American Association of State Colleges and Universities report: Proposal to slow privatization of public universities

18 Jan

Moi really don’t know what to make of the idea of privatizing state universities. In the recent past, government had the goal of raising the standard of living and producing the economic conditions that fostered livable wage jobs. The goal of most politicians was to create the conditions that promoted and fostered a strong middle class. Particularly, after WWII and the Korean War, with the G.I Bill, one part of that equation was the wide availability of a college education. This push produced an educated workforce and a college education was within reach, no matter one’s class or social status. This educated workforce helped drive this country’s prosperity. Now, have we lost the goal of providing educational opportunity the widest number of people possible, no matter their class or social status? This question causes me to wonder about privatizing state universities.

A couple of questions. First, has anyone ever looked at how efficient the academic world is in spending current resources? Second, is the current institutional model one that works? Should there be changes in the institutional model?

Sam Dillion was writing about the prospect of privatizing public universities in the New York Times in 2005. See, At Public Universities, Warnings of Privatization In 2004, William Symonds wrote an opinion piece in Business Week about the role of public 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 privatization issue arises whenever there is a lack of leadership or vision

Recently, Kim Clark at the US News site asked Would Privatization Help Public Universities Excel? Michael Hiltzak addressed the question of privatizing the University of California in an LA Times article, Why Privatizing the University of California Won’t Work

Eric Kelderman reported in the Chronicle of Higher Education article, Report Proposes Federal Matching Grants for State Higher Education:

As Congress begins debating the reauthorization of the Higher Education Act, proposals to change how public colleges get their federal money are starting to pop up.
On Wednesday, the American Association of State Colleges and Universities released a report recommending a new federal block grant to the states for higher education. The goal of the proposed program is to give states some incentive to preserve and even raise the amount they spend on colleges, which has been in decline, and also to strengthen the federal commitment to affordable higher education.
The formula for the additional federal money would be based on a comparison of a state’s per-student appropriation and the maximum Pell Grant.
To qualify for the bonus money, the state would have to provide a per-student appropriation equal to half of the maximum Pell Grant. At that level, the federal government would give the state another 25 cents for each dollar of state money.
“The more fiscal support states provide per … student, the higher the federal match rate, with the peak match reaching $0.60 for each dollar of state investment,” the report proposes. Based on figures for the 2012 fiscal year, Colorado, for example, would receive a block grant of about $1.7-million, while California would get about $1.2-billion.
While the formula would serve as a sort of de facto maintenance-of-effort provision, the additional federal dollars should come largely without strings attached, the report recommends.

The question lawmakers should be asking themselves is why society developed public universities and do those reasons still exist. In the rush to get past this moment in time lawmakers may be destroying the very economic engine, which would drive this state out of the economic famine that currently exists. Of course, if the current public universities were privatized, we wouldn’t have to worry about pigs still at the trough, like university presidents with million dollar salaries or would we?

Here is the press release from AASCU:

News Release from AASCU
Contact: Jennifer Walpole (202) 478-4665
AASCU Proposes Federal Incentive Program to Address College Affordability Crisis
Washington, D.C.—The American Association of State Colleges and Universities (AASCU) released a proposal today aimed at combatting escalating tuition hikes at public colleges and universities. AASCU’s plan calls for leveraging up to $15 billion in federal matching funds to incentivize state lawmakers to invest in public higher education. The erosion of state funding remains the primary driver of tuition increases at public colleges and universities.
The proposed Federal-State College Affordability Partnershipwould reward states whose higher education funding practices align with the federal government’s longstanding commitment to making college more affordable for all Americans. It would compare each state’s per-student subsidy at public institutions to the Pell Grant maximum award—the federal government’s level of support for low-income students—and provide progressively greater federal matching funds to states that better fund their students.
“Providing an annual block grant to states that includes a scaled federal award is an efficient, effective and equitable method to keep college affordable,” says Daniel J. Hurley, associate vice president for government relations and state policy at AASCU.
“The program offers a unique mechanism to counter the privatization trend by ensuring that federal and state funding practices work in tandem to reduce costs for students” says Barmak Nassirian, director of federal relations and policy analysis at AASCU.
Given the vital importance of a highly educated workforce, AASCU calls on Congress to give serious consideration to the Federal-State College Affordability Partnership.
The proposal is the result of the Reimagining Aid Design and Delivery (RADD) initiative—Phase Two; Grants and Work-Study Consortia, led by the Education Trust, and funded by the Bill and Melinda Gates Foundation.It was authored by Daniel J. Hurley, Thomas L. Harnisch and Barmak Nassirian of the AASCU division of government relations and policy analysis.
View AASCU’s report on the proposal here:
A Proposed Federal Matching Grant Program to Stop the Privatization of Public Higher Education

Click to access federalmatchingprogram.pdf

AASCU is a Washington-based higher education association of more than 400 public colleges, universities and systems whose members share a learning- and teaching-centered culture, a historic commitment to underserved student populations and a dedication to research and creativity that advances their regions’ economic progress and cultural development.

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