Friday, 13 May 2016


A nation’s higher education system reflects the ideological and political institutional mainstream as a whole. This has been the case since the founding of universities in the late Middle Ages (University of Bologna, 1088; University of Paris, c.1150; University of Oxford (1167); even earlier for Arab universities (University of al-Qarawiyyin, 859; Al-Azhar University, 970). To this day, universities reflect society’s value capitalist system, prevalent ideological and political trends rooted in neoliberal thinking that dominates the political economy. The question is whether the neo-liberal model of higher education best serves individual students and society collectively or merely large businesses. 

Based on the cosmopolitan ideals of the Age of Reason, the Humboldtian Model of Higher Education - named after Prussian philosopher and diplomat Wilhelm von Humboldt, 1767-1835 - endeavored to forge teaching and research in the arts, sciences and humanities for the broader purpose of general knowledge both theoretical and applied. The Industrial Revolution necessitated education at all levels including university level in order to expand. Therefore, the modern university became a necessary instrument to serve industrial capitalism’s needs (drivers of innovation where basic research and development took place).

 It stands to reason that the most thriving capitalist country, the United States with the world’s largest economy in nominal value at least, would have the best universities both private and public, especially land-grant colleges that started in 1862 under the Morrill Act. Although such schools started with the purpose of indeed buttressing the economy by creating an educated work force, they reflected an apartheid society considering that it was not until the Higher Education Act of 1965 and the Education Amendment of 1972 that minorities, women and lower income whites had access to these institutions that were mostly for white middle class males. 

In the early 21st century the problem is not one of access based on race and gender but rather class because of the commoditization of higher education model prevalent in the US and exported worldwide. Considering the number of US-affiliated colleges and university extensions overseas, but the degree to which non-US universities try to emulate the commoditized model, many around the world accept the commoditized neoliberal model of American higher education as the very best possible.  

It is indeed true that the US has some of the world’s best universities, especially graduate schools if not so as much at the undergraduate level. It is just as true that since the end of the Vietnam War American higher education has become increasingly unaffordable and divided into the top tier schools with many at the bottom providing low-quality in-class or online education at a very high cost. This too is a reflection of broader societal trends such as downward socioeconomic mobility and good education as a commodity reserved for wealthy families. 

Excluding loans, the federal government provides a mere 2% of the budget for higher education, despite a sharp decrease in spending by states since 2008. If we consider the federal student loan program estimated at $170 billion in the next ten years, the cost is still negligible given that the US has proposed foreign military aid of $40 billion to Israel for that same ten-year period; money devoted to continue the repression against the Palestinian people. Two-thirds of American college students graduate with college debt that currently stands at$1.3 trillion. In an economy of $17.5 trillion GDP, this is an enormous burden that has been rising commensurately with the average household debt over the last three decades.  Approximately 43% the student debt is not paid in regular payments and it is estimated that because of the absence of jobs about 20% will probably never repay the loans. This would then leave the federal government with the burden of the guaranteed bank loans. Because the US economy has been experiencing downward socioeconomic mobilization concurrently with the massive rise in student debt and household debt in the last ten years, the problem was inevitable. 

The position of the majority of the politicians is to do nothing, other than have universities raise endowments for scholarship money and force universities to depend even more on tuition and the private sector. However, as Warren Buffett recently noted, the university where he serves as a board member raised its endowment from $8 million to $1 billion but kept tuition at high levels instead of lowering it and it did nothing about improving. As we will see below, doing nothing about the current neoliberal model has many negative consequences for society both domestically and globally.

Another option to fix a broken system is to cut the multi-million dollar costs of the top-heavy administration in universities where presidents, vice presidents, chancellors, vice chancellors, and deans have compensation packages as though they are executives in the private sector. The salary gap between a university president and an adjunct English professor is almost as wide as a worker and a corporate CEO. Clearly, the overhead costs of the bureaucratized universities entails that student tuition is unaffordable for the working class and the weakened middle class.

Another option to fix the costs in higher education is to go tuition free. This is a proposal that Senator Bernie Sanders floated as part of his neo-Keynesian presidential platform that includes free health care for all Americans. This of course means putting an end to the neoliberal model. His reasoning is that students are punished for going to college. They come out with massive debt to start their lives in a job market that is hardly favorable to the majority of them. Considering that a college degree is roughly equivalent today to a High School degree in the 1950s-1960s when the US economy was growing and there was upward socioeconomic mobility, what purpose does the unaffordable tuition serve other than to keep college the domain of the wealthy or those willing to go deep into debt? 

This is a question not just about economics and raising taxes of the rich to pay tuition of the poor. The fact is that the system already favors the wealthy and it is stacked against the lower class. This is an issue of social justice considering that the federal government and states have no problem providing billions of dollars in corporate subsidies and tax breaks for the richest Americans and setting aside a massive budget for defense, intelligence and homeland security and very little for human welfare. This is an issue of values, just like the blatantly racist criminal justice system that punishes the petty thief or small time drug dealer in the inner city, but rewards the bank executive whose bank had been laundering drug money, fixing rates, engaged in inside trading, etc.      

The Rising Cost of Higher Education

From 1978 until 2012 the increase in tuition and fee was 1,120%. An increase far above the level of inflation that generally ranges in the single digits represents a crisis in the cost structure of colleges and universities. Assuming a rise of just 7% between 2016 and 2030, the average annual cost for a public university will be $58,000, or $232,000 for a four-year degree. For a family with two children, this means the cost will be around the half-a-million dollar mark, and the difference between owning a home or sending the children to college and sinking them into debt when they graduate. 

Since the Great Recession of 2008 states have slashed spending on higher education to raise corporate subsidies and provide more tax breaks for upper income groups. The result has been college affordability in 45 out of the 50 states has decreased for the average household which has seen a drop in its income during the same period. This means that households under $30,000 must devote 60% of their income to educate a college age teenager at a two-year college, while those between $40,000 and $100,000 (middle class) need 76% for a four-year college. In short, a very difficult choice for the average American family that must ask whether an undergraduate degree really means much in the workforce of today.

One could argue that a college education is well worth investment not only in terms of securing higher paying jobs in the future but because the quest for knowledge about the world and self discovery are very basic to human nature and society. Moreover, education goes to the core of a society’s claim to maintaining a merit-based system by developing the most creative minds that benefit the totality through the individual.  If higher education is a mirror of society as well as the source for progress, is it time to consider new models other than the existing corporate one that will best serve society and not just a very narrow segment linked to the corporate structure? A few voices including that of Bernie Sanders and his supporters agree the time has come for a new model of higher education. However, the entrenched business, political and media elites are adamantly against change. Interestingly enough, these elites are allies among highly paid administrators who have a vested interest in maintaining the existing system. 

Political Resistance to Changing the Neoliberal Model of Higher Education 

The neoliberal ideology that took hold during the Reagan administration in society impacted higher education because government at all levels adopted a policy of transferring income from social programs, mental hospitals and education to corporate welfare through various subsidies and tax reductions. At the state level, governors and legislatures began seeking ways to reduce their allocations to public colleges and universities, forcing them to seek funds from the private sector. This entailed that they would have to emulate the private sector in everything from ideology to structure and at the same time serve its needs rather than carry out work independently. 

Not just the governance structure of higher education, but endowed chairs and entire departments or even colleges would be created to reflect the millionaire or billionaire donors’ wishes.  Everything from hiring faculty to reflect the neoliberal ideological orientation to setting priorities that link the institution to local and national businesses changed because of the inexorable relationship between university and the donors. Most college presidents and university top administrators serve on boards of local and national businesses, and they are as themselves business people and politicians rather than academics. In some cases, top administrators are as alien to academia as the local bank executive hobnobbing with the mayor, governor and congressmen. 

Higher education has been reduced to a business and the administration views itself as such and students as customers as thought they are shopping for a new cell phone. No candidate of either party has dared to go along with Sanders’ proposal, although there is no shortage of those on the Democrat side promising “something must be done” but within the neoliberal corporate model that exists today. Politicians who raise money from wealthy donors for election and reelection are not interested in facing their benefactors to explain higher taxes to fund higher education. Higher education is a political issue in so far as politicians decide where it fits in as far as a national priority. It is hardly a secret that both political parties have national defense/terrorism/homeland security as a top priority followed by retaining the corporate welfare system.

Between 9/11 and the end of 2015 the US had spent $4.4 trillion on the wars in Iraq and Afghanistan, various interventions in Libya and Syria, the war on terror and homeland security. During that same decade-and-a-half, the corporate tax subsidies from state and local governments cost $80 billion annually, while Export-Import subsidies cost an additional $112 billion. The combined corporate welfare program costs $1.5 trillion annually, but both political parties are committed to it as a national priority whereas higher education is a low priority. Just as the state government in Michigan had as a priority providing a tax break of $1 billion to the richest residents even if that meant cutting costs in the Flint water supply, similarly state and federal government have corporate welfare as a priority over higher education.

The Media and the Corporate Model of Higher Education

All of the mainstream media came out against the Sanders proposals of reexamining the neoliberal model of higher education, including the Washington Post and the New York Times promoting themselves as “liberal”. Every day their pages are promoting neoliberal economic policies and neoconservative foreign and defense policies, but they continue to project the fake image of a liberal media. No matter where one looks in the mainstream media, there is no support for making higher education a national priority, and certainly not at the expense of cutting defense and the generous corporate welfare programs that benefit the richest Americans.;

Although the Sanders plan would cover about 70% of college students, and it would cost an estimated $75 billion annually split between the federal government and the States, Republicans and most Democrats find this plan reprehensible because it calls for a new tax on Wall Street speculation. It must be stressed that the Federal government makes an estimated $11 billion profit annually from student loans. In short, the media has no problem with Wall Street speculation, higher defense costs and higher corporate welfare costs, but it decries free tuition for public colleges and universities. A number of prominent university professors on the payroll of corporations including media companies have come out in opposition to ending the neoliberal model arguing that free tuition would: a. stifle innovation and creativity; b. undermine private colleges and universities; c. too much government involvement in higher education would impede entrepreneurship in higher education; d. deprive people of “freedom of choice; and e. free tuition will necessarily mean that quality suffers. ;

Presenting itself as America’s premier newspaper and supposedly liberal, the New York Times came out against free tuition because: “free tuition means fewer resources to teach students. Unintended consequences could include reductions in need-based financial aid, which would harm the low- and middle-income students free tuition is meant to help.” Oblivious to the current $1.3 trillion in student debt expected to rise sharply by 2030, the media insists that higher education must not become a national priority. After all, the majority of both Republicans and Democrats agree with Wall Street that the economy cannot afford free tuition when it has already set its priorities in the domain of defense and corporate welfare. Along with politicians, the media is silent when it comes to the for-profit online unaccredited colleges and universities that government subsidizes by providing subsidies for low-quality to dubious educational experience for students.

It makes sense that corporate and business opposition in general would be forthcoming on this issue for a number of reasons. First, the businesses would lose the influence they currently enjoy over universities in every matter from curriculum to faculty and top administrators running the university on the existing commoditized model. When the most important function of its administration is to raise money rather than deliver a good education the question arises about the hold that the wealthy donors have on the university either by request or because the university is obligated to cater to the corporate ideological framework.
Just as millionaires and billionaires have a hold on the political arena because they finance campaigns and control the media that provides coverage to politicians, similarly hundreds of millions have been flowing into universities from Koch brothers and other billionaires and millionaires wishing to influence what is otherwise academic freedom. 

Most of the donations to universities go to the already wealthy private institutions, but almost always with conditions that determine everything from curriculum to hiring and program development. “In Kentucky, Papa John’s pizza founder John Schnatter teamed up with the Koch Brothers Foundation to fund business school programmes at the University of Louisville and at the University of Kentucky. Both donations came with the caveat that the donors can stop funding if they do not feel that their mission – the teaching of free market economics and business practices – is being carried out to their satisfaction. To some, such stipulations imply that students will be taught by professors sympathetic to the political and economic views of the donors.”

In the past forty years, the faculty-to-student ratio has remained about the same, although the corporate model has meant relying increasingly on part time faculty. This reflects the corporate model of relying of low-paying part time employees and avoiding the costs of fulltime people. During the same forty-year period of a rise in part-time faculty, there has been an astronomical rise in the administrative bureaucracy that deals with the university as a business and injects a corporate ideology into an otherwise non-profit institution of higher learning. The least educated and most opportunistic elements invariably wind up in administration positions that pay much higher than any faculty position. Administrators identity and self-interest is not with the students but with the business community and they in turn project that value system into the university.  (Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All-Administrative University and why it Matters. 2011);

Corporatization of the University and College Administration

It makes sense that private colleges would object to ending the neoliberal model and supporting Sanders because they would have to reduce tuition and costs. Of course, the wealthy that would rarely consider a public school in the first place will continue to attend private colleges. Moreover, the free tuition of public schools would permit the private schools to promise they are the elite. Representing 1000 private universities, the National Association of Independent Colleges and Universities (NAICU) opposes Sanders’ proposal despite its acknowledgement that costs are very high.  

“But one of the things we very firmly believe is that as it has been for the last 50 years or so, that federal aid money must follow the student, and stay with the student.” In other words, do what you will with public schools, as long as federal and state funds also flow into private schools based on student choice. “There is no trend we can discern yet that suggests schools are going to start cutting back on the amounts of money that they need for the expanding services they offer. There may be a decrease in growth if tuition increases, but nobody is decreasing tuition, nobody is decreasing the number of services offered, and therefore schools are continually getting more expensive.”

In every state where there is a major corporation its influence is heavily felt very clearly on the state institutions. Whether it is Eli Lilly in Indiana or 3-M in Minnesota, the influence of the long arm of the corporate world in ubiquitous in universities that fight amongst themselves to secure corporate funding no matter the cost to academic freedom.  Not just humanities and social sciences faculty, but those in the “hard sciences” are constantly fighting to secure grants for their research and as government slashed National Science Foundation money (16% cut proposed for 2016), faculty look to corporations. Scientists depend on the agrichemicals, pharmaceutical and biotech industry for research funding, so they structure their research around what the corporation expects.;

In his article entitled “Higher Education or Education for Hire? Corporatization and the Threat to Democratic Thinking”, Joel Wetheimer writes:  “The effects of corporatization on the integrity of university research – especially in the sciences – has been well-documented elsewhere. Readers of Academic Matters are likely  familiar with the many cases of scientific compromise resulting from private commercial sponsorship of research by pharmaceutical and tobacco companies. Indeed, faculty throughout North America are already deluged with requests or demands to produce research that is “patentable” or “commercially viable.”

A land grant school, the University of Illinois-Champaign-Urbana campus is one of many public institutions heavily indebted to the private sector. Upon accepting massive grants from agrichemical companies such as Monsanto, the university caters to the wishes of the donors to hire faculty in the field of expertise the company dictates, namely in genetically modified seeds and agrichemicals that would have a direct impact on its multinational business. In other words, this is just another very cheap way of outsourcing research and development. On the surface, there appears to be nothing wrong with this, expect that this is a public tax-supported institution whose work is geared to serve the corporation. In short, the general taxpayer is indirectly subsidizing corporations.

As Wenonah Hauter, executive director of Food & Water Watch put it: “Sound agricultural policy requires impartial and unbiased scientific inquiry, but like nearly every aspect of our modern food system, land-grant school funding has been overrun by narrow private interests….Private-sector funding not only corrupts the public research mission of land-grant universities, but also distorts the science that is supposed to help farmers improve their practices and livelihoods,” said Hauter. “Industry-funded academic research routinely produces favorable results for industry sponsors. And since policymakers and regulators frequently cite these university studies to back up their decision-making, industry-funded academic research increasingly influences the rules that govern their business operations.”

The highly paid university administrators urge faculty to forge closer ties with the corporate world. They bring with them a corporate value system and worldview intended to make the university an institution that models itself after the corporate world. These leaders of the universities are among the most adamant opponents of doing away with the neoliberal model. Catharine Bond Hill, Vassar College president, a Clinton backer argued that Sanders is wrong to propose free tuition for public colleges. There is a vast administrative bureaucracy handling everything from loans to scholarships with layers of vice chancellors and vice presidents in the larger universities. One concern that college administrator have if the Sanders proposal goes through is the inevitable cuts in the administrative bureaucracy that will not be needed to deal with student loans, scholarships, and fundraising for student aid. From 1985 to 2005, the number of administrators rose by 85% and their attendant staff by 240%. People assume that tuition goes for the direct educational experience of the student. “This is no longer the case. Instead, a large chunk of a check made out for tens of thousands of dollars is feeding the burgeoning administrative staff on college campuses.  

The cozy relationship between the corporate world and college administrators illustrates that the neoliberal model is not a theoretical construct but a sinister reality.  To university administrators and board of trustees invariably serve on the boards of businesses large and small. It may surprise the reader to discover that 42% of the Board trustees at public universities come from large corporations and they make the decisions about university governance and direction. 

One reason Sanders has captured the vast majority support of voters under 30 years of age, especially college students is because they agree with him on free college tuition, among other issues such as addressing Wall Street control of politicians. Having lost confidence in the neoliberal model of the university system, the majority of people under 30 have lost confidence in the neoliberal political economy.   A Harvard University study recently shows that 51% of people between 18 and 29 oppose capitalism and 33% stated they support socialism.;; The youth in America is moving farther to the left of its neoliberal political, business and academic establishment, showing the entire societal structure of which higher education is an integral part is not working for the benefit of most citizens. Despite this reality, the neoliberal establishment has deep institutional roots.


There are those who insist that there is nothing with taxpayers subsidizing the rich and the coprorations any more than there is anything wrong with taxpayers subsidizing tax-exempt churches at a cost that some estimate between $70 to $80 billion annually. While many see no problem  of the taxpayer subsidizing the lavish lifestyle of some of the wealthiest ministrers, they have a problem with free tuition. While many see no problem of the government paying between 15% and 350% in cost overruns to defense contractors, money that runs into the billions, excluding the corruption that is associated with such contracts. No matter the cost to society, who would dare propose ending the subsidies of churches and of corporations?

It is indeed amazing that the US model of higher education with all of its problems is actually one that other countries are trying to emulate. Although it has been cultural diffusion, especially the contributions of a global academic talent that has made American Higher Education as productive as it has since the end of WWII, many around the world and here in the US confuse this catalyst to success with the neoliberal governance and operational structure. The fact that high school students in Japan and many European countries actually score at par with US college graduates is indicative that the high cost of US colleges does not translate to better education. Graduation rates across the board are in the mid-50s, and for the lower tiered schools in the low 20s and high teens. Why is it that graduation rates are so low across the board, although tuition and fees keep going higher and grade inflation is a reality driven mostly by an administration that views students as paying customers? If the neoliberal model of education is the best one possible why do we have such grim results?

Billions of dollars in endowments and funding for research from the federal government and states allows the top universities mostly private to buy the best academics in their respective fields. However, the pyramid structure of American higher education suggests that the very few at the top, mostly private with some public schools, enjoy the big money and reputation. Despite a second tier with good departments in all fields from humanities to business, the bottom of the pyramid is where most students attend and where the system shows its cracks. It is at the bottom of the pyramid – The following are all for profit mostly online mostly low-quality education that does not compare favorably to a state university and does not have commensurate weight in the job market.

University of Phoenix at $35.5 billion
Walden University - $9.8 billion;
DeVry - $82 billion;
Capella University - $8 billion;
Strayer University - $6.7 billion
Kaplan University - $6.7 billion

The schools listed above have graduation rates in the low 20s compared with mid-50s for the national average. In short, these places take the students’ money but fail to retain them. The burden of very low graduation rates and such high level of debt falls on students that come mostly from working class backgrounds without the usual social/professional connections that the upper middle class students attending private universities enjoy. As more people find it difficult to afford the cost of public universities, they will turn to the degree mills mostly online that will result in high debt and low prospects for a rewarding career. The results of doing nothing with the current neoliberal corporate model of higher education will be the following: 

1.      Higher student debt as many studies have indicated considering the six-fold rise between 2008 and 2016.

2.      A New elite class will emerge of college graduates with advanced degrees that will become increasingly unaffordable to the majority of American families.

3.      Convergence of costs between public and private universities will make higher education increasingly unattainable for the majority of Americans.

4.      Second and third tier low-quality for-profit schools will continue to prop up marketing themselves as the alternative to a solid college education.

5.       Blacks, Hispanics and poor whites will be the worst to suffer the elitist neoliberal system of higher education.

6.      Lower number of students that attend four-year colleges, choosing instead the bogus online universities and corporate institutions that are in essence degree factories taking the money and providing very little in return.

7.      Rich-poor gap widening in society owing to lack of opportunity for a college education as the ticket to upward social mobility.

8.      More jobs will be exported with the rise of the educational level in other countries while the US will assume increasingly characteristics of a Third World society.

9.      A less educated citizenry may serve the interests of the political, financial elites and those in academia and media whose careers are linked to the elites, but it is a reflection of an autocratic society that deliberately prefers backwardness for the majority of its citizens.

10.  US competitiveness with the rest of the world will diminish over time, although this does not appear to be a problem today because of the chronic “brain drain” from many developing nations coming to the US. 

America’s neoliberal model of higher education will not change because the political economy is based on the neoliberal model and the entrenched elites support it. Among those that view college students as customers and universities as a business, there have been many who argue that higher education will become obsolete in the future. Considering that higher education has existed for nealy 1000 years, an considering the need for an even more highly education population in our post-digital era, why would anyone even think to do away with colleges and universities? 

Who needs Princeton, the University of Illinois, or the California Community college system when you have computers and cell phones at your ginertips? Besides, the employer will train the employee-candidates for the specific job. This thinking assumes two things. First that technology is not a vehicle for facilitating learning but a substitute for it and that technology can teach critical thinking even better than a university professor. Second, higher education is narrowly defined by the specific perimeters of one’s work tasks, for as long as those last of course. Never mind that a person entering the work force today will probably change not only jobs but careers an average of seven times in a life time. The larger issue here is the very narrow utilitarian definition of higher education that reduces human beings to extensions of the cell phones and laptops, all so that private sector can use them and dispose them just as readily as commodities.      

There are Republicans, including Trump, that are interested in privatizing Veterans affairs health care system, thus indicating the course of neoliberal policies will continue not diminish. This privatization craze is at the core of neoliberal ideological framework, and this is one reason they oppose free tuition for public universities. The success of higher education in Germany, France, Norway, Sweden, Finland, among some of European countries offering college-free tuition, as well as Brazil and Argentina means nothing to the neoliberal defenders of the system. Only a crisis deeper and wider in society would bring about change in higher education and that will come with the next inevitable contracting economic cycle that may be much deeper and longer lasting than the Great Recession of 2008.

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