Can our public universities still compete with rich private ones?
Only if they readjust to a new normal and get competitive.


Students walk through campus between classes at Santa Monica College in Santa Monica, California April 4, 2012.

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  • Can our public universities still compete w/ rich private ones? @AEIEducation @AndrewPKelly weighs in.

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  • Private colleges are stoked while public colleges are broke.

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  • This competition is a good thing; it provides entrepreneurial public sector leaders with incentive to blaze new trail in #undergrad.

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Editor's note: This appeared in "Up for Discussion: Private College Stoked, Public College Broke."  Several respondents answered the question: Can our public universities compete with private ones? Anrew Kelly said, "Only if they readjust to a new normal and get competitive."

America’s public universities face unprecedented challenges. In the wake of the economic recession and the resulting budget crises, states have cut higher education funding. At the same time, the nation’s expectations for higher education have grown, with President Obama warning that our economic competitiveness will suffer unless our colleges and universities produce more graduates. College leaders are being asked to do more with less.

In response to these new demands, most institutions have made small changes and battened down the hatches in the hopes that funding will return to normal. Public colleges have raised tuition to make up for lost revenue, made across-the-board cuts, and frozen hiring. These changes may help in the short-term, but they do little to prepare existing institutions for a “new normal” of tight budgets and high expectations.

"In the absence of more public funding, the key is to leverage innovations like online delivery and competency- based assessment to build capacity, reduce tuition prices, and tap new markets." -Andrew P. KellyTo the optimist, the crisis also presents an opportunity for public institutions to rethink their core business and the way they operate. For many institutions, this will mean drawing a distinction between research and teaching. The top research universities—those that were created to do research—should continue to focus on their strength: attracting the resources and talent necessary to produce critical scientific breakthroughs. Public and private funders should reward institutions that take steps to ensure that research dollars go to actual research rather than administrative overhead.

Outside of the top research universities, though, many public colleges that were originally built to teach undergrads have sought to expand their research mission. In an effort to bolster their prestige, these teaching institutions have tried, often unsuccessfully, to mimic flagship campuses. This mission creep has taken away from undergraduate teaching while simultaneously making it more costly to deliver.

Instead, public institutions should use the current financial crisis to refocus on their traditional comparative advantage—providing lower-priced education that has a significant payoff in the labor market. In the absence of more public funding, the key is to leverage innovations like online delivery and competency-based assessment to build capacity, reduce tuition prices, and tap new markets. Rather than close the doors because there are not enough seats in the lecture hall, leaders should ask how they can use online courses to serve more students at the same level of public subsidy. Instead of resisting efforts to measure student learning and the labor market success of their graduates, public institutions should welcome opportunities to show that they provide a substantial return on investment.

If public, teaching-focused colleges fail to embrace these new imperatives, innovative, low-cost options—from massive open online courses (MOOCs) to competency-based institutions like Western Governors University—will take over large chunks of their market. This competition is a good thing; it provides entrepreneurial public sector leaders with an incentive to blaze a new trail in undergraduate education.

Andrew P. Kelly is a research fellow in education policy studies at the American Enterprise Institute.

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