
This fall, the Press published two books on the current state of the American university. Gaye Tuchman's Wannabe U: Inside the Corporate University is an eye-opening exposé of the modern university that argues that higher education's misguided pursuit of success fails us all. James C. Garland's Saving Alma Mater: A Rescue Plan for America's Public Universities, on the other hand, argues that a new compact between state government and public universities is needed to make schools more affordable and financially secure.

We asked these scholars debate the current state and future of American universities. Tuchman and Garland don't agree on much, but their conversation sheds new light on the many problems and promises of the higher education system in this country. Yesterday, Tuchman began by responding to Garland's review of her book. Today, Garland picks back up the debate on the subject of funding.
From: James C. Garland
To: Gaye Tuchman
The trouble with talking about markets is that the word itself has become so loaded. To conservatives, "markets" are the way to fight socialism and Big Government, while to liberals, they symbolize income inequality and runaway corporate malfeasance. Of course, markets are intrinsically neither good nor bad, nor are they embodied with any particular ideology. However, because market forces are very powerful they have to be structured carefully, lest they have bad unintended consequences, a recent example being Wall Street excesses.
In public higher education, market financing is usually juxtaposed against public financing. Back in the days when you and I were in college, there was no public university "market." A year's tuition for a state university was easily affordable (for example, $213 at the University of Minnesota in 1961), and the state paid for the rest. Today, as you know, tuition has grown to about $10,000 and state support has declined to about 25% of the costs.
Many people see this evolution as a de facto philosophical shift from higher education being a "public good" to its being a "private good," the former meaning that all of society benefits (from universal access to college) and the latter meaning that only individuals benefit.
For two reasons, I have long thought this to be a facile and somewhat artificial division. First, it seems to ignore the obvious truth that higher education provides both public and private benefits. There is no clean dividing line between a public and private good.
But my bigger problem with the division it that it links public and private goods to the funding source. By this reasoning, if the taxpayers pay, it is a public good, whereas if the individual pays it is a private good. Again, I see this as an artificial distinction. To me, the more relevant consideration is affordability. I don't really care if the beneficiaries "copay" for their education, so long as they can afford to do so. Unfortunately, as tuition has climbed and state support has dwindled, there is a growing segment of people who cannot make the payments.
"What will it take," you ask "to make policy makers realize that we must find a way to fund universal higher education rather than to place the burden of paying for education on the very people who are most in need?" That is indeed the key question.
But I fear we part company on how to answer it. You would redirect public funds back to universities, pass universal health care to ease campus spending on benefits, free up money by liberalizing drug laws and reducing state prison expenses, and change the public mindset that relegates higher education to a low priority in state budgets.
I would like those things too. In fact, I would like to return to the days when a year's college tuition was $213, when legislatures footed most of the expenses, and when classes were taught by full-time professors on well-maintained campuses. But those days are gone forever. There are just too many other growing demands on public treasuries to expect a return to the past.
So to me, the solution is to make the optimal use of public dollars, and that's where markets come in. Not free markets, but markets regulated to ensure the desired outcome. Since you've read my book you know that I'm recommending using public funds to give grants to needy students, rather than giving it directly to universities. There are two reasons for doing that.
First, it places the money where it will do the most good. When public money is given as an appropriation, it indirectly subsidizes all students. Today, Warren Buffet's grandchildren receive the same financial benefit as the children of young single mothers on welfare, and that just isn't right. Treating all people equally isn't the same thing as treating them fairly. And second, it creates desirable incentives for universities to respond to the needs of their grant-holding students.
Consider, for example, the federal food stamp program. This is a worthy social program in which the federal government spends public funds so needy individuals can purchase food. But now imagine a different kind of food subsidy program, in which the money would be appropriated to supermarket chains instead of needy people, the idea being for supermarkets to pass the savings on to all their customers. That would clearly be a terrible idea, because (a) it would dilute public dollars by underwriting the food expenses of those who didn't need help, and (b) it would give supermarkets an incentive to cater to wealthy customers by stocking their shelves with expensive specialty foods. Under this "revised" food subsidy program, the needy would lose purchasing power they formerly had, while the wealthy would gain it. But that’s exactly the way public higher education is now funded. The money goes to the universities, which pass along the savings to all students, whether they need it or not. And then universities build climbing walls and luxury dorms to attract even more wealthy students, since the needy students can't afford high tuition payments.
My proposal would change this system by giving needy students more purchasing power. Universities would now have incentives to be more responsive to their needs. In fact, the universities that would benefit most by my proposal are the regional, non-selective campuses that enroll large numbers of low- and middle-income students. The new system would benefit such schools, because their students would be armed with need-based grants that would more than reimburse their campuses for the loss of public subsidy. Thus "market forces," would decrease educational inequities by empowering precisely those people who cannot now afford the high price of college. The full picture is more complicated (which is why I wrote a book on the subject), but basically, my proposal would reshape incentives to accomplish the end goals that I believe both of us consider worthy.
So how do you think Wannabe U would react if it faced the prospects of losing its state subsidy (over, say, a six-year period) and knew that the only way it could make up the loss was by making itself more desirable to low- and middle-income students? (Keep in mind that the same total dollars would be going to public universities in the state, but the universities couldn't count automatically on receiving the money.)
How do you believe Wannabe U would respond to this challenge? How would the faculty respond if the university started recruiting more low- and middle-income students? How would the change impact classes and the campus environment? Would Wannabe U stop being a "conformist" university by trying to compete with the Berkeleys of the country, which cater to well-prepared upper income students? What do you think the reaction of the University Senate would be?
Continue reading "Wannabe U vs. Saving Alma Mater: Part II" »