For the past three weeks, we have been considering one of the biggest problems facing the U.S. today: the astronomical increase in the price of public higher education that has seriously impacted access for an increasing number of students now in the K-12 pipeline, coupled with growing concerns by parents and prospective students that the quality of the undergraduate experience at these public institutions has fallen, despite the rise in price.

Now, in Part 4, we will consider some possible solutions – but a warning: these solutions are much easier to identify than they will be to implement. The question will be whether the public’s interest in a college education that is both affordable and high quality will prevail over a higher education establishment that wants the status quo (even as it continues to lobby for larger state appropriations).

It is by no means a given that the problems of public higher education will automatically diminish, once the national economy improves. The federal budget plan recently released by the House Budget Committee, under the leadership of its chairman, Rep. Paul Ryan, proposes cuts of $5 trillion over the next decade, including the likelihood of significant reductions in the size and number of Pell Grants (Inside Higher Ed, “Ryan Budget Calls for Cuts to Pell Grant, Elimination of NEH,” April 2, 2014). That budget is unlikely to be approved by the Senate this year, but the mid-term elections could give the Republicans a majority in the Senate, in which case we can expect significant changes in how the federal government supports higher education in 2015.

Some states have already begun a reconsideration of the mission of public universities. Consider the University of Texas at Austin, the leading flagship campus in the state (Associated Press, “Elite State Universities Come Under Fire,” February 2014.) As a consequence of state budget cuts and soaring tuition, members of the Board of Regents, along with the Center for Higher Education at the Texas Public Policy Foundation, began asking why the state of Texas needs a “Cadillac,” when a “Chevrolet Bel Air” will do. (Ironically, the Bel Air model was discontinued in 1975.) The Director of the Center for Higher Education said, “We’ve gone too far in the direction of research at the expense of our students,” and cited a study that claims most of the faculty were not doing top-quality research.

The faculty, administration, and alumni of the University of Texas fought back, arguing that the state needed a “university of the first class,” and not a trade school. The chair of the alumni association said, “I just don’t understand why they want to dumb down a public institution of this magnitude.”

But opponents questioned the need for seven museums at the University, spending millions acquiring literary collections such as Jack Kerouac’s notebooks, or public memorabilia such as the dresses worn by Vivian Leigh in “Gone with the Wind.” The chair of the Board of Regents, himself a UT alumnus, said, “We are a public university that [is] paid for by the citizens of the state of Texas…[Texas has] a lot of students who cannot afford an institution that is a very high priced, Ivy League-type institution.”

Similar questions are being raised in other states, leaving a very uncertain future for public higher education in this country. Is it possible to have an outcome that doesn’t place the academics and the politicians in a fight to the death?

I am not under the illusion that there is a magic potion that can cure all of public higher education’s ills. On the one hand, there is no question in my mind that our country needs the states to recommit to the virtues of public higher education – and be willing to pay for it. A better-educated workforce will be better compensated, resulting in growing tax revenues for the state. More highly educated people are healthier, and less likely to require any form of public assistance, or to be incarcerated. There are highly pragmatic reasons why the states should reinvest in their public colleges and universities.

At the same time, the state colleges and universities need to reaffirm their commitment to provide what the public wants and needs – a highly affordable, quality undergraduate education for their children – rather than focusing on moving up a notch or two on the lists developed by the college ranking services. This will mean paying more attention to teaching, and, to the extent that they still wish to have a research agenda, finding ways to involve their undergraduate students in that work, something that we have done very successfully at Roger Williams University.

The state colleges were once the doorways through which first-generation college students achieved social mobility. If students and parents were given the option of paying lower tuition that supported quality undergraduate education only, versus the option of a higher tuition that was used in significant measure to support graduate education and research, does anyone really doubt which option most parents and students would choose? When will a state college take the step to give them that choice?

The public flagships face a different problem, because they are tasked with the inherently conflicting missions of undergraduate education, graduate education and research. In that world, tenure and promotion decisions are heavily influenced by the quality of faculty research; teaching is of secondary importance.

The answer to the conflict between a focus on undergraduate education on the one hand, and graduate education and research on the other, may be for the public universities to rely on research professors, supported by grants, to be the primary researchers and graduate student advisors, and to have the faculty who are on the state payroll to be far more focused on providing an excellent educational experience for the undergraduates.

However, as long as public universities give greater weight to faculty research than to high-quality teaching, we can anticipate that the public will continue to withhold their support for increasing the level of state funding for public higher education.

Finally, all of the public colleges and universities must become far more creative in developing alternative revenue streams that reduce their historic reliance on the state for the bulk of their funding. What alternatives might the public colleges and universities consider? Here’s a list of possibilities. To be sure, not each suggestion will necessarily work for every campus:

• Expand philanthropic efforts, with a commitment to use a growing endowment to increase affordability, not to build more campus monuments.
   
• Create dual admission programs with community colleges, to guarantee placement of community college students who earn an associate’s degree – and commit to accept all of the students’ credits when they transfer.
   
• Expand adult learning programs, offered online or blended with face-to-face instruction, at sites that are convenient for the prospective students.
   
• Expand the use of the campus in summer, either through a larger summer school or through more extensive use of the campus for camps and conferences – or move to a trimester or quarter system, and away from the semester system that underutilizes the campus over the course of a year.
   
• Create public-private partnerships for everything from dormitories to joint programs with social service agencies and nonprofit organizations.
   
• Develop more joint programs with other four-year institutions for low-enrolled courses and programs.
   
• Utilize more instructors (educated at the masters level) for introductory courses in writing and mathematics, on term contracts, and lessen the use of doctorally educated faculty for introductory courses (and lessen the use of underpaid adjuncts with no benefits as well).

• Develop a portion of the campus for commercial purposes, or lease a portion of the campus for a purpose compatible with the educational mission.

Some public universities have already shown admirable entrepreneurship in diversifying their revenue streams, but there are still many that expect to be rescued by the state. The states can, and should, do more, but the glory days of the 1960s and ’70s, where the state carried most of the load, are gone forever. Yet the public institutions can do far more to increase affordability, if they have the will to do so.

Our continued economic success as a nation depends on first creating, and then implementing, a shared vision on the part of the states and their public universities that will lead to affordable access to a high quality university education for a significant fraction of the students now moving through the K-12 pipeline. Getting there will not be easy – but we have no other choice.

This is the third part of a conversation about what has gone wrong with public higher education. In Part 1, we considered some metrics that demonstrate the extent of the problem:

• Low graduation rates at most public universities and colleges;
• Insufficient funds to offer a quality educational experience;
• Rising levels of deferred maintenance of campus buildings and infrastructure;
• A focus on graduate education and research at the expense of serving the undergraduate population;
• Diversion of scarce instructional funds to support Division I athletics;
• A steep decline in affordability because of rapidly rising tuitions (public university tuition and fees have risen by more than 70 percent in just the past five years in Arizona, Georgia and Washington state – Morning Edition, National Public Radio, March 18, 2014).

In Part 2, we discussed the underlying reasons behind the current problems associated with public higher education – including how the history, evolution and expansion of the public institutions created tension with state governments because the universities and the states did not share the same assumptions regarding the role each would play in serving the public at large.

Now, in Part 3, we will examine in greater depth the unintended consequences both of “mission creep” by the state colleges and of a greatly expanded research agenda by the flagship publics.

To review: All of the states now have at least one flagship public university, charged with providing undergraduate, graduate and professional education, as well as research. All that is well and good. But as the research agenda and budget of the federal government grew in the years after WW-II, many public colleges and universities succumbed to the lure of research dollars (and many state legislatures proved only too willing to support that ambition). It is important to understand that this change has come at the expense of the public universities’ original mission that focused much more on undergraduate education.

(Until WW-II, the federal government did not consider research in science and engineering to be a federal responsibility. The National Science Foundation dates only to 1950, and in its first year had a budget of just $150,000. NSF now has a budget in excess of $7 billion and annually provides 50,000 grants to researchers at 3000 institutions. The National Institutes of Health has funded health-related research since 1930, modestly at first, but now with a $30 billion annual budget. A high level of federally sponsored research in public universities is, in short, a relatively recent phenomenon.)

Federal grants dollars do not just pay for the research proposed by the faculty member who wrote the grant. In addition, so-called “indirect funds” – money that Washington allocates to the institution to pay for the costs of managing the grant – can be an important source of operating revenues for institutions with many federal grants.

However, success in obtaining big research grants is not the unmitigated triumph that institutions claim. Research grants come with negative consequences, both to the institution and to the state. Consider:

• Very often new facilities must be built to provide a proper venue for the research that the grant is intended to fund. At public universities, construction of these facilities is rarely paid from the institution’s operating budget. Instead, the state provides “capital” funding that is specifically directed to new construction.
• A new building may look like an obvious win for the campus – but the campus now has to operate this additional space, paying for more custodians, hiring more researchers and technicians, providing more financial support to more graduate students, and incurring additional utilities costs, all of which are drains on the campus’s operating budget.
• Funds for new public university buildings rarely come from the state’s annual budget, but instead from the issuance of bonds. In effect, the state creates buildings the same way that an individual buys a house: by acquiring a mortgage. Interest costs over the 25 or 30 years the state needs to retire a bond can easily double the actual cost of the building – and, of course, it is the taxpayers who are ultimately obligated to pay for the bond.
• So how does the state benefit from the construction of buildings devoted to research? Erection of the building itself employs construction workers, and anything that creates new jobs, however temporary, is always popular. In addition, it is certainly possible that a particular research grant may produce a marketable product (although that outcome is seldom the stated purpose of the grant) – but there is no guarantee, even if a new product is developed, that the state will in any way benefit. The product may be sold to an out-of-state firm, in which case the state receives no return on its investment.
• The bottom line is that research grants rarely provide a positive return, either for the state or for the institution, by the time that capital and operating expenses are calculated.

All this is not to say that research grants are a boondoggle. Universities are places that not only transmit knowledge but also expand it. Society advances because of research. The current quality of American life owes a great deal to the decision of the federal government to utilize universities to carry out much of the nation’s research agenda. But these advances come with substantial costs for both the states and the universities that are largely hidden, yet that represent a long-term drain on the states’ finances.

In the face of the added costs to the universities of having more funded research, the public universities were obliged, over time, to redirect to graduate education a portion of the state appropriations that were intended to subsidize the education of undergraduates, in order to balance their operating budgets. The result has been ever larger undergraduate classes that are more and more commonly staffed by adjunct instructors or graduate assistants.

The Great Recession has significantly exacerbated the consequence of this diversion of funds from undergraduate to graduate education. Historically, for the public universities to sustain their research enterprise, they required continual increases in state support – but when state support instead began dropping, the consequences of diminished resources fell heavily on the undergraduates, most obviously in the form of greatly increased tuition. Worse, the educational experience was often inferior to what a previous generation of students had experienced – an outcome that quite reasonably infuriated the parents of prospective undergraduates who had been planning to attend these state schools.

In contrast to the flagship state universities, the state colleges were generally charged by the states with providing undergraduate education only. However, as I noted in Part 2, the state colleges engaged in “mission creep” by developing graduate programs – and of course graduate education requires a thesis that demonstrates original research. Original research must logically be overseen by faculty who have the requisite education and experience. The consequence was that state colleges that had once cheerfully hired faculty with masters’ degrees who taught four or five courses a semester, now felt it necessary to hire doctorally trained faculty – people who understood how to conduct and oversee research, but who had absolutely no specific training as teachers.

Faculty with the Ph.D. not only cost more, but they generally are also interested in (and expected by the institution to continue) their research – so they successfully lobbied for a reduction in their teaching loads. The state colleges became state universities, frequently developed visions of grandeur, and too often set out to become miniature versions of the flagship public research universities, to the consternation of almost everyone. Yet with a smaller research base, these universities remained highly dependent on state appropriations to balance their budgets – and when state appropriations fell, as they have in recent years, it was impossible for these universities to raise tuition enough to recoup the lost state dollars, even though, to the public, the increases in tuition have been outrageous and unjustified.

To summarize, today almost every state has public campuses with billions of dollars of deferred maintenance in their aging buildings; highly inflated tuition levels; relatively costly faculty doing research at the expense of time spent in the classroom; pricey athletic programs that almost always lose money; a dramatic increase in the number of poorly paid adjunct faculty; and in general a too-often unsatisfactory educational experience for the undergraduate students.

These are huge problems. How might we attempt to address them, and put public higher education back on track?

Next week: Part 4.