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Breaking Away: Top Public Universities Push for ‘Autonomy’ From States

Many are worried that as public universities gain freedom, they will end up sidelining broader goals such as access and affordability.

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(Kevork Djansezian/Getty Images)

The chancellor of Oregon’s higher-education system currently oversees all seven of the state’s public colleges and universities. But as of July next year, she’ll be chancellor of four.

The schools aren’t closing. Rather, Oregon’s three largest state schools are in the process of breaking away from the rest of the public system.

The move, long pushed by some university leaders in the system, will give the University of Oregon, Portland State University and Oregon State University more freedom to hire and fire presidents, issue revenue bonds, and raise tuition.

Across the country, a small but growing number of public universities are making similar pushes, looking to cut deals with state lawmakers that scale back direct oversight, often in return for less funding or for meeting certain performance targets. Over the past few years, schools in Texas, Virginia and Florida have all gotten more flexibility to raise tuition. Other plans have recently been broached, though with less success, in Wisconsin, California and Louisiana.  

The proposals vary in scope, but their proponents generally argue that more autonomy allows public universities to operate with less red tape and with greater freedom to raise revenue as state funding has fallen.  

But many within higher education point to the potential downsides. They worry that these universities -- often the better-known and wealthier public universities -- could end up sidelining broader state goals such as access and affordability in pursuit of their own agendas, such as moving up in college rankings.

“My fear is that if public flagships become so focused on revenue and prestige, and so focused on autonomy, they will minimize their commitment to the public agenda,” said Richard Novak, who was previously director of public-sector programs at the Association of Governing Boards. “They should be leading the public agenda. If they privatize too much, they’re not going to be doing it for much longer.”

Others have similar concerns.

“I think there’s a potential for confusion, unhealthy competition and misuse of resources,” said Robert O’Neil, who headed the statewide University of Wisconsin system and was also president of the University of Virginia. In O’Neil’s experience, centralized oversight helps keep in check ambitions that might lead colleges to pursue wasteful projects or duplicative programs.

There’s relatively little research on the overall benefits or drawbacks of schools gaining autonomy, but it does appear that such universities often end up resembling private colleges, moving toward a “high tuition, high aid” model in which schools hike sticker prices significantly while offering big discounts to students schools are trying to attract.  (As ProPublica has detailed, state schools have been giving a growing portion of grants to wealthier students and a shrinking portion to the neediest.) 

State and university officials pushing for more autonomy often balk at the term “privatization,” noting that the universities aren’t severing all ties with the state.

As one planning group at the University of Virginia wrote last month, “Autonomous is not the opposite of public.”

The University of Virginia, along with two other state universities, struck deals in 2005 that won it significant autonomy from the Commonwealth. Those agreements mandated that the schools still meet various benchmarks -- but they also gave the universities wiggle room.

Three years after the deal, a state audit report concluded that while the schools were meeting their “access” goals, the number of low-income students at each of the universities -- as measured by federal Pell grants -- was actually decreasing. (A university spokesman said enrollment of low-income students has gone up since then.)   

Even some supporters of moving toward privatization have begun to have second thoughts. 

James Garland, former president of Miami University, a public university in Ohio, was once a strong proponent of what he calls “semi-privatization” of American public universities, having headed a university that he describes as “public in name only.” In 2009, he wrote a book arguing that public universities should be autonomous and deregulated by their states.

In the years since, Garland said, his views on the autonomy question have “mellowed.” Though he still believes autonomy can make sense for some schools, he’s also concerned about the potential pitfalls.

“Some of these flagships would like to make decisions that benefit their own financial future and give them the ability to build posh dining halls or giant stadiums or create new nanotechnology centers,” Garland said, “when what really may be more needed than that is simply providing a high-quality rigorous college education for legions of students in the state who can’t afford that now and have no place to go and get it.”

“It’s not an accident that you see this happening among big, well-funded publics,” Garland added.

At the University of Virginia, internal discussion of further steps toward privatization has continued. As the Washington Post recently reported, a draft report from a university planning committee recommended “another major restructuring of the relationship between the University and the Commonwealth.” The document notes that the change “would not mean complete privatization.”

University of Virginia spokesman McGregor McCance said the draft report was part of early discussions about possible models for public higher education, and that there are no plans for the university to ask for additional autonomy.

Colleges and universities that do seek to move in this direction need to have candid conversations about their goals, said Garland: “As more and more schools argue successfully for some kind of autonomy from their states, there has to be a real understanding about what the mission of those schools is going to be in the future and there has to be some way of evaluating their conformity to that mission.”

In Oregon, they’re still feeling their way through. All of the state’s public colleges will still be overseen in some way by a coordinating commission. That includes the three largest schools, which, even with their new freedoms, will still need the commission to approve certain items, such as tuition hikes beyond 5 percent. The details of how that system of checks and balances will work -- and how the change will affect the smaller universities still part of the system -- remain to be seen.

“It’s such a turbulent time for higher education, there’s a lot to be said for helping to position institutions to be much more nimble when it comes to shaping the business and delivery of higher education,” said Ben Cannon, the governor of Oregon’s education policy advisor, who was recently appointed head of the commission.

As to whether the new autonomy will actually help schools become more nimble, Cannon acknowledged, “It’s kind of unproven.”

Asked what they will call the new structure and whether the “Oregon University System” will nominally continue to refer to all seven universities, Cannon said that was still being decided.

“That’s a complicated question. The labels are still up for grabs,” Cannon said. “The structure really isn’t. That’s done.”

Morris Foutch

Oct. 7, 2013, 3:42 p.m.

Indeed, they will lessen affordability and accountability. This is just another case of the public colleges and university’s managements being unable to control their costs. It is also a naked grab by these same high level administrators to pump up their salaries and pensions. We should not let them break away from their original missions: Serve their states students at a fair cost to their parents and the public coffers.

Bruce Johnson

Oct. 7, 2013, 3:56 p.m.

If we want the state university systems to “serve their state’s students at a fair cost” how about the states start kicking in their fair share.  At my university state funding per student has dropped 55% in the last 20 years. Colorado State university now gets something lik 9% of all it’[s funding from state appropriations.

These are now essentially private institutions operating under public institution rules.

Gerry di Pierno

Oct. 7, 2013, 4:48 p.m.

The ulterior motives of those who would like to break away from state supervision should be thoroughly questioned. If they are allowed to raise funds through their own fund-raising efforts then the state must oversee how those funds are used.  State owned institutions of higher education need to be reminded what their mission is; to provide a quality education to those who cannot afford a private one. Higher education should never become elitist!

Byard Pidgeon

Oct. 7, 2013, 4:53 p.m.

I’m a UO grad and former OSU employee, now living where one of the non-autonomous Oregon colleges is located.
UO and OSU are awash in funds garnered through their massive public entertainment businesses…football and basketball. These so-called athletic programs generate millions in revenue and more millions in donations, very little of which goes to programs, activities or even buildings that benefit the student body or faculty.
Tuition keeps rising, while faculty salaries stagnate, and most lower division courses are taught by GTFs and even many upper division courses are taught by adjuncts.
It’s true the state no longer adequately funds higher ed, but if the funds generated by athletic businesses were, by law, directed to education rather than to self perpetuating sports empires we would see more reasonable tuition fees and fewer faculty temps.

One more layer of inequality being piled on the younger generation thus ensuring the power and privilege of those who control the aristocracy. The Founding Fathers’ worst fears are becoming fully realized.

If ever you doubt the moral and political bankruptcy of the ideas of the anti-tax crowd, just take a dispassionate look at US public education…..from kindergarten to graduate school.

William G. Ellis

Oct. 7, 2013, 5 p.m.

Having earned my doctorate from UVA, I am keenly interested in the university’s ability to maintain freedom from narrow-minded politicians who often use schools to promote their limited world view. I do, however, believe that the university should serve the people of Virginia by meeting educational needs of the citizens. These goals have been met in the past and should be met in the future with a high degree of university autonomy.

Many state legislatures have nearly abandoned any real commitment to public higher education, slashing support for institutions. High salaries and administrators’ pet projects are legitimate concerns, but if legislators want control, they need to step up and fund these public assets.

We the public OWN THESE Universities. As owners we are not receiving the full financial benifits of these institutions. Not only should we not allow them to be stolen by the private sector we should demand payment for what they produce.

Byard Pidgeon

Oct. 7, 2013, 7:44 p.m.

@johnseattle…in theory, the public owns public assets. However, it seems that more and more, the private sector owns many of our office holders.
Check this out…scroll down to find your state:
http://www.sourcewatch.org/index.php/ALEC_Politicians

Mr. Shahislam

Oct. 7, 2013, 11:07 p.m.

In this rapidly advancing digital age of quick and adroit awareness in universally knowledgeable matters, most of the global populace is being self educated without certificates of pundity (old style problem solving tactfulness of punditry in the lawless royal-dark-ages). 
And the gradually increasing numbers with self learned mediocre level of wisdom shall make “old-fashioned certificated products of outdated organisations” such as law-schools, universities etc. feel & look like ‘Jobless certified fools with old royal type useless credentials”.

Simultaneously developing in all corners, the emerging new ‘Luxury seeking world generation’ needs now only productive hands of skilled labor and not too many ‘manipulating brain products of opportunity’ anymore ending the old game of educational certificates in confusing imperial design of extreme greed and dishonest manipulation.

I found this article very superficial, without much substance.  First, what advantages do the universities achieve?  The article’s author seems to be concerned that it is a power grab by the university management that might not be in the best interest of some demographic populations of students.  However the case is not made very compelling, with the only evidence being the reduction in pell grants (which may be a bad sign) but then quotes a University spokesman that said enrollment of low-income students had gone up.  Are both statements true?  Was the spokesman asked for data supporting the statement?  To make matters more confusing, there was very little detail of the various “autonomous” arrangements?  This ties back in to my first question and would help the reader understand the possible motives for this trend.  I expect ProPublica investigative journalist to dig a little deeper.

Byard Pidgeon

Oct. 8, 2013, 1:39 a.m.

@Eric Taylor…there are 7 links within the article to sources for the article. This isn’t meant as an in depth investigation, but more as a heads up to watch for further developments.
I’ve been observing the developments in Oregon, and have little doubt that the results will be good for the institutions involved, but much less good for the public in general and the students.

Look to Penn State where the state government and citizenry bemoan the separation. The independence allows PSU to circumvent public disclosure laws that impact other schools in the state system and help preserve some degree of transparency. It has also allowed PSU to maintain an incestuous board of trustees focused on prestige, money, football, money, and money.

Enrollment of lower income children has also dropped off which PSU wants to blame on the failure of loans and grants to keep up with inflation, while true, is also due to rising costs at PSU that are not driven by faculty salaries or updating infrastructure but new development.

PSU uses money derived from its football program to support large salaries and main campus development. Despite making a “profit” none of that money goes to student academics.

PSU is one school that years ago lost sight of its original mission. I think this is a bad move for any state university.

Mr Pidgeon:
Had I read your comments first I could have saved time and effort. What you wrote exactly applies to PSU.

ProPublica may want to take a quick look at SUNY Stony Brook, since (a) they’ve been whispering about going private for about twenty years and (b) they’re a shorter drive than Oregon.  I didn’t go there, but I’ve always been suspicious of the process of privatization, for reasons largely discussed above, such as how you “gain independence” when you’re owned by the local government and want to do so just because there’s more money in avoiding serving the people.

Byard Pidgeon

Oct. 8, 2013, 1:17 p.m.

@Wesley Brown…I find your comments valuable, and not at all redundant, as they illustrate just what is happening in the Oregon system and how far back the autonomy/privatization efforts go…Graham Spanier was second to the top in the administration of Oregon State U. before taking the presidency of Penn.
I believe there was, once upon a time, a mindset in the administration of public education at all levels that was not of the business school/corporate model that now pervades all aspects of governance.

Spineless state legislators just need to go back to funding the schools like they are supposed to. Stop overpaying administrators; stop growing their ranks. A cap on sports coaches salaries would be nice as well, from a logical perspective. ECM better would be excising the minor league basketball and football squads from the universities, but there is no chance that happens.

States have been cutting funding for public universities for more than a two decades. The level of state support is approximately 18% of the university budget, fully in line with GOP legislative goals of getting the government out of public education. Universities have cut costs: Parking has been privatized; janitorial services have been privatized; the book store has been privatized; the food services have been privatized; some of the accounting costs have been privatized; health insurance benefits support have been cut; donated land has been sold to private developers; most universities have defined-contribution pensions (begun four or five decades ago, something US businesses are just doing now); and staff are paid like hourly mall workers.Public university trustees, many appointed by governors, love the idea of running a university like a company, like a business—not like a common good. In fact, if they could, many would prefer to run university endowments like a hedge fund. For them, the students, faculty and buildings are a nuisance, while the sports teams and private boxes, costly though they may be, are a terrific business perk.

It is surprising to me that Universities do as well as they do in spite of the acutely unfavorable economic climate created by the lack of support by elected officials.

In the mid 1980’s Colorado higher education was permitted to get out from under state line item budget control. I was the key staff person making this happen. Since then Tuition has doubled again and again. Administrator numbers have more than doubled and their salaries more than tripled per person.
Faculty work loads at the Research university have changed. They now teach half as many courses for twice the salary in inflation adjusted dollars.
Giving universities such freedoms sounded good but has resulted in much higher tuition, lower productivity, and less student access.
Yes, taxpayers have dramatically lowered their support for universities. Biggest cause is Medicaid going up at double digits. In Colorado in 1975 less than one percent of state budget was for health care. Now it is over 20 percent. Higher education was 24 percent, now under 8 percent.
However, privatization without constraint has not been good.

Byard Pidgeon

Oct. 9, 2013, 2:25 p.m.

@Dr. Ed Lyell
Thanks for your post, and not using a pseudonym. Now we all know where to march with our torches, pitchforks, hot tar and feathers.

Medicaid may account for CO’s higher ed budget woes, in part, but in OR and probably CA, property tax limitation initiatives (5 in OR, 13 in CA) cut the revenue stream for K-12 drastically, forcing the state to make up the difference and to essentially take over responsibility for K-12.

Colorado was right behind Calif in putting in both property tax lowering laws but also in freezing all taxes. actually lowered income tax to a flat tax giving the rich several percentage points of ‘relief’.
Thus the legislature cannot increase taxes without a vote of the people. Property tax used to pay 60% of K12 and is now under 40%. What bothers me most about that is that the state cannot even audit the local districts budgets and spending. They have the best of both worlds, more state support and yet no state oversight.
Higher Education became the place to take money for Medicaid and K12 got its own constitutional provision guaranteeing that they will get more money each year per student. Thus HE takes the hit from both.

I was on the State Board of Education in the 1980’s and 90’. Later I was on the state community college board. It got to the point where we could not recruit presidents for the 14 colleges since the best candidates were not about to risk their career on Colorado. The odds of doing good were very low with no money, rising illiterate college admissions, and a downbeat culture.
Those universities able to break away, CU and CSU are wanting their freedom and it may be best for them, but will further hurt others.

Let the land grants go.  The best institutions of higher education in terms of bang for the buck are the regional universities such as Evergreen State and Truman State.

This has already happened at most if not all public colleges. It is already too late. Those of us who cared about equal opportunity in higher education have lost. Tuitions and college CEO pay have increased exponentially while incomes for most people have declined. Where we once had public subsidies for institutions and people we now have public and private loans. Concrete example: when I went to a state university college in New York during the late 1970’s tuition was only around $1,200 a year. Public colleges even here in the Southeast US where I live average $15,000 a year for tuition. A Regent’s Scholarship and Tuition Assistance helped pay for my books and to insure the car I used to commute. But nowt the days when average middle class kids could afford a quality college education here in the states are gone forever. I actually blame a selfish and ignorant public, who for a generation continued to think they were voting themselves tax cuts while instead empowering the corrupt politicians and robber barons who have looted our economy and public investments.

Jonathan Ryan

Oct. 14, 2013, 7:41 a.m.

The best example of this strategy not working is at the State University of New York’s (SUNY)  flagship campus the University of Buffalo. In 2010 the university published a plan called UB 2020 which was a proposal for the university to re-gain control of it’s tuition stream and it’s construction bonding authority from SUNY. The plan , paired with a $2.9 Billion 10 year construction program was very popular in depressed Western New York, but was never able to attract enough support in the State’s Senate and Assembly where the proposal came down in a resounding crash.

The plan would have expanded Buffalo, already the largest university in the northeast to a student population of over 40,000. In a feeble attempt to spin the defeat in Albany, the university said that the 2020 program would continue unmodified but on a longer timeline. Sardonically many involved with the proposal began calling the revised proposal “UB 2070” accurately indicating the current spending rate of it’s construction program.

The plan was less about privatization and more about local control, but many in the state senate and assembly felt it was an attempt to privatize a great public asset. When it became obvious that the proposal would crash,  the university’s President resigned and it was rumored that the new president got his job only after he agreed to scrap the proposal completely. Several politicians who had supported the proposal were voted out of office in the aftermath and after several years of very intense promotion and hype there is now a distinct lack of vision and much confusion as to the university’s future

That really isn’t an example of the strategy not working, since the strategy was never implemented.

Nor is this really a matter of ‘privatization’ of public schools. As I said in my original comment, many public universities in the US are de facto ‘private’ thanks to starvation of state funding by anti-tax zealots in the various state legislatures.

Is an institution really ‘public’ if its funding is < 10%-20% from the public?

What’s the lower bound here? Do universities remain under the thumb of anti-education legislatures even if the level of funding drops below 10%?

When the vast majority of funding is from sources other than the state, is it really a ‘state’ university anymore?

The rise in tuition and the decline of income for the 99% have exactly the same source: the increased concentration of wealth at the top, with their aversion to taxes, or anything for the common good that does not line their own coffers.

If spending keeps going up, and funding from loans, tuition, sports, etc. ever goes down, will universities be too big to fail?

Could semi-autonomous universities put tax payers at risk?

What many universities have done the last few years is to take a ‘poison pill’. This is a strategy started in the corporate sector wherein you take on so much debt that no one wants to purchase you or take you over.
So many universities around the country have used bonds to spend hundreds of millions expanding their physical facilities. These bonds must be paid even if the college closes. Thus the state as final guarantor will find that keeping the college open, even if losing money, is at least serving some of this debt.
In essence a way to blackmail the state into keeping them open. (and you might have thought that extortion for budgets started with the current Congressional house members)

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