The Emergence of the Hybrid Research University

Everyone associated with public research universities knows they are undergoing fundamental changes in the way they are financed, in their relationships to state legislatures and in the demands placed on them for services from students and the public at large. We have every reason to believe these trends will continue. They are contributing to the evolution of a new type of higher education institution -- a hybrid university that maintains its historic ties to the public higher education environment even as it acquires more and more traits of private institutions. The changes affect almost every aspect of institutional operations, from classroom offerings to the funding of campus services and facilities.

As part of this evolution, public research universities are experiencing a long-term and structural change toward relatively less public support. Reflecting this shift in support are recent tuition increases at public colleges and universities -- averaging 7.7 percent, or more than twice the rate of inflation, according to the most recent annual College Board survey. Most observers cite the faltering economy as the major reason for the increases, as public institutions have sought to offset drops in state support. More recently, the attacks of 9/11 have continued to compound pre-existing economic difficulties. Indeed, the National Conference of State Legislatures reported recently that 43 states are experiencing revenue shortfalls and more than half are considering budget cuts. At least nine governors warned universities last year to expect midyear rescissions in their state appropriations.

Even when state budgets were expanding during the past decades, public research universities made little headway against the legacy of the lean years. Thus, regardless of the economy, in the foreseeable future, students at public research universities either will have to pay more of their own educational costs or attend institutions of diminished quality. As the proportion of the cost of education borne by students continues to rise, we are seeing the continuation of a fundamental shift away from the historic role of public research universities. More than a century ago, state governments and public research universities developed an extraordinary compact. In return for financial support from taxpayers, universities agreed to keep tuition low and provide access for students from a broad range of economic backgrounds, train graduate and professional students, promote arts and culture, help solve problems in the community and perform groundbreaking research. Yet through the past 25 years, that agreement has withered, often leaving public research institutions in a purgatory of insufficient resources and declining competitiveness.

One indication of this decline is the growing gap between professors’ salaries at public and private universities. The gap has surged from $1,400 in 1980 to $22,100 today. As a result, public institutions find it increasingly difficult to compete for the best faculty members who, in turn, attract the brightest students and significant research dollars.

Long-term demographic changes lie at the heart of public research universities’ predicament. During the past 40 years, the proportion of American family households with children has declined from almost one-half to one-third. The country’s aging population often appears more interested in issues like health care and public safety than higher education. While higher education’s share of average state spending fell 14 percent from 1986 to 1996, Medicaid’s share nearly doubled and the funds allocated to state correctional facilities grew by more than 25 percent.

Observers sometimes note that, through the past 25 years, state support for higher education has generally kept up with inflation, as measured by the consumer price index (CPI). But public research universities are extraordinarily labor- and technology-intensive enterprises. To attract top talent and stay on the cutting edge, they must invest and spend at a rate significantly higher than the rate of inflation. The CPI simply is not an accurate benchmark in recruiting and retaining medical researchers, geneticists, engineers and others who are expected to expand knowledge as well as transmit it.

While state support for higher education has declined relative to other public services, the value of education to students has increased substantially, as measured by lifetime earnings. After adjusting for inflation, a male college graduate today makes an average of $32,000 more each year than a high-school graduate, compared with a $15,000 gap in 1975. Through a lifetime, a person with a bachelor’s degree will earn an average of $1 million more than a high-school graduate; a professional degree widens the differential to $3 million. With the wage premium rising, education is increasingly seen as a private, rather than a public, good.

The fact that students realize a large personal gain from their university educations often goes unspoken, but it may influence policymakers as they consider university budgets and loan and scholarship programs. In a related development, some elected officials are seeking to ensure quality through market accountability -- with institutions competing with each other for students -- rather than through traditional public oversight. They encourage universities to charge higher tuition, and then favor giving direct aid to students in the form of scholarships and tax benefits to help make that tuition affordable. Other legislators seek to maintain traditional regulation of university functions even as the proportional public investment dwindles.

As state support erodes, flagship research universities face other challenges. Many local businesses now operate more globally and are less oriented toward state or regional concerns. Businesses are also creating their own educational programs, such as Motorola University or Dell University, to focus on work force needs.

Moreover, increased enrollment in higher education through the past 30 years, and the growth of regional universities within states to meet that demand, have further diluted state support. In states with growing populations, more flagship universities may be needed. Often, the relatively new regional universities have limited research capacities and potential, and their emergence, while an important development in serving the public’s need for higher education opportunities, only sharpens competition for scarce state dollars.

All of these trends are spurring the evolution of a hybrid public research university, one with roots in both the public and private spheres. This new hybrid will confront significant new challenges.

The first challenge will be to articulate accurately to the public and decision makers the tradeoff between increases in tuition and declining quality and loss of competitiveness with private research universities. Raising tuition further will be anathema to many parents and students, who believe costs are already too high. University advocates will have to demonstrate, and not merely assert, the benefits to the economy and society as well as to students of charging more in order to support a high-quality research institution.

Maintaining the strong tradition of public universities while increasing student costs will require that access for low-income and historically disadvantaged students be ensured through both expanded institutional student-aid and scholarship programs. That, in turn, will require public universities to accelerate their efforts to garner philanthropic dollars, as well as to secure stronger political support for government initiatives that give financial aid and tax benefits to students.

Another challenge will be the continuing need to provide public goods. Students and parents may question using tuition dollars to pay outreach activities that do not directly improve campus education programs. In addition, institutions will face the issue of how to support professional-degree programs that usually cost far more money to operate than tuition will ever generate. Maintaining the quality of programs such as medicine, dentistry and veterinary science may require universities to explore new partnerships with private foundations and organizations; charge fees for traditionally free programs; and seek more direct, earmarked state support.

The hybrid university also faces a long-term tug of war over its fundamental mission and philosophy. To compete in the market for student dollars, it will have to operate more efficiently, do more to tailor academic programs to student preferences, and radically improve student services in every area, from academic advising to campus housing and food service. But, to remain a great learning institution, it will have to continue to nurture learning for its own sake, transmit cultural values, encourage civic understanding, and foster other less-quantifiable and less-profitable -- but still valuable -- features of the university. The potential for conflict between the new market-driven forces and the traditional mission of the university is not unlike the long- running debate about the university’s proper role in economic development, applied research and job training. The relative paucity of state support places such debates in the new context of survival in the marketplace.

The author William Arthur Ward once said, “The pessimist complains about the wind; the optimist expects it to change; and the realist adjusts the sails.” Unfortunately, many at public research universities and their supporters have fallen into a pattern of blaming the circumstances of the day -- this year’s economy, the current legislature or governor, or the news media -- for the dwindling share of state resources, rather than focusing on the future through the long haul. Keeping public research universities thriving will be no easy task, and we should start by recognizing that the long-term political winds have shifted.

Mark G. Yudof is the chancellor of the University of Texas System.