Commentary: Should Public
Universities Behave Like Private Colleges?
They're hiking tuition and becoming more
elitist -- ducking a key social role
Ever since Thomas Jefferson founded the University
of Virginia in 1825, it has been a leader among the nation's public
universities. But in recent years, Richmond's contribution to one of its
best-known institutions has been steadily shrinking. Today, the state provides
just 8% of UVA's $1.7 billion annual operating budget, down from 28% two decades
ago.
No wonder UVA -- along with the College of William & Mary and
Virginia Polytechnic Institute -- wants to cut some of the strings that bind it
to the state. Virginia's three flagship universities have asked the General
Assembly to make them "chartered" universities. If Richmond agrees, they would
get more freedom to set tuition and run themselves, making them more like
Harvard, Princeton, or other private colleges.
America's public
institutions still educate some 80% of the nation's 14 million undergraduate
students. But increasingly, the crown jewels in this system, the state flagship
universities such as UVA, Pennsylvania State, and the University of Colorado,
are aiming to break out of the mold that traditionally has differentiated them
from private universities.
To date, no major public university has been
fully privatized. But as the states foot a smaller share of their budgets, the
flagships have become more dependent on tuition and other sources of funds. They
may still be publicly owned, but increasingly they're privately financed. So a
number of the flagships are seeking more freedom from state control. In July,
University of Colorado President Elizabeth Hoffman won "enterprise status" for
her school, which means it's no longer governed by the same rules as state
agencies. Miami University of Ohio recently became the first major public campus
to adopt the high-price, high-financial-aid tuition model used by elite private
colleges. That means all students across the board are now charged $19,642,
although Ohio residents receive scholarships of at least $10,000. "We are
becoming more like our private counterparts," says Penn State President Graham
B. Spanier.
This is a powerful yet troubling trend. On the one hand, the
flagships are being forced to rely more on fund-raising, research grants, and
other private or nonstate money. Given this reality, it makes sense to free them
up from state rules that could impede their ability to become efficient and
competitive. Such moves could help to insulate them from meddling politicians,
as well.
Squeezing the Poor At the same time, creeping
privatization accelerates a broader movement by the top 100 or so flagships to
hike their tuitions at a double-digit rate. The result is that a public good
designed to give all Americans access to higher ed is turning into something
more like a private one, open primarily to those whose families can afford it.
Already, the student body at some flagship campuses is more affluent than at
elite private schools: At Ohio's Miami, for one, the median family income tops
$100,000 a year.
Moreover, as flagships break free, support could erode
for less prestigious state schools that remain more dependent on public funds.
Privatization "will accelerate the social stratification of higher education, in
which the elite [public colleges] are primarily filled with kids from privileged
backgrounds, and the kids from poorer families are concentrated in less
prestigious schools," says David W. Breneman, dean of the Curry School of
Education at UVA. At the nation's 146 most selective colleges -- including the
top flagships -- just 3% of entering freshman come from the bottom socioeconomic
quarter, while a staggering 74% come from the top quarter.
The flagships
say they have little choice. Although state and local governments still cover
64% of the cost of public higher education, other sources fund a much larger
share at most elite public colleges. Today, Ohio provides only 15% of Miami's
total revenues. At Penn State, only 12% of the budget comes from state funds,
says Spanier. At Colorado, Denver kicks in just 9%.
To raise funds
elsewhere, most look to students. This year, four-year public colleges raised
tuition by nearly 11%, more than three times the overall rate of inflation, to
an average of $5,132 for in-state students, according to the College Board. Over
the past decade, tuition has climbed 90%. With room and board, the annual tab at
public colleges averages more than $11,000. Although those costs are less than
the $27,500 at private colleges, the hikes reflect a view that flagships should
seek funds from those willing -- and able -- to pay. Take UVA, where the state
froze tuition in four of the past eight years. If it's granted charter status,
UVA could raise in-state tuition to $10,200 over the next five years, up from
$6,600 now, says UVA Chief Operating Officer Leonard W. Sandridge. UVA, however,
is launching a more generous financial-aid program.
The fear is that the
flagships will use their market power to price poor and middle-class students
out of their classrooms. Penn State already charges in-state students more than
$10,000 a year, although it also provides significant financial aid to poorer
students. A more typical approach is to hit up out-of-state students. UVA
charges nonresidents more than three times as much as Virginians. "In effect,
they're paying 150% of the cost of their education," concedes Sandridge. At
Colorado, whose Boulder campus is a magnet for affluent nonresidents,
out-of-state students generate 72% of total tuition revenue even though they're
only 30% of the student body.
The danger is that ever-rising tuitions
will exacerbate inequities in higher education. Because out-of-state students
tend to be affluent, public flagships that rely on them already are serving
fewer low-income students. Indeed, less than 9% of students at UVA and William
& Mary received federal Pell Grants for poor students in 2000, vs. 10% at
Yale University and 16% at Amherst College, according to a study by the Century
Foundation, a New York research group. Already, "many flagships are not serving
their traditional role of providing broad access to the brightest from all
economic backgrounds," says Century senior fellow Richard D.
Kahlenberg.
Sliding Scale One solution is for flagships to
adopt a variable pricing model similar to the one that's used at private
colleges. Miami recently began offering larger scholarships to Ohio students
from needier families while charging more to affluent ones. The gap is only
$1,200 a year, but President James C. Garland intends to widen it sharply.
Already, he says, the university has seen a large increase in applications from
moderate-income students.
North Dakota has found a more comprehensive
solution. Historically, the legislature micromanaged the 43,000-student
university system. But in 2001, it scrapped moste controls, giving colleges lump
sums that they could spend as they saw fit, plus complete pricing flexibility.
In return, the universities agreed to meet accountability measures that include
graduation rates, student retention, and economic benefits.
The result
has been far more entrepreneurial behavior. Distance learning has increased, and
research work has doubled at the two flagship schools, the University of North
Dakota and North Dakota State. There's also a new emphasis on recruiting
out-of-state students to offset an expected drop in North Dakota high school
grads because of the declining population. "The university system is now viewed
as a primary economic engine for the state," says University System Chancellor
Robert Potts.
Still, North Dakota is an exception. In other states, the
flagships often try to solve their problems with little regard for the rest of
the state system. "Each of these decisions is being made piecemeal," worries
Stanley O. Ikenberry, the former president of the University of Illinois.
"What's absent is any national dialogue about what these changes will mean for
America."
What's more, public universities seem reluctant to give up
their public funding altogether. Earlier this year, South Carolina Governor Mark
Sanford offered his state's universities the chance to become fully private,
meaning they actually would own their campuses. But because they would also have
had to give up all direct state support, none stepped forward.
Public
universities have played a fundamental role in American society, from spurring
technology to helping create and expand the country's middle class. But without
better planning, the move to keep them competitive could widen the already
growing class divide in higher ed.
