Historically, state supported public universities have made an immense contribution to the nation's economy, and particularly to the wellbeing of the middle class. Relatively modest in-state tuition has allowed millions of students from low and middle-income families to acquire a college education and thus advance their career prospects. Additionally public universities have been major contributors to the research and development that maintains America's technological edge, and that sustains the progress of medical care. Over the last decade or so, however, the positive role of public universities has been undermined through chronic underfunding by state legislatures. This trend has been well documented in a recent Wall Street Journal article  and on Roger Pielke's blog. For example, in 1980 at the University of Colorado students paid about 25% of their education while the state covered 75%; today the ratio is essentially reversed . There are many reasons for this chronic, nationwide reduction in support for public higher education. Increasing Medicaid costs have drained state coffers, improved funding for K-12 education has also competed with higher education funding, and finally conservative legislators and voters in many states have crippled the ability of states to raise money via taxation.
With declining state dollars universities have placed increased emphasis on other sources of funding, primarily research grants and contracts, student tuition, entrepreneurship, and private donations. While there are positive elements to these thrusts, there are also many unintended negative consequences.
The quest for grants and faculty salary disparities. Research-intensive public universities have sought to capture increasing amounts of federal and private grant and contract support. Overall this is a good thing since it drives research, one of the main missions of an academic institution. However, there are side effects. Faculty at research-intensive institutions, especially ones with strong biomedical programs, are expected to cover a substantial fraction of their salaries from grants, usually in the range of 50-90%. Further, in seeking to promote grant-getting activity, many institutions have developed essentially a bounty system for faculty salaries; if you bag a grant your salary goes up, if you lose one it goes down. Naturally this tends to focus faculty efforts on research and grantsmanship, rather than on teaching; this has been widely discussed, but with little resolution in sight. A subtler side effect is that larger and larger disparities in faculty salaries are becoming common, particularly between professors in the physical or biomedical sciences and those in the humanities. Thus a highly successful professor of biochemistry of or engineering may earn two or three times as much as a professor of history who is equally renown in his/her field. Clearly there should be differences in compensation between faculty members who contribute to the university mission to different degrees. However, grant bounty hunting accentuates these differences in a way that may be disproportionate to true contributions to the university. This can lead to a great deal of dissatisfaction among faculty whose fields are not blessed with abundant opportunities for grantsmanship.
Raising tuition; the student as a customer. Universities nationwide have increasingly adopted the argot and attitudes of big business. One of the most pernicious concepts to have crept into academic thinking is the notion that students are ‘customers’ and thus need to be gratified. This of course is driven by the need to raise tuition to replace state dollars and the consequent fear that students may not apply if tuition is raised. Thus universities now compete to provide better food services, dormitories, athletic services and the like. Unfortunately they also compete in an academic ‘race to the bottom’ that includes massive grade inflation and a reluctance to flunk undeserving students. This last is particularly true in professional schools like medicine or pharmacy where tuition is high; faculty members who give failing grades are pressured to provide remediation thus keeping marginal students in the program. The inevitable result is the undermining of intellectual standards and of the worth of an academic credential. Universities need to think seriously about this issue. As a recent article in the Economist pointed out , obtaining a college degree, or even a law degree or MBA, no longer automatically translates into high paying career opportunities. Students cannot be expected to shoulder increasing tuition an increasing debt burden to obtain degrees that have diminished intellectual and economic value.
Entrepreneurship; the elusive goal of demonstrating economic worth. In an effort to demonstrate relevance to the economic health of their states, many research intensive public universities have adopted an ‘entrepreneurial culture’. Thus faculty and even trainees are encouraged to translate lab results into the commercial arena, often by starting small ‘spin off’ companies. Clearly one would like to see research moving out of the ivory tower and being made useful to society, when that is appropriate. However, some universities (and faculty) have bought into the entrepreneurial role to such a degree that the main missions of the university are being compromised, often for the sake of technologies that have questionable commercial value. The primary roles of a faculty member are clearly research and teaching. However, in some settings if you haven’t founded a company or two, your faculty colleagues won’t respect you and your reputation with the higher levels of university administration will suffer. This, coupled with the possibility of large monetary rewards, leads to a feverish pursuit of commercialization of research results. Thus some faculty members spend inordinate amounts of time seeking funding for and organizing their spin off companies, often to the detriment of their teaching and mentoring activities. Unfortunately, only a tiny fraction of spinoffs will ever succeed in bringing significant financial benefits to the faculty member and to the university. This gold rush mentality has even extended to students. For example, some graduate students seem more interested in starting companies than in doing the academic research that will lead to their PhDs. To this observer that approach seems to be putting the cart before the horse. No doubt students are inspired by the examples of Steve Jobs or Mark Zuckerberg, but those rare exceptions are as relevant to the average graduate student as the NBA star is to the average high school basketball player.
Big donors/ athletic scandals. Public universities are increasingly following the path of private universities in pursuing funding from wealthy donors. Unfortunately in the case of the publics fund raising is often tied to the success of the football or basketball team. This has led to the whole nightmare of big time college sports with its million dollar coaches, pseudo-student athletes, TV contracts, and ultimately academic scandals. Notice that the Ivies and other elite universities have managed to at least partly uncouple private fund raising from big time sports; perhaps their donors are more sophisticated. In any case the big donor/ big time sports linkage is, at least in part, another manifestation of the results of reduced state funding for public universities.
In this commentator’s opinion our society needs to rethink the role of public universities. The current ongoing, haphazard conversion of the major state universities from institutions that exist to serve the public good to enterprises that happen to be in the business of education is a slow motion tragedy.