Taking the "state" out of state universities: tight budgets have lawmakers considering options that could change the face of public universities.

• Author: Bell, Julie Davis
• Position: SPECIAL REPORT

It's a fact: Higher education budgets are cut when times are tough, but restored when times get better.

Unlike most other state budget areas, higher education has a built-in mechanism to adjust to budget cuts--tuition. But this most recent recession lasted longer, the cuts were deeper and tuition sky-rocketed. As states enter the fourth straight year of severe budget cuts, lawmakers, college presidents and students know this is a defining moment. Fundamental changes in the way we fund and run our public universities must change if higher education is going to continue to offer high quality education to all kinds of students.

There is an important new conversation brewing. Can states continue to afford higher education? How important is it to maintain a public system? Why can't higher education be run more like a private business?

As legislators face the reality of little to no more public money for higher education, they are exploring options. These include partially or completely privatizing public universities, reducing regulations, creating voucher systems and funding institutions based on performance.

States currently provide nearly $80 billion to support higher education through appropriations and financial aid to students. Amounts vary by state. In Vermont, for example, students pay nearly 70 percent of the cost of their education through tuition while in California, students in

California pay only about 26 percent of the cost, with the balance made up by the state. (That formula would change under the proposed budget in California.)

In most states, that balance is shifting dramatically: Only 25 years ago state appropriations, on average, paid for 78 percent of the cost of college. Now their share is down to 60 percent.

That's no surprise to parents and students. Tuition and fees at four-year, public universities, on average, in just the last three years went from $6,185 to $7,605 today, a 22 percent increase, according to the College Board. That does not include room and board.

MORE PRIVATE THAN PUBLIC?

Is this trend slowly draining the "public" out of public education?

Many college presidents would say yes. They argue state funding levels have decreased so significantly in the last decade that colleges and universities are more private than public. If funding continues to decrease, they say, these institutions would better operate privately or at least with much more autonomy. Such an arrangement would free them of the rules that...