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?

From: Gaye Tuchman
To: James C. Garland

You asked some hard questions that clarify some of our disagreements. The first problem concerns language. I think that it really matters what you call something. You note “The trouble with talking about markets is that the word itself has become so loaded.” So, we start by agreeing that the connotation of words is really meaningful.
As a sociologist, though, I want to go a bit further. Way back in 1929, W. I. Thomas and Dorothy Swain Thomas formulated what became known as “The Thomas Theorem:” “If [people] define situations as real, they are real in their consequences.” Thus, a hard-working person might condemn “someone on the dole,” but not “someone on social security;” and a university administration might strive to increase its school’s reputation (ranking in U.S. News & World Report‘s annual America’s Best Colleges), because identification as a top-notch institution increases applications for admission and so, for many colleges, economic viability. One simply cannot run a college or university without students.
So whether one identifies higher education as a public good matters, too. To be sure, my education benefits both me and the country, just as your education helped you to earn more and was certainly useful to the citizens of Ohio. But I suspect that legislatures are more willing to fund someone who will use her education to serve our country’s needs (public good) than to finance an education that will permit someone to earn a boodle (private good). Let’s return to the notion that education is a public good that helps both our country and its citizens to survive in an ever more complex world. The rebirth of that concept might help legislatures to fund education for more students who are working-class or are members of racial and ethnic minorities. I know that we both want to see more of those students in colleges and universities, because we both know that America no longer leads the world in the proportion of its citizens who graduate college. Also, as Paul Attewell and David Lavin have demonstrated in Passing the Torch, higher education for the less advantaged pays off across the generations—not just for the newly educated and their children, but for all of us. I cannot see either state legislatures or Congress pouring funds into a private good.
That said, we also disagree on whether people should fund students or fund colleges and universities. You asked how Wannabe University would fare under your plan. Just fine, thank you. Wannabe is a first-tier university with selective admission. It does not struggle to find students; it is not about to close its doors. However, even with a lot of financial assistance, working-class students are less likely to be admitted to Wannabe U than to either a state college or a community college. On the whole, upper-middle class kids get better grades and SAT scores than students in the working class and enough of them want to attend Wannabe for its Vice Provost for Enrollment to feel secure in Wannabe’s survival (and his job). Admitting better students and achieving a high yield-rate may even “cause” more upper-middle class to want to attend Wannabe.
Not so the struggling college down the street. Suppose it barely meets its enrollment quota and most of its students are working-class or lower-middle class. (In sociology, there is no such thing as a middle-middle class.) With public monies in hand, working-class students may look for a better place to go. If enough of them find that better place, Struggling State College and Struggling Private College may fold. I fear that many colleges now devoted to working-class and minority students will fold. Hard-put to attract students now, they will probably wind up in an even worse position. Maybe those struggling colleges should fold. But then where are those students going to go?
In essence, you are proposing an extension of the Pell Grant program that funded students, not schools; only now needy students would supposedly get enough money to fund their education. Over the years, Pell grants have not been able to keep up with the increasing cost of a college education. The cost of college has increased quicker than the Pell grants. Equally important, institutions of higher education have been shifting scholarships toward merit-based grants. Although Boards of Trustees use formulas to determine whether they are pricing an education out of the reach of the working class, they are not about to eliminate merit-based scholarships. I cannot see either Miami University or Wannabe University doing so. Those smart and wealthy kids simply do the selective colleges too much good. And their parents are going to remind legislators that these meritorious kids deserve a scholarship too.
Wannabe U might flourish, but I’m not quite sure that the students will. Funding students, not schools, makes the “customer” the real power in the educational process and encourages colleges and universities to cater to them. Giving the students what they want may further obfuscate the difference between teaching students and making them think that the university “cares about them.”
For decades, Wannabe U has needed a new infirmary. The building that houses Student Health Services is just too small and too outdated. Best practices reveal that students really care about working out; the Wannabe U recreational facilities are outdated, too. Since Wannabe U is dedicated to showing students that it cares, it will build a new field house before it constructs a new infirmary. When high school students and their parents visit campus on those pre-application tours, they may want to check out the field house, but they don’t plan on their kids getting sick. Treating students as customers—giving them the money not the colleges and universities—will help Wannabe U to justify more attention to a facility to house intramural basketball games than one to preserve student health. Certainly students are entitled to some power over their lives; we all are. But what will happen to universities when the customer [the student] is always right?
Jim, it’s pretty romantic that I would like to return to the days when schools did not charge tuition. But I think that you’re being pretty romantic too. That emphasis on the individual’s choice implicit in your proposal might very well come at the expense of the public good. And it’s not going to help us return to a day when the people who fund colleges and universities valued education, not training. Will the day ever return when the corporatizing colleges and universities of the United States give more than a cursory nod to the arts, humanities and social sciences, not just to the fields that build revenue streams?
From: James C. Garland
To: Gaye Tuchman

Whether public higher education is a private or public good, or a mixture of both (as I believe), is unfortunately a topic that interests scholars more than elected officials. In my interactions with dozens if not hundreds of state representatives and senators over the past thirty years, I think it is fair to say that the vast majority already understand that “education is a public good that helps our country and its citizens to survive in an ever more complex world.” Where you and I differ is in your conviction that “the rebirth of that concept might help legislatures to fund education for more students who are working-class or are members of racial and ethnic minorities.” The concept doesn’t need to be reborn. It’s already very much alive. It just isn’t shaping any legislative behavior.
Your belief is a variation on a theme that won’t die—that if higher education advocates could only express their needs more eloquently and persuasively, if only they could show more clearly how financial support of universities serves the national interest, if only they could convince elected officials how educating the needy would alleviate a whole host of social ills, then finally—finally!—government priorities would change and public universities and colleges might be able to fulfill their vast potential for good.
This is a theory that, however noble, unfortunately is mostly a waste of time and money. It is the theory that drives public universities to hire lobbyists, that causes presidents to write op-ed pieces pleading for more money, that sends university officials off to Washington to campaign for more federal support. The problem is that this strategy has been used for half a century and it just hasn’t worked. It hasn’t worked in blue states, where elected officials are philosophically sympathetic to helping the working class and the needy, and it hasn’t worked in red states where officials want government to stay out of the way and let personal initiative thrive.
The reason “getting the message out” doesn’t translate into increased support of public universities is not because the message isn’t believed. It’s because the message is irrelevant to the day-to-day workings of government. Elected officials mostly live in the present, where they face problems of tremendous complexity and challenge. To them, the needs of higher education have to be juxtaposed against the needs of the poor, of the elderly, of police and fire departments, of K-12 education, of roads, of Medicaid, and on and on. Most of these areas of social need have no other means of support other than taxpayer dollars. Higher education, by contrast, also has income from tuition, federal grants, and other sources, so when public money is running out, as it nearly always is, the needs of universities are inevitably subordinated to more immediate pressing needs. You and I can rail against this fact of life as much as we want, but there is nothing we can do to change it. For half a century higher education authorities have been flogging a dead horse. To me, the lesson of history is that it is time to try a different strategy.
This is the context that leads me to propose that public funds be directed to students rather than to universities. (Please keep in mind this is only part of my proposal!) When public money is given as a subsidy, half of it is wasted on people who do not need it. With tuition as high as it is now, and campuses as dilapidated as they are now, the nation can’t afford to keep frittering away public dollars.
As to whether redirecting money to students would cause universities to build recreation centers instead of infirmaries, I think we can look at private universities for guidance. Private universities balance student desires with genuine needs quite ably, and I see no reason why the publics couldn’t also. In fact, more so than today, since with the current funding mechanism there is no financial incentive for public universities to spend dollars strategically. Instead, they spend hundreds of millions of dollars on sports facilities, student centers, low income housing developments, conference and hotel complexes, and other things that are not central to their educational mission.
My great fear, Gaye, is that in the end nothing will change, and that there will be no systemic reform of public higher education. Your crystal ball is as clear as mine, so let me ask you to look into the future twenty years or so. What do you imagine Wannabe U will be like if all the current trends continue? Your concerns are mostly with the “corporatization” of the university and its impact on academic life. I see “corporatization” (more accountability, greater focus on alternate revenue sources, a growing shadow faculty of poorly paid contingent teachers) as mostly symptoms of an underlying chronic disease. Unless the disease is cured the symptoms are only going to get worse.
You and I won’t be participants in public higher education in twenty years. I for one will be quite content then to sit on my deck, sipping a margarita and watching the Santa Fe sun set behind the Sangre de Cristo mountains. When that day comes, you and I will be doing just fine. But I fear for my children and grandchildren if their country’s higher education system is allowed to wither and die in the intervening decades.
From: Gaye Tuchman
To: James C. Garland

Ah, Jim. In twenty years, Wannabe University will be just fine—sort of. Still struggling for money, it will cut and paste budgets, pressure professors to do funded research on topics that might produce patents, show its concern for students as consumers, and express its devotion to the economic future of its state. Perhaps Wannabe U will fly huge banners, each with a picture of a celebrated professor or basketball player from street lights, as does the University of Arizona. After all, Arizona’s practice makes Wannabe U’s introduction of top grant-getters to trustees seem like almost no recognition at all. Perhaps Wannabe U will eliminate some costly foreign language programs. Since English is the language of international business, why should students learn Arabic or even Chinese? Perhaps Wannabe U is not the issue, but only the example. The real issue remains: what are the consequences of the corporatization of colleges and universities for higher education today?