Privatization of Public Higher Education Will Not Solve Any Problem!

In the May 1 issue of the Chronicle of Education, an article appeared with the headline: “Public Colleges Consider Privatization as a Cure for the Common Recession.” The article was written by Eric Kelderman (for those with access the article can be found here). He writes:

As state tax revenues plummet, some lawmakers and higher-education leaders are once again looking at loosening the bonds between state governments and public colleges to save money and give colleges the freedom to bolster their bottom lines in new ways.

In light of the recent bailout of Wall Street, I wonder what kind of brain can propose more “market” as any sort of “cure”. In fact, privatization of the type discussed in the articles creates more problems, increasing inequality being only one.

But a key problem originates in the further blurring of the line between public and private, and in particular, the assumption that private entities can easily and naturally serve the public ends. Found in the article is the assumption that the purpose of education is unrelated to how society organizes its provision.

Those who seek to bring “market discipline” to k12 or higher education, argue, as the Frederick Hess (2002) does in his Progressive Policy Institute brief “Making Sense of the ‘Public’ in Public Education,” that:

Defenders of the status quo are often able to successfully attack choice-based reforms as “anti-public education” because Americans by and large believe that the public has some legitimate responsibility to ensure all children receive an adequate and appropriate education. Even such noted public critics as libertarians John Stuart Mill and Milton Friedman have always conceded there is some component of public good to education, and have argued for state funding and/or monitoring of educational mastery to ensure that all children are adequately served. However, this agreement poses a new challenge by demanding that we first determine what constitutes an adequate education and then consider, separately, how it ought to be provided. It is important to recognize that, in multiple sectors, legislators routinely craft policies intended to address public needs, but then rely upon a variety of public agencies and private firms to execute these policies. In such cases, we generally accept that a public service is being rendered regardless of the agent providing the service. For instance, we typically consider community bus services as public even if operated by a private vendor. Such reflection suggests the poverty of current conversations about what it is that makes public schools public. Simple-minded proclamations on the topic have encouraged would-be reformers and their critics to squabble over the symbolic banner of “public education” while shortchanging the public’s substantive concerns. (p. 3-4)

Kelderman continues:

Operating more like private institutions not only would be a buffer from the recession and the volatility of state budgets, some college officials argue, but also may well be vital to the survival of many public colleges.

Insisting that the governance and manner of securing funds for education will somehow not impact “quality” we read: “Those that seek to thrive in the future must earn money from a variety of sources and continually cut costs in ways that don’t harm the quality of instruction, says Philip J. Hanlon, vice provost for academic and budgetary affairs at the University of Michigan at Ann Arbor, which gets just 7 percent, or $320-million, of its revenue from the state.” Instead of demanding that public funds be used for the public good and that funding for public higher education be increased, “leaders” offer the view that since things have degenerated to the point where much of the revenue for higher education comes from other sources, why not remove the limits of public oversight?

Some factual claims cited in the article:

“Public research universities in Colorado, Montana, New Hampshire, Oregon, and Vermont are so reliant on tuition that students are paying, on average, for more than 70 percent of the cost of their education, compared with a national average of 51 percent, according to the Delta Project on Postsecondary Education Costs, Productivity, and Accountability, a nonprofit group that studies how colleges spend their money. Students at private research universities pay, on average, nearly 56 percent of their educational costs, the project reported.”

After the 2001-2 recession, public universities in Colorado, Massachusetts, and Virginia exchanged operational freedom for reductions in public aid.

“While no public college is likely to free itself entirely from fiscal ties to its state, many of the nation’s largest public institutions, like Michigan, have evolved to operate nearly like private colleges,” Kelderman observes.

According to Kelderman, “the trend toward privatization has been widely discussed by public-college officials since at least the early 1990s, especially during nationwide recessions when state revenues have plummeted.” During that time “spending on health care and prison costs has climbed rapidly.” Even as public funding for public higher education has increased “in real dollars, it has diminished as a proportion of most state budgets.”

Now, with states facing budget shortfalls totaling as much as $350-billion in the current and coming fiscal years, lawmakers are looking hard for ways to trim spending on higher education. Even the federal stimulus package, which includes nearly $40-billion to offset cuts to education, has not done much to ease the pressure, which has prompted some lawmakers in Colorado and Michigan to suggest cutting flagship universities loose from state budgets entirely. While those ideas have not gained much traction, they reignited discussions about whether it was desirable, or even possible, for large universities to maintain their public status.


At the same time, some state lawmakers question why they should still underwrite the university at all as it raises more private dollars and increases tuition. A nine-member legislative panel [in Michigan] created last year to suggest major budget cuts included a recommendation to turn the university into a private institution, although some panelists thought that was not a realistic option. Similarly, a Colorado lawmaker proposed this year that the four public research universities there would perform much better if they were off the state dole. But that proposal, too, died quickly.

Later on, Kelderman writes: “While privatization has occurred in an ad hoc fashion in most of the country, a few states have moved purposely down that path, with mixed results.” He cites the example of Virginia, which initiated a program in 2005 that “gives its public colleges varying degrees of fiscal and administrative autonomy in exchange for agreeing to hold down tuition for resident students and to meet benchmarks in areas such as retention and graduation rates.”

It seems worth studying the trends pointed to in this article in relation to Obama’s plan for financing student aid. See his recent speech.

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