A bold plan to turn UW into a Stanford died a quiet death
State universities have clumsy and stingy masters in state capitols. Is it time for divorce court? Here's the story of how some people advising the University of Washington looked at such a scheme.
"Privatization" is one of the no-nos in the populist politics of this state, where public employees are zealous about protecting their turf and suspicion of corporations runs high. Even so, the concept of shifting costs to the private sector is likely to grow stronger, particularly when it comes to building bridges and transit and new toll roads.
What about public research universities? Might they be weaned from state support and control, and turned into independent non-profits? Given the suspicion of many legislators toward exalted research universities, is some form of devolution the only way the UWs can keep up with the Stanfords?
Ambitious research universities like the University of Washington sometimes entertain heretical thoughts like these, struggling to stay competitive. This is the story of one such episode, about 10 years ago. The idea sprang mostly from outside financial advisers, definitely thinking outside the box. The notion was politically dead on arrival and remains only an interesting historic footnote. Since that more despairing time, the UW under its new and politically astute president, Mark Emmert, has made remarkable progress in patching up relations between Huskies and Olympians. It looks like this marriage can be saved.
A decade ago, some passionate advocates for the UW were feeling a lot of frustration with the ties that bind the university with the state. As universities grow much larger (especially through the medical schools), the percentage of state funding, compared to huge overall budgets, has actually been declining. (State support is about 13 percent of the total UW operating budget today, though a very significant 55 percent of the "core educational budget.") State regulations inhibit freedom of innovation at universities. The Legislature understandably likes the idea of subsidized low tuitions and stringently capped out-of-state undergraduates -- and these requirements cost the UW hundreds of millions of dollars in tuition it might otherwise collect.
What seems to have triggered the brief look at divorcing the state was the Legislature's insistence that the UW create branch campuses in Tacoma and Bothell. That move was supposed to get the UW more geographic support in Olympia, but it also diverted capital and other funds from the mighty Montlake campus. And so, well outside of public view, some financial advisers to the UW played around with an intriguing what-if?
As reconstructed by one of the key formulators (who declines to be identified), the idea was to have the state take the present value of its likely commitments to the UW for the next 10 years, currently running a bit over $400 million a year, float a bond for that combined amount, and give the bond proceeds to the university's endowment. In exchange, the UW would agree that it would never have any further claims against the state for compensation and that the university could run itself.
The UW would have purchased its freedom, and the state would no longer have to fund the university, once the bonds were paid off. The state might still fund scholarships for Washington residents, and lay down a few covenants, such as the governor appointing one member of the governing body or requiring in-state tuition to be half the out-state rate. But otherwise, the UW would be a non-profit like other great private universities, free to charge tuition it deems wise and to start and terminate programs as it sees fit. All the other state colleges and universities would remain state-supported.
In effect, we would have created a Stanford, and presumably this liberated university would turn into even more of an economic dynamo for the state, if one harder for local students to get into. (It's already getting pretty selective, as shown in this Seattle Times survey.)
My source says that some investment banks looked at the practicality of the scheme purely from a financial basis and concluded that it could work. And there the bold idea died, the politics of such an idea being daunting. Among the serious objections: How would the UW be able to afford buying all the land and buildings at a fair-market price, and how could the state could legally sell such asssts at lower than market value? House Speaker Frank Chopp is a fierce foe of "privatization." And one can just imagine the outraged Husky alums who would feel betrayed, along with staffers anxious about a loss of generous state benefits. End of idea.
The bond scheme was a much bolder version of another idea that some UW Regents and leaders pushed through the 1990s, modeled on the University of Michigan system. In that state's constitution, the University of Michigan is given a protected autonomy, under which the school (with qualifications) controls its own tuition and destiny, while remaining a state institution with some public support. The result is undergraduate and professional school tuitions significantly higher than UW's. (Tuition at Michigan for undergraduates is now $10,500, compared to $6,400 at UW.) In addition, UM draws its undergraduates from all over the country, and those from out of state (two thirds in Michigan's case, one-sixth in UW's case) pay tuitions comparable to elite private colleges. (Out-of-state tuition for UW is now $23,231, according to a recent story in The P-I.) Some badly strapped state universities, such as University of Oregon, have been forced by draconian state cuts to increase dramatically its percentage of out-of-state students.
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Comments:
Posted Tue, May 20, 9:01 a.m. inappropriate
in the humanities indeed leagues away from stanford: or from a u.c.l.a. or berkeley.
but also, in the medical school, all one needs do is compare the u.c.l.a med library with the one at the u.w. this is an extremely provincial university perforce of the city and the state it is located in. this matters little in the sciences however where first rate work is done.
Posted Tue, May 20, 6:16 p.m. inappropriate
There Are More Apt Comparables Than Stanford.: Stanford neither "punishes the humanities" nor "devalues the undergraduate experience", quite the opposite, Stanford is heralded for its outstanding undergraduate educational experience and strengths across a broad spectrum of the humanities and the sciences. Biggest problem here is that we don't know what we want the UW to be, a football power, high tech research center, or an undergraduate training mill for industry. Whatever it is we want, it doesn't appear to be a center of intellectual excellence in the traditional sense of what makes for a world class university. Perhaps that is just recognition that we can't afford a world class university, or that our taxation system is disfunctional, or that we are cheapskates.
Posted Wed, May 21, 10:25 a.m. inappropriate
If it isn't Broke Don't Fix It.: Unfortunately the UW is broken - and I think this may well be endemic to many large public Universities. The reasons for this are difficult to understand as these institutions are deeply ingrained in the personal lives, positively and negatively, of just about everyone capable of commenting on the discussion.
I do think there are three things though that would definitely improve the experience and that just about everyone can agree on.
First, the UW shouldn't try to become Stanford, but it would benefit from having private sector COMPETITION of that level.
Second, make the UW more a part of its Community, not as some sort of isolated bureacratic monster. Add local working adults to the classroom mix, appoint community leaders not just corporate leaders to the board. Break off branch campuses in practice, if not name, from the oversight of the main campus.
Third, stop teaching folks that insulting your colleagues with pc insults of racism and sexual degeneracy is the best way to get ahead. Treat folks who engage in this behavior to exactly the same punishment they wrongly dole out currently with legal impunity.
FWIW, Brewster would make a good candidate for the UW Board - if he is capable of 'playing well with others'. That question, simple as it sounds, may well not yet be answered for this individual.
-Douglas Tooley
USA
Posted Wed, May 28, 5:07 p.m. inappropriate
higher ed funding math is a bit more complicated: Privatization would be interesting, but I have a hard time believing it would actually pencil out for one looming reason: the UW at Seattle alone enrolls more than 40,000 students. Two comparable privates, who do the type of research the UW does and have a competitive medical school, Stanford and Harvard, enroll 15,000 and 20,000 students respectively, and they are large. And both are top heavy in the sense that graduate enrollments constitute 60% or more of total enrollment. The UW is currently the reverse. Having a smaller undergraduate enrollment allows both to have faculty-student ratios at the undergraduate level that result usually in better teaching and always in better ranking. If this proposal had gone forward, the UW would at least have changed the mix of undergraduate to graduate enrollments and certainly would provide fewer slots for in-state students.
Another aspect of the UW's size is that the university awards perhaps 40% of the baccalaureate degrees in total awarded to state citizens. Anyone who has followed discussions about the future of higher ed knows that Washington state is a net importer of degreed citizens. To achieve the high rates of education in King County and relatively average rates elsewhere, we have to rely on other states to educate people. If you cut UW's contribution in undergraduate degrees in half, suddenly the state is heading quickly towards the deep South in its upper-division participation rate. If it is sometimes complained that Washington trains its citizens to serve those who come in the state, the problem would only get worse. Of course, theoretically, the state could have grown the branches faster, but one wonders if the new money made available to Olympia would have gone to higher ed. Indeed, if the whole point of privatization would have been to rid the state of an obligation, then it would be rather upsetting to find out the obligation had simply been spread out, with no resulting savings for the state.
Even if Oly and many other parts of Washington are skeptical, I really think that folks at places like Crosscut would be well advised to strongly advocate for more public funding for higher education at the UW and its sister universities. The US system is the outlier when it comes to public vs. private funding of higher education, much as it is in health care: most international universities are funded by (and answerable to) central gov't. This is the case in Britain, our closest peer in screwy public-private funding arrangements, and is certainly the case of nations that intend to catch and surpass the US in educational attainment. If the country as a whole goes down the path of privatizing or making higher education a fee-for-services good, one can easily predict a more polarized society with an increasing disparity between the lives of those at the top who can pay and the lives of those who can't. While I can hear George Will justifiably saying things are not bad as all that now, I will repeat with Bachman Turner Overdrive that, if this occurred, You ain't seen nothing yet.