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Public Universities Should Stop Going Private

Oct 27, 2011

State funding to public universities has been on a steady decline for over a decade, and recent economic hardships have only exacerbated the issue. That's left schools struggling to find ways to fill that revenue gap. For some, like California's vaunted public university system, that means adopting the tactics of private schools. But is this the right move?

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By Eric Garneau

money

Tight Pocketbooks

In January 2011, California governor Jerry Brown proposed a $1.4 billion cut to the state's higher education budget for the 2011-2012 fiscal year. While significant on its own, that's far from an isolated incident - although the 2010-2011 budget gave a small boost to funding for higher education, the year before it saw another massive cut of $637 million, a 20% reduction overall. Clearly California's famed public university system can't really depend on any kind of consistency when it comes to state funding.

That's caused schools in California's public system to embrace a different method of obtaining revenue, one that more closely mirrors the strategies used by their private competitors. That could mean bad news for students, who've faced unprecedented tuition raises in the past few years - according to a September 2011 editorial in The Economist, this is the first year that in-state students will pay for a larger share of their public education than the state itself does. Out-of-state students are hit even harder; it's not uncommon for them to pay as much at a public school outside their own state as they would at a private institution.

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Mistaken Identity

The problem with this scenario, as many commentators have pointed out, is that when public schools start to price students out, they lose the idea that those schools are meant to provide a public good. As The Economist puts it, California's initial goal with their massive public higher education system was to give state residents 'nearly universal and free access' to a college education. Now, those same students can expect to pay about $13,000 a year for that education, not counting room and board.

In response, some universities have sought to shuffle off the coils of state control altogether. One such example is UCLA's business school, the Anderson Graduate School of Management, which has proposed forgoing all state funding. The school would then be free to control itself completely, not needing to worry about state guidelines when structuring its curriculum or policies. It would also be free, of course, to raise tuition as its administrators saw fit. Supporters of what would essentially be its privatization, however, argue that tuition changes could be more 'predictable' without state interference - and given the state's ever-fluctuating education budget, they may have a point.

Other proponents of privatization note that their universities could still provide significant subsidies to in-state students to help keep education a public good. Miami of Ohio undertook such a move when they adopted private university pricing in the early part of the 2000s - in 2004, their base tuition was $19,642 per year, though Ohio residents received scholarships of at least $10,000 each (from Businessweek, November 2004). Similarly, California university officials stress that in-state residents would still receive a tuition break for attending a state university, regardless of any price hikes.

What Does It Mean?

But, after all, a price increase is a price increase, and for many would-be college students, money is no simple matter. When Businessweek reported on the trend of public flagship schools adopting private college methods in 2004, they related the disturbing statistic that among the most selective schools in the country (including those flagships), 74% of incoming freshmen came from the top economic quarter of society, while only three percent came from the bottom. If public schools are meant to be democractic institutions, their pricing out students would only take them further from their mission. On the other hand, schools are themselves put in a tough situation when state funding dries up. Money's got to come from somewhere - ideally, however, it would come from some place that wasn't always the students themselves.

Maybe state university funding isn't in so dire a situation after all.

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