A New Model to Help Finance Higher Education

By Robert J. Birgeneau and Frank D. Yeary
Sunday, September 27, 2009

Almost 150 years ago, in an effort to better serve a growing nation, President Abraham Lincoln signed the Morrill Land Grant Act, which gave struggling states federal land with which they could generate revenue to build colleges. The result of that bold action is a national resource: a structure for higher education that is admired, and copied, around the globe in places such as Japan, Germany and Canada. We are the only country to have both private and public universities of world renown. Sadly, this amalgam of great public and private research and teaching universities is at risk as economically struggling states progressively disinvest in public higher education.

Our private and public research and teaching universities have contributed greatly to American prosperity. Public universities by definition teach large numbers of students and substantially help shape our nation. The top 10 publics have more than 350,000 undergraduate students. By comparison, the eight Ivies educate less than a sixth of that number. Public universities with strong state support have an admirable cross-section of ethnically and economically diverse students. In essence, their student bodies look like America. They are the conduits into mainstream society for a huge number of highly talented people from financially disadvantaged backgrounds, as well as the key to the American dream of an increasingly better life for the middle class.

Yet over several decades there has been a material and progressive disinvestment by states in higher education. The economic crisis has made this a countrywide phenomenon, with devastating cuts in some states, including California. Historically acclaimed public institutions are struggling to remain true to their mission as tuitions rise and in-state students from middle- and low-income families are displaced by out-of-state students from higher socioeconomic brackets who pay steeper fees. While America is fortunate to have many great private universities, we do not need to add to the list by privatizing Berkeley, Illinois, Rutgers, etc. On the contrary, we need to keep our public research and teaching universities excellent and accessible to the vast majority of Americans.

Given the precarious condition of state finances, we propose that President Obama emulate President Lincoln by creating a 21st-century version of the Morrill Act.

Specifically, the federal government should create a hybrid model in which a limited number of our great public research and teaching universities receive basic operating support from the federal government and their respective state governments. Washington might initially choose a representative set of schools, perhaps based on their research achievements, their success in graduating students, commitment to public service and their record in having a student body that is broadly representative of society.

Washington would provide sufficient additional funding for operations and student support to ensure broad access and continued excellence at these universities. A portion of these resources would ensure that out-of-state and in-state students pay the same tuition and have access to the same financial aid packages. The combined federal-state funding must be sufficient for these universities to maintain their preeminence as well as charge moderate fees to all U.S. citizens and permanent residents.

Philanthropy must continue to be an important resource. To ensure stability, the federal government should agree to match, at a rate of 2-to-1, and the state government at 1-to-1, private endowment funds raised by these public universities for 10 years. If such a public-private partnership raised private philanthropy of $150 million per year, the university would have $6 billion contributed toward a new endowment at the end of 10 years. The payout from this new federal-state endowment would provide operating and other support such as need-based scholarships and would essentially secure excellence and access for a generation.

As with any daring scheme, the devil is in the details. This proposal for a national federal-state university system may require new models of financial governance that include federal and state oversight. This proposal would require these universities to accept a more diverse geographic mix of students, with perhaps fewer students from their own state. Yet such problems are solvable, if there is a will. The great benefit to all states, particularly those that do not yet have internationally acclaimed public universities, would be the opportunity for residents to attend other flagship state universities without paying out-of-state fees.

The need for an alternative model to preserve the public character of our great universities is increasingly urgent. This is one model, but there may be other, and more attractive, options. Simply put, no matter what the form, we must take some radical steps if we are to preserve the public character of America's great public universities.

The Morrill Act was passed during the darkest days of the Civil War by a bold president and farsighted members of Congress. Even in perilous times they recognized the irreplaceable value of a well-educated populace for the country's economic and democratic future. Today's political leaders would be just as right in making a similar investment in America's future.

Robert J. Birgeneau and Frank D. Yeary are, respectively, the chancellor and vice chancellor of the University of California at Berkeley.

© 2009 The Washington Post Company