June 4 (Bloomberg) -- From Pennsylvania to Oregon, the number of top public universities bidding to shake off government control keeps growing.
The universities want more control over tuition and academic programs as they become less dependent on public subsidies. Some state systems have resisted because, without their flagships, they lose premier faculty and students as well as clout in legislatures that set funding.
Pennsylvania’s West Chester University, the fastest-growing of 14 state-owned campuses and the one with the highest SAT scores, could break away under legislation filed this year. Its departure would deepen a divide between independent ‘haves’ and tightly controlled ‘have nots’ plagued by dwindling funding and enrollment. Pennsylvania State University and three other public institutions already operate autonomously.
“We can do this better than they can,” said Robert Tomlinson, a West Chester trustee and Pennsylvania state senator who filed the bill in March. “We have a train wreck coming financially. We’ve got to do something.”
After gaining greater independence, many public universities have increased tuition, raising fears that West Chester would follow suit.
“For any university that leaves the state system, tuition and fees will likely go up -- creating an added burden for students and their families,” Frank Brogan, chancellor of the Pennsylvania State System of Higher Education, said in a statement opposing the bill when it was introduced.
The independence drive is analogous to the rise in K-12 education of charter schools, which are privately run public institutions. Like charters, breakaway universities want less red tape and more freedom to experiment with academic programs. Like charters, they fuel fears about the future of public systems and whether some institutions will be left behind to wither as competition intensifies.
State support for higher education has been shrinking for years. Where public subsidies on average covered almost three-quarters of operating costs in the 1980s, the share is now closer to half and falling every year, according to the State Higher Education Executive Officers Association. To compensate, colleges keep lifting tuition, contributing to soaring student-loan debt, which topped $1.1 trillion this year.
Top universities also raise revenue by attracting higher-paying, out-of-state and foreign students while boosting alumni donations.
As state aid makes up a smaller share of their overall support, “universities have made the pretty persuasive argument that they should not be restricted in the same fashion,” said George Pernsteiner, president of the executive officers association, a membership organization in Boulder, Colorado. “The question is: Will it harm the system and other institutions?”
A steep recession and tepid economic recovery has further undermined aid. Arizona’s university system cut 2,100 positions and closed or merged 182 colleges, schools, programs and departments as per-student funding dropped 48 percent in six years, a recent study by the Center on Budget and Policy Priorities found. Louisiana State University eliminated 1,210 full-time positions, including 220 faculty members, in the same period, the group said.
The stakes are high given that President Barack Obama wants to expand access to higher education. The White House has set a target of 60 percent of adults obtaining a college degree by 2020, up from about 40 percent today. Two-thirds of undergraduate degrees are obtained from public institutions, according to federal data.
“I’m profoundly concerned,” said Robert Birgeneau, the former chancellor of the University of California at Berkeley. “If we don’t provide the education we need to our own people we’re going to see the quality of life in the United States diminish progressively.”
West Chester is thriving amid the cuts in public support, with enrollment increasing 9 percent to almost 16,000 students in the last three years. The historic campus is located about 35 miles west of Philadelphia in one of the state’s fastest-growing counties, near the so-called Main Line, a nickname for a collection of wealthy boroughs known for horse farms, rolling hills and exclusive private schools.
The SAT scores for freshmen averaged 1,079 in the last academic year, the highest among campuses and above the 987 average for the system, according to state data. The majority of the student body comes from Philadelphia and the counties around the city, said Pam Sheridan, a spokeswoman. It charges state residents about $17,000 a year for tuition, room and board, while Penn State costs close to $30,000.
“West Chester is a great bargain -- you get the same quality at a lower price,” said Alex Paez, 24, a recent graduate from Levittown, Pennsylvania, who earned both a master’s and bachelor’s degree from the university.
The rest of the system by contrast is struggling, with enrollment down 6 percent to almost 112,000 students in the last three years. As it shrinks, it has also been cutting programs and staff, shedding 540 positions including faculty since 2008 when the recession peaked through retirement, voluntary separations and furloughs, according to state data.
Much of the losses are concentrated on campuses in rural or old industrial areas of Pennsylvania, where the number of high school graduates has begun to plummet. Edinboro University in the far northwestern corner of the state near Lake Erie, saw enrollment drop 18 percent in three years. At Clarion University near Pittsburgh, the decline was 17 percent.
“It’s a tremendous pressure cooker,” said Karen Whitney, Clarion’s president. “The students are pushing back, the parents are pushing back.”
After cutting aid to higher education by almost 20 percent in 2012, the state has funded the 14 campuses at $412.7 million a year for the past three years. The subsidy on average amounts to about 27 percent of their operating revenue, down from 47 percent in 2000.
Governor Tom Corbett, a Republican who sought to cut higher education aid by half after the recession, proposed flat funding again this academic year even as the system projected a budget gap of at least $61 million, according to Kenn Marshall, a spokesman. Any deficit would have to be closed with more staff or faculty cuts and higher tuition rates, he said.
Eager to expand and frustrated with the state’s control over programming, some West Chester trustees developed legislation giving it and possibly other campuses a pathway to independence while guaranteeing a minimum amount of funding. The universities would need to have least 7,000 students, which nine do, while being able to show they can afford to buy their campuses from the state. In exchange they would set up independent boards and control matters such as hiring.
“The goal is not to raise tuition,” said Christopher Lewis, an attorney at Blank Rome LLP in Philadelphia and a West Chester trustee. “The goal is administrative and academic stability and fiscal stability over the long run.”
Penn State, Temple University, the University of Pittsburgh, and Lincoln University have always operated independently of Pennsylvania’s system of state-owned institutions. Except for Lincoln, a historically black college south of Philadelphia, the annual appropriations to those schools represent less than 10 percent of their budgets, according to state data.
The proposal in Pennsylvania, which backers hope will be the subject of a legislative hearing this year, mirrors other state efforts. Oregon last year passed a law after a lengthy campaign led by Philip Knight, the billionaire founder of Nike Inc., permitting the University of Oregon, Oregon State University and Portland State University to become independent. Knight is a graduate and major donor to the University of Oregon.
The University of Wisconsin at Madison gained some autonomy in 2011 after making a bid backed by Republican Governor Scott Walker for independence from the state system. The school was granted additional control over personnel and budgeting. Virginia in 2005 restructured its higher education system as flagship schools such as the University of Virginia became more financially independent.
Pennsylvania’s governor, who is running for re-election, opposes the West Chester proposal, saying it would be a mistake to break up the system. He told reporters in March that Brogan, the system chancellor who was hired from Florida last year, is a visionary who should be given a chance to fix any problems on the campuses.
Greg Weisenstein, West Chester’s president, declined to comment through a spokeswoman. The university’s council of trustees is an advisory group while senior administrators such as Weisenstein work for the system.
Still, the effort is resonating with some early opponents. While West Chester’s faculty union took a stand against the legislation in March on concern it might undermine collective bargaining, it supports greater autonomy and has offered feedback on how to improve the legislation, according to Mark Rimple, a music professor.
“The worries are if enough time goes by without the financial system getting fixed we could get dragged down by other universities in the system,” said Rimple, who serves as a union head on campus. “The state has not been doing its fair share in funding. We’re always asked to do more with less.”
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