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Trending to Zero: The Lasting Impact of Total State Disinvestment from Public Higher Education

The EvoLLLution | Trending to Zero: The Lasting Impact of Total State Disinvestment from Public Higher Education
While public higher education funding is often first on the list of budget cuts for state leaders, the lasting impact of these cuts will be devastating for America’s rich and diverse higher education environment.

The term “privatization” is frequently invoked to describe the current and future state of public higher education. The label is used as shorthand for the shift away from state funding and toward tuition and other private revenue streams. State funding cuts for public colleges and universities have produced an evolving administrative model increasingly influenced by corporate-style management, where market-driven metrics replace mission statements and where reliance on revenues from campus assets, donors, out-of-state student enrollment and other non-public sources fill the gap left by ever-diminishing state appropriations.

Public university privatization has been years in the making. According to the Pell Institute, state funding efforts for public higher education today stand at 55 percent of what they were in 1980. While the presidential campaign—particularly Bernie Sanders’ proposal to make public colleges free—has created some political pressure in the opposite direction, absent a radical realignment of federal and state funding practices, the disinvestment trend is expected to accelerate due to projected growth in other state budget items. While states often increase funding for public higher education during stronger budget cycles, the increases typically do not make up for the cuts from difficult years, and state funding patterns suggest an inexorable downward trajectory.

The endgame for state funding is fast approaching in some states. According to an analysis of state higher education funding efforts from the Pell Institute, extending trend lines from 1980 indicate that when children born this year graduate high school, six states will have reduced funding to zero, a number that increases to 13 states for children born five years from now. Nationally, the Pell Institute projects the trend line to hit zero in 2058. Barring any substantial policy intervention, alterations in the cost structure, and changes in institutional control, the next generation of students in a number of states will only have a choice of de facto private colleges under public control and private colleges under private control.

This will be devastating for students and states. State funding allows public campuses to provide in-state students with a discount on tuition, making college more affordable for state residents. Without this discount, many students from low- and middle-income households would not be able to afford college. State funding also builds the capacity of public colleges and universities to address a wide variety of state economic needs, as well as renew state cultural, social and political fabric.

Total state disinvestment extinguishes a host of longstanding—albeit crumbling—compacts and commitments. There has long been an unwritten social contract between the states and their residents under which states agree to provide affordable public higher education opportunities in exchange for taxes. A number of states are actually explicit in this commitment (see the constitutions of Arizona, North Carolina and Wyoming). In a total disinvestment scenario, the states’ implicit guarantee of access would be repudiated at the point when families would seek to take advantage of a benefit they assumed their tax dollars would make available to them.

Privatization also breaks the American tradition of generational advantage: the commitment of every generation to provide better opportunities to their children and grandchildren. In their youth, today’s grandparents had access to low-tuition public universities funded primarily by the states. In contrast, their grandchildren confront a largely privatized system financed through tuition and debt. Likewise, equal opportunity would become a hollower slogan, as low- and middle-income students have to disproportionately rely on the public sector for access to high-quality, affordable college opportunities.

Policymakers and the public should contemplate the landscape of total state disinvestment with greater intentionality and confront the consequences explicitly. These consequences include: decreasing college affordability and access, quality degradation and a federal takeover of a responsibility reserved for states. These trends are already in evidence, but will worsen unless state funding practices of the past four decades radically change course.

Deepening Affordability, Completion and Access Challenges:

As states stumble toward complete privatization, affordability will continue to deteriorate, and the pricing structure of public colleges will resemble their private counterparts. This change will primarily affect working families and their children, and turn higher education—long considered the great equalizer in our society—into yet another mechanism for compounding social and economic inequality. Low- and middle-income students will suffer, as price becomes an unsurmountable barrier to starting college, let alone completing it. Student debt will become an even more alarming concern, as the long-term trend of stagnant wages combined with higher prices lead to more debt financing. Additionally, some public universities could respond by scaling back in-state enrollment, which could also harm students from working-class backgrounds.

Erosion of Quality

As the price of college escalates, and the public puts pressure on lawmakers for solutions, quality could be on the chopping block. States could mandate tuition freezes amid declining public funding, which will affect educational services. In Wisconsin, for example, the past few years intensified the longstanding trend of deep budget cuts for the University of Wisconsin System, while also mandating tuition freezes. This led to fewer course offerings, reductions in faculty and academic support staff, cuts in access to databases and other library materials, and increased maintenance backlogs. These changes will be particularly adverse for non-wealthy, open-access universities that serve large shares of students from working-class backgrounds.

Policymakers may also increasingly embrace the assembly-line approach of depending almost entirely on technology to cut instructional costs. Others could call for cutting the number of credits needed for a degree or eliminating programs that do not align to a position in the workforce. Policymakers may also seek to discontinue academic features like tenure and shared governance, without regard for the consequences of a command-and-control administrative model on the integrity of college programs. The ability of faculty to speak out against compromising quality has eroded due to state budget cuts and the subsequent rise in part-time and non-tenured positions. Zero state funding may silence this important voice.

Increased Federal Control

Public higher education in America has long been a decentralized affair by virtue of the nation’s careful division of political authority between the federal government and the states. The state-federal financing distribution has helped insulate public institutions from inappropriate political interference with curriculum and instruction. As federal aid replaces state funding, the question will be the extent to which the federal government controls public colleges and universities and the implications for students, institutions and states. If current trends continue, a federal takeover of public higher education will arrive—just quietly and through the backdoor.

In order to maintain balance and make college more affordable, AASCU led the call in 2014 for a state-federal financing partnership. Some of the college affordability plans included in this year’s presidential campaigns and Higher Education Act (HEA) reauthorization proposals on Capitol Hill also include a state-federal financing plan. This will be a topic of discussion when HEA reauthorization efforts resume in Washington next year.

As lawmakers consider budgets next year, rest assured there will be more talk of “sacrifices,” and public higher education will likely again be a target. As they describe the budget cuts, we should encourage them to look at the long-term trends and consider the consequences for the next generation. They may be sacrificing more than they know.