The decline of public higher education

Here in the Bay Area, with sky-high property values and a very intelligent workforce, we have public schools that would be the envy of most of the country. Of course, being “middle class” in Silicon Valley requires you to have a salary and asset value that would make you the richest guy or gal in most of rural America.

But eventually college rolls around, and it’s time to choose between the $40,000/year private tuition or the $10,000/year public tuition. A pretax family income of $100,000 or $125,000/year doesn’t go very far if you’re shelling out $200k for college. (Depending on your circumstances, planned tuition waivers by Ivy League and Stanford may or may not kick in).

Once upon a time, the bread and butter of the California middle class was the University of California. Berkeley was one of the top universities in the world, and the regional branches offered at least a good education. The social compact with the middle class was “pay taxes for higher education and your kid will get a first rate public college education.”

It’s hard to find many California-born members of the educated classes not touched by the UC. Both my parents and my father-in-law got their bachelor’s degrees from Cal, and both my wife and I have degrees from a lesser UC campuses. Our college financing plan for our daughter is “get into UCLA.”

Alas, the UC has been devastated by budget cuts during the 1990 recession, and of course the furloughs and other cutbacks this year. To backfill cuts, the professional schools (business, law, medicine) were allowed to charge market rates for graduate degrees, meaning the self-employed or otherwise those of modest means can no longer self-finance these graduate degrees. Today, California universities face the intersection of the long-term secular decline in funding, superimposed on the ongoing incompetence of political “leaders” and a deep recession that is worse here than almost anywhere else.

However, it’s not just a California problem. What was striking about Thursday’s rankings of 1400 universities from US News and World Reports (the former news magazine) was how much public universities all across the country are slipping. Even though I know that rankings have their limitations — they use only what’s easily measured and produce a single list for wildly heterogeneous needs — it’s still a scary outcome.

Not surprisingly, the rich get richer: the list was headed up by Harvard, Princeton and Yale. More strikingly, of the top 20 research universities, none were state-sponsored schools but instead private schools with annual tuition ranging from about $34k to $41k. Of the 262 universities on the list categorized as research universities, the public schools are 61.6% of the 262 but only 12% of the top 25.

This is not just a California problem. Those landing below the top 20 were not just Berkeley (#21) and UCLA (#24), but also Virginia (#24), Michigan (#27) and UNC (#28). Of the flagship campuses of the traditionally strong schools, Illinois and Wisconsin tied for #39 with Florida and Texas at #47, well behind secondary campuses in Virginia (William & Mary) and California (other UCs). Georgia Tech, Washington, and Penn State also ranked in the top 50, but Ohio State and Maryland are not.

The University of Michigan is instructive. My UCI PhD advisor left for Michigan a few days after I finished my PhD (a profound motivation to finish on time) and talked about how they solved the funding problems that UC had failed to do, through quasi-privatization. However, the benefits do not seem to be not visible through the crude prism of the rankings, although perhaps 5 years from now UM and UVa will have passed their under-funded California rivals.

Perhaps the factors used in the rankings favor rich private schools:

• 35% is faculty resources, financial resoures and alumni giving, all of which directly favor private schools
• 25% is peer assessment — the halo effect — which can be influenced by buying a few high-profile superstars or having lavish facilities
• 20% is retention, and frankly the public schools that serve middle- and lower-middle class students tend to have more students who committment to college (or financial situation) is more tenuous that Junior who got accepted to Harvard. (My dad was a counter-example, flunking out of Harvard Law in 1934 due to insufficient interest in studying.)

Even so, it’s impossible to argue against all these measures, and the cumulative effect is that private schools are continuing to get better, and elite public universities (let alone run-of-the-mill teaching schools) are struggling to maintain quality standards.

If you look at the US News “best value” rankings, the results are not that much better for the public schools, which only muster 2 in the top 20. The story is a little better for middle class parents, because the richest and most elite schools provide need-based aid to 50+% of their students; on, average student sin the top 7 (Harvard, Yale, Princeton, Stanford, MIT, Columbia, Dartmouth) only pay about 1/3 of the list price of the total cost).

An alternative ranking based on the core curriculum — the once-customary “classical liberal education” — rates UT Austin, Baylor & Texas A&M high and the educationally trendy Ivies rather low. However, I must agree with the WSJ evaluation:

the American Council of Trustees and Alumni … has the quaint notion that a university be judged on what it teaches its students. … Their effort to change the focus to learning is no doubt an admirable one, but I suspect that it will have a limited effect. Any grading scale that gives an "A" to the University of Arkansas and an "F" to Yale may prove too contrarian to capture the public imagination.

One salutary benefit of the US News (and competing) rankings is that once a year the sponsoring magazine publishes some longer sidebars on the state of higher education, and this year one article is on budget cuts for public colleges. The article focuses on California’s problem (more on that another time), but notes the issue is broader than this:

Even during the boom years, most states weren't increasing college budgets to match rising enrollments. The average public research university got almost $8,350 per student from taxpayers in 2002. By 2006, that had dropped below $7,100, according to the Delta Project on Postsecondary Education Costs, Productivity, and Accountability.

Of course, that average will have plummeted even further by 2010; a few well run (mostly “red” states) states will keep up their spending, but many states beyond California are cutting state funding by “double-digit percentages” just this year alone. Even if you’re not a conspiracy theorist, the numbers suggest a long-term (and probably irreversible) decline in public education support.

As anywhere else, a crisis is an opportunity to make changes (good or bad) that would otherwise be impossible. The sidebar continues:

"This is an opportunity," says William Bowen, a former Princeton University president who has written several books examining inequities and quality problems in higher education. "Some sensible pruning is occurring. Some good could come out of this." But, he worries, colleges are not using the recession as a spur for the kinds of fundamental changes needed to give more Americans better training.

The article lists some example of colleges (like the U. Alabama) that have attempted more scalable, computer-driven instruction techniques to server higher volumes at lower costs. It concludes:

Cheaper, better classes are the only long-term solution to the growing demand for education and shrinking funding, says Carol Twigg, founder of the National Center for Academic Transformation.

The economy will some day rebound, of course. But those colleges that are just cutting courses or having instructors lecture in front of ever bigger classes will simply offer lower quality. They won't have solved the structural problems that have led to high costs and low graduation rates. "Thinking differently," Twigg says, "is the only solution."

I think the reworking will happen, but I still see that the public schools will unable to compete with private schools in the long run, as politicians throw money at direct benefits (which buy them votes) and powerful public employee unions which provide campaign dollars.

(The story may be slightly less grim for graduate school, because in departments such as engineering and medicine, graduate students are funded by external grants that do not discriminate between public and private schools.)

If the elites of American higher ed do become a private-only club, I hope that the leading universities are forced into some sense of public accountability — not to pressure groups and other activists, but to a broader societal imperative of producing an educated workforce and fueling economic growth. Having followed MIT presidents over the past 35 years, if they are any indication then the record of accountability is mixed at best.

However, the current MIT president and her Stanford counterpart both seem to understand the responsibilities that come with the great privilege they and their well-paid faculty enjoy. Frankly, the universities that are largely funded by contract research — produce results for external commercial or government sponsors who can take their money elsewhere — are more directly accountable for improving societal welfare than those who can sit on fat endowments and spend it as they please.