Commandment #10: Divest Universities of Non-Core Activities

Commandment #10: Divest Universities of Non-Core Activities

by Daniel L. Bennett

The purpose of universities is to produce and disseminate knowledge. Providing students with fancy cuisine, elaborate accommodations and a plethora of student entertainment and recreation options has no impact whatsoever on the outcome of student learning objectives. If anything, the proliferation of such a consumer-oriented focus on campuses across the nation has detracted from student learning. Colleges need to divest themselves of these non education-related activities and re-focus on their original purpose - to seek and transmit knowledge.

It is true that students residing away from home for college need a place to live, dining options and social activities, but this does not necessitate that the colleges themselves need to provide such services. By doing so, colleges establish local monopoly power that results in an inefficient allocation of resources. It is safe to assume that if these markets were open to competition, there would be no shortage of private sector and entrepreneurial interest in providing these services -- and likely in a much more efficient and consumer-friendly manner. The privatization of these services would free up university resources and administrative burden to focus on education-related services. This would, in turn, result in lower operating costs that could be passed on to students in the form of reduced tuition charges.

In addition, a reduction in the operating costs via privatization of non-core activities would be a two-fold victory for the general public. First, it would lessen the need for public support of inefficient, tax-free college services. Second, the private sector pays taxes on its profits, so the privatization of non education-related services (i.e. - housing, dining, entertainment, etc.) would actually boost the tax base, as opposed to being a hindrance on it as is currently the case. This would free up public dollars for more productive uses, such as reducing the nation's growing debt that will surely imperil the future of the next generation of Americans.

Good policy will produce a win-win situation. Students and parents will benefit from private-sector competition of these services with lower costs and more choices, as well as from colleges placing a renowned emphasis on education-related activities. Faculty will benefit as more resources will be made available for education-related activities. The general public will benefit from the simultaneous reduction in expenditures on higher education and the increase in tax dollars from private businesses (not to mention the job creation in the private sector), assuming that policy makers direct the additional resources to more productive means. By privatizing non-core college activities, everyone wins except for rapacious university administrators whose bureaucratic regimes will diminish.