January 16, 2017; Inside Higher Ed

A recent opinion piece in Inside Higher Ed laments the decline in state funding for higher education. The New York Times reported on how the City University of New York’s sputtering resulted from notable budget collapses. Inside Higher Ed recalls how CUNY, the state of New York’s public higher education institution that produced 13 Nobel Prize laureates between the years 1933–1963, was tuition-free until 1976. Yes, just as in notable universities in Illinois (including University of Illinois Urbana-Champaign and Chicago State University), high-quality, tuition-free public higher education was once possible in the USA the way it still is in Nordic countries and Germany. However, that was when American public university systems like the ones in NY and Illinois could “enjoy greater public support, support it once had.”

Pew Charitable Trust statistics illustrate the declines in state funding. Between the years 2000–2012, the average annual state support per full-time student dropped by almost 4 percent ($7,000 to $4,400 after inflation). Montana, North Dakota, and Wyoming are the only states to have reported increases, while the remaining 47 states have witnessed decreases.

The Increased Federal Funding Paradox

In contrast to diminishing state funds, from 2000–2012 federal support grew by 2.5 percent annually (from $3,800 to $5,100) after adjusting for inflation. The post-recession years 2008–2012 note an even sharper state-versus-federal contrast. While annual state support declined by 7.8 percent, federal support grew by 7.3 percent. Hofstra University professor Harold M. Hastings explains in Inside Higher Ed that this phenomenon “appears to be the flip side of a classic economic conundrum: The tragedy of the commons.”

First described by W.F. Lloyd over 200 years ago, the tragedy of the commons describes the overuse of a shared resource (the commons) by various individuals. While each person is only supposed to use a fraction of the resource, the collective result of everyone’s partaking ironically drives the resource to depletion. The “tragedy” takes place due to a “fundamental mismatch between the scale of the decision maker[s] and the scale of the resource…the absence of communication and agreement among users, and each user’s optimal economic strategy in exploiting a shared resource…is to over-exploit the resource, potentially driving it to extinction.”

Most of us realize that the only way to avoid the risk of depleting a valuable resource is to ensure its sustainability. With respect to state funding for public universities, globalization and enhanced out-of-state employment opportunities grinds the sustainability process to a halt. Hastings explains:

This reverse tragedy of the commons describes the present-day United States. Public universities have become national resources, not merely state resources, providing benefits both in the state and outside of it. The educated population is highly mobile, and businesses recruit and hire their best-educated employees on a national or global scale. Thus, federal support for public universities has grown in recent years because the scale of federal decision making and investment matches the national scale of usage of public universities. But meanwhile state support has fallen sharply because the scale of state decision-making and investment does not match the national scale of the hiring and mobility of the well-educated.

When fewer graduates stay local, any local sense of ownership of the “investment-in-higher-ed-resource” sadly diminishes. National or global hiring often offers individuals little incentive to invest locally. As decreased investments and public funding damages the quality and affordability of universities, local workforce competitiveness also suffers. Businesses can hire out of state, even outside the United States, to attract a more global talent pool.

Bloomberg has reported on the “brain drain” that states like Illinois are concerned about as a result of more lucrative mobility options. Such concerns arise from the exodus of in-state students as local colleges face “liquidity crunches.” In addition, while out-of-state students’ tuition may fill state funding gaps, any need to increase both in- and out-of-state tuition exacerbates the problem by reducing people’s access to higher education—and the band plays on. A domino effect further leads to the reduction of an institution’s economic competitiveness, which further weakens the case for taxpayer support, “driving the downward spiral in state support for public universities.”

A Call for Effective User Communities

According to Inside Higher Ed, saving the public university system from collapsing due to funding decreases may require the U.S. to return to a higher ed model it once espoused: “Provide funding at a sustainable level on a suitable scale and then allocate enrollment.” Politifact quotes Bernie Sanders as pointing out that tuition-free public colleges and universities used to exist in the United States. The past model applied the concept of an effective “user community” with shared funding that was split into thirds between state, local funders, and students. Such a model requires community partners to have a common agenda, mission, and openly communicative environment between individual community players who take ownership of the stakes in higher public education. Hastings explains that this would enforce “a match between the scale of a common resource and the community of its users.” He cites 2009 Nobel laureate Elinor Ostrom as linking a resource’s enhanced value to its users “with long-term interests, who invest in monitoring and building trust.” Hastings reminds us that both public and private universities benefit from this model, as all types of “colleges and universities with a well-identified sense of community have increased overall giving and high alumni giving rates.”

According to Hastings, the user-community model lost its luster in the United States years ago due to low public support and a preference for increasing tuition, paralleling de-investment trends. However, the model is still used in countries across Europe. While the Guardian reveals that some European policy-makers continue to ponder the benefits of tuition-free public higher ed in Germany, it continues to prove successful because that is what the communities want. This may be why, as Hastings puts it,

We in higher education must work together to build a more active and effective national user community, one that acts on its collective responsibility to support its commons—the public universities of the United States.

—Noreen Ohlrich