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As Universities Cut State Strings, Some Fear 'Privatization' of Public Schools

Many are worried that as public universities gain freedom, they will end up sidelining broader goals such as access and affordability.
 
 
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The chancellor of Oregon’s higher-education system currently oversees all seven of the state’s public colleges and universities. But as of July next year, she’ll be chancellor of four.

The schools aren’t closing. Rather, Oregon’s three largest state schools are in the process of breaking away from the rest of the public system.

The move, long pushed by some university leaders in the system, will give the University of Oregon, Portland State University and Oregon State University more freedom to hire and fire presidents, issue revenue bonds, and raise tuition.

Across the country, a small but growing number of public universities are making similar pushes, looking to cut deals with state lawmakers that scale back direct oversight, often in return for less funding or for meeting certain performance targets. Over the past few years, schools in Texas, Virginia and Florida have all gotten more flexibility to raise tuition. Other plans have recently been broached, though with less success, in Wisconsin, California and Louisiana.  

The proposals vary in scope, but their proponents generally argue that more autonomy allows public universities to operate with less red tape and with greater freedom to raise revenue as state funding has fallen.  

But many within higher education point to the potential downsides. They worry that these universities -- often the better-known and wealthier public universities -- could end up sidelining broader state goals such as access and affordability in pursuit of their own agendas, such as moving up in college rankings.

“My fear is that if public flagships become so focused on revenue and prestige, and so focused on autonomy, they will minimize their commitment to the public agenda,” said Richard Novak, who was previously director of public-sector programs at the Association of Governing Boards. “They should be leading the public agenda. If they privatize too much, they’re not going to be doing it for much longer.”

Others have similar concerns.

“I think there’s a potential for confusion, unhealthy competition and misuse of resources,” said Robert O’Neil, who headed the statewide University of Wisconsin system and was also president of the University of Virginia. In O’Neil’s experience, centralized oversight helps keep in check ambitions that might lead colleges to pursue wasteful projects or duplicative programs.

There’s relatively little research on the overall benefits or drawbacks of schools gaining autonomy, but it does appear that such universities often end up resembling private colleges, moving toward a “high tuition, high aid” model in which schools hike sticker prices significantly while offering big discounts to students schools are trying to attract.  (As ProPublica has detailed, state schools have been giving a growing portion of grants to wealthier students and a shrinking portion to the neediest.) 

State and university officials pushing for more autonomy often balk at the term “privatization,” noting that the universities aren’t severing all ties with the state.

As one planning group at the University of Virginia wrote last month, “Autonomous is not the opposite of public.”

The University of Virginia, along with two other state universities, struck deals in 2005 that won it significant autonomy from the Commonwealth. Those agreements mandated that the schools still meet various benchmarks -- but they also gave the universities wiggle room.

Three years after the deal, a state audit report concluded that while the schools were meeting their “access” goals, the number of low-income students at each of the universities -- as measured by federal Pell grants -- was actually decreasing. (A university spokesman said enrollment of low-income students has gone up since then.)