When college was male: Higher education and the war against women

 

It should come as no surprise that as higher education in America has become more dominated by women it is facing more disparagement and less support since World War II.

Prior to World War II higher ed was male. Most professors were male, as were most students. Women were generally excluded from higher education, most of the schools in the United States were for men only, including the most elite Ivy League schools such as Harvard and Yale.  Yes, there were the Seven Sisters female-only colleges  for women, but for the most part, college could be defined as white male. And at the same time, the vast majority of university professors also were male.

As late as the early 1970s, barely a quarter of the college faculty in the United States were female. Among some of the most elite coed schools, there were no female professors. Women comprised about 40% of college students, but many schools still excluded women. But over the past 50 years, the composition of higher education, both in terms of faculty and in terms of percentage of students who are female, has dramatically changed.

For example, what we now know is that in the past few years, especially since 2009, college enrollment has dropped dramatically. According to the Pew Research Center, in 2020 the total number of 18- to 24-year-olds enrolled in college was down by approximately 1.2 million from its peak in 2011.

THE DECLINE IS MOSTLY COLLEGE MALES. THERE ARE ESSENTIALLY 1 MILLION FEWER MALES IN COLLEGE NOW THAN THERE WERE BACK IN 2011. IN 2022 BARELY 42% OF COLLEGE STUDENTS ARE MALE — ALMOST A MIRROR REVERSAL OF MALE-FEMALE STUDENT ENROLLMENT RATIO COMPARED TO 1970. BUT AT THE SAME TIME, WHAT WE SHOULD BE LOOKING AT IS HOW THE FACULTY RATIO HAS CHANGED. AND THAT WHAT WE’RE NOW SEEING, DEPENDING ON WHAT STATISTICS YOU LOOK AT, IS A DRAMATIC SHIFT IN THE COMPOSITION OF COLLEGE FACULTY.

Remember again in 1970, approximately 24% were female. According to more recent statistics from Zippia, for example, we’re now looking at approximately 49.8% of faculty being female, 50.2% male, essentially parity on the surface. An AAUP 2020 survey found that 43% of full-time faculty who were in tenure-track positions were female, but 54% of the faculty who were full-time, non tenure-track were female.

Additionally, female faculty members make 94 cents on the dollar compared to males. Over time, as higher education has become more dominated by female students and faculty, what we’re seeing is a backlash. According to the AAUP  in 2022 only about 26.5% of all faculty are tenured, 10.5% are tenure track, annual contracts are 18%, and part time contingent 45%. The vast majority of individuals now who are teaching in America are what are part-time contingent, no protections with tenure. They are mostly women. The road to equity in higher education is characterized by overall falling salaries and less secure positions for women compared to when colleges and universities were dominated by men.

As higher education feminized, states cut funding, forcing increasing numbers of female students to borrow to finance their schooling. Student loan debt in 2023 is $1.8 trillion, with 67% of it owed by women.

The feminization of higher education has  been accompanied by the disparagement of higher education in America. As males exit higher America higher education, we see increasing attacks upon college and college degrees. No surprise that governors such as Gov. Ron DeSantis have attacked higher education as it has diversified. The same is true in Texas and across the country. Attacking and defunding higher education is part of the new war against women.

Higher Education After Affirmative Action

So what would higher education in America look like without affirmative action? This is the question many are asking after the Supreme Court decision in  Fisher v. University of Texas, Austin declaring that the use of race in college admissions must be justified by a compelling government interest.  While the decision did not invalidate or declare the use of race unconstitutional in admissions decisions, it made it very difficult to do that, perhaps effectively ending affirmative action.

Some see this decision as a blessing and victory for color-blind justice. In its place some advocate the use of class or economic disadvantage as a way to recruit and diversify. But given the growing economic polarization in the United States and trends in higher education, the use of class as admissions criteria in itself will fail to diversify and open up higher education to many new faces.

The mixing of race and education have always been controversial. Affirmative action was one tool to combat this discrimination. In 1978, the Supreme Court in Board of Regents of California v. Bakke upheld the use of race as one factor that could be considered among others when making college admissions decisions. It was a controversial 5-4 decision, with Justice Lewis Powell writing the controlling opinion defending affirmative action and the use of race in admissions as a means of promoting educational diversity. Twenty-five years later in Grutter v. Bolinger, the Supreme Court in another controversial 5-4 opinion again upheld the use of race and affirmative action in college admissions decisions. This time Justice O’Connor wrote the controlling opinion, yet this time opining that she hoped in another 25 years race no longer would need to be an admissions factor in a color-blind society.

But many in America still resent affirmative action. States such as California have already banned it, and there are calls to shift away from race and instead use economic disadvantage or class in place of it. What if the Supreme Court does ban the use of race in admissions, is class a good proxy or replacement? Not necessarily.

The real problem with shifting to class as an admissions criteria is that higher education has closed its doors to the poor, and America is more and more becoming an economically unequal society. The reality is that the poor cannot afford to go to school and higher education no longer seems to want or can afford them.

Consider America’s economic polarization. The first study is from the United States Census Bureau in 2010 describing poverty and income in America. In 2010 the richest five percent of the population accounted for 21 percent of the income, with the top 20 percent receiving more than 50 percent of the total income in the country. This compares to the bottom quintile accounting for about 3 percent of the total income.

A second study by the Center on Budget and Policy Priorities in 2010, drawing upon Congressional Budget Office research, found that the income gap between the top one percent of the population and everyone else more than tripled since 1973. After-tax income for the top one percent increased by 281 percent between 1973 and 2007, while for the middle class or middle quintile it increased by 25 percent, for the bottom quintile it was merely 16 percent. Looking beyond income to wealth, the maldistribution has not been this bad since the 1920s. According to the Institute for Policy Studies, in 2007 the top one-percent controlled almost 34 percent of the wealth in the country, with half of the population possessing less than 3 percent. The racial disparities for wealth mirror those of income. Since 2007, the wealth gap has increased as the value of American homes–the single largest source of wealth for most Americans– has eroded. Studies such as the Survey of Consumer Finances by the Federal Reserve Board have similarly concluded that the wealth gap has increased since the 1980s.

But Americans still dream and believe they can rise to the top. Yet social mobility in America has ground to a halt. A 2010 Organization for Economic Cooperation and Development study found that social mobility in the United States ranked far below that of many other developed countries. Nearly half of the economic advantage parents have in the United States is transmitted to their children; a number nearly two-and-one-half times that of Australia and Canada. The biggest cause of social immobility according to the report is declining educational opportunities for many students. Other studies, including those in 2005 and 2010 in the Economist, similarly point to the declining social mobility in the United States that makes it difficult for individuals to rise from one social economic status to a better one. In fact, there is better than a 95 percent chance that children will not improve their social economic status in comparison to their parents. In sum, the rich are getter richer and the poor cannot change their lot.

Now consider higher education. The New York Times and other media services have talked about the declining applications from blue-collar students to elite universities and higher education in general. Rising tuition rates are pricing the poor out of school. But other studies point to universities which are culturally intolerant to the poor and working class. Fewer and fewer professors are first generation college students, and many schools rely upon legacy admissions. At Harvard, studies recount how legacies–children of students who previously attended Harvard–appear to have a greater chance of securing admission than those whose parents did not attend the school. For supposedly the most selective school in the country, the legacy applicant pool is not as competitive. Additionally, applicants who attend a select number of preparatory schools also seem to benefit in terms of admissions. Income and family economic advantages make a difference in terms of admissions and success in school.

The point here is that finding  race in admissions as unconstitutional and replacing it with class will do little either to diversify higher education or open up opportunities for the disadvantaged. Affirmative action for the poor will do little to ensure they are admitted, that they can afford to go, or that they can succeed and compete. Merely changing the law this way will do little to help the disadvantaged, regardless of race.

Blue-Collar Education in a White-Collar University

Is American higher education closing its door to the poor and blue-collar students?  According to a recent  New York Times  article the answer is yes. In “Better Colleges Failing to Lure Talented Poor” the Times discusses a recent study finding that poor but talented students are increasingly unlikely to apply to elite colleges, instead opting to attend community and weaker state schools that offer lesser prospects and educational challenges for them.  The study suggests that schools are not doing a good job in enrolling blue-collar students because of poor recruitment techniques.
    The NY Times and the study it reports on have largely missed the point.
    The failure of elite colleges to recruit and retain the talent poor is not just  a problem of financial aid and bad communication to prospective students.  It is also about attitudes, culture, and a failure to foster a learning environment welcoming to working class students and faculty.  It is about the hierarchy of higher education, and the problem of class in America.
    I am one a dying breed of first-generation college students who became a professor and see first hand the return of higher education in American into what it was before World War II–a citadel for the affluent.  Since the 1970s the number first generation college students who go on to get their doctorates has declined, and with that, the percentage of faculty who come from blue collar roots has deteriorated.  The faculty who teach our students increasingly are detached and removed from understanding a working class world.  Blue-collar students have few role models who appreciate their experiences.
    I am also the editor of the Journal of Public Affairs Education.  In a recent issue of the journal  several working class faculty told their stories about life as students and professors.  My story is also included.  The stories recounted ivy league schools with legacy admissions that discriminate against first generation students and even if accepted, fail to appreciate the different ways blue-collar students experience the world, be it in how they talk, dress, or forgo spring break to exotic places because  they need to work.   The faculty stories also point to the same schools unwilling to recruit faculty from state schools because they and their students and parents want to see professors with ivy league degrees next to their names.  It is the good old boy network of high education that  recruits their professors from the ranks of their former students.
    There is a class hierarchy among universities. At the apex come the Ivy League schools, the Seven Sisters, and then the many small-private Ivy League–like schools. It then descends to big research state universities and eventually to community colleges. We all know the hierarchy. We know it from which schools we want our children to attend and from the schools we covet teaching in. The Ivies are supposed to be the most selective, but certainly they are among the most expensive. Working-class and first-generation students are often priced out of going there, and recent studies suggest that admissions officers are focusing more on students who can pay the full tuition.  Research documents that first-generation college students amass far greater debt than those who are not first generation, thereby precluding them from attending these schools.  Other studies also indicate that in general, cost has become a new barrier to higher education and is forcing many first-generation students to drop out of college and perhaps never graduate. The dropout rate for first-generation college students is four times greater than that for those whose parents attended college.
    One may argue that cost is reflective of academic competitiveness and quality. But that is not necessarily the case. Take Harvard, for example. Several studies recount how legacies—children of parents who previously attended Harvard— have a greater chance of securing admission than those whose parents did not attend the school.  Legacy admissions at Harvard are near 30%, nearly four times the rate for the general population.  For supposedly the most selective school in the country, the legacy applicant pool is not as competitive. Additionally, applicants who attend a select number of preparatory schools also seem to benefit in terms of admissions. Children whose parents can afford to send them to the Harvard-Westlake School and Phillips Academy as well as other private schools experience significantly better chances of securing admission to the Ivy League schools than those attending public high schools. Finally, as Ross Douthat  discusses in his aptly titled Privilege, those attending Harvard do so with a sense of entitlement and are rewarded with connections and networks that replicate themselves well beyond school. Overall, students from lower socioeconomic backgrounds face difficulty getting into good high schools that serve as a feeder to elite colleges. Once a parent has attended an elite institution, his or her child has an advantage in being admitted as a legacy. Now one may contend that in fact these children represent the best and the brightest, and that is why they enjoy these advantages. However, given the declining social mobility in America, many students from blue-collar families never have the opportunity to compete fairly—they are economically restricted in their ability to compete.
    Higher education reflects a hierarchy that mirrors the social-economic inequalities and decreasing mobility of American society.  But the bias against the poor is also  cultural, reflecting a world view largely ignorant if not hostile to the experiences of many.  This is what they NY Times and higher education in America largely fail to grasp.
    So how do my blue-collar working-class experiences affect my teaching? I have never held out myself as a role model specifically to blue-collar students. I do not discuss my family background or politics in class. I do not think of myself in terms of identity politics, nor do I approach students by categorizing according to specific identities or background. Yet class affects my teaching in the sense that I do not give anyone special treatment because of their backgrounds, including their socioeconomic status. I emphasize hard work and smarts, and not connections, in my approach to teaching. All my students realize that. Moreover, I am more comfortable with working class students and the most rewarding teaching I ever did was at Minneapolis Community College where I taught  mostly first generations and those on welfare.
    I  have both sympathy and empathy for my students from working-class backgrounds. I can appreciate the situation they are in and respect that they are struggling to go to school and trying to earn a living. But at the same time, from my own life I have learned that these students are not asking for special treatment, just a fair chance and opportunity. I did receive financial aid and support to pay for school, but to succeed academically I learned I had to do it on my own. I showed professors I was willing to work hard and expected them to help me by putting in the time to teach and talk to me. I recognize that my blue-collar students have many obstacles to overcome, they are hesitant to ask for help, and they feel they have to do it on their own. I will provide mentoring and support; I reach out to talk to them; but I expect them to work. My role model, if one exists, is that merit and hard work will be rewarded.
    Conversely, I accept few excuses based on anyone’s background. I teach in a graduate program that includes many working adults. I do my best to appreciate that they are attending school and working, but I cut little slack for them. If I could grunt out work and school, they too should be able to do that. They are expected to deliver and perform. This is the message I learned from my experiences, and that is the message I impart—it is about performance. My blue-collar students understand this message and thrive with it.
    As blue-collar students and faculty we do not want anyone to cut us slack. We accept we have to work harder than the more affluent and we do. We simply want to be given  a fair shot to compete.
   

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.

The Collapsing Business Plan of American Higher Education

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 democratization 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. In 2004, the State of New York constituted only 29% of SUNY’s funding and 31% for CUNY. As of 1998, New York spent more on its prisons than on higher education. 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. 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. 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.

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.