Today, there are some 5,300 colleges and universities in the United States, everything from beauty schools to Harvard. Though we often refer to them collectively as “the American higher-education system,” it’s far from an organized system. In essence, they operate as 5,300 little fiefdoms.
Even so, American higher education remains the envy of the world. But that respect really only extends to a few hundred universities at the most. At too many colleges attended by the vast majority of American students, costs are spiraling out of control and quality is declining. And the very worst of the institutions suffer from low graduation rates, high debt loads for students, and poor placement rates into jobs.
Last week, on a panel I moderated about the future of higher education at a conference in Nashville, Tom Angelo, an expert in teaching and learning at the University of North Carolina at Chapel Hill, called these bottom-feeder institutions a “cancer on American higher education.” In most markets, such bad players would simply go away, driven out by more-efficient and less-expensive options.
But colleges rarely go under because they are heavily subsidized and regulated by the government. They receive hundreds of billions of dollars in direct subsidies (and indirect tax breaks as non-profits) and the only way to get access to those funds is to be an accredited institution, under a system controlled by the colleges themselves. The story of Sweet Briar College is a perfect example of how difficult it is to put a college out of business, and it had only about 700 students.
Because there never has been a federal higher education system, the growth of new American colleges and universities over the centuries has been uneven. The reason for their placement on a map was somewhat random, and often political. In the 1960s, for instance, Ohio’s governor, James Rhodes, promised a college within 30 miles of every resident. Such pledges, of course, often increased inefficiency more than access to higher education.
The problem now is that if you look at a map of American colleges and universities, many of them are clustered in the Northeast and upper Midwest, when most of the young college-going population lives in the South and West. It’s why several colleges, both public and private, in the Northeast and Midwest are struggling financially and are desperate to fill their seats every fall, while many in the West don’t have enough room for all the qualified students who want to come.
Now is the time for the federal government to exert a role in this non-federal system. The forthcoming renewal of the Higher Education Act, which governs federal student aid programs, is a perfect opportunity to do so. What we need is a federal commission similar to those that have been tasked with closing military bases over the years. In the case of higher education, this commission wouldn’t just recommend colleges for closure, but it also could identify where mergers or alliances could produce the best solution for clusters of struggling institutions.
The federal government has a huge stake in this game. It spends about $165 billion annually on higher education in grants, loans, and tax credits, while the states spend about $74 billion in direct appropriations. Given that government subsides account for close to 90 percent of revenues at some colleges when you add up grants, loans, and research funds, the federal government certainly should have a big say in how that money is spent nationwide.
“In the absence of a government subsidy, most colleges could not fill up their seats,” Ronald Ehrenberg, a higher-education economist and professor at Cornell University, told me.
Yet the states mostly control what happens to institutions in their backyards, both public and private. A few states have been proactive on this front. The university system in Georgia has approved six campus mergers in recent years, a response to declining state appropriations for higher education. But most states, like Pennsylvania, Maine, and West Virginia, have largely punted on the issue, leaving them with a patchwork of public and private colleges in the face of aging demographics and shrinking financial resources.
Closures remain very rare in higher education because alumni don’t want a college to lose its identity (witness Sweet Briar) and lawmakers don’t want to be known as the politician that shuttered a major employer in town.
But in some cases, mergers and deep academic alliances — which would allow colleges to share faculty — could stave off actual closure and make the resulting institution stronger in the long run because of its bigger size. We already have examples of alliances in higher education with athletic conferences, and on the academic side, the University Innovation Alliance, a group of 11 public research universities. And such collaborations are no longer limited to colleges in close proximity because of advances in technology.
Any time I drive in the Northeast, I’m always struck by the number of signs along the highway for a nearby college. The diversity of the American “system” — from two-year community colleges to four-year research universities — is one of the features that other countries want to copy.
Only by looking at the future of U.S. colleges and universities through the wide lens of the nation as a whole will we ensure that diversity remains, but we don’t need a college at every exit along the highway anymore.