|
CSU Sacramento – Division of Inclusive Excellence |
Campus office for equity, inclusion, and campus climate programs[5]. |
$1.2 million[5] |
Spent in FY 2019–20 |
|
CCC – Student Equity Funding |
State categorical funds for Student Equity Plans and related support
at community colleges (consolidated into the Student Equity & Achievement
program by 2018). |
$70 million initial (2014) rising to $475
million/year by 2018[6][7] |
2014 onward (annual funding) |
Table 1: Selected DEI-Related Expenditures in California Public Higher
Ed. These examples illustrate the scale of DEI
investment, from individual campus offices to systemwide programs.
As Table 1 shows, UC campuses spend multi-millions annually on
DEI. For example, UC Berkeley’s Division of Equity & Inclusion alone has an
annual budget of about $36 million[1], supporting 150+ staff and numerous initiatives. Other UCs have
similarly staffed DEI units (e.g. UCSD’s EDI office at ~$5.8M[2]; UCSF ~$7.4M[3]). The CSU system likewise dedicates tens of millions: in
2021–22 the CSU budgeted $28 million for DEI-related activities,
including $18M to implement a new ethnic studies graduation requirement[4]. Individual CSU campuses maintain “Inclusive Excellence” offices (e.g.
CSU Sacramento spent $1.2M in one year[5]), and each campus has a Chief Diversity Officer or equivalent
administrator (often at six-figure salaries[8][9]).
In the community colleges, DEI efforts are embedded in
state-funded student success programs. In 2014, California earmarked $70
million specifically for community college equity plans[6]. By 2018, this evolved into the Student Equity and Achievement (SEA)
program funded at $475 million per year[7][10] (combining equity, basic skills, and support services). These funds
allow every community college to implement equity initiatives – from tutoring
and mentoring for underrepresented students to professional development on
inclusive teaching.
Additional Indirect Costs: Beyond dedicated
budgets, there are indirect costs such as faculty/staff time on DEI committees,
training programs, and curriculum development (e.g. revising courses to meet
diversity requirements). For instance, the UC Office of the President reported spending
$8.1 million since FY2017-18 on systemwide anti-bias training and
workplace inclusion consulting[11]. Similarly, CSU’s Graduation Initiative included investments in campus
climate and student support (some of which overlap with DEI goals). While
harder to quantify, these indirect efforts contribute to the overall cost of
“inclusion messaging and policies.”
Trend Over 10 Years: Overall, DEI spending has
expanded significantly in the last decade. National analyses indicate
universities now collectively spend billions annually on DEI staff,
programming, and compliance[12][13]. In California, a 2022 study of public records found that 24 higher
education institutions reported roughly $90–$103 million in recent
DEI expenditures (partial data)[14][15], suggesting that total statewide higher-ed DEI spending over ten years
likely reaches the hundreds of millions of dollars. Indeed, a
conservative estimate putting UC’s systemwide DEI spend at ~$50–100M per year
and CSU’s at tens of millions per year would yield on the order of $1
billion over a decade across the three systems. A watchdog report even
deemed DEI California’s “next billion-dollar industry” when accounting for all
public sector levels[16][17].
In summary, the cost side of the ledger is substantial:
California’s public colleges have devoted sizable budgetary resources to DEI
offices, staff salaries, trainings, student programming, and curriculum changes
focused on equity and inclusion.
Impact on Student Retention and Completion Rates
A key rationale for DEI initiatives is that creating a more inclusive,
supportive environment will improve student success outcomes – namely
retention (students staying enrolled) and completion (earning degrees). The benefit
side of our analysis examines whether these investments correlate with better
student persistence, and how that translates into financial gains for
institutions and the broader economy.
Retention and
Graduation Improvements Attributable to DEI
Evidence
suggests that strong DEI programming can indeed bolster retention and
graduation, especially for historically underrepresented or disadvantaged
groups:
- Higher Retention Rates: Institutions with
robust DEI programs have 6–10% higher retention rates for
first-generation and minority students compared to schools with minimal
DEI focus[18]. In other words, students from marginalized backgrounds are more
likely to stay in school and continue to their second or third year when
they feel supported and included. This aligns with research on belonging:
students who perceive a welcoming climate and see diversity valued on
campus are less likely to drop out[19][20].
- Targeted Program Success: Specific
inclusion initiatives have shown measurable gains. For example, one
university’s first-generation student retention program (a facet of DEI
support) saw a 14% increase in retention after investing about
$620,000 annually[21]. Likewise, a CSU campus (Sacramento State) reported a 10% jump
in retention of historically underserved teaching credential
candidates after implementing a culturally responsive support program
(part of a CSU-wide inclusive recruitment effort)[22].
- Graduation Rates: While overall
graduation rate trends result from many factors, CSU’s experience suggests
that an emphasis on closing equity gaps contributed to record-high
completions. The CSU’s Graduation Initiative 2025 – which, among other
things, emphasized student engagement and well-being and
eliminating achievement gaps – coincided with historic improvements in
graduation rates. Systemwide 4-year graduation rates for first-time
freshmen rose from 19% to 35%, and 6-year rates from 57% to ~62% over the
past decade[23]. More concretely, in the year after the initiative launched, 7,000
more students graduated (99,000 in 2016–17 vs about 92,000 the
previous year)[24] – the largest year-over-year increase ever. Many of these
additional graduates were likely students of color and low-income students
who, in earlier cohorts, might have stopped out before completion.
It’s
important to note that not all outcomes are positive: some critics point
out that despite heavy spending, achievement gaps persist. For instance,
one analysis found Black and Hispanic graduation rates nationally saw only low
single-digit growth in the past decade, suggesting DEI spending alone
hasn’t closed the gap[25].
At UC Berkeley, despite a large DEI budget, enrollment of Black undergraduates
did not increase (3% in 2010 to 2% in 2021)[1].
Such cases indicate that DEI programs are not a panacea, and their
effectiveness can vary. However, the prevailing view in California’s systems is
that these efforts have been integral to fostering improvements in
student success, in combination with academic reforms.
Financial Benefits
to Institutions (Extra Tuition from Retained Students)
From
an institutional finance perspective, improved retention and completion
directly translate into additional tuition revenue:
- When students stay enrolled (rather than dropping out), they pay
tuition for more terms. Each additional semester or year a student
persists is revenue that the college would have lost if that student had
left. For example, a full-time CSU undergraduate pays roughly $7,000 in
tuition and fees per year; a UC undergraduate pays around $14,000
per year in-state. If a DEI initiative helps a student who would have
quit after freshman year stay through sophomore year, the institution
gains another year of tuition (on the order of several thousand
dollars). Multiplied across hundreds or thousands of students, this is
significant. A CSU budget forum recently emphasized that retaining
students is financially smart: “in the long run, it is cheaper to
retain a student than to recruit a new student”[26]. The cost of acquiring a replacement (through outreach,
admissions, financial aid to a new student, etc.) often exceeds the cost
of supporting an existing student to degree completion.
- Example – CSU’s 7,000 additional graduates: As noted, CSU produced 7,000 more graduates in 2016-17 than the
prior year[24]. These represent students who, without improved support, might
have dropped out or taken longer. Conservatively assuming each of those
7,000 persisted one extra year due to CSU’s student-success initiatives,
that’s roughly 7,000 × $7,000 = $49 million in extra tuition
revenue systemwide (not even counting additional state funding tied to
enrollment). Over the 10-year span of Graduation Initiative 2025,
CSU aimed to graduate 100,000 more students than it otherwise would
have[27] – implying tens of thousands of students retained, yielding on
the order of hundreds of millions in additional tuition. (Indeed,
CSU ramped up its Graduation Initiative funding from $50M in 2016-17 to >$400M
annually by 2024-25[28], an investment largely justified by the anticipated returns in
enrollment, tuition, and improved outcomes.)
- UC and CCC Retention Gains: UC campuses,
starting from higher baseline graduation rates, have also seen incremental
gains in timely graduation. Even a few percentage-point increase in
retention at UC (where annual in-state tuition is ~$14k) can yield
substantial revenue. For community colleges, which receive state
apportionment based on enrollment, keeping a student for additional terms
means the college continues to receive funding for that student (and
potentially that student transfers to a CSU/UC, filling a spot that
generates tuition). The California Community Colleges Chancellor’s Office
even launched one-time “Retention and Enrollment Outreach” grants
during the pandemic to re-engage students, recognizing that each
retained student has a funding value to the college’s budget[29].
In
short, every percentage point increase in retention and graduation
translates to monetary gains for institutions. DEI programming – by
improving campus climate, mentoring, and support for at-risk students – likely
contributes to these retention gains. While it’s hard to isolate exactly how
much of the improved persistence is due to “inclusion messaging and policies”
versus other academic factors, the financial logic is clear: successful
DEI initiatives pay for themselves by keeping more tuition-paying students
enrolled. As one analysis notes, many universities are seeing that students
who feel they belong are more likely to persist to graduation, benefiting both
students and the institution’s bottom line[30].
Long-Term Economic Benefits to California
Beyond the ledgers of campus budgets, DEI-driven improvements in
college completion yield significant economic benefits for the state.
Additional college graduates mean a more educated workforce, higher earnings,
and greater contributions to the economy. Key points include:
- Higher Lifetime Earnings: College
graduates earn far more over their lifetimes than those who don’t complete
college. On average in the U.S., a bachelor’s degree holder will earn
about $1.2 million more in median lifetime income than someone with
only a high school diploma[31]. In California’s high-wage economy the premium is especially
large – the median annual wage for workers with a bachelor’s is about $90,000,
whereas those with only a high school diploma rarely exceed $40,000[32]. This “college earnings premium” has remained at historically
high levels (60%+ higher wages for graduates)[33]. Each additional student who completes a degree because of
better support or an inclusive environment stands to gain substantially in
earnings.
- Increased Tax Revenues: Higher earnings
translate into higher tax payments. College graduates not only earn more,
but also have lower unemployment and rely less on public assistance, which
improves the public fiscal balance. According to PPIC, society sees “higher
tax revenue” as one outcome of more college-educated citizens[34]. For a rough illustration: if a graduate earns $1.2M more over a
lifetime, even a 5–10% tax rate on that extra income yields $60k–$120k in
additional tax contributions per graduate to state and federal coffers.
Multiply this by thousands of extra graduates and the return to the public
investment in higher ed (including DEI programs) is enormous. For
instance, CSU’s goal of 100k additional graduates could correspond to well
over $100 billion in aggregate additional earnings (100k × ~$1M
each) and on the order of $10+ billion in taxes over time.
- Workforce and Economic Growth: A more
inclusive higher education system produces more graduates from
underrepresented groups, which helps meet California’s workforce needs.
The state faces a skills gap in many industries that require college
degrees. By improving completion rates for first-generation,
low-income, Black, Latino, and other underrepresented students, DEI
initiatives contribute to a larger talent pool. Many of these graduates
will fill high-demand jobs, start businesses, and drive innovation. As the
PPIC observes, higher education is a “critical driver of economic
progress” and a key lever for upward mobility[35]. California’s knowledge-based industries (tech, biotech,
education, etc.) benefit from the diverse perspectives and skills of
graduates who might have been lost to attrition without inclusion efforts.
- Social Benefits and Cost Savings:
Graduating more students from all backgrounds yields societal benefits
that, while harder to monetize, are impactful. College graduates have lower
poverty rates and lower incarceration rates on average[34]. They are less likely to need social services or public
assistance[34]. They also tend to have better health outcomes and higher civic
engagement (voting, volunteering)[34]. These outcomes mean reduced government expenditures in areas
like healthcare, welfare, and criminal justice, and a richer civic life.
In essence, the public ROI of higher education extends beyond GDP.
An inclusive college system that propels disadvantaged students to
graduate can break cycles of intergenerational poverty, with far-reaching
economic and social implications[36][37].
To summarize the benefit-cost equation: California’s investment
in DEI programming has been costly (hundreds of millions spent), but the potential
returns are sizeable. More students retained and graduating yields
immediate financial benefits to colleges (through tuition and state funding)
and long-term benefits to the state economy (through higher earnings, taxes,
and reduced social costs). Table 2 highlights these benefits in quantitative
terms:
|
Benefit Metric |
Value/Impact |
Source/Note |
|
Increase in Retention (DEI Schools) |
+6–10% for first-gen and minority students vs. low-DEI schools[18]. |
Higher persistence due to strong inclusion support. |
|
Additional Annual Graduates (CSU) |
+7,000 in one year (2016–17 vs prior)[24]; goal of +100,000 over 10 years[27]. |
Attributed to student success & equity initiatives. |
|
Extra Tuition Revenue (CSU example) |
~$49 million for 7k students retained one extra year (≈$7k tuition
each). |
Author’s calc. (CSU tuition ~$7k/year) based on above. |
|
Lifetime Earnings Premium per Grad |
~$1.2 million more (Bachelor’s vs. HS)[31]. |
Calif. BA median wage ~$90k/year[32]. |
|
Tax Revenue Gain per Grad (est.) |
~$100k additional taxes over lifetime (approx. 8% effective tax on
$1.2M). |
Scaled from APLU/Georgetown data[31]. |
|
Societal Outcomes |
Lower poverty, lower public assistance reliance, higher civic
engagement[34]. |
College degree linked to broad public benefits. |
Table 2: Key Benefits of Improved Student Retention & Completion (enabled in part by DEI initiatives). This illustrates how increased
graduation yields financial and social returns.
Conclusion
Cost-Benefit Summary: Over the past decade,
California’s public higher education institutions have poured significant funds
into DEI programs – from diversity staff salaries and training workshops to
targeted student support services. These costs, running in the hundreds
of millions of dollars statewide, are an investment in creating campuses where more
students can thrive and reach the finish line. The benefits of these
efforts, while sometimes difficult to attribute with precision, are
increasingly apparent in improved student retention and completion metrics.
Higher persistence means more tuition revenue and lower recruiting costs for
schools, and each additional graduate contributes to California’s economy
through higher productivity and earnings.
In pure economic terms, even a modest uptick in graduation rates can
yield a strong return on investment. For example, spending $500 million
on DEI over ten years must be weighed against the billions of dollars in
additional lifetime earnings and public benefits generated by the graduates who
otherwise might not have completed college. As one analysis notes, institutions
with intensive DEI commitments do see improved student success outcomes –
but it is also critical that those outcomes are measured and maximized[38][39]. Moving forward, stakeholders are calling for careful oversight to
ensure DEI dollars are spent on interventions that demonstrably boost student
success cost-effectively[40].
In conclusion, the cost/benefit calculus for DEI programming in
California higher education involves substantial upfront costs, but the
potential benefits – both to the institutions’ finances and to the broader
state economy – are considerable. An inclusive college system not only aligns
with California’s values of equity and opportunity; it also appears to pay
off by producing more graduates who bolster the state’s prosperity and
social well-being. The challenge will be to continue refining these programs to
ensure that the promised benefits are fully realized and equitably distributed.
Sources:
·
UC Berkeley Division of Equity
& Inclusion budget[1]; UC and CSU DEI office budgets[3][2][4][5].
·
CCC Student Equity funding in
state budget[6][7][10].
·
Retention and DEI impact
statistics[18][21]; Stanislaus State budget forum (retention vs. recruitment)[26].
·
CSU Graduation Initiative outcomes
and funding[24][28].
·
Earnings and societal benefits of
degrees (PPIC, APLU)[32][34][31].
[1] How one college spends more than $30M on 241 DEI staffers … and the
damage it does to kids - American Council of Trustees and Alumni
[2] [3] [4] [5] [8] [9] [11] [14] [15] CORE Report on California DEI Spending | PDF | Critical Race Theory |
California
[6] The Challenges of Student Equity Plans | ASCCC
https://www.asccc.org/content/challenges-student-equity-plans
[7] [10] California Community Colleges Proposition 98 Spending by Program
[EdBudget]
https://lao.ca.gov/Education/EdBudget/Details/297
[12] [13] [18] [19] [20] [21] [25] [38] DEI Spending in U.S. Higher Ed: A Carnegie Classification Analysis
https://www.emerging-strategy.com/dei-spending-in-u-s-higher-ed-a-carnegie-classification-analysis/
[16] [17] California spent $500M on DEI initiatives, including $50K on 'racial
equity' fish dept trainings: Nonprofit | Fox News
https://www.foxnews.com/politics/california-spent-500m-dei-initiatives-race-equity-fish-nonprofit
[22] CSU Program Shows Promising Results in Recruitment, Retention ...
[23] A Rising Tide in Graduation Rates at the California State University
...
[24] calstate.edu
https://www.calstate.edu/csu-system/news/Documents/Graduation%20Initiative.pdf
[26] Budget Forum Questions | California State University Stanislaus
https://www.csustan.edu/university-budget-office/budget-forum-questions
[27] Graduation Initiative 2025 | Academic Affairs and the Office of the
...
https://academic.sfsu.edu/graduation-initiative-2025
[28] [39] [40] Report recommends more oversight of spending on Cal State graduation
efforts | LAist
[29] More California Community Colleges Embracing "Caring Campus"
https://iebcnow.org/more-california-community-colleges-embracing-caring-campus/
[30] Diversity, Equity, and Inclusion (DEI) Initiatives - Yellowdig
[31] How does a college degree improve graduates’ employment and earnings
potential? - APLU
https://www.aplu.org/our-work/4-policy-and-advocacy/publicuvalues/employment-earnings/
[32] [33] [34] [35] [36] [37] Is College Worth It? - Public Policy Institute of California
https://www.ppic.org/publication/is-college-worth-it/
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