Introduction
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. http://www.theatlantic.com/education/archive/2015/09/income-inequality-in-higher-education-the-college-president-to-adjunct-pay-ratio/407029/
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. http://www.takepart.com/article/2016/04/29/when-it-comes-college-costs-middle-class-kids-are-still-screwed
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. http://usuncut.com/class-war/10-corporate-welfare-programs-that-will-make-your-blood-boil/
The Media and the Corporate Model of Higher
Education
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. http://www.usnews.com/opinion/knowledge-bank/2015/05/27/why-bernie-sanders-free-public-college-plan-is-a-bad-idea ;
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.” http://www.nytimes.com/2015/11/30/opinion/free-tuition-is-not-the-answer.html?_r=0 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.” http://www.independent.co.uk/news/business/analysis-and-features/phil-knight-nike-stanford-universities-billionaire-donate-a6894716.html
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); http://www.salon.com/2014/10/10/noam_chomsky_corporate_business_models_are_hurting_american_universities_partner/
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.” http://dailyfreepress.com/2015/09/11/private-college-presidents-hesitant-on-sanders-education-stance/
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. http://www.livingbetter.org/livingbetter/articles/corporate.html;
http://www.sciencemag.org/news/2015/05/house-spending-panel-does-its-best-hide-large-cut-nsf-social-and-geosciences-research
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.” http://www.academicmatters.ca/2010/04/higher-education-or-education-for-hire-corporatization-and-the-threat-to-democratic-thinking/
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.” http://www.foodandwaterwatch.org/news/public-research-private-gain-corporate-influence-over-university-agricultural-research
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%. http://www.occupy.com/article/college-bureaucracy-how-education-forgot-students-and-became-business#sthash.G22kz58h.dpuf.
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. http://www.cavalierdaily.com/article/2015/04/mink-the-misguided-bureaucratization-of-higher-education)
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.
Conclusions
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.
