If US states cannot fund their universities, they must stand aside

Privatisation or nationally funded consortia are the only solutions to US public education’s financial malaise, says Sheldon H. Jacobson

March 1, 2018
James Fryer illustration (1 March 2018)
Source: James Fryer

Public research institutions in the US are in crisis.

States are unable or unwilling to provide a level of support commensurate with the huge value that these institutions bring to the nation. Several state universities already receive less than 10 per cent of their income from state sources and many have been forced to take radical steps to balance their budgets. Tuition and fees have been increased. Enrolments have been expanded. Efforts to attract more out-of-state and international students, who pay higher fees, have been stepped up. And a raft of new, revenue-generating programmes, typically at the master’s level or in online education, have been introduced.

Despite all this, the total budgets of public institutions have remained flat at best over the past decade. Hence, faculty have been asked to teach more or larger classes, while their salaries have remained stagnant. Those who can tend to leave for private institutions better positioned to value their abilities and contributions. Their loss suppresses the intellectual energy and spirit of excellence among those left behind, resulting in a downward spiral that costs institutions far more than the meagre savings accrued by keeping compensation and resources in check. It is putting at risk all the investments made over the past several decades to build a national research infrastructure. The consequences for US global competitiveness and standard of living could be dire.

There are two possible ways out. The first is for states to set free their public research universities and allow them to operate as private institutions. Of course, this would be complicated. Since states currently own such institutions’ land and infrastructures, agreements would have to be reached either to transfer ownership entirely to the universities or negotiate a lease arrangement. But the benefits would be considerable. By acquiring full responsibility for and control over their education and financial affairs, the institutions would be able to operate in a free market system, unfettered by state regulations that do not match the needs of higher education operations.

Indeed, many state universities have already recognised the benefits of this, creating certificate, professional and online education programmes that are not covered by the regulations. And hard-pressed states may appreciate being freed of the burden of directly supporting universities. If they still wanted to do so, they could provide vouchers to in-state students to partially offset the cost of their education. They could also offer grants for activities that require research effort, just as industry and federal agencies support mission-driven research. This would also allow states to be more transparent over the funds they spend on higher education and to connect their residents more directly to such allocations. 

An alternative solution would be to create a national consortium of public research universities supported by federal dollars. This would represent a 21st-century rebirth of the 19th-century Morrill Land Grant Act, except instead of land being donated to the states to establish new universities, financial support would be provided directly to the existing universities. Such a model would retain the public support paradigm while providing a more reliable income stream.

Public research universities are spread around the country and already attract a significant amount of federal research funding; providing additional support for their educational activities would solidify and stabilise their positions. And while many graduates often remain in the states of their alma maters, science and engineering graduates are nationally mobile. So by redefining public universities as nationally supported public schools, their financial support would be better aligned with the scope of the benefit that they offer.

The stability that would ensue from such a transformation, even during these tumultuous fiscal times, would likely yield greater creative and entrepreneurial productivity. The details, of course, would need to be resolved. Would such a consortium of institutions become entities within the Department of Commerce or the Department of Education? Or would they operate like private institutions with public support? Would faculty and staff become federal employees? How would such universities interact and compete? And who would decide whether new institutions should be added to or removed from the consortium?

But one thing is clear: something has to change. The alternative is to accept the continued erosion of academic employment conditions and both educational and research contributions. Their inaction suggests that this is the option that many public institutions have chosen, but it is an intolerable one. As US global competitiveness is challenged by countries such as China that are emulating our higher education system and making the kinds of serious investments that took place in our public education 30 years ago, the time has arrived for university administrations to kick-start dialogue around the kinds of radical solutions that I have suggested.

The national future depends on state research universities’ ability to fulfil their missions to deliver enhanced human capital and new knowledge for the public good. If states are no longer willing or able to support those missions, they would be wise to relinquish this responsibility, stepping aside to make way for those who are.

Sheldon H. Jacobson is a founder professor of computer science at the University of Illinois at Urbana-Champaign.

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