Harry Targ
Purdue University President Mitch Daniels testified
March 17, 2015 before a subcommittee of the House of Representatives Committee
on Education and Workforce on what he calls higher education reform. He also
spoke during that week to the American Council on Education and the Brookings
Institute. A centerpiece of his recommendations was “income share agreements”
whereby students partner with investors, particularly alumni, who would provide
funds for their education in exchange “for a small share of the student’s
future income.”
Daniels was touting this idea in addition to new
cost-saving policies at Purdue University, such as offering three-year degree
programs, using different metrics rather than course hours to measure student
preparation, and tuition freezes. He has also urged a reduction in costly
federal regulations.
Although some of Daniels’ proposals and programs at
his home university have merit, the conversation he and other administrators
around the country are having about rising tuition and the accumulation of
years of debt ignore the major reason why costs and tuition are rising. In
addition to the cost of higher education attributable to increased faculty salaries;
layers of new administrators; the creation of new luxury amenities to attract
students (housing, food, and recreational facilities), tuition has risen
because state government financing of higher education has not kept pace with
expenditures.
The Center for Budget and Policy Priorities issued a
report on May 1, 2014 (“States Are Still Funding Higher Education Below
Pre-Recession Levels”) which provides data to show that higher education
funding remains below 2007-2008 pre-recession levels in 48 of 50 states. This
means, according to CBPP: “the large funding cuts have led to both steep
tuition increases and spending cuts that may diminish the quality of education
available to students at a time when a highly educated workforce is more crucial
than ever to the nation’s economic future.”
CBPP reports that since 2007-2008 state spending on
higher education is down 23 percent, or $2,026 per student. Tuition increases
have been substantial in public colleges and universities from fiscal year 2008
to 2014 ranging from $253 in Montana to $4,493 in Arizona. In Indiana tuition increased by $1,191 during
this period. CBPP notes that in 1988 colleges and universities received 3.2
times more of their revenue from state and local governments than from
students. That ratio declined to about 1.1 times more from government supports
than tuition in 2013. Put another way the report states:
“Nearly every state has shifted costs to students
over the last 25 years--with the most drastic shift occurring since the onset
of the recession…Today, tuition revenue now outweighs government funding for
higher education in 23 states…”
Not surprisingly Daniels’ idea that students find a
rich supporter in exchange for future student earnings came from proposals made
by free market advocate Milton Friedman in the 1980s. Friedman, the University
of Chicago economist, was the most significant descendent of so-called “free
market” economists who believe as did President Reagan that “government was not
the solution; government was the problem.” From the vantage point of 2015, the
privatization of all education, including higher education, is on the agenda of
wealthy conservatives such as the Koch Brothers and the powerful state
legislative lobbying organization, the American Legislative Exchange Council
(ALEC). ALEC funds state politicians who support the elimination of public
institutions, such as education.
Naomi Klein, author of The Shock Doctrine: The Rise
of Disaster Capitalism, argued that during periods of economic or political
crisis, changes have been introduced to weaken government and the maintenance
of public services. The CBPP data suggests that the deep recession of 2008-2011
was an occasion for ALEC and the politicians and educators they support to reduce
resources available for higher education. Despite the long history of
government support for higher education, public schools from kindergarten
through high school, libraries, roads, and police and fire-fighting services,
the recession offered the occasion for influential and wealthy elites to
pressure for policies that reduced state financial support for public services
and a shift toward their privatization. In addition universities became even
more dependent on big corporations, banks, and the military. Finally, tuition increased and students had
to pay a higher share of the cost of their education.
Throughout much of U.S. history public education, including
higher education, has been seen as a public good. The land grant system of public
higher education was instituted in 1862. From then until the recent recession,
public colleges and universities educated large percentages of the young and generated
much of the scientific and technical knowledge that stimulated the U.S.
economy, based on substantial public support and low student tuition.
After World War II, returning veterans became
eligible for free higher education under the GI Bill. The program led to the
training and credentialing of a whole generation of young people who went on to
become educators and researchers, and
also consumers of products manufactured after the war. The so-called economic
“golden age,” from 1945 until the 1970s, was driven by research and development
initiated by GI Bill recipients. These college graduates became members of the
largest middle class in American history.
As Bob Samuels author of Why Public Higher Education Should Be Free put it:
“I
actually believe that we should and could make all public higher education
completely free. We’re currently spending around $185 billion on higher
education annually—which includes spending on for-profit schools, which have
very low graduation rates and high debt rates, as well as on merit aid for
wealthy students. Given current enrollment, I estimate that it would cost about
$155 billion to fund public colleges and four-year institutions completely. My
argument is instead of funding the individuals, we should just fund the
institutions directly” (quoted in Rebecca Burns, “Why Can’t
College Be Free?” In These Times,
June 13, 2014, http://www.inthesetimes.com).
However, advocates of “higher education reform” at
least those collaborating with economic and political elites who advocate
policies depriving government of financial resources, sometimes called
“starving the beast,” envision a day when all public institutions are
privatized. There is much evidence that the privatization of education will
increase gaps between rich and poor and may leave the latter with inferior
educations. The Daniels plan will rely on wealthy benefactors to support
students while tuition costs continue to rise and those who still seek a
college education will continue to accumulate a lifetime of debt.
Without a
return to affordable publicly supported higher education, large proportions of
young, intellectually curious, and talented students may be deterred from
pursuing higher education which will have negative consequences for the entire
society.
