Letters and Sciences retreat explores effect of privatization on public universities

September 1, 2006

Kathleen Sell and Katharine Lyall

"No matter the measure used, the public share of support for higher education is declining," said Kathleen Sell, senior lecturer in the integrated liberal studies program at UW-Madison, during her presentation with Katharine Lyall, former president of the UW System, at the 2006 College of Letters and Sciences Annual Retreat. The presentation was based on their book, "The True Genius of America at Risk: Are We Losing Our Public Universities to De Facto Privatization?"

"We have this annual retreat to chart what is coming," said Mary Pinkerton, interim dean of the College of Letters and Sciences, about the Wednesday, Aug. 30 retreat at the Kachel Center in the Greenhill Center of the Arts. "There have been some changes in the dean's office and we wanted to let faculty know what they are. We also wanted to share what initiatives in the past will continue and the new goals we have." Half of the retreat time, however, was focused on Sell and Lyall's presentation.

Lyall served as president of the University of Wisconsin System from 1992 to 2004 and is widely recognized as a long-serving, productive and visionary leader. Since 2004, she has held an appointment as visiting senior scholar at the Carnegie Foundation for the Advancement of Teaching in Palo Alto, Calif. Sell is a senior lecturer in the integrated liberal studies program at UW-Madison and served as vice president for budget and planning and chief budget officer for the UW System for 19 years.

"We asked Kathleen Sell and Katharine Lyall to come to provide the larger political and economic context for what we do in higher education," Pinkerton said. Their presentation focused on the fact that public universities are losing public investment and are having to function more in the competitive marketplace. Sell pointed out that between 1991 and 2004 in Wisconsin, local support per student has declined 12 percent with an acceleration to -16.8 percent in the last four years.

Since state investment in public universities has been shrinking for more than a decade, public universities have to make up for the lost funding, like increasing tuition. Sell pointed out that at many public institutions, the contributions of students, alumni and donors now exceed state support.

According to Sell, there are indicators of de facto privatization in Wisconsin. The tuition share of the budget approaches or exceeds the state share, financial aid is growing more slowly than tuition, the substitution of part-time for full-time faculty, the increasingly selective admissions standards and the growing gap in faculty compensation and workloads between public and private institutions, among others, are all indicators of de facto privatization.

Lyall sees this privatization as a long-term trend. Legislators can cut higher education funding because of the perceived availability of alternative revenue sources, like tuition. Also, states are shifting financial focus to meet more domestic needs, like Medicare and homeland security.

According to Lyall, there are some benefits of privatization, including a greater operational efficiency, increased responsiveness to client preferences and greater revenue independence/reduced volatility. There are also some disadvantages, which are declining access for low-income students, the possible commercialization of curriculum and a weakened outreach/service mission.

"There are states that have gotten over the grieving stage and are experimenting with real and practical solutions," Lyall said. Colorado, for example, has taken money for higher education and converted that funding into vouchers worth about $2,500 to give to college-bound students to use. Illinois has developed a cohort tuition, meaning that what the tuition is as a freshman stays the same throughout that student?s college career. The University of Virginia operates with a mix of publicly supported and privately endowed units in the same university structure.

"We're not unique," Pinkerton said. "Other states are facing the same things and there are other universities that are experimenting with solutions that we should be watching."

What are our core values? What specific structural roles can administrators play for our core values? What are the permissible trade-offs? Are we organized to make these choices? These are questions that Lyall asked the faculty and staff of the College of Letters and Sciences to ask themselves about UW-Whitewater, as well as the rest of the UW System.

"There were facts in the presentation that were depressing, but it's better to be knowledgeable," Pinkerton said. "This is a big issue, and we can't be in denial."