A set of powerful forces is transforming the American system of higher education, including: increasing competition among traditional institutions, rapid expansion of new for-profit and virtual institutions, technology influences, globalization of colleges and universities and the shift toward streamlining of higher education as a market, rather than a regulated public sector.

A wake up call to the leaders of colleges and universities, as well as policy makers, this book aims to convince academic, political, and civic leaders that American society has an enormous stake in preserving, clarifying, and enhancing the public purposes of higher education—it is not just a private good.

The last decade marked the rise of corporate ownership represented by the for-profit national shareholder colleges and universities

Kinser, K. (2006). From main street to wall street: For-profit higher education. ASHE Higher Education Report, 31(5).

due in large part to the 1972 reauthorization of the Higher Education Act, which increased the amount of government student aid available to for-profit schools

The surge in growth that began circa 1994 can be partly explained by Wall Street’s increasing interest in the for-profit education sector

nlike nonprofit education, for-profit is maturing as an industry, and as a result, the sector is subject to more radical upheavals and revisions in how they do business, which has resulted in significant “creative destruction” within the industry

larger percentage of faculty members are employed only part-time by the for-profit sector than in the traditional nonprofit sector

Apollo Group, for example, leads the industry with its use of part-time faculty, employing 22,176 part- time instructors, or 70 percent of their total instructional staff. Nevertheless, Apollo Group has been able to keep class sizes small, averaging between 15–20 students per classroom

Too Big To Fail: The Role of For-Profit Colleges and Universities in American Higher Education

Tierney lays out the background and recent past of for-profit institutions, examines their growth to 12% of the industry, and lays out needed improvements for for-profits' success while arguing that they are a needed part of the higher education system going forward. A good read.

"If we agree that increased participation in higher education is critical for the country's economic and social well-being and we acknowledge that 1) the public sector is unlikely to increase its enrollments significantly and 2) the private non-profit sector is not able to meet the ambitious goals that have been set, what alternatives exist other than to ensure that the for-profit sector expands in a way that conforms to ethical industry standards?

Like it or not, the country needs the for-profit sector to ensure economic viability. If we concur, either begrudgingly or happily, that it has a role to play in maintaining the health of American higher education, then what are the key sticking points that ensure that it will do so responsibly?

Is HE in a crisis?
Levine's chapter: HE as a "mature" industry

HE has gone through tremendous changes in the last 40 years

Spellings commission's key recommendations is that our country "ensure the capacity of its universities to achieve global leadership in key strategic areas such as science, engineering, medicine, and other knowledge- intensive professions." But it says little or nothing about how to provide those universities with the necessary resources to do so.

a severe loss of financial support for public research universities is a quiet crisis in the making.

The great public universities are the ultimate key, not only to the nation's global economic competitiveness,

The University of Michigan at Ann Arbor now derives only about 7 percent of its total operating revenue from the state; the University of California at Los Angeles, 15 percent;

The chief objection to that approach is likely to be that it would undermine the long tradition of access for less-wealthy students, which public universities have provided through their low tuition levels. But the facts suggest that the real beneficiaries of low public tuition are middle- and upper-income families.

http://iiiprxy.library.miami.edu:10038/docview/214735951
Higher education's new status as a mature industry
Levine, Arthur. The Chronicle of Higher Education43.21 (Jan 31, 1997): A48.

In P. G. Altbach, R. O. Berdahl, & P. J Gumport (Eds.), American higher education in the twenty-first century.

Speaks of ACCESS and about WHO SHOULD PAY

public institutions in the U.S., which enroll three-quarters of all college students and two- thirds of all students in four-year colleges.

On average, states now supply only a little over one-third of public colleges’ revenues.

40-50% state expenditures on K-12 education and medicine
reliance now on private funding or expanding contract education outsourcing commercial technology transfers (Bok, 2003).. privatization of knowledge

need sufficient need-based Fin aid
budget cuts affect institutional mission

wide gaps between private and public, tenure, non tenure

in 2003 60% of high school grads were enrolled in college

enrollments increased 11% nationally 2003-2013

40% college age population is people of color

in CA alone 40% of HS grads are Latinos

Acess: 90% of US citizens think that everyone who wants to go to college should attend
2/3 think that the govt should contribute more money in HE

shift away from need-based aid and more towards loans

70% of all aid is loans!

financial support will not ensure access and success in college.. savage inequalities (J. Kozol)

who decides? challenges to access
who pays? growing privatization and more commercialized and politicized research system

who benefits? accountability and governance and accountability

risk if private-oriented, market-driven system, disengaged from public interest
as a result role as public agency diminishing (Zemsky)

http://www.educationanddemocracy.org/Resources/Zusman.pdf

Core institutions are the most selective and research-oriented employing faculty with the highest credentials

differences are the most marked as you move away from the center.. can't move from outside the rings (cc to first tier private easily)

diversity in this system strength and its weakness

no other institution except for maybe military service comes close to do what colleges do--they contribute to society in many ways:
associate with govt and private industry to conduct research, train the workers, and invent products basic to a modern economy and less quantifiable but very valuable social and cultural benefits

Technology and Higher Education: Opportunities and Challenges for the New Era, a chapter in Altbach's book American Higher Ed in the 21st Century

students are socially retarded ; lack F2F skills

Keohane, N.O. (2001). The liberal arts and the role of elite higher
education. In P. Altbach, P. Gumport, & D. Johnstone (Eds.). In
defense of American higher education (pp. 181-201). Baltimore,
MD: Johns Hopkins University Press.

The historical dynamics of curriculum reform in American higher education, discussed from an organizational perspective.

religion vs secular science
prescribed study of the classics vs curricular pluralism
tradition/conservatism vs experiementation/growth

prescription vs election
conservation vs innovation
stability vs growth

McSpirit et al. (2000) found that the faculty they surveyed believed that student evaluations were the largest single cause of grade inflation.

Grade inflation is the increase of students’ average GPA due to the mere passage of time, unconnected with increased academic achievement.

Identifying Grade Inflation at an Open-Admissions Institution

grades as fundamental currency of our educational system

there was a time that grades had more meaning, but grade inflation had run its course by 1970

there is no reason to believe that grading standards are any different from 40 years ago

mean grades have increased in secondary schools but not at college level grades have actually dropped after 1972

here has been an increase in the signaling power of grades between 1972-2004

signaling power of grades: ability to provide information to and about students

t

An examination of the effects of such commonplace stress factors such as: identity development, relationships, sexuality, roommate problems, academic pressures, extracurricular demands, parental expectations, and racial and cultural differences that affect self-worth.

Personal stories of students under stress and describes how they overcame a variety of problems.

The warning signs and symptoms of common problems, including depression, sleep disorders, substance abuse, anxiety disorders, eating disorders, impulsive behaviors, and suicide.

The Handbook of Student Affairs Administration

tuition in last 25 years has gone up 440%

admin staff has grown higher than the faculty body for more than ten years

Issues in HE 21st century
Who Pays?
— Growing privatization of public colleges and universities
— A more commercialized and politicized research system?
— Who Benefits?
— Who will attend college? Challenges to access

— The changing and uncertain job market for Ph.D.’s
— Who Decides?
— Accountability, governance, and coordination
Who Pays?
On average, states now supply only a little over one-third of public colleges’ revenues.

state tax systems are obsolete – for example, a growing percentage of economic activity is in non-taxed services and Internet sales

an estimated 40-50 percent of state expenditures is locked up in mandated program costs, particularly for K-12 education and Medicaid.

In 1995 a $26 billion backlog in deferred maintenance of existing facilities. A new survey, to be conducted in late 2003, was expected to show that this estimate had increased by at least 25 percent.

While the declining proportion of state funding at some institutions is due in part to success in obtaining more extramural grants and private donations as well as growth in auxiliary enterprises, nationally two-thirds of the change reflects the substitution of tuition and fee income in place of state support… move toward more reliance on private funding for “public” higher education – unless there is a paradigm shift in public support or unless state or federal policy makers impose mandatory tuition limitations.

Many public institutions are themselves pursuing privatization as a means to raise revenues or reallocate scarce state dollars. Some institutions are requiring that certain academic programs, especially high-demand, high-return professional programs like law or business, become fully or nearly fully funded by clients, business…

Community colleges and other institutions are expanding contract education programs with specific businesses or industries. Both public and private universities have adopted commercial technology transfer and other for-profit collaborations with industry. Colleges and universities are “outsourcing” many institu- tional functions to private vendors or other education institutions, including operation of residential dorms, employment training, and even academic functions such as remedial education and beginning language instruction. University hospitals have formed partnerships

Unless sufficient need-based financial aid is provided, low-income students and historically underrepresented ethnic groups may be excluded.

Access, success, and diversity: Over the next decade, many new faculty will be needed, both to replace the large numbers of expected retirements and to teach the growing numbers of students.

Impacts on faculty:According to the American Association of University Professors, the increasing reliance on part-time, temporary, and adjunct faculty threatens the tenure system and may harm the quality of higher education.

Program reallocations:In a more market-driven environment, will institutions (private as well as public) respond by shifting program resources toward fields that promise tuition-paying students high-paying jobs or that bring in more external research grants?
— Narrowing of institutional missions: Will budget cuts result in a contraction of institutional missions?
Impacts on the higher education system as a whole: Will declining state funding, along with government or market limits on tuition, widen the gaps between the “haves” and the “have-nots” in the U.S. higher education system overall – between faculty and student resources at most public institutions and those at well- endowed private institutions, between elite and less elite institutions within the public sector, between tenure- track and non-tenure-track faculty, or between science and non-science fields?
University/industry collaboration
Between 1980 and 2000, industry funding for university research and development (R&D) in science and engineering grew much more rapidly than any other funding source, nearly doubling as a percentage of total university research dollars, from four to almost eight percent.
University/industry partnerships, where researchers in both sectors are jointly involved in research activities, have also grown dramatically over the past two decades… However, such collaboration is also subject to potential problems.
Commercialization: Critics also charge that commercialization may further shift research priorities toward more marketable areas in science and technol- ogy fields, distort traditional academic missions, and replace science dedicated to the public good with the “privatization of knowledge.”
Who Will Attend College? Challenges to Access
“mass higher education.” In 2003, over 60 percent of recent high school graduates and more than one-third of the traditional “college-age” population (18-24-year-olds) were enrolled in postsecondary education institutions.
Total enrollments have increased dramatically, rising nearly 50 percent over the past 25 years, to over 16 million students in 2003.
Poverty is the biggest barrier to college attendance.
Young adults from families in the bottom income bracket are eight times less likely than others in their age group to complete a bachelor’s degree.
The National Center for Education Statistics projects that college enrollments will increase 11 percent nationally between 2003 and 2013,
By the end of the decade, students of color will constitute close to 40 percent of the college-age population nationally
By 2010, for example, California projects that over 40 percent of public high school graduates will be of Latino background,
these changed perceptions come at a time when high school students of all ethnic back- grounds are completing substantially more college preparatory and advanced coursework in science and mathematics than previous generations, as a result of higher state graduation and college admission require- ments.
higher education is increasingly viewed by both policy makers and the general public as primarily a private benefit, rather than a broader social good. Over 90 percent of U.S. adults believe that every high school student who wants a four-year college education should have the opportunity to gain one, accord- ing to a 2003 survey, and two-thirds believe state and federal governments should invest more money in higher education –
Access implications
First, the growing demand for higher education will collide with forces limiting enrollment: budgetary demands on governments that already have limited revenues to meet other social needs, greater public readiness to consider higher education a private good, and consequent reduction in public funding for higher education… Many private institutions and some public ones will have a seller’s market, allowing them to become more selective. More institutions may “leverage” financial aid funds by directing more of their limited dollars to relatively well-off, tuition-paying students.
over the past 25 years, federal, state, and institutional financial aid programs have increasingly shifted away from both grants and need-based support. Federal financial aid has moved overwhelmingly toward loans, rising from about half to about 70 percent of all federal aid, and aid eligibility has been expanded to include more middle-class students.
hird, financial support alone will not ensure access and success in college. Low-income, underrepresented ethnic minority, and first-generation students often come from schools with fewer academic resources, have less academic preparation, and may have lower expectations. In Jonathan Kozol’s view, the differences in the resources available to rich and poor school districts have created “savage inequalities” in the education their

State govts continue to shift the cost burden from taxpayers to Ss & families via high increases in tuition
Private colleges with huge endowments will experience continuing cost pressures
Finance underlies three overarching themes: quality, access, and efficiency
Three broad issues in financing HE in the US:
-Size of the publicly funded HE enterprise
-Effficiency and productivity of this enterprise
-Sources of revenue to support this enterprise: who pays? Ss & parents? Govt & taxpayers? Donors?
Diverging trajectories of costs and revenues

-Price resistance from upper middle class parents…shift in demand to selective private and in bargain hunting
-price resistance from older students and from graduate and advanced professional students
-sharp decline in the stock market beginning in 2008 and resulting collapse of c & U endowments
-decreasing support from governors and state legis ..collapse of state revenues in the recession
-increasing cost of big science
access to private C & Us by low & middle class depends largely on taxpayer support via state & federal grants
high cost public institutions -> substantial indebtedness particularly for middle income student

by 1995 the endowments of Ivy League schools were 70 times larger than state units

rising tuition due to
research
dependency on govt
administrative costs due to federal and state pressures
more and more low income students (more and more those coming from single parent homes) have access to HE and these depend heavily on student loan subsidies which are supported by taxpayer monies (McClellan & Stringer, 2009)

in the 1960-70s took for granted that the public would pay 70-80% of the costs of HE but in recent years state only funds public unit with 10%

financing of HE is from
students
parents
philanthropists
taxpayers

cost of college shifted from state govts to students and families

a lot of competition for state funds: healthcare, welfare, transportation (McClellan & Stringer, 2009)

financial pressures to perform and changes in funding sources, there is a pressure to generate new income sources (Fullan & Scott, 2009)

http://www.ed.psu.edu/educ/cshe/working-papers/WP%236