Ownership, Control, and Reform: Market-Based Approaches to Universities – The American

By almost any indicator, American higher education is in trouble. Enrollments have fallen continuously since 2011, the longest period of sustained decline in the over 150 years since the federal government began regular data collection. Opinion surveys show low levels of public support for America’s universities. For decades, higher-education tuition fees rose faster than nearly all other prices and even more than American incomes, meaning that, amidst general affluence, college had become less affordable. Student outcomes, too, generally have been disappointing, with a majority of entering freshmen at baccalaureate schools either failing to graduate within the expected four years or ending up “underemployed,” taking jobs historically filled by those with a high school education or less.

Alarmingly, there is striking evidence of a lack of collegiate intellectual diversity and tolerance for alternative points of view, as witnessed by numerous incidents of shouting down speakers or otherwise canceling their visits. Freedom of expression, characterized by vigorous but civil debate over competing ideas — the foundational principle on which good universities operate — is in peril. Most frightening? Higher education seems impervious to change — resistant to needed reforms.

An overwhelming majority of American students attend so-called public universities, legally owned by public entities, usually state governments. But with some small but important exceptions, even so-called private colleges and universities receive a considerable amount of federal-government support, often indirectly. At private schools, many students use federally provided loans to pay otherwise-unaffordable high tuition fees, while faculty, staff, and outside donors also receive massive amounts of federal research support or other forms of indirect aid (e.g., favorable tax treatment of donations and investment income).

However, the federal government appears to be more the problem than the solution, as is evidenced by the New York Federal Reserve Bank and others suggesting that its financial-aid programs have contributed mightily to rising tuition fees. Therefore, reform of the federal financial-aid system is urgently needed, but the Biden administration is actually aggravating the problem with constitutionally, financially, and academically dubious loan-forgiveness programs. Another complication: Higher education itself has become a prime provider of money, ideas, and the training of many — largely progressive — governmental leaders, and it is thus now an almost sacrosanct ward of the state.

Hence, in the current national political environment, arguably the best hope for reform of public higher education will come at the state level. State governments “own” most of the public universities in some sense, and their governing boards are usually selected via the political process, although in a myriad of different ways (i.e., gubernatorial and/or legislative appointment; election by the public). If the U.S. is, in the late Justice Louis D. Brandeis’ phrase, a “laboratory of democracy,” are some states paving the way toward positive substantive changes in the way colleges and universities operate?

The Florida Initiatives

Florida in particular has been receiving a good deal of attention lately. Let by Gov. Ron DeSantis, who is highly critical of American higher education, Florida has initiated several reforms. I’ll mention just three: He is bringing in a number of conservative academics and activists to serve on the governing board of New College, a rather unique, public liberal arts college in Sarasota; he is demanding accounting from all public universities on their expenditures related to “diversity, equity, and inclusion” (DEI); and he is supporting direct state-university funding of research and teaching decidedly outside of mainstream progressive academia.

Changing the Governing Board: New College

The New College of Florida is very small — it has fewer than 700 students — with a traditional liberal arts emphasis. Like many liberal arts colleges, it has a progressive orientation that some have likened to Washington’s Evergreen State College, where race-motivated (some would say anti-white) protests a few years ago led to upheaval and dramatic enrollment declines. New College does not give out grades, instead relying solely on written evaluations. Outside evaluators such as U.S. News & World Report have historically ranked the school rather highly despite its somewhat nontraditional method of assessing student excellence, and the institution fashions itself as Florida’s “honors college” (although published data suggest few applicants are turned down for admission).

Should a state government subsidize an expensive-to-operate (on a per-student basis), small liberal arts college? Perhaps, but DeSantis has his doubts, and he wants to transform it into a classical liberal school with a decidedly more conservative orientation, like Michigan’s Hillsdale College. To that end, he has named six new trustees of the school (nearly half the board), all with a staunch right-of-center orientation.

One of the new appointees, Christopher Rufo of the Manhattan Institute, a think tank with mostly classically liberal scholars, has been particularly vocal, telling Michelle Goldberg of the New York Times, “If we can take this high-risk, high-reward gambit and turn it into a victory, we’re going to see conservative state legislators starting to reconquer public institutions all over the United States,” and adding that the school’s curriculum is “going to look very different in the next 120 days.”

Other new board appointees are somewhat skeptical, notably Mark Bauerlein, a retired, very distinguished literature scholar at Emory University who now edits the conservative magazine First Things and once served with me amiably on the board of the conservatively oriented National Association of Scholars. Bauerlein told the Sarasota Herald-Tribune, “I do believe what we see will be a lot less controversial than we’re hearing now.”

I suspect Bauerlein is right. Not all new board members think alike. Besides, changing directions radically and quickly in academia is nearly impossible, hence why some reformers think that whole institutions (like the University of Austin) need to be created from scratch in order to effect positive change. The New College faculty probably has tenure protection and may belong to the local faculty union. Does Rufo think the board of trustees can turn a woke gender-studies professor into, say, an admirer of the Enlightenment who loves David Hume, John Locke, and Adam Smith and promotes their contributions? Where does Rufo, one of 13 trustees, think the money to radically transform New College is going to come from? Already students and alumni are up in arms over Rufo’s and the governor’s announced intentions.

However, in a Wall Street Journal op-ed with Ilya Shapiro, Rufo suggested another path to reform that might be more effective: having legislators pass laws abolishing DEI bureaucracies, outlawing racial preferences, etc. Regarding the latter point, why do state governments allow state institutions to even collect data identifying students or employees by race? A cautionary note here, however: While conservative legislatures might pass anti-DEI laws, progressive ones might do the opposite, for example, requiring mandatory “anti-racism” indoctrination of all students. Be careful what you wish for.

Exposing Administrative Bloat, Especially DEI Initiatives

It is possible to expose how much university funding does not further Job One — teaching and research — but actually opposes rewarding scholarly excellence. American Enterprise Institute scholar Mark J. Perry and others have written about the vastness of DEI bureaucracies at major institutions like the University of Michigan and the Ohio State University — often numbering in the triple digits. DeSantis’ call for information from each school on DEI spending could incite legislatures or university trustees to take action to reduce or eliminate this form of spending. My extensive experience working with governing boards reveals that members are often abysmally ignorant about such spending details — and university presidents work hard to keep them from learning about politically controversial activities occurring on campus in order to enhance their own job security and income.

Indeed, the information-gathering powers of state government can be extended further. Already Florida is asking universities to provide information on gender-reassignment surgery. Using detailed Texas data, I once revealed that the University of Texas had a substantial number of very highly paid professors with few outside grants, modest research activities, and minimal teaching responsibilities — an expensive, taxpayer-funded academic…