By Richard Vedder
It was bound to happen sooner or later: an important committee at the University of Virginia (UVA) has recommended the de facto privatization of the institution. Specifically, "The University of Virginia and its supporters should initiate a process designed to change the status of the University from a state controlled...and supported entity to a state affiliated or state associated institution." This is what the "Public University Working Group" is proposing as part of a strategic planning initiative.
In 2005, Virginia began a modest but real partial privatization, and the law school and Darden School of Business consider themselves essentially independent of state control now. And the University's demographics more resemble those of an elite private school than a typical state university. The percent of students receiving Pell Grants is the same as at Yale and Dartmouth -UVA is, to a considerable extent, already a school for relatively affluent kids. The four-year graduation rate at UVA is 87 percent, identical to the Ivy League average, compared with, say, 26 percent rate at Virginia Commonwealth University. The school gets roughly a tenth of its income from the state now, so the financial consequences of a gradual privatization need not be dire. And, as the report clearly hints, the school hopes and expects more private control will enhance philanthropic donations.
Seems Private Already
Virginia's endowment already approaches $5 billion, or $250,000 a student. On a per student basis, this is about as high as it gets in public higher education (the University of Texas has a much larger endowment, and the University of Michigan a modestly higher one, but both have much larger enrollments.) It is similar to that at Ivy-League Cornell University. UVA looks like a private school, acts like a private school, so why shouldn't it be a private school, albeit one with a bow to its historic mission as a public institution serving Virginia residents?
As part of the deal, UVA would give up receiving direct appropriations from the state, in return for a lot of freedom from state imposed constraints. It would ask the state to appropriate funds for tuition discounts for Virginia residents. But it wants to abolish the in-state tuition fee, going to a single tuition charge (with maybe some increments in certain academic areas). It wants the right to expand significantly out-of-state admissions. It would propose ending the currently rather dysfunctional arrangement for selecting members of the governing body, the Board of Visitors, to having a significant proportion of them NOT selected by the governor. It suggests that criteria be established for board member selection. I personally would hope the current short (four-year terms) might be extended a bit, to say six years, to give the board greater institutional memory and stability.
The Problem of Elitism
On the whole, this is a good proposal. The single most potent legitimate objection would be that it expands an already troublesome elitism that the institution's founder, Thomas Jefferson might find abhorrent and is contrary to the historic mission. I think if properly constructed, the opposite would be the case. Instead of merely paying part of the tuition of in-state residents in lieu of direct institutional appropriations (the apparent committee proposal), give "University of Virginia Commonwealth Scholarships" that would be a voucher varying with income. Suppose the average scholarship is $12,000 and is given to 10,000 in state students. Give poor kids who are accepted perhaps $25,000, which, with Pell Grants would make UVA virtually tuition free, but give kids from families with incomes above $150,000 (I suspect a majority), maybe only $5,000 in tuition remission. This would probably further the Jeffersonian vision of accessible higher education for able but relatively poor students more than the current system, and would still provide some tangible support for bright, able kids from affluent Virginia families.
Will this plan be adopted in, say, the next couple of years? I wouldn't bet on it. The political obstacles are substantial at two levels -within the UVA community and in the state capital (and I would give even money that President Obama would weigh in against it given his aversion to privatization). Universities are notoriously slow to react, and faculty members, even at UVA, are predominantly liberal and thus suspicious of privatization. Frankly, I think it would be a good deal for the UVA community -they would end up with more money long term and an even more selective student body, enhancing their ratings which are the most obvious "bottom line" in higher education. But rationality and common sense are often short commodities at even the best of schools. The Board of Visitors might be alarmed at proposals on their board's composition, although given rapid turnover and long time to implementation, those self-serving fears are likewise mostly unwarranted.
William & Mary Next?
What about the broader Virginia politics? At one time, I would say this would be a non-starter; the public nature of UVA is too engrained to allow this seriously discussed. However, I am not so sure now. The possible egalitarian possibilities discussed above might quell some opposition from the left. Generally folks on the right prefer private to public institutions. Would schools like William & Mary object? My guess is they would not protest too vigorously, because this is model might be adaptable for them too in a few years (if not simultaneously).
University committees seldom have anything worthwhile to say. This is a notable exception. Just as Thomas Jefferson advanced republican government and democracy so eloquently with his Declaration of Independence, this more bureaucratic and self-serving Declaration of Independence could form a model for other possible candidates of privatization, such as the universities of Michigan (high endowment) or Colorado (huge out of state enrollment).
Richard Vedder directs the Center for College Affordability and Productivity, teaches economics at Ohio University, and is an Adjunct Scholar at the American Enterprise Institute.
(Photo: UVA. Credit: UVA.)