[EAS] Public Higher Education Funding

Peter J. Kindlmann pjk at design.eng.yale.edu
Sun May 8 22:07:32 EDT 2005

The increasing funding pressure on public colleges and universities
should be kept in mind each time we hear the vapid claim that it
will be the inventiveness of our scientists and engineers that will
be our 'edge' in an age of global technological competition.

The article is by Katharine Lyall, president emerita of the
University of Wisconsin System and a visiting scholar at the
Carnegie Foundation.  --PJK

>X-Sender: reis at reis.pobox.stanford.edu
>Date: Thu, 5 May 2005 08:51:39 -0700
>To: tomorrows-professor at lists.Stanford.EDU
>From: Rick Reis <reis at stanford.edu>
>Sender: owner-tomorrows-professor at lists.Stanford.EDU
>"Public colleges and universities, which enroll 77 percent  of all
>students in higher education, drew more than half of their operating
>support from taxpayer sources in the  1980s; today money from state
>coffers provides about 30  percent of funding. At some of the
>nation's most prominent public universities, such as the University
>of Virginia  and the University of Colorado, state funding
>contributes less than 10 percent of university operating support."
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>The posting below, by Katharine Lyall, president emerita of the
>University of Wisconsin System and a visiting scholar at the
>Carnegie Foundation. looks changing models for higher education in
>the United States. It is #16 in the monthly series called Carnegie
>Foundation Perspectives. These short commentaries exploring various
>educational issues are produced by the Carnegie Foundation for the
>Advancement of Teaching <http://www.carnegiefoundation.org>.  The
>Foundation invites your response at:
>CarnegiePresident at carnegiefoundation.org. Reprinted with permission
>Rick Reis
>reis at stanford.edu
>UP NEXT: Engaged and Engaging Science: A Component of a Good Liberal
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>                 ----------------------------------- 1,125 words 
>By Katharine Lyall
>America is rapidly privatizing its public colleges  and
>universities, and that process is raising questions our society
>desperately needs to grapple with. Who should aspire to a higher
>education? To what extent are education's benefits public and social
>in nature, and to what extent is higher  learning a private good?
>What are the core values of higher education and what are we willing
>to pay to preserve them?
>The move toward privatization is the result of a "perfect  storm" of
>economic and political trends that are putting  insurmountable
>fiscal pressures on the states. When Republican  tax policy
>architect Grover Norquist said, "I simply  want to reduce government
>to the size where I can drag  it into the bathroom and drown it in
>the bathtub," he  articulated an increasingly popular view of
>government.  Currently, this view is driving the federal government
>to shift costs and risks formerly borne at the national  level to
>the states, and the states, in turn, to shift costs and risks to
>individuals. The idea of privatizing  a portion of Social Security
>and the continuing press for  reductions in tax bases and tax rates
>follow this line  of thought. And public colleges and universities
>are swirling  in the vortex of this ideological storm as
>institutions  scramble to find new ways to fund the educational
>enterprise  by diversifying revenue sources and addressing new
>Public colleges and universities, which enroll 77 percent  of all
>students in higher education, drew more than half of their operating
>support from taxpayer sources in the  1980s; today money from state
>coffers provides about 30  percent of funding. At some of the
>nation's most prominent public universities, such as the University
>of Virginia  and the University of Colorado, state funding
>contributes less than 10 percent of university operating support.
>This  steady disinvestment in higher education by the states does
>not seem to reflect a clear public policy decision to reduce higher
>education opportunities. It indicates instead structural problems in
>state budgets and budgeting practices. Indeed, the criticism of
>higher education for "exorbitant" tuition increases demonstrates a
>continuing belief by legislators that access to higher education is
>more essential than  ever, both for individuals and for the state's
>economic future, and that somehow universities should find a way to
>maintain access despite the steady erosion of funding.
>In response to criticism from state legislatures, and  from the U.S.
>Congress as well, public universities have been extraordinarily
>diligent and creative in diversifying  their revenue sources: today,
>no single revenue source dominates-as mentioned, state funds provide
>30 percent, tuition supplies about 20 percent, and gifts, grants,
>and  contracts (mostly for research) constitute 50 percent or  more.
>In effect, state taxpayers have become minority shareholders in
>their public colleges and universities.
>The move toward privatization of public colleges and universities
>poses both threats and opportunities. Many argue that universities,
>like other entities, can benefit from exposure to the competitive
>discipline of the market to make them more focused in mission and
>more efficient in operations. The market, they argue, will break the
>bonds of tradition and either free or force universities to serve
>students better. But others worry that privatization is forcing
>universities to sell out to corporations and donors, to deny access
>for low-income  students, and to abandon their core public purposes,
>including the extension of intellectual and human assets to the
>larger  community.
>Whatever one's view, the stark facts are:
>	 * Public support (per student) for public universities  has been
>falling for two decades or more-and with growing fiscal pressures on
>states, there is no relief  in sight.
>	 * Higher education leaders have encouraged growing access without
>considering how it can be paid for-we see the urgency of the need
>but have not anticipated the  shifting fiscal and political
>circumstances in which it must be met.
>	 * The 20th century "social compact" among states, families, and
>higher education has been abandoned de facto-neither elected
>officials nor educators  want to admit this, but a realistic
>adjustment cannot be made until they do. Finger-pointing and
>accusations  of bad faith, bad management, and bad priorities will
>not work.
>As some state leaders begin to pay attention and realize  that
>solutions are needed, they are creating interesting  experiments in
>higher education funding. For example:
>Charter universities  are being created.  The Virginia state
>legislature has just adopted legislation  providing for three tiers
>of charter status that permit  public universities to obtain greater
>operating autonomy in exchange for meeting specified state
>performance goals. This relationship more honestly recognizes the
>state's minority stakeholder status and frees the university to
>obtain management efficiencies outside the contractual constraints
>of state government.
>Hybrid universities like Cornell University and the University of
>Virginia operate with a mix of publicly supported and privately
>endowed units within the same university  structure. This permits
>focusing scarce state funding on units and programs that state
>decision makers designate  as of critical state interest, leaving
>the operation and  funding of remaining units/programs to the
>university operating  privately.
>Full-cost pricing experiments, like Miami University in Ohio where
>tuition is set to cover full costs  of operation, and financial aid
>set-asides from the tuition  revenues are used to ensure access for
>low-income students.
>Experiments like these are being closely followed and  will help to
>answer the question of how much of higher  education's "core public
>purposes" can be sustained as public support wanes.
>Promising experiments aside, we urgently need a public discussion of
>a new sustainable higher education policy,  based on realistic
>financial and operating expectations,  that outlines the commitments
>of federal, state, and higher  education institutions. Without this
>public debate, privatization  will continue to an inevitable end of
>fewer institutions,  less access-especially for those of modest
>income-and  erosion of our economic future.
>My own view is that the higher education universe is converging
>towards a new model, the "public purpose university," defined not by
>the old concepts of ownership and control (public  vs. private) but
>by the particular public goals it has  elected to serve. No longer
>can we expect Clark Kerr's  multiversity to be all things to all
>people. The core public  purposes of higher education must be
>collectively achieved  (if they can be sustained at all) through
>specialization and allocation of resources across all higher
>education  institutions. In this new model, both research and
>teaching  missions will become more focused, and more collaborative
>activity will occur between and among "public" and "private"
>institutions,  coordinated by statewide university systems.
>This view may hinge on a spirit of cooperation that will  be
>difficult, if not impossible to achieve. But as Barack Obama has
>said: "The true genius of America [is] a faith in simple dreams, an
>insistence on small miracles." Our  public colleges and universities
>share that faith and work  daily to bring about those small
>Katharine Lyall is president emerita of the University of Wisconsin
>System and a visiting scholar at the Carnegie Foundation. Katharine,
>who is an economist and public policy scholar, is completing a new
>book on the financing of public higher education.
>Carnegie Perspectives is a series  of commentaries that explore
>different ways to think  about educational issues. These pieces are
>presented  with the hope that they contribute to the conversation.
>You can respond directly to the author at
>CarnegiePresident at carnegiefoundation.org or you can join a public
>discussion at Carnegie Conversations.
>Join the Carnegie Perspectives email list by sending  an email to
>CarnegiePresident at carnegiefoundation.org with "Subscribe" as  the
>subject line.
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