Can you think of a business whose product has increased in price, often by 10 percent or more, year-over-year for decades? Meanwhile, that same product has consistently gotten worse. Of course you can’t think of a business that was run so recklessly. But that pretty much sums up what’s happened in American higher education, with its endless stream of public subsidies.
According to a recent report by the Chronicle of Higher Education, more than 100 colleges in America are now charging over $50,000 a year for tuition, room and board — and that list even includes one public school: the University of California at Berkeley. The Chronicle of Higher Education further reported that 30 college presidents now make over $1 million a year.
So I was somewhat pleased to see the new president of my alma mater, Richard Lariviere of the University of Oregon, take to the pages of the Wall Street Journal and offer a bold new proposal to rethink the economics of public universities. Recognizing that Oregon, like many other state governments, is heavily in debt, Lariviere proposes creating a public-private endowment of $1.6 billion to fund the university — half from taxpayer-secured bonds and half from an ambitious $800 million fundraising campaign.
According to Lariviere, “Projecting returns of 9 percent and assuming distributions of 4 percent, the endowment’s annual payout will increase to $263.4 million in its 30th year. The endowment’s capitalized balance of $6.9 billion at that point will secure the university’s future.”
Once you stop laughing at the assumption of 9 percent annual returns over 30 years, Lariviere’s proposal is admirably capitalist and not all bad. But I’m afraid that Lariviere is largely missing the forest for the trees.
Nowhere in Lariviere’s proposal does he say the university will cut costs. Large public universities are pure administrative bloat. In the real world, when organizations run out of money, they cut staff and programs. They don’t get billion-dollar handouts.
Which brings us to another problem. A college education isn’t just more unaffordable — it’s less valuable. Universities need to redouble their efforts toward helping students be competitive in the job market. As P.J. O’Rourke recently quipped, the typical American curriculum consists of “a smattering of Spanish, Fun With Numbers, Earth in the Balance, computer skills, Toni Morrison, safe sex, and multicultural studies.” That’s still true at the University of Oregon, and that’s not going to cut it.
And finally, if the university hopes to raise $800 million for an endowment, it would help if they dipped a toe in the mainstream. If you’ve ever been to Eugene, Ore. — or Berkeley, Madison, Ann Arbor or any other big college town — you know exactly what I’m talking about.
UO’s journalism department sent me a mailer last year with a cover photo of a kid in class wearing a Che Guevara T-shirt in front of an Obama “Hope” poster. (I’ll stomach the Democratic agit-prop, but I draw the line at mass-murdering communists.) The UO still sends about $100,000 a year in mandatory student fees to Oregon Public Interest Research Groups, a liberal political lobby founded by Ralph Nader. As an alumnus, UO asks me for money all the time. But why would I — or the vast majority of alumni whose politics are fairly centrist — subsidize this?
Lariviere’s proposal seems predicated on the assumption that big public universities are fine as they are, they just need more money. But in order to truly solve the problems of American higher education, the university as we know it — expensive, impractical and politically radical — needs to go out of business.
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at [email protected].
