As Government Support Shrinks, Community Colleges May Start Looking More Like Private Institutions

April 22, 2012

As less federal, state, and local money flows to community-college coffers, institutions are becoming more dependent than ever on tuition and fees—and gradually assuming some of the characteristics of private colleges. That provocative notion was the focus of a panel discussion here on Sunday afternoon at the annual meeting of the American Association of Community Colleges.

Community colleges across the country have had to cut their operating budgets in recent years, leaving them to make painful choices such as scaling back programs and services or seeking additional dollars through other channels, such as renting out space on their campuses and creating endowments.

This shift toward privatization could fundamentally change how community colleges operate, and concerns about access and the sector's commitment to serving low-income and minority students inevitably would arise, college presidents and others say.

Stephen Curtis, president of the Community College of Philadelphia, said his college can't wait around for state money that may not come. The college recently purchased property using its own money rather than waiting for state funds.

"The model is changing," he said. "We are never going to go back to what it was before."

Mr. Curtis was one of two speakers on the panel. He said that the traditional formula of financial support at his institution—with the state, the city, and student tuition each contributing about a third of the college's operating budget—has evaporated over the last few decades. Today, student tuition makes up nearly 60 percent of the budget, with 26 percent coming from the state and 15 percent from the city.

"We almost flipped the model on its head," he said. "Where before two-thirds was supplied by public sources, state and local, we are almost at the two-thirds point of being supported by students. That is my definition of a private college."

Aside from raising tuition and fees, other characteristics associated with private colleges that are being seen more at public, two-year institutions include treating the student as a "client" (a mantra in the for-profit  sector), having greater autonomy from government, and expanding private fund-raising.

Mr. Curtis says he hasn't heard that many community colleges are intentionally interested in going "private" but that in many ways it is already happening. He said his own institution already acts more like a private college because it is not required to seek state approval for the creation of new degree programs, changes in curriculum, or tuition increases.

"Not all characteristics of a private college are bad," he said.

A recent survey of urban community colleges found examples of new revenue streams some institutions are finding to replace lost state and local dollars, Mr. Curtis said. They include leasing land, establishing "incubation centers" where entrepreneurs can develop businesses, operating corporate colleges that contract with companies to provide training to their employees, and developing public-private partnerships.

The idea of a community college acting more like a private college is unsettling for some but may become inevitable, said Rufus Glasper, chancellor of Maricopa Community Colleges, in Arizona, the panel's other speaker.

His district has seen its share of state aid drop from 27 percent in the mid-1980s to 1 percent now. And that 1 percent is scheduled to end when a temporary state sales tax expires in 2013. "When that next cliff comes, they will come in and take those last resources, and we will have zero money coming from the state of Arizona."

Mr. Glasper said he has come to realize that moving toward privatization may be the only way forward as community colleges try to find more predictable financial resources. He said he has asked his board of trustees to bring in legal and financial experts to help build an infrastructure that would incorporate more features of a private institution at Maricopa.

He said he feels like he has no choice but to go in this direction. "We don't have to do this overnight, but we need to be there."

A main concern of the privatization model would be the effect it would have on the commitment to access that has long been the hallmark of community colleges. The case of Santa Monica College, a two-year institution in the California system that sought to introduce a two-tier tuition system but abandoned it after an outcry from the community, was brought up as example of an institution that tried to do something a bit entrepreneurial but didn't succeed.

Mr. Glasper acknowledged the access concern, but he also said that it doesn't make sense that students toil for years in college trying to earn an associate degree. He said that a new model that would bring in additional revenue might allow remedial students to take the lowest-level courses for free.

"We need to change the way we do business," he said.