Cost of Higher Education in US Public Universities. (October 19, 2005)

    One of TFW's readers has pointed us toward a recent article in The New York Times on the course of tax payer support for students at US public universities.

The NYT's opening together with an accompanying chart sets the tenor.

 Taxpayer support for public universities, measured per student, has plunged more precipitously since 2001 than at any time in two decades, and several university presidents are calling the decline a de facto privatization of the institutions that played a crucial role in the creation of the American middle class.

Sam Dillon, author of the NYT article quotes John Wiley, Chancellor of the University of Wisconsin-Madison, who opined at a recent forum that during the years after World War II, America built the world's greatest system of public higher education, but "We're now in the process of dismantling all that."

Katharine Lyall, an economist and president emeritus of the University of Wisconsin says, "America is rapidly privatizing its public colleges and universities, whose mission used to be to serve the public good. But if private donors and corporations are providing much of a university's budget, then they will set the agenda, perhaps in ways the public likes and perhaps not. Public control is slipping away."

On the other hand Paul E. Lingenfelter, president of State Higher Education Executive Officers, a non-profit association told the NYT, "Let's not panic and say that the public commitment to higher education has fundamentally changed; let's just say that these cycles happen, and get back to work to restore the funding."

In Dr Lingenfelter's opinion the declines are only part of a familiar cycle in which legislatures cut the budgets of public universities more radically than other state agencies during recession but restore financing when good times return.

Public Funding  in US 64% (see below)                                     In Australia 44%

Nevertheless as Dillon points out, "At stake are institutions that carry out much of the country's public-interest research and educate nearly 80 percent of all college students, and whose scientific and technological innovation has been crucial to America's economic dominance."

In hard figures the NYT reports, "The average in-state tuition nationwide for students attending four-year public colleges increased 36 percent from 2000-01 through 2004-05, according to the College Board, while consumer prices over all rose about 11 percent." In addition "the average percentage of state tax revenues devoted to public higher education, has declined for several decades. About 6.7 percent of state revenues went to higher education appropriations in 1977, but by 2000, universities' share had fallen to 4.5 percent, according to a study by the Urban Institute."

Finally, Dillon sites some specific examples of some "flagship" public universities which have become virtually privatised, "About 25 percent of the University of Illinois' budget comes from the state. Michigan finances about 18 percent of Ann Arbor's revenues [while] the taxpayer share of revenues at the University of Virginia is about 8 percent."

That said, however, the share of all public universities' revenues deriving from state and local taxes in 2004 was 64% (74% in 1991), significantly above current Australian public funding (see pie chart).

And yet the US is home of aggressive private entrepreneurship on the one hand and currently suffering from serious public deficits, while our government, with overweening pride, points to its budget surpluses as it tightens the screws on the nation's higher education sector.

Fees in US$ for Current Academic Year in the US