Universities weigh funding options

As public universities grapple with budget cuts, privatization — schools gaining more autonomy in exchange for turning down some state funding — is becoming a more attractive alternative.

But a proposal released this month by the American Association of State Colleges and Universities, a public university advocacy group, aims to lessen the appeal of privatization by attracting state money with a federal matching program.

Matching programs incentivize states to contribute to higher education by having the federal government match a certain percentage of state education money, depending on how much a state allocates.

The UNC system has had nearly half a billion dollars cut from its state funding since 2011. Under the association’s proposal, North Carolina would receive $834 million in federal block grants in the first year.

North Carolina has never proposed privatization, but other states have taken steps in that direction. Oregon, Virginia and Florida have given public universities more autonomy in recent years, particularly the flagship schools such as the University of Virginia and University of Oregon.

Proponents of privatization say it allows universities to offset state budget cuts, giving them more flexibility to raise tuition. But critics say steady tuition increases are threatening the affordability of higher education.

Gordon Lafer, a professor at the University of Oregon and an expert on labor policy, said privatization is part of a shift away from public universities’ original mission.

“Schools are increasingly abandoning the idea that universities exist for the poor and middle-class students to get an affordable education,” Lafer said. “Instead they are driving toward looking at students as a source of revenue, particularly out-of-state and foreign students.”

Edward St. John, a professor of education at the University of Michigan, said this change is partly due partly to efforts to compete with other universities.

“Private schools and elite public schools have begun to compete with one another on rankings and giving students and parents a sense of getting their money’s worth for increased prices,” St. John said. “Tuition increases go toward new residence halls, workout facilities and other things as much as (they go) toward education.”

D. Bruce Johnstone, a professor of education at the University of Buffalo, said state officials are willing to leave tuition hike decisions up to the universities to avoid political blame.

“What states often do is say to a school is, ‘You can raise your tuition,’ but put a cap on it so you can’t raise it too high — but are still able to say that the school’s governing board raised prices and not the politicians,” Johnstone said.

St. John said matching programs have existed for years, but their lack of consistent funding hampers their effectiveness.

Lafer thinks education reform will stall unless there is a strong enough outcry from students, parents and educators.

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