Cash-Strapped State Schools Being Forced to Privatize

http://www.time.com/time/business/article/0,8599,1893286,00.html?xid=rss-topstories-cnnpartner

by bilbo0s • 17 years ago

14 11 17 years ago

bilbo0s2• 17 years ago

Back when I was a faculty member at the University of Wisconsin there was a raging debate on this very issue. Oh to be a fly on the wall right now! At Wisconsin, UT-Austin, Michigan or North Carolina. What these administrators must be thinking!

With money from the states going down, do you continue to let in under qualified students from your own state? Or do you go private and run admissions as a true meritocracy, and make a few bucks in the process? What will the people of the state think when their "top 5% of her high school class" daughter gets a letter telling her to hit the bricks? Keep in mind, they don't know that the top 5% in an American high school is not the same thing as the top 5% in say . . . a secondary school in Singapore. Do Universities have an obligation to educate the people of the states they serve?

There is no denying that the current system is, in effect, affirmative action for white people. Supported by a level of public expenditure that is probably unsustainable long term. The question is, does everyone deserve a shot at a good education no matter how much money you have, or where you went to high school? If so, what is the best way to make that happen?

My own opinion was that the best thing for these states to do is to go private with their Universities and use them as immigration magnets. That way the state and its businesses benefit by having some of those students stay on after graduation. The University thrives, since, at least in Wisconsin's case, it would have the funds to support its teaching mission. And finally, the public expenditures being made to support these facilities are eliminated. You keep some level of affirmative action, and you expand the qualifications to include say 'people from the state we serve'. There is a quota, so not everyone who wants to would get in, but there would be some number of state residents in the student body. Added benefit, you really would get only the better students from that state since competition would be so fierce.

I realize that each University's situation is different. Even with that in mind I think that, at the University level, privatized education can work extremely well for the student, the University, local businesses, and the community.

zmonteca• 17 years ago

Interesting. I'm not sure I see the benefit to the students? Won't this cause tuition costs to go even higher?

tjic• 17 years ago

> There is no denying that the current system is, in effect, affirmative action for white people.

I deny it.

Are you asserting that entrance to state schools disproportionately helps whites? Affirmative action standards work to boost under qualified blacks and hispanics, and hold back qualified Asians. The net effect on whites is, if anything, a bit of a penalty.

Are you asserting that whites, taken as a whole, get more dollar value out of state schools than they pay in taxes? If so, I'll assert that whites pay a higher percent of taxes than whites make up a percent of state school student bodies.

Of course, I'm not a big fan of this whole train of logic, because it tries to create (even if just implicitly) group classes that pay costs or receive benefits, and I dislike any world view that attributes costs and benefits on groups larger than an individual.

bilbo0s2• 17 years ago

>"Of course, I'm not a big fan of this whole train of logic, because it tries to create (even if just implicitly) group classes that pay costs or receive benefits, and I dislike any world view that attributes costs and benefits on groups larger than an individual."

I respect that position. In general, I do too. I didn't mean to come off like that. I used the affirmative action comparison, because we are all familiar with it.

>"Are you asserting that entrance to state schools disproportionately helps whites? Affirmative action standards work to boost under qualified blacks and hispanics, and hold back qualified Asians. The net effect on whites is, if anything, a bit of a penalty."

So going back to my post, perhaps I should say that currently, residents of the state of Wisconsin, who happen to be white but could be any color, get into the University of Wisconsin with less qualification than let's say . . . the typical foreign student applicant. At the same time, the foreign student will pay more in tuition. Now affirmative action was the first familiar label in my head that could be used to describe such a system. There may be others, or we may want to come up with a more politically correct term for it to use during the course of the discussion.

Again, affirmative action was a comparison I used to provide context. I didn't assert that the affirmative action program at UW helps whites, just that the ADMISSIONS program at UW helps Wisconsin residents. Who happen to be white, but could be any color for the purposes of the discussion.

>"Are you asserting that whites, taken as a whole, get more dollar value out of state schools than they pay in taxes? If so, I'll assert that whites pay a higher percent of taxes than whites make up a percent of state school student bodies."

Again, I am not asserting that white people get more out than they put in. I am asserting that Wisconsin residents, "taken as a whole, get more dollar value out of state schools than they pay in taxes". Absolutely. The amount of money the state gives the University of Wisconsin is, by design, just a token amount. Enough to claim the University as public. So very few of your tax dollars actually end up at the University. For that small amount, tens of thousands of Wisconsin residents are, every year, given an education that anyone else would have to pay 3 to 4 times as much for. Surely you can see the asymmetry there. If there were no asymmetry, in fact, there would be no debate on going private.

philwelch• 17 years ago

"affirmative action for white people"

Not sure I agree, but last I checked, affirmative action for white people was just called "racism".

mhb2• 17 years ago

The article says that a $16 billion endowment is needed to replace the state's annual contribution of $327 million. Obviously no one know what a reasonable return on an endowment will be in the future, but you would like to think that 2% is overly pessimistic.

If they assume a 5% return, the endowment needed is $6.5 billion.

gambling8nt• 17 years ago

You're not considering that they also need to grow the endowment to keep up with inflation; their estimate seems to indicate an expected return of 2% over inflation--a more reasonable projection for long term conservative investment.

mhb2• 17 years ago

OK. Thanks.

briansmith• 17 years ago

The residents of Michigan would have to be fools to allow their legislature to approve the privatization of the University of Michigan for free. Right now they have 100% ownership of the university. The article claims that state funds are only 6% of the yearly income to the university. But, the other 94% is sales revenue and donations--neither of which buys equity. Even if the state contributed $0.00 per year, it would still have 100% ownership.

That means the university would have to raise a lot of money to buy itself from the state and go private. And, since the university's reason for going private is to make it harder for Michican residents to attend the university in favor of out-of-state students with more money, there's no reason for the state to be charitable with the sale price.

The article claims that the University of Michigan is somehow doing the state a favor by buying a bunch of construction. Yet, the university is a whole-owned subsidary of the state, so really the state is simply shuffling its own money around. The state could just cut the university's funding and use that money to buy buildings somewhere that is probably much more beneficial to the average Michigan resident.

dugmartin• 17 years ago

I've believed for years that public universities are essentially doomed. The idea of professors primarily being researchers with a bit of teaching on the side carries too high a cost.

Instead I think states should adopt a four-year community college model. Hire people to teach and not to research. I know most university educated people look down at community colleges as little more than extended high schools but the people I've know that have attended community colleges said the quality of instruction they received was much better than at the university level (most went on to get a university degree).

kiba• 17 years ago

Less taxes for Michigan residents and more efficent schools now that they're private. A win-win situation.

Cash-Strapped State Schools Being Forced to Privatize

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