Free the Public Universities

Jon Krause for The Chronicle

May 05, 2016

Over the last decade, the fate of America’s public universities has commanded considerable attention. The principal concern has been the impact that steadily declining levels of state support for higher education has had on tuition levels, enrollment patterns, and program offerings and priorities.

Since 2000, public universities have lost 25 percent of their state funding per student. The University of California at Berkeley, one of the leading public research universities in the nation, now receives only about 13 percent of its budget from state appropriations, compared with about 50 percent a few decades ago. This shift from public to private funding support has led many to conclude that we are witnessing nothing less than the privatization of the public research university.

But while public universities can be said to be "privatizing," another equally powerful, but typically overlooked, trend has been moving in the opposite direction — the "publicization" of private research universities, or the accelerated incorporation of public values and mission into the traditional role of these institutions.

Taken together, privatizing public institutions and publicizing private institutions suggest nothing less than a convergence of these once very different institutions.

This convergence has taken a number of forms. For instance, one of the traditional calling cards of a public university has been its affordability. But the decline in state funding has forced public universities to lean far more heavily on tuition revenue. Since 2000, the average net tuition at public four-year institutions — that is, published tuition and fees less financial aid — has risen by 136 percent. By contrast, due in large measure to an investment of endowment funds into financial aid, net tuition at private institutions has risen by only 17 percent in the same period. There are now private research universities, such as Harvard and Emory, that cost less after financial aid than a number of their public peers.

Another of the once-distinctive traits of public research universities is accessibility, or their capacity to open their doors to a broad and diverse group of students. Here, too, budget cuts have taken a serious toll. At public institutions, the share of institutional grants received by low-income students dropped from 34 percent in 1996 to 25 percent in 2012. At several public research universities, the enrollment of underrepresented minorities has fallen in recent years, sometimes by 10 percent or more. Many leading public research universities now hover alongside their private peers in the percentage of Pell Grant recipients in their classes.

At the same time, private research universities have been in the vanguard of accessibility in a new domain — online mass education. Universities like MIT, Harvard, the University of Pennsylvania, and Stanford were among the early leaders in the development of open, online platforms like Coursera, edX, and OpenCourseWare. Although these platforms do not yet constitute a substitute for a residential experience, they are playing an undeniable role in democratizing access to knowledge.

There has been a sea change among private research universities in their connectedness to their surrounding communities.
Finally, convergence has been apparent in the civic-mindedness of private universities. Public universities have long been regarded as anchored in their local or regional communities, while private universities have been seen as more standoffish. Yet, in recent years, there has been a sea change among private research universities in their connectedness to their surrounding communities. Institutions like Stanford, MIT, and Harvard have played a central role in fueling the rise of vibrant high-tech clusters in Silicon Valley and Cambridge, inspiring others to follow.

But more than that, the leaders of a number of private universities are now harnessing their resources to invest in community development, job training, local schools, and other opportunities. This reveals an awareness of the deep and enduring ties between these universities and their communities. Public research universities are not at all exempt from this trend to enhanced engagement, but it is manifestly one additional way in which the approaches of public and private universities have become more aligned over time.

There are a number of forces driving this convergence, besides the contraction of state funding: the expansion of federal research funding to private and public universities alike, the passage of the Bayh-Dole Act and the emergence of the knowledge economy, the growth of rankings and other third-party intermediaries in the education sector, the rise in income inequality and concern about college prices. This swirl of forces, taken together, is continuing to draw public and private institutions more closely together in function than ever before. And this convergence is bringing these institutions into ever greater competition in areas such as students, faculty, research grants, and donor dollars.

But, as they seek to compete, public research universities are impaired by a set of onerous regulatory and governance obstacles, in sharp contrast to their private peers.

For example, many of them are subject to an arcane web of state bureaucratic rules that can reach every corner of the university. Depending on the state, these universities might be prevented from purchasing goods without the approval of a state agency, barred from launching construction projects without running a gantlet of procedures, or obliged to use the state attorney general’s office for their legal work. These sorts of rules reduce the autonomy of public research universities to act, sometimes in significant ways.

Further, over the last several years, there has been a sharp rise in the number and intensity of political clashes between public universities on the one hand and political leaders and the university boards they appoint on the other, in states such as Wisconsin, Oregon, Texas, and North Carolina.

These episodes have disrupted campuses, subverted the public universities’ academic mission, and impaired the capacity of academic leadership to manage their institutions. One telling note is that the presidencies of public research universities in the Association of American Universities now turn over at more than twice the rate of their private counterparts.

There is much that is distinctive about public universities that compels preservation. Even after years of convergence, they still open their doors to far more students, at a lower cost, than private universities. And they serve as miniature laboratories of knowledge development in the finest traditions of American federalism.

Public research universities are caught in a vise between ever-contracting state support and ever-expanding state encroachment.
But public research universities are caught in a vise between ever-contracting state support and ever-expanding state encroachment. To ease this pressure, a reinvestment in these institutions is essential. But I believe we also must not neglect the need to reform outdated regulatory and governance regimes.

I propose four steps that states should consider:

First, states should shift to a not-for-profit model of governing boards, where members are chosen outside of political channels. This move would provide public research universities with a critical layer of insulation from political distortion.

Second, more states should adopt arrangements that provide universities with greater latitude in areas such as procurement and budgeting, in exchange for a commitment to reach certain benchmarks.

Third, states should move to multiyear guarantees of funding, to allow universities to more predictably engage in strategic planning. California, for example, has experimented with this approach.

Finally, states might explore using a bond offering to shift public universities from an unreliable annual appropriation to a self-sustaining endowment. Although not a solution for every public university, such a mechanism could offer certain institutions greater control over their budgetary future; Oregon considered such a proposal several years ago.

The convergence of public and private universities shows that greater structural freedom to act is hardly incompatible with fidelity to the public interest. The question now is whether states can muster the will to unshackle the public universities in this newly converging world.

Ronald J. Daniels is president of the Johns Hopkins University and co-author of the recent report "Converging Paths: Public and Private Research Universities in the 21st Century."