Putting 'Public' Back in Public Universities

Since the 1970s the share of the costs of a public college education funded by the taxpayer has dropped precipitously. Now it is typical for state appropriations to cover only 20 percent or less of the actual cost of education in a public university.
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The U.S. has had a strong history of public universities offering a world-class education to non-affluent men and women. (As James Angell, an early president of the University of Michigan put it in the early years of the twentieth century, public universities offered "an uncommon education for the common man.") For fifty years or so many of the states provided substantial funding for public universities to permit students to attend these universities at very low tuitions. In 1970, students at the University of Illinois paid a tuition of about $321 a year, which was less than 10 percent of the total cost of education and only a small fraction of the median family income of $9,870. (Harvard's undergraduate tuition was $4,070 in that year.) So public funding provided about 90 percent of the cost of public higher education, and this was an enormous advantage for middle and low-income students, and contributed strongly to social mobility in the 1970s and 1980s. Further, the quality of the university was first-rate. (I was thrilled to meet Professor John Bardeen, a double Nobel-prize winning scientist, in my first year as a physics undergraduate at the University of Illinois.)

The benefits of this public support for university education were enormous. The rate of college-educated adults increased dramatically and the foundations were laid for a high-productivity economy. Great public universities helped to make the United States innovative, productive, and affluent.

Since the 1970s the share of the costs of a public college education funded by the taxpayer has dropped precipitously. Now it is typical for state appropriations to cover only 20 percent or less of the actual cost of education in a public university. This shift has effectively "privatized" college attendance. It has shifted the bulk of the costs from the taxpayer to the student and his or her family.

So what should be done? Many commentators seem to think that the remedy is to apply pressure on public universities to flatline tuition. But running a university that provides a high-quality education to its students costs money, and many of the unnecessary costs have been squeezed out of university budgets by the fiscal discipline of the past ten years. It currently costs a minimum of $15,000 per student for a public university to provide the faculty, staff support, libraries, laboratories, classrooms, and utilities to keep the university running. (This is roughly 25 percent of the average cost of instruction in a top-end private college or university.) This money has to come from somewhere, and the past ten years have decimated the part of the cost that is funded by the public through state appropriations. That means that the only other sources of revenue are tuitions and charitable contributions. Insisting on keeping tuition constant in the current circumstances guarantees that educational quality will suffer, and the damage would be worse and worse every year.

Instead, we as citizens should make the case that our elected officials should get the balance back and return to a level of funding that would represent 50 percent of the cost of education. Tuition should then provide the balance, reflecting the fact that the student himself or herself also benefits greatly from the education provided. This would reflect a return to the priority given to affordable higher education on all sides. It would make good on the idea that a quality university education is not the sole prerogative of the affluent. It would also make good on the idea that the state can contribute to its economic and social progress by increasing support for a better-educated population.

This strategy would require a substantial reinvestment of state tax revenues towards higher education. In most states it would reflect an approximate doubling of current commitments. But the benefits would be great. College would be more accessible to a wider range of capable students, the percentage of college-educated adults would rise, and the state would be better off as a result.

This proposal will no doubt seem politically impossible. A "big bang" return to substantially higher state appropriations for higher ed will be hard to sell. By gradually reducing the state's contribution over the past twenty years, we have created budget realities in every state where returning to an appropriate level of funding will appear impossible. And yet it needs to be done.

If states find it impossible to significantly increase the portion of their budgets they devote to higher education, then public officials need to accept the consequence: either tuition will continue to increase at 3 to 5 percent per year, or there will be a precipitous drop in the quality of the public universities and the quality of the education they offer to the men and women who come to them. What was once a singular strength of American society will become a liability.