Putting Public Colleges on a Path to Privatization

Overview:

This article was written by Adam Kissel at American Enterprise Institute. 

​

• Public universities in the U.S. often avoid sharing ideas outside the prevailing academic norms.
• Interest rates should drop below 4 percent before states pursue university privatization through an endowment/bond plan.

​

Key Quotes:

​

• "Public universities suffer from demonstrated cultures of timidity when it comes to sharing ideas that stand to the right of the prevailing academic regime."
• "States seeking to privatize their universities through an endowment/bond plan should wait for interest rates to return below 4 percent."

​

What They Discuss:

​

• Public universities demonstrate a noticeable reluctance to entertain conservative ideas, contributing to a perceived culture of speech suppression.
• Privatizing public universities is proposed as a solution, potentially saving states like Texas nearly $14 billion annually.
• One privatization approach involves gradually reducing state funding to zero while giving colleges ownership of their land.
• Alternatively, states could use an endowment/bond plan that maintains revenue neutrality by appropriating funds equivalent to eighteen to twenty times the average funding from the past five years.
• Fairmont State University serves as a case study, highlighting issues like low graduation rates and high drop-out rates despite significant state subsidies.

​

What They Recommend:

​

• States should consider privatizing public colleges either gradually or through an endowment/bond plan.
• State legislatures should wait until interest rates fall below 4 percent before adopting the endowment/bond approach.
• Resources should be redirected towards students most likely to succeed rather than continuing blanket subsidies for institutions.
• States could reallocate savings from privatization to other public needs or reduce taxpayer burdens.

​

Key Takeaways:

​

• Privatization could address cultural and financial inefficiencies in public universities.
• Approaches to privatization include reducing state funding gradually or using a revenue-neutral endowment plan.
• Privatizing universities could improve the intellectual climate and financial accountability in higher education.
• States could save billions in subsidies by privatizing public institutions and should wait for favorable interest rates to proceed.

​

This is a brief overview of the article by Adam Kissel at American Enterprise Institute. For complete insights, we recommend reading the full article.