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Public Missions, Private Dollars and Ordinary People

December 11, 2008

You can tell a lot about institutions – and societies – by how they invest their money. This is why many public college and university leaders, myself included, are so concerned by the shameful spiral of disinvestment in public higher education in America.

At a time when our global competitors from Ireland to China are investing aggressively in their higher education systems, almost every state in our nation is headed the other direction. This pattern, now nearly three decades old, not only hampers our ability to be engines for economic prosperity, it also threatens our historic -- and essential -- role in creating opportunity for students who have traditionally looked to us as their gateway to success.

Varying degrees of recovery in state funding for public higher education in the last two years offered a glimmer of hope -- until the current economic slow-down. Forecasts of further financial turmoil and economic uncertainty are dramatically undercutting states’ general revenue budgets nationwide, and that surely will mean further belt tightening for campuses that have long since run out of notches on their belts.

In 1980, states funded nearly half of the operating budgets of public campuses. Twenty-five years later, states were covering only one-fourth of the bills, and that percentage has since fallen even further. Here in Oregon, for example, our largest public universities receive only about 15 percent of our funding from the state. Consequently, students have been forced to pick up a larger share of the cost of their education through tuition increases.

According to the College Board, tuition and fees for in-state students at public institutions went up 6.4 percent this year, to $6,585. Add in room and board, and annual costs now average $14,333. If you think that’s steep, try covering the estimated $25,200 expenses of an out-of-state student.

It will get worse. So far, 17 states anticipate midyear budget cuts that could result in midyear tuition increases for the 14 million students enrolled in universities there, according to a senior leader of the American Council on Education. Colleges and universities in other states, including my own, are already being asked to produce scaled-down budgets in anticipation of revenue shortfalls for the next fiscal year or two. Already, our neighbors in the University of California and California State University systems have announced plans to roll back enrollment by thousands for the coming academic year, and California high school seniors are scrambling to apply by newly announced deadlines at the end of this month.

The long-term consequences of these ever-shrinking budgets are troubling, indeed. America no longer risks simply falling behind educational needs in an increasingly sophisticated, technology driven global economy; we now face the prospects of being mostly privately funded and losing our public mission.

Lest we forget, that public mission is to provide higher education opportunities to students who often come from ordinary or worse economic and social circumstances, many of whom are capable of accomplishing extraordinary things. In fact, the history and the promise of this great nation is predicated on the fact that social and economic mobility have provided the dynamism that has created the most technologically sophisticated and prosperous nation on earth. Education has been the most powerful source of that mobility and dynamism. If public universities are forced to abandon that public mission for lack of funding, we are at risk as a nation of creating a permanent underclass of disadvantaged citizens who have little or no stake in our society and of losing the dynamism that has served us so well at the very moment when challenges we face relative to global economic competition have never been greater.

There are further, clear benefits to society within this public mission. The average college graduate working full time, for instance, pays roughly 134 percent more in federal income taxes and about 80 percent more in total federal, state and local taxes than the average high school graduate. In Oregon, it has been estimated that an average group of 1,000 college graduates will generate at least $62 million in state income taxes over the course of their lifetimes.

For a land grant university like Oregon State, which I serve as president, it would be easy to adopt a private mission and to keep our financial house in order. This would allow us to focus on what is good for the university in terms of reputation and financial strength, rather than considering how effectively such actions might address public needs, including access for qualified students. There is no shortage of companies that might like to support proprietary research at our university and other similar
institutions, and we could market our academic programs in high-demand fields to wealthy, out-of-state-students, charging private college tuition in the process. We could abandon teacher education programs and devote resources to those activities that attract the most outside support.

But all of the above would mean no less than an abandonment of our founding values. The Morrill Acts of 1862 and 1890 provided land and money for states to establish public campuses “to promote the liberal and practical education” of their working-class citizens. President Lincoln referred to the land grants as the "people's colleges." For more than 140 years, colleges and universities established through those initiatives have helped to create the world’s best-educated workforce and fueled a dynamic, innovative economy. Where will the most financially vulnerable students on those campuses turn if they are priced out of the most affordable option for a four-year degree – increasingly, the basic credential required to compete in today’s job market? Where will the American economy be without the enhanced contributions that education prepares them to make in the workplace? We should all lose sleep considering the answers to those questions.

Oregon State University created an innovative financial aid program this year in support of that land grant mission – the Bridge to Success Program. Combining federal Pell Grant funds, Oregon Opportunity Grant monies, donations from Oregon State supporters and operating funds redirected toward this program, Bridge to Success aimed to cover tuition and fees for some 1,500 students this fall – 10 percent of our in-state students. With the economy spiraling downward, response to the initiative escalated; aid awards were given instead to a breathtaking 2,900 students; demand surely will grow significantly next year, as will the challenges to ensure the program’s sustainability.

Other public universities in states whose economies have been hit harder than ours are feeling the pinch more immediately and more deeply. There are no easy answers for any of us, only a collective recognition that our nation’s capacity to move forward rests in large measure on our ability to find solutions. State and federal governments need to consider funding strategic investments in the enrollment capacity of community colleges and public universities to provide access to quality higher education for an increasingly diverse population of students; such students often come from ordinary circumstances but often have extraordinary potential. To do so requires more support for public higher education from existing funds and possibly new sources of revenue. There is no way around it: Public higher education needs public investment.

Our public universities have represented hope to generations of Americans. In a campaign year in which the concept of hope has become central to our electoral dialogue, we must not forget that real hope, meaningful hope, requires financial investment and that among the institutions in need of a financial rescue plan, public higher education must be a top priority.

Bio

Ed Ray is president of Oregon State University and an economist.

 

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