How the Corporate University Created and Destroyed Diversity

This blog originally appeared in Counterpunch. 

The Supreme Court did not kill diversity. Higher education did it to itself. It has done it slowly and methodically over the last few years, as the corporate university created and then destroyed diversity as part of its business plan to attract students and make itself more relevant to American capitalism.

Many thought that the US Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard, which ended affirmative action, pronounced the death knell for diversity in higher education. The reality is that colleges produce the seeds for its destruction. Typifying this undermining  of diversity is a recent Chronicle of Higher Education article highlighting how many colleges are now advertising to students that they are  a school where everybody is just like you.

How did all this happen?

The history of higher education in America has always faced a contradiction.  On the one hand, universities have preached diversity as intellectual openness to new ideas, while excluding or segregating women, the poor, those of certain religions,  and people of color. Yet from the 1960s, partly as a result of the civil rights movement and of changing demographics in America, universities gave lip service to demographic diversity.   This resulted in affirmative action programs providing special consideration for women and individuals of color.

In the landmark 1978  Regents of California  v. Bakke, the Supreme Court ruled that while racial quotas were unconstitutional, the use of race could be considered as an effort to try to promote diversity. From that decision on, schools struggled with what it means to be diverse, how to promote it, and really, who would be the beneficiaries of it.  But for the corporate university, diversity rested less on a concept of fairness and equity than it did on both a way to expand its customer base and use the concept as a marketing tool to achieve that.

Who won from diversity?  In part because of the failures of K-12 to deliver an adequate and equitable education for students of color, the pipeline to college was racially constricted.  The main beneficiaries of affirmative action became middle class white females. Recruiting them allowed schools to “check the box” for diversity. Over the course of the last 50 years, higher education has transformed from being a male-dominated  to a female-dominated institution, with some numbers suggesting that more than 60% of those enrolled in colleges and universities are now female.   That has come at the expense of persons of color, whose numbers continue to dwindle, or at least remain stagnate, especially at some of the elite schools such as Harvard.

At the same time, the corporate university in its effort to boost enrollment and to define a niche for itself, has increasingly pitched its message to its students that it is a school that will specialize to the  particular needs of students in the same way businesses market to locate customers and maximize profits.  This narrowing of the focus of higher education comes at the same time that schools are deemphasizing liberal arts education. Liberal arts, at its best, was about exposing students to new and contrasting ideas. It was intellectual diversity that went beyond gender and skin color.

But liberal arts is expensive. It requires universities to staff a variety of courses and programs that are not necessarily high profit producing even though they are important for intellectual diversity. The narrowing of the perspectives of higher education has morphed into intellectual safeness and narrowness, protecting both conservative and liberal students from opposing ideas from which they disagree.

The result is that the real diversity that college universities are supposed to stand for—exposure to new ideas, different perspectives, and different people—has gradually eroded.

The business plan of the corporate university in its effort to save money has narrowed the intellectual scope and diversity of both the ideas that it offers and the students that it caters to.  The future of higher education increasingly looks much like the past of higher education.

Campus Protests and the Corporate University

 

This blog originally appeared in Counterpunch.

The murder of the four students who protested the Vietnam War at Kent State University on May 4, 1970, was a tragedy.  The suppression of student protests on campuses across the United States in the spring of 2024 is a farce. The latter points to how little college administrators and politicians have learned when it comes to students’ speech, thinking that repression is the solution for dissent and disagreement.

The student protests of the 1960s were born of political anger. Students were unable to vote. They lacked a political voice in American elections and politics, and they lacked a voice in the governance of their schools. They demanded a seat at the table, the right to be heard and some control over the institutions that literally dictated their lives. Their demands for a voice were met with force and repression much in the same way that the civil rights demonstrators who crossed the Edmund Pettus Bridge  were.

College administrators first ignored student demands.  Then they sought to break up the demonstrations with campus police.  Politicians such as Governor Reagan in California, and Governor Rhodes in Ohio responded even more forcefully. They, along with President Richard Nixon, sought to capitalize on the protests politically and personally. They made political careers by running against challenges to authority, campaigning  as law and order candidates, claiming to speak for the silent majority, and labeling those who dissented as un-American.

A show of force was their solution across college campuses in America.  Eventually they called out the National Guard. The tragic result culminated in Kent State. Four Dead in Ohio as sung by Crosby, Stills, Nash & Young.

Colleges and politicians should have learned the lessons of this mistake.  The lesson should have been that student voices matter, that students have a right to express their views, and  force is not a way to stifle or to address differences of opinion.

They should have also learned that universities are supposed to be socially responsible. They are or have become political institutions, not private corporations. They are socially responsible in the sense that they have responsibility to act ethically and act consistent with their values. Their values include free and open inquiry, disagreement, and debate.  They need to be responsible to their stakeholders, including their students, and they need to live up to the democratic ideals and values that they are supposed to be fostering.

But what we learned in the 1960s was that schools were also hotbeds of hypocrisy. That was the source of much of the campus unrest and protest in the 1960s.  Instead of fixing the hypocrisy, living  up to their values, and respecting student demands, higher education turned corporate.  Over a fifty year period schools thought they had learned how to address the dissent on campus. They adopted even more of a corporate structure, seeking a top down mechanism for trying to control curriculum, faculty, and students. They adopted speech and civility codes as a way not to encourage debate but as a tool to discourage views that they do not want to hear.

The corporate university turned itself into a  private good, forcing students to borrow tens of thousands of dollars and thereby discipline their behavior by the demands of the economic marketplace.  Moreover, the corporate university  created its own problem by not being neutral when it came to a diversity of viewpoints, favoring some as opposed to others. It created not a tolerance but an intolerance of certain types of speech. Moreover, as universities have become even more corporate they have built lofty endowments whose investments are oftentimes questionable and which gives donors  outsized influence upon  what administrators and professors can do.

Much in the same way that the students of the 60s criticized universities for the defense contracts they took and how universities furthered the Vietnam War, students today criticize endowments for supporting causes and issues of which they do not support.  They have legitimate grievances against both the US government’s support for a war they do not endorse, and also against universities  whom they see as complicit. They demand a voice, call for disinvestment, or simply want to express their disagreement.

Yet again politicians such as Donald Trump and Speaker Mike Johnson are denouncing the protests, calling for the National Guard to quell student  speech.  Yet again a sitting president seems unable or unwilling to  listen to the students.  Yet again another war will impact a presidential campaign.

This is more than a tragedy.  It is a farce.

So why is my college tuition so high? Or why learning no longer seems like the primary goal of colleges and universities.

This is the season.  It’s the time when high school seniors are waiting to hear from colleges regarding whether they have been accepted.  But once the joy or disappointment sets in after acceptance or rejection letters have been mailed, another set of emotions and questions kick in for students and parents who ask: “How do we know we made the right choice to get a good education and how will we pay for college?
    The simple answer is don’t look to my salary or my colleagues for the reason why college is so expensive.  Instead, one needs to understand how higher education has changed in last generation or so to realize that getting a good education is barely the major purpose or goal of colleges and universities anymore and that the real drivers of educational costs are factors that take us way beyond the classroom. 
    A recent report by the Delta Cost Project entitled Labor Intensive or Labor Expensive?: Changing Staffing and Compensation Patterns in Higher Education highlights how the changing structure and employment patterns of American colleges and universities really de-emphasize classroom learning.  In that report what we find is that over the last decade colleges are experiencing a bloat in hiring of non-teaching staff.  For the most part schools are employing more and more administrators and ancillary staff and less faculty, or at least traditional full time tenured or tenure  track faculty.  According to the report:

    *  The overarching trends show that between 2000 and 2012, the public and private nonprofit higher education workforce grew by 28 percent, more than 50 percent faster than the previous decade.
   
    *  Growth in administrative jobs was widespread across higher education—but creating new professional positions, rather than executive and managerial positions, is what drove the increase.
   
    *  As the ranks of managerial and professional administrative workers grew, the number of faculty and staff per administrator continued to decline. The average number of faculty and staff per administrator declined by roughly 40 percent in most types of four-year colleges and universities between 1990 and 2012, and now averages 2.5 or fewer faculty and staff per administrator.

The Delta Cost Project points out that several things are going on in higher education.  First, as the Millennial generation has gone off to college these students are trading in their helicopter parents for helicopter schools.  Colleges are increasingly providing more services and programs to attract and retain students, especially as the number of eighteen-year-olds are decreasing.  Tighter competition for a declining pool of students means schools are spending more and more money to woe and retain students.  More lavish dorms, sports, food, bandwidth, gee whiz technology, and campus aesthetics.
    Second, colleges and universities are experiencing administrative bloat.  As the Delta Report points out, the ratio of faculty to administrator keeps falling and falling, with it now  being overall being 2.5 or fewer faculty and staff per administrator.  Many of these administrators have little or no experience in teaching, often coming from the private sector demanding salaries comparable to what they had there.  This shift in administration is different from more than a generation ago where  colleges were run by real faculty (who actually taught and published) who rose in ranks. 
    Third, the amount of money being spent of faculty–especially full time tenured or tenure track–is going down.  In efforts to reduce teaching costs more adjuncts are employed on an as-needed  basis, or teaching loads are increased.  A recent Star Tribune article highlights this trend. Additionally, faculty salaries have more or less been flat for the last decade.  While there are many competent adjuncts, often they are overworked, undervalued, and just do not have the same commitment and time to serve students.
    The Delta report really highlights a trend in higher education I have been writing about for nearly a decade (corporate university;  neo-liberal university). Colleges and universities have lost their purposes.  They have become corporate universities.  For the corporate university, many decisions, including increasingly those affecting curriculum, are determined by a top-down pyramid style of authority.  University administration often composed not of typical academics but those with business or corporate backgrounds had pre-empted many of the decisions faculty used to make.  Under a corporate model, the trustees, increasingly composed of more business leaders than before, select, often with minimal input from the faculty, the president who, in turn, again with minimal or no faculty voice, select the deans, department heads, and other administrative personnel.  The business of higher education has essentially become that–a business, often with little regard for the quality of education.
    So much of what is invested in higher education is completely incidental to learning.  Schools spend a ton on learning technologies but there is little evidence that they make much difference in  learning outcomes.  For the last five years I have edited a journal devoted to public affairs teaching and have yet to find an article or study demonstrating the value of all high tech toys in the classroom.
Such technologies impress parents and students, but they do little more than drive up costs needlessly.  Pedagogy should determine what technology is used, instead the opposite is the case.
    Additionally, expenses on bandwidth and sports are  nice amenities but secondary to what happens in the classroom.  Yes support services to help learning are needed–especially for students with disabilities–but it is not clear how necessary these expenses are.  I am the first to argue that a good chunk of college is teaching students how to grow up and take responsibility, but it is not clear  that higher education is fostering this type of social learning or maturation.
    What really encourages learning are well-trained professors who have both the substantive knowledge and teaching skills to work with students. In my 25 years+ of teaching I have largely remained a professor whose most extensive use of technology is a piece of chalk.  I assign lots of reading and writing and expect students to do both.  I ask tough questions in class, I give students the chance to rewrite assignments, and I set high standards for me and my students.  I tell my students if they work hard I will to.  I also read, write, and publish, making sure that I stay up to date with my research and that of others.  It takes two to tango, and it takes both a hardworking teacher and a hardworking student to foster good learning.  This is what colleges and universities need to encourage.
    So where are we? Today’s higher education displays all the worst traits of the private sector–top heavy with middle and upper management, expenditures on items not essential or necessary to its core mission, while spending on what really is the core mission and who generates the real value for the school–faculty–is going down.  In the private sector, a company run like this would go out of business.  Yet colleges do not because they are able to pass the costs on to the customers–students and parents–who know that a college degree is essential to most successful careers.
    So as you contemplate why your college tuition or that of your children is so high remember it is not my salary that is doing it.

The Rise and Demise of Neo-Liberal University: The Collapsing Business Plan of American Higher Education

In honor of the start of school, I am reprinting here a recent article of mine that appeared  recently in Logos.  “The Rise and Demise of Neo-Liberal University: The Collapsing Business Plan of American Higher Education” Logos,  2012: vol. 11 issues 2-3


The Rise and Demise of Neo-Liberal University: The Collapsing Business Plan of American Higher Education

by David Schultz

The dominant business model for American higher education has collapsed, taking with it the financial integrity, academic quality, access, and independence that college and universities once enjoyed.

Since the end of World War II two business models have defined the operations of American higher education.  The first was the Dewey model that lasted until the 1970s. The second, a corporate model, flourished until the economic crash in 2008.  What the new business model for higher education will be is uncertain, but from the ashes of the status quo we see emerging one that returns to an era before World War II when only the affluent could afford college and access was limited to the privileged few.

Model I:  The Dewey University

The first post-World War II business model began with the return of military veterans after 1945 and it lasted though the matriculation of the Baby Boomers from college in the 1970s.  This was a model that produced an ever expanding number of colleges for a growing population seeking to secure a college degree.  It was a model that coincided with the height of the Cold War where public funding for state schools was regarded as part of an important effort to achieve technological and political supremacy over communism.  It also represented the expansion of more and more middle and working class students entering college.  This was higher education’s greatest moment.  It was the democraticization of college, made possible by expansion of inexpensive public universities, generous grants and scholarships, and low interest loans.

Public institutions were key to this model.  They were public in the sense that they received most if not all of their money either from tax dollars to subsidize tuition and costs or federal money in terms of research grants for faculty.  The business model then was simply-public tax dollars, federal aid, and an expanding population of often first generation students attending public institutions at low tuition in state institutions.  Let us call this the Dewey business model, named after John Dewey, whose theories on education emphasized the democratic functions of education, seeking to inculcate citizenship values though schools.

Model II: The Corporate University

Yet the Dewey model began to collapse in middle of the 1970s.  Perhaps it was the retrenchment of the SUNY and CUNY systems in New York under Governor Hugh Carey in 1976 that began the end of the democratic university.   What caused its retrenchment was the fiscal crisis of the 1970s.

The fiscal crisis of the 1970s was born of numerous problems.  Inflationary pressures caused by Vietnam and the energy embargoes of the 1970s, and recessionary forces from relative declines in American economic productivity produced significant economic shocks, including to the public sector where many state and local governments edged toward bankruptcy.

Efforts to relieve declining corporate profits and productivity initiated efforts to restructure the economy, including cutting back on government services.   The response, first in England under Margaret Thatcher and then in the United States under Ronald Reagan, was an effort to retrench the state by a package that included decreases in government expenditures for social welfare programs, cutbacks on business regulations, resistance to labor rights, and tax cuts.  Collectively these proposals are referred to as Neo-liberalism and their aim was to restore profitability and autonomy to free markets with the belief that unfettered by the government that would restore productivity.

Neo-liberalism had a major impact on higher education. First beginning under President Carter and then more so under Ronald Reagan, the federal and state governments cut taxes and public expenditures.  The combination of the two meant a halt to the Dewey business model as support for public institutions decreased and federal money dried up.

From a high in the 1960s and early 70s when states and the federal government provided generous funding to expand their public systems to educate the Baby Boomers, state universities now receive only a small percentage of their money from the government.  As I pointed out in my  2005 Logos “The Corporate University in American Society” article in 1991, 74% of the funding for public universities came from states, in 2004; it was down to 64%, with state systems in Illinois, Michigan and Virginia down to 25%, 18%, and 8% respectively.  Since then, the percentages have shrunk even more, rendering state universities public institutions more in name than in funding.

Higher education under Neo-liberalism needed a new business model and it found it in the corporate university.  The corporate university is one where colleges increasingly use corporate structures and management styles to run the university.  This includes abandoning the American Association of University Professors (AAUP) shared governance model where faculty had an equal voice in the running of the school, including over curriculum, selection of department chairs, deans, and presidents, and determination of many of the other policies affecting the academy.  The corporate university replaced the shared governance model with one more typical of a business corporation.

For the corporate university, many decisions, including increasingly those affecting curriculum, are determined by a top-down pyramid style of authority.  University administration often composed not of typical academics but those with business or corporate backgrounds had pre-empted many of the decisions faculty used to make.  Under a corporate model, the trustees, increasingly composed of more business leaders than before, select, often with minimal input from the faculty, the president who, in turn, again with minimal or no faculty voice, select the deans, department heads, and other administrative personnel.

The corporate university took control of the curriculum in several ways in order to generate revenue.  The new business model found its most powerful income stream in profession education. Professional education, such as in public or business administration, or law school, became the cash cow of colleges and universities.  This was especially true with MBA programs.  Universities, including traditional ones that once only offered undergraduate programs, saw that there was an appetite for MBA programs.  The number of these programs rapidly expanded with high-priced tuition.  They were sold to applicants that the price would more than be made up in terms of future income earnings by graduates.

This business model thus used tuition from graduate professional programs to finance the rest of the university.  Students either were able to secure government or market loans or those from their educational institution to finance their training. Further, the business model relied heavily upon attracting foreign students, returning older Baby Boom students in need of additional credentials, and recent graduates part of the Baby Boomlet seeking professional degrees as a short-circuit to advancement.

This model accelerated with the emergence of the Internet, on-line classes, and was especially perfected with the propriety for-profit schools.  In the case of the expansion of on-line programs over the Web or internet, a specialist designs the curriculum for courses, sells it to the school, and then the university hires adjuncts to deliver the canned class.  Here, the costs of offering a class are reduced, the potential size of the classes are maximized, and if and when the curriculum needs to be changed to reflect new market needs or preferences, it is simple to accomplish.  Traditional schools, seeing this model flourish, began emulating it, expanding on-line programs, often with minimal investments in faculty.

A second way higher education became corporatized was in the increased funding streams from corporations.  These funding streams became necessary as a result of decreased public support funding for higher education.  One way schools have become more dependent upon private funding is simply by turning to corporate donors either to contribute directing to them, or by way of naming, that is, giving private corporations the right to donate in exchange for naming some part of a school after them.   For example, in recent years many business schools have adopted famous names of companies in return for donations or sponsorships.

Overall, the new business model relied heavily upon the expansion of pricey professional programs sold to traditional and non-traditional students who financed their education with student loans.  This model took off with the Internet, and was facilitated by a management structure and partnering that drew higher education into closer collaboration and dependence upon corporate America.

The Collapse of the Corporate University

The corporate business model worked-until 2008-when it died along with the Neo-Liberal economic policies that had nourished it since the late 1970s.  The global economic collapse produced even more pressures on the government to shrink educational expenditures.  But the high and persistent unemployment also yielded something not previously seen-the decline of students seeking more education.  The decline came for two major reasons.  First, Baby Boomer were aging out into retirement, no longer needing educational training.  With that, the Baby Boomlet had run its peak, with the American pool of potential students rapidly decreasingly.  In effect, the demand for education had dropped.

Second, traditionally MBA and other professional degrees flourished in tough economic times as individuals used their unemployment as the opportunity to get retrained.  But since 2008 that has not happened, in part because of the persistent high unemployment and rise of consumer debt.

Unlike previous post World War II recessions, the most recent one has dramatically wipe out the wealth of consumers-some $13 trillion in wealth was lost-and consumer debt has skyrocketed.  Student loan debt has also ballooned and is now greater than personal consumer debt-$829 billion compared to $826 billion as of early 2012, with estimates that it will soon top $1 trillion. The average student loan debt for a graduate of the class of 2010 exceeds $25,000.  In effect, potential students are tapped out-they have no money to finance further education, they see that companies are not hiring, and overall, find little incentive to debt finance for jobs that may not exist. The result?  A crash in applications to graduate professional programs including MBA and law schools.  From 2009 to 2010, MBA and law school applications declined by 10% for full time programs.

The corporate business model has crashed.  Even  such mainstream publications as the Economist in its August 4, 2012 issue noted the collapse of this old model. It was a bubble that burst much like the real estate one that burst in 2008.  But in actually, it was a model waiting to burst.  The corporate business model functioned as education Ponzi scheme.  Higher education paid for programs by raked in dollars from rapidly expanding professional programs and selling degrees on the promise that the high tuition costs would be worth it to students.  But as all Ponzi schemes go, they soon collapse and that is what higher education is now experiencing.

The Next Business Model?

But what is the next business model?  In a foreseeable era of high unemployment, decreasing public funding for education, and persistent consumer debt, significant retrenchment will occur along a few models.  For one, a few elite universities will continue to exist, serving elites who can afford to pay the privilege of attending them.  This model negates the democratic function of higher education that existed since World War II.

Second, expect significant collapse and merger of weaker institutions as they seek to find ways to complete for a dwindling student population and resources.  This model decreases access to higher education as the range of college and university choices decrease.

Third, while many for-profit institutions may not be able to withstand market pressures, look to see many traditional colleges and universities will have no choice but to emulate that management style.  It may not be a viable business model but given economic pressures for the future, that may be the only one that exists, rewarding a few schools that are able to provide a curriculum that is cheap enough that students want to attend. In effect, the new business model is a hyper-extension of the current model.  This may mean even more alliance with corporate America along with curriculum pressures that further de-emphasize traditional liberal arts studies in place of professional education.  One sign of that already is the movement to take professional degrees such as MBAs and now offer BBAs instead.

Fourth, the education market is ripe for non-traditional suppliers.  For example, media companies such as the Discovery Channel and Disney see delivering educational materials as an extension of their brand.  They are able to combine the power of the television and media presence with textbooks and educational materials and deliver a package of services that few if any traditional let alone for-profit schools can.  With an intense and loyal viewer-consumer, it makes sense of them to now leverage that relationship into one that taps into the student-education market.  This neo-liberal solution simply opens up education to even more exploitation and profiteering.  Look to see down the line one of the major media companies purchase a Walden or Capella University.

Likely business models for higher education are not good.  They threaten to erode the strengths that American higher education enjoyed for years, while at the same time not articulating a plan that is financially sustainable.