The ‘Private University’ Model

Private Universities

While most of my blog posts thus far have focused on public universities, both state-related and state-owned, it will now be very instructive to examine the ‘private-university’ model, especially since all the public universities are being privatized—that is, rapidly driven to function more and more like private universities—as far as their funding shares, but not their governance shares, are concerned. 

It is important to note, however, that the public universities in Pennsylvania will never become entirely private, either financially or functionally, for reasons that will be described later. 

Specifically, the majority stakeholders at the state-related universities provide over 80% of the funding, while the majority stakeholders at the state-owned universities provide over 70% of the funding.

This means, in terms of who pays—although unfortunately not yet in terms of who rules—the state-related universities are already 80% private, and the state-owned universities are already 70% private!

A brutal combination of factors is at work here:  1) the rapid defunding (a.k.a. privatization) of public higher education by the State over the last 30 years; and 2) the absence of any discernible plan, public discussion or faintest sign that the leadership of PASSHE and the State are aware of a dire need for both.

Unfortunately, this relentless privatization without a plan makes it absolutely certain that all the public universities are moving toward private university status, at least financially, if not yet functionally. 

We have discussed the issue of funding share vs. governance share extensively in the past.  But the functioning of any university—public or private—includes, but goes beyond, the issue of governance—however dominant governance must be in the conversation about the critical issues to be resolved.

More specifically, university functioning begins with governance but goes beyond it to include such things as operations, which then reflect institutional tradition, culture, and expectations—including those the institution has for the student, as well as those the student has for the institution.  

Key Differences between Public and Private Universities

Public and private universities differ in three (3) key ways, including: 1) How they are funded; 2) How they are governed; and 3) How they are operated.

How they are Funded

Private universities rely on high tuitions, private donations and large endowments—rather than State support—to remain financially viable.

Public universities rely on high State appropriation (which, in fact, is shrinking), low tuition (which, in fact, is growing), and small endowments (a recent development, historically) to remain financially viable. 

 How they are Governed

Private universities are governed by self-perpetuating boards of trustees which often follow the precepts of the Association of Governing Boards (AGB) as to their fiduciary duties and obligations to all university stakeholders, including students, parents, alumni, faculty, staff and the general public. The AGB serves over 1,250 member institutions—colleges and universities, both public and private.

Public (i.e., state-owned) universities in Pennsylvania are governed by the PASSHE Board of Governors (BOG), consisting of twenty (20) individuals, all of whom are appointed by elected officials, or are themselves elected officials.  The oath of office taken by PASSHE BOG members is the Pennsylvania Constitutional Oath of Office taken by every Commonwealth official, and reads precisely as follows: “I do solemnly swear (or affirm) that I will support, obey and defend the constitution of the United States and the Constitution of this Commonwealth and that I will discharge the duties of my office with fidelity.” 

PASSHE responded in writing to a recent Right to Know (RTK) request with the following statement:  “The duties and responsibilities of members of the Board of Governors are described in Act 188 of 1982 (Sec. 20-2006-A), as amended, the enabling legislation for the State System of Higher Education.”

Here is a direct quote from Sec. 20-2006-A, Item (a) (15), of Act 188:  “To do and perform generally all of those things necessary and required to accomplish the role and objectives of the System.”

 

This particular statutory duty and responsibility would clearly require BOG members ‘to do and perform generally all of those things necessary to accomplish’ the statutory purpose of PASSHE itself, which is to provide “high quality education at the lowest possible cost to the students,” a purpose that, as shown in two previous blog posts, the PASSHE Board of Governors has simply and utterly failed to accomplish.