Academic Health II

Science  27 Aug 2004:
Vol. 305, Issue 5688, pp. 1213
DOI: 10.1126/science.305.5688.1213

I started this second diagnostic foray into the health of American universities with good intentions and a list of topics'but events intervened, as events often do. For example, an alarming postscript has been added to one of the issues discussed in last week's Editorial. The inspector general of the Department of Defense had produced a report urging contract officers to watch contract language more carefully (Science, 23 April 2004, p. 500). Two other agency inspectors general have since come out with ominously similar recommendations. It is uncertain how all this will be interpreted, but university administrators worry that the government will become more willing to attach restrictions short of classification to research awards, in the name of export control. Didn't anyone out there hear National Security Advisor Condoleezza Rice say that National Security Decision Directive (NSDD) 189 still held, and that we therefore weren't using halfway proxies for classification?

But another and even larger worry has also intervened. It now is becoming clear that the biggest problem in higher education in the United States is the steady erosion in the economic health of its great state-supported public universities. There was a time when these institutions dominated the sector. When William Rainey Harper became president of the University of Chicago in 1890, he described his fledgling but handsomely endowed institution as “surrounded by the great engines of public instruction.” This politically adroit, poor-me bow to the Big Ten universities echoes strangely in 2004, when the faculty of the University of Illinois would surely like to have The University of Chicago's salary structure.


The economic decline of state budgets, of course, is largely responsible, and its sources have recently been analyzed in a 2003 Brookings Institution study by Thomas Kane and Peter Orszag. There are a variety of causes: business cycle effects influencing tax revenue and—most important—the escalation of Medicaid costs. The expected result in state appropriations for higher education is that these have dropped from about $8.50 per $1000 in personal income in 1977 to about $7.00 in 2003. The resulting changes in faculty salaries and other indicators of academic welfare, as documented in the Kane and Orszag study, are these. First, state spending per student in public institutions versus private ones fell from 70% in 1977 to 58% in 1996. Second, there has also been an adverse effect on student recruitment, as candidates in the highest categories of the usual admissions criteria have increasingly preferred private to public universities. Finally, and perhaps most troublesome, faculty satisfaction in the public universities has also dropped. Small wonder: In 1981, the ratio of public to private university professorial salaries stood right about at parity; by 2000, it had dropped to about 0.85.

The struggle for the public universities, as they labor at the low end of this tilted playing field, is increasingly desperate. Some, like the universities of Virginia and Oregon, have adopted a “privatization” strategy, upping tuition (especially for out-of-state students) to make up for shrinking state allocations—which, in many institutions, now constitute less than 15% of total revenues. The University of California has limited enrollment by requiring otherwise-qualified applicants to attend community colleges for 2 years. Research has also suffered, although formula funding for agricultural research has left the land-grant institutions in somewhat better shape than the others.

What is to be done? The academic community, especially its private sector, needs to be aware of the situation and support the public universities wherever state or national policies are being crafted. Federal policies could make a difference by reforming Medicaid—the key factor in driving out state higher education support. As for the states, they need to recognize what a powerful economic engine higher education represents, and consider the long-term costs of failing to fuel it. A final possibility, surely the most politically controversial, arises because most state institutions provide a large educational subsidy in the form of tuition charges for all students that are way below the real cost of education. Unlike other state welfare programs, this comes with no means test. If families who can afford the real cost of education had to pay something closer to it, the new revenue could be applied to financial aid for able but poor candidates—leaving something over for program improvement. It's an unpopular idea, but in hard times it may belong on the table.

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