By Richard Vedder
Colleges and universities are impacted by politics, being so dependent on governments for funding. National elections then are always important, and arguably more so this year than usual.
If the Democrats are successful in taking control of Congress, there will be efforts to vastly expand student assistance programs, especially Pell Grants, and to put the squeeze on private loan providers. There might be a willingness to increase other forms of governmental assistance (such as research grants), although there is little evidence the Democrats find these programs any more important than the Republicans who have presided over a spending spree during their recent control of Congress.
Three states have major constitutional restrictions regarding state spending on the ballot: Oregon, Nebraska, and Maine. Universities are worried because strict spending limits will force some reduction in what might be viewed as "discretionary" spending, which increasingly means funds to universities. When push comes to shove and budget cuts need to be made, university subsidies lose out --legislators rather reduce them than, for example, restrict Medicaid or lower K-12 educational subsidy payments. To politicians, easing the pain on middle class families whose children mightily benefit economically from a university education is less important than avoiding significant cuts in health care to lower income families, or even funding cuts to primary or secondary schools. The arrogance and extragvence of some universities has strengthened those convictions.
The President of the University of Oregon says if their constitutional proposal (similar to Colorado's Taxpayer Bill of Rights amendment) passes, the U. of Oregon may have to consider some form of privatization. I say, why not? The intellectual justification for state subsidies of institutions of higher education is increasingly weak.
There are some other interesting college-related issues on ballots. In Ohio, for example, gambling interests are promoting slot machines at race tracks and other locations, with 30 percent of the proceeds allegedly going for university scholarships (thereby giving universities incentive to raise tuition even more). At least one university board (Ohio State --the flagship university) has actually opposed the measure, but many university officials are secretly hoping for its passage.
All of this, of course, is of secondary importance in the broader scheme of things. The major problem with American universities is NOT inadequate funding, but rather a variety of other issues --inefficiency, lack of full accountability, the absence of transparency, dubious academic standards and performance, etc. It is not until these issues are addressed that we will be any closer to solving the problems faced by higher ed.