- 'Privatization and Public Universities'
- The “O” word
- Are state systems endangering our public flagship universities? (essay)
- Community college leaders told privatization is wave of the future
- Moody's reports portray stabilizing higher ed finance picture
- Revenue Dip for Private Colleges
- More Tuition Struggles Projected
- Price growth slows, but aid levels off too, College Board finds
'The True Genius of America at Risk'
Public universities in the United States may be at a turning point, write Katharine C. Lyall and Kathleen R. Sell in The True Genius of America at Risk: Are We Losing Our Public Universities to De Facto Privatization? (Praeger). The new book comes at a time that many leading public universities are conducting billion-dollar fund raising campaigns while finding it difficult to match their states' ambitions with legislative appropriations.
Public universities in the United States may be at a turning point, write Katharine C. Lyall and Kathleen R. Sell in The True Genius of America at Risk: Are We Losing Our Public Universities to De Facto Privatization? (Praeger). The new book comes at a time that many leading public universities are conducting billion-dollar fund raising campaigns while finding it difficult to match their states' ambitions with legislative appropriations. Lyall, president emeritus of the University of Wisconsin System, and Sell, a senior lecturer in the Integrated Liberal Studies Program at Wisconsin's Madison campus, recently responded to questions about the themes of their book.
Q: How is the role of American public universities different from the way national universities developed elsewhere and from private universities in the United States?
A: American public universities are creatures of their states rather than part of a national system. This has made them more nimble and creative over a long period of time and set up some constructive competition among universities across the nation to achieve more, extend access, and respond to practical state needs. But, with states now facing outdated revenue structures, significant spending demands for other needs (Medicaid devolution, K-12 costs, homeland security), and a political consensus for tax reduction, it becomes more difficult to sustain public investment in public universities or to sustain a coherent national approach to higher education opportunity. The latter is a pressing concern for our national economic position, at a time when more of our present and future jobs require at least a baccalaureate degree.
Public universities differ from private universities in the clear and direct expectations placed on them to have a strong public mission, to serve the pressing needs of their states. However, as we note below, heads of public universities are beginning to have more similar responsibilities to those of private institutions, given the increasing need to fund raise as state appropriations decline or stagnate. Both public and private universities are facing pressure to increase institution-based financial aid to keep college affordable for lower-income families. Private institutions are ahead of us in responding to the adult student market, and public universities have a lot of catching up to do in that arena, while maintaining academic quality.
Q: Are we losing our public universities to de facto privatization?
A: We are well on the way to doing so: Public investment in public higher education has dropped from about 50 percent in the 1970s to around 30 percent on average nationally today, without public knowledge or public discussion. And, for America’s major public research universities, public support typically amounts to 20 percent or less (some major public institutions like the University of Virginia and University of Colorado receive less than 10 percent of their support from taxpayers). This means that public universities are surviving by diversifying their stakeholders to depend increasingly on student tuition, research grants and contracts, donor contributions, and earned revenues. And the goals of these other stakeholders may not align with the public purposes for which these institutions were founded. We are backing into these decisions and will awake one day to wonder how we privatized American higher education without a policy debate.
Q: Do top universities have no choice but to privatize?
A: The alternative for universities is to downsize enrollments and/or reduce academic quality. Neither of these will serve the interests of the nation well. Private universities in the U.S. cannot absorb large numbers of students downsized out of access to a public university education, and many of those students could not afford private college tuitions in any case. The real challenge of "privatization" is how to maintain our national capacity to educate the next generation of Americans for a global economy.
Some observers hope that technology will be the answer. Instructional technology is now widely applied in most public universities and 15 years of experience teaches that it is an excellent tool for expanding access and streamlining the instructional process, but it is generally not a big cost-saver when the costs of buying, maintaining, and regularly upgrading IT are counted. Indeed, reductions in state support per student of 16 percent since 2001 cannot be offset by instructional savings from technology.
We must note that the privatization of a number of services that have long been defined as part of the public good is a growing trend in the United States, even while opinion polls show that the average citizen sees these services as a public responsibility. Nationally, we are also shifting risk from the public sector role of protection and providing a reasonable safety net toward the individual, even while the individual’s income is stagnating and capacity to protect one’s family and achieve one’s goals face growing constraints. All of this is a decision based on a shift in political philosophy. As a nation, we are moving our definitions of the benefit of higher education toward the private side of the ledger and erasing our commitment to the public benefits. This is not wise, given the substantial internal and international challenges we face.
Q: Do states have to address tax policy to play a more meaningful role in public higher education?
A: Sooner or later, states will have to address the dilemma of eroding tax bases, recurring structural deficits, and the cascading effects of federal and state tax cuts on their ability to secure their own futures. Until they do so, higher education will continue to be squeezed out of public budgets. Some states, like Virginia, have recognized these trends and forged creative new arrangements that provide more management flexibility to their universities to cope with the decline in state funding. Many states and universities, however, are still in denial about the long-term trends, hoping that public funding for higher education will bounce back. This seems to us to deny the reality that our economy and state revenue structures have fundamentally changed; we are entering a new global era and waiting for a return to the good old days is not a productive approach.
Q: Is it wise for public universities to expect their presidents to behave like those of private universities, and to treat them accordingly?
A: As we force public universities to raise 70 percent + of their own operating revenues and to compete increasingly in the marketplace for the faculty and administrative talent to succeed, the expectations/responsibilities of public and private university presidents tend to converge. This means we need to recalibrate both faculty and administrative compensation against the markets in which they must compete for talent. We cannot expect public institutions to succeed in a competitive environment while continuing to treat them like wholly owned state agencies. States that cling to this outmoded state-agency model, will soon find their world-class public universities becoming as distinctive as their state departments of transportation.
Q: What about privatizing some parts of a university but not others?
A: There are some very successful examples of this hybrid approach (Cornell University, etc). The purpose is to focus public dollars on those schools and programs that cannot expect to raise large private endowments and require schools and programs that can raise private funding (business, engineering, law, etc) to provide a larger share of their own budgets from these other sources. Recruiting more out-of-state students is a natural part of this approach; as states reduce their funding for resident students, more seats become available for students able and willing to pay full cost.
This is one reason our book calls for a public policy dialogue before it is too late. With shrinking state investment, where and how should it best be targeted? How should institutions balance the needs for more teachers, nurses, social workers, etc in the management of declining public funding? Universities should not be left to make these decisions alone.
Q: Which states and public universities are doing the best job of responding to these challenges?
A: Some states have recognized these trends and addressed them boldly; others are still waiting for the good old days to return. Virginia’s new tiered charter system enables public universities to select various levels of self-financing/autonomy to fit their mission and circumstances and agrees on explicit six-year public performance goals for each institution. Colorado has moved from funding institutions to funding individuals via higher ed vouchers and provides autonomy to any university receiving less than 10 percent public funding. Maryland has debated a proposal to realign admissions so that more students would start at two-year community colleges and transfer to four-year campuses to complete their degrees. (Note: 10 years ago, Maryland successfully created an independent public college model at St Mary’s College.)
We do not argue for transplanting any of these approaches wholesale to other states; but we do advocate that states and their public university leaders begin to have constructive public policy discussions about realistic, sustainable, models of public purpose universities that can preserve the most important public goals of higher education.
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