What's Happening to Public Higher Education?
The Shifting Financial Burden

Richard Vedder reviews What's Happening to Public Higher Education? The Shifting Financial Burden, edited by Ronald G. Ehrenberg.

Visiting Scholar
Richard Vedder

A financially induced crisis is developing in America's public universities, if we believe this book edited by Ronald Ehrenberg, distinguished Cornell University economist. We are told that stagnant, even declining, state government support is forcing these schools to adopt practices that reduce educational quality, leading to their decline relative to wealthier private schools. The solution? More public funding.

In the longest essay, Michael Rizzo provides detailed econometric evidence as to why higher education's share of state government budgets is falling, and why some states are increasingly giving funding directly to students rather than to institutions. Hugely important, Rizzo argues, is the growing income inequality in America, but other factors, such as an ageing population, increased federal government aid to low-income students and rising tuition rates are also important.

Despite some good scholarship and irrefutable evidence, this book suffers from a serious error of omission.

Three papers (by Ehrenberg and Zhang, Bettinger and Long, and Blose, Porter and Kokkelenberg) show that moving to lower-cost faculty and other funding reductions have led to declining levels of student achievement, as measured by the proportion of students graduating on time. Roughly two thirds of the book is devoted to ten case studies describing funding changes at individual schools or state university systems and the effects.

We learn from Kissler and Switkes that the University of California is falling behind peer institutions in salaries for senior faculty, from Cornwell and Mustard that the University of Georgia is sharply decreasing the use of senior and permanent faculty, and from Olien that the University of Wisconsin is having trouble maintaining quality and offering affordable student access. Two prominent university administrators conclude the volume, saying that the privatisation of public universities is fiscally impossible (Wiley) and that the dearth of public support endangers the nation's future (Alexander).

Despite some good scholarship and irrefutable evidence, this book suffers from a serious error of omission. We do not read, for example, that total spending per student adjusting for inflation today is actually higher in these schools than 25 years ago, that non-instructional staff members, especially university bureaucrats, have soared in number, or that salaries of top university officials have exploded, with one major public university now paying at least six employees $1 million a year or more in annual compensation.

Moreover, there is no discussion of the biggest scandal in U.S. higher education: schools, taxpayers, parents and others have virtually no idea whether graduating seniors are somehow better because of their college experience. What evidence is there that they know more about the world, have better critical learning skills, improved leadership traits or a better set of moral values? Productivity is measured by dividing outcomes by inputs. While outcomes are largely unmeasured and may be changing little, input usage is in fact growing, so it is at least plausible, and I suspect probable, that productivity in American higher education is actually falling. With its medieval form of organization and the same teaching technology used by Socrates, this is not altogether surprising. The solution, however, is not simply providing more money.

Richard Vedder is a visiting scholar at AEI.

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