Published on 2013/03/11

Lack of State Investment Opening the Door to Federal Influence in Higher Education

AUDIO | Lack of State Investment Opening the Door to Federal Influence in Higher Education
As state governments begin to disinvest from their public higher education systems, it might fall to the federal government to step in and provide the necessary funding, in exchange for programming that suits the national good rather than a specific state’s needs.

The following interview is with John Douglass, senior research fellow of public policy and higher education at the Center for Studies in Higher Education at UC Berkeley. Douglass has done a great deal of work related to the California Master Plan for higher education and, in this interview, explains how the roles of both state and federal governments in public higher education might evolve over the next decade.

1. How dependent are public institutions today on the policies of state governments?

If you’re going to look in a historical timeline, you would say that they’re becoming less and less dependent, at least on a financial side. We’re seeing significant declines in investment rates and you can do it various ways — per student, looking at GDP, personal income — all of those numbers are going down. And in a state like California, for example, you would see a 20 to 25 percent (to sometimes 30 percent) decline over the last 15+ years in investment in higher education on a per-student basis. …

2. Given the nationwide inconsistency of state funding to public higher education systems and institutions, are individual institutions being forced to find independent funding?

Absolutely. There’s much discussion about fundraising and getting corporate gifts or donations and building up endowments, but in the public side the biggest lever for making any kind of substantial financial contribution to the operating budget of these institutions is tuition and fees.

3. When it comes to funding, do you think public institutions will be more independent from state governments in 10 years’ time?

As I said, you’re having a long-term decline in public investment in public higher education and I would also just caution you, when you talk about public higher education, you really have to disaggregate. The institutional types are very different; they have different kind of funding models. A community college verses a research-intensive university, like here at Berkeley; they really operate in different ways and service different constituencies. In any case, noting that, you’re seeing this process of significant declines in public investment.

And, also, one other caveat is, in places like California, we’re facing large-scale population growth and increasing demand for higher education. So, at one side you’ve got this declining investment. On the other side, you have increased calls by government for accountability to justify the investments that they are making, increased regulations, and you see this general trend throughout the US, throughout the world. Well, that’s not completely true; it varies because there are some nations that are investing large scale into their higher [education] systems, but you’re seeing this accountability drive. So there’s this bit of irony in that while you’re having decreased investment by public coffers, you’re seeing increased efforts to develop accountability structures, many of which I think are well intentioned and justified, but sometimes they are not.

4. Looking 10 years into the future, will there be a model in place to determine how accountable institutions are or are not to their funding sources? How do you see that drive for accountability playing out in a decade’s time?

It’s really hard to predict that. What I would say is that these accountability drives, thus far, are mostly oriented towards providing consumer information to students and their families. There are, and will be, increased efforts to use accountability structures to drive funding from public coffers. So, for example, a very common one now being discussed in California and other states, and has been there in various forms, “Well, how many degrees are produced per dollar invested by taxpayers?”

But what I would say is that I think the scenario will become more significant in terms of accountability and these budgetary structures and regimes. They will become more significant if state investment increases. In other words, there is some significant change in the trend we’re seen over the last 30 or so years of public disinvestment. That, I think, would then make the accountability structures more relevant, more significant, in the operations of these institutions. The other side of the fence is, though, and I think is very likely, is modest bumps of reinvestment, but still a long-term trend of … a process of disinvestment. And then, we have to ask, how will these accountability structures have meaning in terms of how they influence the institutions.

5. What about when it comes to curriculum? Many state governments are adamant that higher education institutions must be more tied to meeting workforce needs and, in California, all new programs at public institutions must go through a state approval process. In 10 years, what kind of influence will state governments have on program development?

What I will note to you is that there was a process in California to actually coordinate and look and review new programs, but that has gone away. … This is a good case example of the kind of inconsistency that we’re facing in policy development. We have this high value in higher education, significant increases in demand, but limited resources, which are having all kinds of different effects on the institutions themselves, but also what kind of programs are available — vocational or otherwise — to fit into the demand.

But in California, for example, we did have a process that was supposed to help coordinate and look at these programs administered by something called the California Post-Secondary Education Commission and this is a coordinating body — almost every state in the US, except for a few small ones, have some kind of coordinating body. Well, the budgetary problems in California were so severe that the governor got rid of that Commission. So, all the processes about reviewing what each of our public sectors do — we have three here in California, the Community Colleges, the California State University and the University of California System — these are very large systems in the largest state in the Union. Well, the largest state in the Union no longer has a coordinating body or a process review.

But, to get back to what I think is the gist of your question: How will government action help influence curriculum development that might be more careerist in this orientation, or help fit more specifically labor needs in California, in other states, these kinds of things?

I think what we’re seeing is there is this real problem that the lack of resources and funding. For example, the California Community Colleges, which enroll over 70 percent of all students in the state, has the worst funding of any community college system in the nation. There’s this dysfunction and disconnect, and so the lack of funding at that level, even with significant demand for vocational programs and otherwise — they can’t provide those programs. There’s no money! One estimate is over 250,000 students who would normally be in the community colleges, many of them in vocational programs, can’t get in because there’s no funding to actually provide those courses. It’s not because there’s not demand.

And so, in that particular instance, you’re seeing many of those students who go away to a lower cost vocation program at a community college, … many of them find some way of entering higher education or a vocational program through the for-profit sector which is extremely expensive and, on average, has extremely higher attrition rates, higher than community colleges.

So, I think there’s these major disconnects in the idea of workforce development. If you starve institutions that are primary providers, it’s hard for them to meet that kind of demand or be, let’s say, innovative and sent away to build new programs. So, what I think is what we’re seeing now, and this is the common pattern, is that there are monies being put up for very specific purposes. That is influencing the vocational development programs. It’s, more or less, not institutions having the resources and then developing them to meet demand or to create closer relationships with business and industry. It’s very specific line-item dollars that are being allocated. … I think what we’re seeing are very special initiatives. I think that’s okay. It’s something that can help in workforce development. But I don’t think that’s part of a long-term plan as to how to create robust institutions, public universities and colleges that then can better respond to labor needs in local markets or elsewhere. It’s a kind of short-term, how-can-we-get-this-going approach as opposed to a holistic, more integrated approach.

6. Do you think that in 10 years’ time, the for-profit sector of higher education is going to dominate the workforce development field from state to state as federal government coffers begin to dry up in this area?

That might be a scenario. I think it will be that the for-profits have at least a window here to expand their markets significantly. As to whether they will dominate it, I don’t really sense that would be the case. If it is the case, it would be very sad, because it’s not an efficient usage of taxpayer money. And just to remind you that the for-profits in the United States, at least, [for] most of them … 90 percent of the money they are making is from federal and sometimes local and state loans and grants to students. So if you look at, for example, the University of Phoenix, some 90 percent of all of their income is from taxpayer money that is basically provided in grants and loans to students that spend it at for-profits. So we can argue about the efficiencies of it, but I think what we’d see is probably not a dominance, but a more significant presence unless, of course, there are more regulations placed on the for-profit sector.

7. Do you think the federal government in 10 years’ time will look at the public and state to state higher education systems and say, this is maybe an area where we need to start exerting a little more power?

I think they are already doing that, and it’s probably because of the financial difficulties and criticisms of higher education and sometimes how it matches up with workforce development. Again, you’ve got to disaggregate.

We can talk about workforce development at community colleges and the vocational programs. What about universities or four-year institutions? … But I think this is an area in which the Obama Administration has shown tremendous interest. I think we’ll see that continue.

I think you may be right there that this is one area, a comfort-zone, shall we say, in which the federal government feels that they can intervene or directly in what has traditionally and historically been something that’s organized and structured at the state level. So, in United States higher education, the organization of it, the charter of institutions, public and private, is legally and has historically been at the state level and the federal government has been restricted in the areas of financial aid and funding … basic research, academic research and otherwise. Here is an area in which there is significant growth in activity by the federal government, is vocational and workforce training. So I think this is an area of growth.

8. Do you have anything you’d like to add about what the role of federal governments in higher education will look like in 10 years’ time?

I think one thing that concerns me tremendously — and that is not on the radar of higher education policy folks or the higher education community or the public discussion — is, the United States has embarked on a very risky experiment, in my viewpoint, and that is, of all the developed economies, we have the most students who are part-time. Tremendous numbers!

If you look at the California Community Colleges, some 70 percent of the students are part-time. This relates to when students are entering their professional lives. But it really also can be whether they have other responsibilities in their lives and they are coming back to education, which is a good thing, but it also reflects tremendous financial stress that we’re asking so many students not to be able to focus on their studies for a brief period of time or a long period of time on a full-time basis.

And I think you can make a direct correlation or link that to the significantly and tremendously high attrition rates. The United States is a high-access, high-attrition system; a low-degree production system. One of the reasons is that you have so many people who are students who are part-time.

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Readers Comments

Eugene Partnoy 2013/03/11 at 12:08 pm

Douglass does a good job of pointing out the state’s contradictory actions on higher education. To provide less funding while demanding more of an oversight role is outrageous, even more so when those new accountability mechanisms are then tied to future funding! It’s time for higher education institutions to push back and demand more clarity about the role of the state in the industry and a better relationship moving forward.

Rebecca Cruser 2013/03/11 at 3:40 pm

It may not just be funding that’s driving more federal government involvement in higher education. How about other factors, like the reality that many universities now cross state boundaries, either with extension campuses or through their online activities? This might be a good time to discuss which level of government, whether state or federal, is best positioned to take on higher education as a portfolio.

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