The Corporatization of Higher Education The Corporatization of Higher Education It is not just the economic climate in which our colleges and universities find themselves that determines what they charge and how they operate; it is their increasing corporatization. Photo by origamidon, 2010, via Flickr creative commons

In 2003, only two colleges charged more than $40,000 a year for tuition, fees, room, and board. Six years later more than two hundred colleges charged that amount. What happened between 2003 and 2009 was the start of the recession. By driving down endowments and giving tax-starved states a reason to cut back their support for higher education, the recession put new pressure on colleges and universities to raise their price.

When our current period of slow economic growth will end is anybody’s guess, but even when it does end, colleges and universities will certainly not be rolling back their prices. These days, it is not just the economic climate in which our colleges and universities find themselves that determines what they charge and how they operate; it is their increasing corporatization.

If corporatization meant only that colleges and universities were finding ways to be less wasteful, it would be a welcome turn of events. But an altogether different process is going on, one that has saddled us with a higher-education model that is both expensive to run and difficult to reform as a result of its focus on status, its view of students as customers, and its growing reliance on top-down administration. This move toward corporatization is one that the late University of Montreal professor Bill Readings noted sixteen years ago in his study, The University in Ruins, but what has happened in recent years far exceeds the alarm he sounded in the 1990s.

Rank Tyranny

The most visible sign of the corporatization of higher education lies in the commitment that colleges and universities have made to winning the ratings war perpetuated by the kinds of ranking U.S. News and World Report now offers in its annual “Best Colleges” guide. Since its relatively modest debut in 1983, the “Best Colleges” guide has grown in influence. For any number of small colleges, getting traction from the “Best Colleges” guide may be a dream, but for a wide range of middle-tier and upper-tier colleges and universities, winning a good “Best Colleges” ranking is considered so essential to success that it shapes internal policies.

Robert Morse, who heads the team that makes up the college and university rankings for U.S. News, says the “Best Colleges” guide never sought to shape higher education policy, but that claim no longer matters. Colleges and universities continue to do whatever they can to boost their U.S. News ranking, especially when it comes to whom they admit.

It is now a standard practice for many schools to solicit applications from students who have done well on their SAT tests, even though they know there is no room for most of these students. Admissions officers don’t mind this waste of their time. The more students a college or university gets to reject, the higher it is ranked on the all-important U.S. News selectivity scale. Having a student body with impressive SAT scores is great; having a student body with impressive SATs and rejecting more applicants than a rival is better still. The closer a college or university comes to Harvard’s nationwide low of taking just 5.9 percent of its applicants, the happier parents are.

Instead of backfiring, the make-it-as-hard-as-possible-to-get-in strategy has pushed more and more high school students to go to extremes to win the attention of admissions officers. Recent cheating scandals at New York City’s elite Stuyvesant High School and the Great Neck high schools on Long Island’s Gold Coast show how desperate even “gifted” high school students are these days. Everyone is telling them they need to find an edge. Middle-class families as well as the rich are as a result spending thousands of dollars to hire private college advisers, SAT tutors, and sports coaches for their college-age sons and daughters.

The students who succeed in getting into our highest-ranked colleges and universities are thus far wealthier than the population as a whole. At elite schools, 74 percent of the student body come from the top quarter of the socioeconomic scale, while just 3 percent come from the bottom quarter. What follows from this skewed demographic pattern is a second layer of college spending. In the eyes of college administrators, students, especially those who are not on scholarship, have become customers who need to feel satisfied with the campus experience bought for them at prices that now top $50,000 per year at many elite schools.

Food courts, spa-like athletic facilities, and elaborate performing-arts centers are increasingly common on college and university campuses. Whether this emphasis on the amenities is much more than a throwback to such a nineteenth-century Harvard extravagance as having a student room come with extra space for a valet to live is open to debate, but not open to debate is how so many colleges and universities with four-year residential campuses have increased spending for student services that on a percentage basis outpace their increases in academic instruction and financial aid.

Equally telling, winning the higher-education prestige battle no longer involves just changing the internals of college and university life. Prestige—and with it the prospect of new cash infusions—also comes these days from increasing educational market share. We are currently witnessing the rise of the imperial university with campuses around the globe, particularly and ironically in countries with authoritarian regimes willing to invest in a brand-name university. As of 2010, thirty-eight American schools had sixty-five branches in thirty-four countries, all with the authority to grant degrees.

Colleges and universities that don’t have a foreign campus worry about getting left behind. As Brown University’s outgoing president, Ruth Simmons, complained in an interview she did for the Brown Alumni Magazine, “Our competitors are internationalizing at a much faster rate than we are. As a consequence, they are making themselves more attractive on the global stage.”

Not all university officials are as candid as Simmons, but what they are willing to give up in order to open a foreign campus is considerable. In starting its new campus in Singapore, Yale University has not only ignored protests by its faculty over civil rights abuses there. It has also ignored the warnings of Human Rights Watch, which classifies Singapore as a “textbook example of a politically repressive state.”

New York University, which has started a campus in Abu Dhabi, where free speech is also limited, has been equally cavalier about the toll its venture will take, but there is no doubt about who is ignored as NYU builds its global empire. Half of NYU’s faculty, compared to 20 percent at Columbia or Harvard, is part time, and scanty financial aid leaves the average NYU graduate with $35,000 in debt (the average college debt is $23,000 nationwide).

The Rise of the Administrators

Not surprisingly, those administrators who occupy the highest ranks in our college and university bureaucracies are those who have professionally benefited the most from corporatization. Running a corporatized college or university is not easy. The professor who takes time out from teaching and research to devote him- or herself to administration for a few years increasingly is an anachronism. A new, permanent administrative class now dominates higher education. At the top are the college and university presidents who earn a million dollars or more a year and serve on numerous corporate boards (Shirley Ann Jackson, the president of Rensselaer Polytechnic Institute, earned a reported $1.38 million in a single year from her multiple directorships). Thirty-six private college and university presidents, according to the Chronicle of Higher Education, fall into the million-dollars-a-year category, and many more are close behind.

Not surprisingly, those administrators who occupy the highest ranks in our college and university bureaucracies are those who have professionally benefited the most from corporatization.

A still bigger change in how higher education is managed lies in its growing number of administra-tors in its ranks. As political scientist Benjamin Ginsberg, the leading authority on this subject, has pointed out, administrators have become a greater presence in colleges and universities while faculty have been in decline. Between 1998 and 2008, private colleges increased their spending on instruction by 22 percent while they increased their spending on administration and staff support by 36 percent.

If we go further back in time, the rise in administrators becomes even more striking. In the last forty years the number of full-time faculty at colleges and universities has grown by 50 percent—in line with increases in student enrollment—but in this same period the number of administrators has risen by 85 percent and the number of staffers required to help the administrators has jumped by a whopping 240 percent. Small wonder, then, that so many policy decisions at colleges and universi-ties are made without—or despite—faculty input.

Small wonder, too, that when colleges and universities think of economizing, their target is all too often those who are already their most vulnerable employees—part-time faculty and service workers. The administrators who run our leading colleges and universities are unwilling, the record shows, to downsize themselves. In the 1970s, 67 percent of faculty were tenured or on a tenure track. Today that figure is down to 30 percent, and for those who run higher education such a low number is ideal. Whether they are adjuncts or teaching assistants (TAs), those without the claim to permanent jobs cost less and are easy to get rid of in a period of contraction. Unionization efforts by teaching assistants in graduate programs at public universities throughout the country have rectified some of the worst abuses in what is in essence an academic temp system. But the TA union successes have not changed the fact that, at our largest universities, an academic underclass is at work: the faculty having the greatest amount of contact with individual students are those on the lowest rung of the academic ladder.

The corporatization of higher education has placed similar burdens on the employees who do the brunt of the janitorial and food-service work. In the case of food-service workers, whose median wage in 2010 was $17,176, these burdens are often made even worse because the workers are actually hired by a contractor, whom the school then pays. This hiring distinction is an artificial one that simply adds a bureaucratic layer, but colleges and universities like it. Hiring through a contractor allows them breathing room when, as is bound to happen, their workers complain about their wages and benefits and win the support of students and faculty. The schools can then promise to deal with the contractor while insisting that they are caught in the middle of a crisis not of their making.

This claim of being trapped is a fig leaf worth paying attention to, however. It reminds us that those responsible for the corporatization of our colleges and universities are aware that they face limits on their own power. Whether they will be able to erode these limits further, as they seem to want, or forced to deal with a pushback is an unanswered question. “It is easy to criticize the corporatization of education,” social critic Thomas Frank warned in a Harper’s essay, (“The Price of Admission,” June 2012). “But criticizing it is actually different from halting its progress—a political step we seem unable to take.”

Beyond the GI Bill

The corporatization of higher education began to take its present form in the early 1980s at the same time Ronald Reagan was dominating American politics. U.S. News’s “Best Colleges” guide came into existence then, as did the willingness of college and universities to increase their prices at a faster rate than the cost of health care or inflation was rising. In an age of deregulation, a built-in restraint that had been in place for years was suddenly gone, and no effective resistance movement by parents and politicians rose to counteract it.

Today, by contrast, critiques of higher education abound. Columbia University literature professor Andrew Delbanco’s book College: What It Was, Is, and Should Be has won widespread praise within the academic world for its old-fashioned defense of liberal education and its insistence that today’s students are being betrayed by being “relentlessly rehearsed and tested until winners are culled from the rest.” Criticism from within colleges and universities by professors such as Delbanco, even when accompanied by union organizing, is still limited, though, in the actual reform it can bring about.

For starters, faculty are going to have to take back much of the power they have surrendered over the years to professional administrators to see real change.

In addition, the federal government will also need to play a bigger role in higher education. The Morrill Land Grant Act of 1862, which in the middle of the Civil War gave the states federal land they could sell and use to start state universities, was transformative. The GI Bill, which Franklin Roosevelt signed into law in the summer of 1944 while the Second World War was still going on, opened up educational opportunity for the nation’s military. By 1947, veterans accounted for 49 percent of the students in American colleges and undid the Great Depression notion that higher education was only for the rich.

Barack Obama, faced with Republican and Tea Party opposition at every turn, has acted cautiously with respect to higher education. At a time when, according to the Education Department and the Consumer Protection Bureau, outstanding student loan debt is over $1 trillion, the president has nibbled at the edges of reform, calling for keeping down the interest rate on student loans and insisting that colleges and universities need to make their actual costs clearer to families. But the Obama administration’s caution should not be a guide for the future.

According to a 2011 Pew Research Survey, 75 percent of Americans believe college is too expen-sive. There has never been a better time for proposing major reform in higher education. Allowing students to pay for their college educations by having a small percentage of what they earn following graduation deducted from their income tax could make a difference in reducing the burden of student debt, and so could a loan-forgiveness system that allowed students to write off their government loans in exchange for working at a public service job, such as high school teaching, at subsistence wages for the same number of years they were in college.

The only thing out of the question when it comes to higher education is continuing to do business as usual.



Nicolaus Mills is professor of American Studies at Sarah Lawrence College. His most recent book is Winning the Peace: The Marshall Plan and America’s Coming of Age as a Superpower.