All but lost in the brouhaha over Gov. Piyush Jindal’s overt moves to privatize the Louisiana Office of Risk Management, Office of Group Benefits, state prisons, Medicaid, the Louisiana Office of Student Financial Assistance and K-12 public education is the quiet but steady erosion of state financial support for state colleges and universities that is pushing higher education toward that same precipice.
Once considered sacrosanct, Louisiana’s state colleges and universities no longer are considered untouchable by legislators. Accordingly, administrators find themselves having to seek funding more and more from private endowments and from tuition increases that threaten to push student costs to a prohibitive level for all but the wealthiest.
And Louisiana is by no means the exception. The trend toward pseudo- and outright privatization is becoming more prevalent in all 50 states as state colleges fall victim to cuts in state aid, the depletion of federal stimulus dollars, tuition increases, caps in enrollment and the elimination of positions. Throw in billions upon billions of dollars in corporate tax exemptions and it’s easy to comprehend the fiscal disaster Louisiana has been courting for decades.
Even as this perfect storm gathers momentum, conservative legislators, led by the American Legislative Exchange Council (ALEC) are pushing to recast state universities in the mold of private corporations.
If this sounds somewhat familiar, it is because state colleges across the country are following the same track as K-12 public education in the conversions to charter schools—another of ALEC’s model legislative crown jewels.
In fact, the plan for higher ed was presented at ALEC’s national convention in New Orleans last August. That meeting was hosted by then-State Rep. Noble Ellington (R-Winnsboro), ALEC’s 2011 national president. Ellington, who did not seek re-election, eased from his House seat to a more comfortable position as second in command at the State Department of Insurance at a salary of $150,000 per year.
ALEC, which purportedly espouses increased transparency in government, restricted access to its New Orleans meeting and specifically barred the media.
And, considering Jindal’s dogged determination to privatize everything public and his penchant for secrecy, it must be no coincidence that ALEC bestowed upon him its Thomas Jefferson Freedom Award at last August’s New Orleans closed-door convention.
Alarming examples of this slow trip down Privatization Lane abound in practically any state one chooses to observe.
In Texas, for example, Gov. Rick Perry, whom Jindal backed in his bid for the Republican presidential nomination, has packed the board of regents at all six state college systems with political allies who, like Perry, adhere to the Republican mantra that colleges should be run like businesses whose “customers are students.”
In Arizona, voters in 2010 approved a state referendum banning affirmative action in state universities, replicating the same action taken in Florida in 1999.
At the University of Virginia, the first public college in America and founded by Thomas Jefferson, the state provides less than 8 percent of the school’s operating budget, down from 28 percent 25 years ago. Things are no better at William & Mary and Virginia Tech, prompting Virginia’s three flagship universities to ask the General Assembly to make them “chartered” universities, which would give them freedom to set tuition and to run themselves.
Of the $1.8 billion cost to operate all 27 of Louisiana’s state universities, colleges, junior colleges and technical colleges, only $734.2 million, or 40.2 percent, came from state appropriations but even that figure is deceiving because Jindal has ordered an additional cut of $50 million.
In February, not long after Jindal submitted his executive budget, then-LSU Systems President John Lombardi, no doubt at Jindal’s behest, sent an email to his administrators asking that they not complain about Jindal’s proposed elimination of 2,837 positions in higher education. Lombardi said that Jindal would appreciate it if the administration acknowledged that the budget “gives higher ed special treatment…”
That “special treatment,” it turned out, was a carrot that Jindal dangled before university presidents in the form of a promise of $100 million for higher education should the governor’s retirement package pass.
Goodbye $100 million.
And on April 27, goodbye Lombardi as the LSU Board of Supervisors, acquiescing to Jindal’s wishes, unceremoniously fired the LSU president.
A spokesperson for the Board of Regents said that the state only a few years ago provided 70 percent of the funding for state colleges and universities with tuition making up most of the balance. That formula is virtually reversed today with the state providing 40 percent and tuition and other resources providing 60 percent.
This trend toward privatization is not new; it has been taking place for more than a decade, but the implications are only now becoming clear.
As state financial support dwindles and colleges begin implementing double-digit tuition increases, the result is that the school’s mission to provide access to higher education for all suddenly becomes a mission more akin to a private university that caters only to those who can afford it.
Sometimes, even that doesn’t work. When Virginia Commonwealth University bumped its tuition by 24 percent to make up for previous cuts in state appropriations, Republican Gov. Robert McDonnell cut the school’s appropriation even more.
Consequently, as flagships gravitate toward the elitism of privatization, poor and middle-class students are priced out of their institutions and into second-tier schools. This then creates the social stratification of higher education in which the elite colleges are filled with kids from upper income families while kids from poorer backgrounds are relegated to less prestigious schools.
What was it again that Romney said about class warfare? Oh, yes, he said that the Occupy Wall Street protests represented class warfare.
So, when state colleges privatize and their tuition, which currently averages around $7,500 a year (not including room and board), escalates to the private college levels of $25,000 to $40,000 a year, many students who do manage get into those schools will do so only by taking out ever-larger student loans and just who will profit from that?
A few clues:
• Sallie Mae currently has $21 billion in student loans on its books;
• Citi Student Loans, part of Citibank: $5.9 billion;
• Wachovia Education Finance: $5.5 billion;
• Bank of America: $4.9 billion;
• JP Morgan Chase (yes, the one that just reported the $2 billion trading loss): $3.5 billion.
And those loans are guaranteed by the federal government so the lenders are betting on a sure thing, which is more than be said of the students. Even taking the low end of $25,000 tuition plus room and board, a student graduating in four years would exit as a 21- or 22-year-old college graduate, possibly with no job, and with a $150,000 debt (Don’t forget the room and board). Add two years of graduate study and presto! His debt is now $200,000. No wonder he moves back home.
ALEC was ostensibly founded to promote the “Jeffersonian principles of free markets, limited government, federalism and individual liberty.”
One has to wonder if this is what Thomas Jefferson had in mind for his school.