'Privatization and the Public Good'

Put five public university administrators in a room, and chances are good that within an hour one of them will joke about the fact that his or her institution has gone from being "state supported" to "state assisted" to "state located." As funding for public higher education has shrunk (or at least failed to keep up with growing enrollments) in many states, public colleges and universities have increasingly sought other forms of funding that, over time, make them look less and less like state entities and more and more like their cousins in the private nonprofit sector.

That trend toward privatization has spurred controversy in numerous states, troubled faculty members who believe their institutions may lose their public purpose, and raised serious questions about whether the future of "public" higher education is imperiled.

Matthew T. Lambert doesn't believe it is. Granted, his new book, Privatization and the Public Good: Public Universities in the Balance, published this fall by Harvard Education Press, uses the term "crisis" to describe the situation and offers plenty of evidence of the fragility of the state, federal and institutional partnership that has traditionally undergirded public colleges and universities.

And the portrait Lambert provides of how legislators view the colleges in their states (teased out through interviews with nearly 150 lawmakers) might be enough to send a chill down the spines of many public college professors and other employees, both in terms of their understanding of the institutions and the skepticism they have for the motives of some college leaders.

But Lambert, vice president for university advancement at the College of William & Mary, argues that some privatization is not necessarily a bad thing for public institutions, and seems reasonably optimistic that state leaders -- when presented with the right case about the institutions' importance -- can once again be persuaded to support the institutions at a level that gives them a secure future.

He answered questions about the book via email.

Q. For many public college advocates, especially on the faculty side, "privatization" is a dirty word, representing to them both a withdrawal of state support and an abandonment of public purposes. You argue that it isn't necessarily in conflict with the public good. How so?

A. As Mark Twain once quipped, “the difference between the almost right word and the right word is really a large matter—it’s the difference between the lightning bug and the lightning.”  Privatization is the right word to describe what’s been happening at public colleges and universities, but it’s not just a phenomenon of the past 30 years. The forces of privatization have been at work throughout American history at both public and private institutions. Robert Berdahl astutely noted four decades ago that “many academics are trying to protect too much, and many persons in state government are trying to claim too much.”  The connections between government and higher education are increasingly strained, leading to a growing divide between the two. Privatization is much deeper than just autonomy, finance, and regulation. What matters more is the mission of a public institution, and I found no reduction of the focus on public purposes at public colleges (nor did most of the 150 legislators and governors I interviewed during my research).  We must, however, all remain vigilant to ensure our public (and private) colleges remain focused on the broader societal interests—our democracy depends upon it.

Q. Is privatization something that universities do, something that happens to them, or both?

A. Privatization is a push and a pull, often viewed as an agenda being advanced by a college or university seeking to gain more freedom, but forces at the institutional, state, and federal levels lead to the shifts.  As colleges and universities advocate for greater autonomy to set their enrollment mix and tuition level to compete in the marketplace, many legislators and governors are pushing them to identify alternative revenue sources, to become more efficient, and to operate differently than the rest of government.  At the same time, some public universities are being pulled toward national and international prominence, which requires significant emphasis on greater resources, increased research and a decrease in the traditional focus on teaching as the primary domain of the institution.  The knowledge economy, which is driven by globalization, requires institutions to focus on economic development in whole new ways. This is why I frame privatization on a continuum between public and private, rather than public or private.

Q. You make the case that you can calculate the social benefits of higher education, and that when you do, they outweigh the financial and other benefits that accrue to the individual. This should, in your view, help university leaders make the case for higher education as a public good rather than a private benefit. When you floated this approach with legislators, did they buy it?

A. During my research and writing for this book, I was constantly reminded of Dickens’s A Tale of Two Cities, because this does seem to be the best of times and worst of times for higher education. There are more exciting opportunities for expanding the reach of our institutions and a higher education is more critical than at any point in our history.  On the other hand, you can’t go a day without reading a story about student debt or an op-ed by someone questioning the value of a college education (quite frequently politicians holding advanced degrees). 

All of us undervalue the individual and societal benefits of higher education. Walter McMahon’s extensive study in 2009 found that the total benefits to the individual and society were grossly underestimated and, in the end, more than half of the benefit accrues to society. Many legislators and governors know this inherently and spoke often of the economic power of their colleges and universities.  Far fewer had given much thought to the importance of civic engagement and its value to our democracy, lower health care costs and dependence on state services, or the increased tax revenues that come from a more educated population. 

Clearly we need more research on the quantifiable value of higher education to the state and nation, but this is an important start. While most legislators remain concerned first and foremost with the lifetime earnings of the individual that receives the degree, we must continue to talk about the broader value of higher education to all of society.

Q. You spoke with almost 150 state legislators, especially in California, North Carolina, and Virginia. Some of their views were damning; you recounted one as describing college leaders as having "long arms and short memories." How would you characterize their understanding of and appreciation for higher education, and what are the implications for public colleges of that outlook?

A. Politicians are nothing if not colorful, and the analogies and metaphors they have for colleges and universities range from children (“sometimes adolescent, sometimes mature, but always needy”) to Chicken Little (“the sky is falling!”). Their words help to tell the story of a rapidly changing system of higher education and one of the reasons I chose to research their perspectives was to try to understand better the disconnect between those inside institutions and those in elected office. 

Out of the 150 leaders I interviewed, very few were deeply knowledgeable about higher education or the issues impacting our colleges and universities.  There were some who were passionate, some who were hostile, and many who were agnostic.  Nearly all have great affection for their public institutions and appreciation for the impact their system of higher education has on their economic and workforce needs, but far less understanding for how to establish a public agenda or what one might look like.  Several legislators described the “wink and nod” that occurs when funding is cut and tuition is raised: legislators decry publicly the increase in tuition, then admit behind closed doors that universities have an “escape valve” that the rest of state government lacks — tuition. 

Many indicators point to the conclusion that the prospects for public colleges and universities are not bright and very few legislators predict increased funding in the future, but I do see strong evidence for the potential for new relationships where institutions are given certain freedoms in exchange for a continued connection to the state’s needs and a focused public mission.

Q. There is enormous variation in the extent to which different public institutions (flagships and land-grants, regional four-year institutions, public liberal arts colleges colleges) are dependent on state funding. How does the privatization trend affect them differently, and affect their long-term viability and outlook?

A. Public policy in higher education is as varied as the 50 states — indeed, if you know one state then you likely only know one state.  My research focused largely on the flagship institutions and those with great market strength, but I did analyze the community college systems and comprehensive universities and found increasing forms of privatization at those institutions as well. 

To be clear, I don’t think any public university will fully privatize — by which I mean be released from any and all responsibility to the state — in my lifetime, and I didn’t find a single legislator willing to give away or sell a public institution.  There is an enormous sense of ownership legislators and governors feel and, to a certain extent, these institutions are seen as the “people’s university.” 

The more elite flagships and liberal arts colleges will have the greatest ability to alter their relationships with the states.  However, as was seen in Virginia’s “Restructuring” in the past decade, the focus on the flagship and elite institutions led to greater autonomy and flexibility for all institutions — including the regional and comprehensive universities and community colleges. 

Sebastian Thrun, founder of Udacity, has said that “in 50 years there will only be 10 institutions of higher education.”  I don’t foresee a future as bleak as that, but I do see elements of privatization leading to greater stratification between the elite and flagship public institutions, the comprehensive universities, and the community colleges.  The elite flagships will likely become more and more similar to their private peers in terms of management, tuition, and research profile. That’s not necessarily a bad thing and does not have to mean a diminution of the public mission if the states and the institutions can change the conversation toward how they can strengthen the public mission and focus on the public good.

Q. Will the flagship universities you focus on in your case studies — the University of Virginia, UNC-Chapel Hill, and Berkeley — still have a meaningful public orientation in 10 years? 25? 50?

A. After setting out with this research to capture the “other” perspective with elected officials, I wasn’t sure how I would see the future for public higher education.  My initial orientation had been focused on autonomy (institutions wanting more) and finance (governments providing less).  My research suggests that these two elements, while important, are not what define a public institution.  Teresa Sullivan, president of U.Va., noted, “What makes this institution public is public mission. It is in our DNA. It is what Mr. Jefferson designed us to be.” Several university leaders also emphasized that public is not solely defined by dollars — it is first and always about mission and history. 

And guess what? Legislators and governors feel the same way. Whether an institution is receiving 50 percent or 5 percent of its funding from the state, public mission is not defined solely by the percentage of state support. I would note that private institutions can also serve a public mission (private universities also receive fair portions of their budgets from the state and federal governments). While these three institutions have very different histories, they each embrace a definition of public mission and orientation uniquely reflective of their individual state. I think that critical factor alone will allow them to endure far longer than the last 30 years of decline in support might suggest. When managed with an eye toward clarifying public policy objectives and creating clear expectations for what constitutes an institution’s responsibility for the public good, privatization need not represent a departure from public mission.