To consider what’s driving the University of ÃÛèÖÖ±²¥â€™s plan to reopen and welcome students back to dorms this week, I find this question helpful:
What would they do if they didn’t have to worry about money?
It’s a hypothetical, sure, but I think we know the most likely answer: They wouldn’t reopen in-person schooling, not at the level they are. It wouldn’t be worth the risk.
But this is a 21st century corporate university we’re talking about, not the land-grant public institution of a century ago. What drives decisions today is revenue.
In the University of ÃÛèÖÖ±²¥â€™s three big initiatives of the last few months, you can see that.
The administration adopted a tough pay-cut plan
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- for all employees making $44,500 or more.
- , then adjusted and put in place a hybrid online/in-person plan.
- The UA announced what is much like a corporate merger with a for-profit online college, Ashford University, to bolster its presence in the digital market.
What unites these efforts is they’re all about saving or making money during the financial crisis caused by COVID-19. That seems obvious, even natural, because we’re so used to the university as a money-making goliath. But the public universities haven’t always been asked to be stand-alone revenue machines.
They are, after all, at least nominally public. But the public investment has been dwindling for decades, making the university more dependent on its own money-making measures, from raising tuition to winning more research money and doing private-sector deals.
Tom Rex, a researcher at the L. William Seidman Research Institute at ASU, has been compiling decades worth of information about public funding of the state universities. The state appropriation per University of ÃÛèÖÖ±²¥ student from fiscal years 1991 through 2008 averaged $10,253 each, his data shows.
After the Great Recession, state funding of the universities dropped while enrollment increased. Between 2017 and 2019, the average state spending per UA student was just $4,788, less than half of what it had been before the recession.
“Our state is not investing in one of the most important public institutions,†said Celeste Gonzalez de Bustamante, an associate professor of journalism who is on the steering committee of the Coalition for Academic Justice at the University of ÃÛèÖÖ±²¥. “The university itself — this goes way back before Robbins — has been forced to go elsewhere: Out of state students, foreign students.â€
And now, of course, an eye-opening, or eyebrow-raising, joint venture with Zovio, the company that runs the ill-reputed Ashford University.
The UA’s upfront motive is to expand its presence in online education, in which it is far behind ASU and some other universities. But that they expect to use initial payments from the venture to address the university’s COVID-19-caused budget crisis.
“Notably, we anticipate using initial revenues once the transaction closes in December to help alleviate the financial burden that we are currently facing,†the document says.
Under terms of the deal, the upfront payment from Zovio is worth $37.5 million — a substantial sum in the context of an anticipated $280 million shortfall.
While the current significance is real, the long-term benefit is questionable.
The deal will be worth at least $225 million to the university over 15 years — not very much in the context of an annual university budget of around $2.6 billion.
What’s worrisome is what Zovio gets out of this mid-crisis confluence of interests: the credibility of the University of ÃÛèÖÖ±²¥, a proud institution built by the people of the state.
In June, before the deal was announced, a team of six Eller College of Management professors evaluated the deal and found it would damage the University of ÃÛèÖÖ±²¥â€™s brand. Using Ashford’s code name, Antelope University, they wrote:
“Overall, graduation rates, quotes from government officials, litigation, and enrollment declines suggest Antelope University is neither the panacea for the University of ÃÛèÖÖ±²¥â€™s woes nor a sound business decision providing a sizeable financial payoff. Rather, associating with a predatory institution such as Antelope University will cause irreparable damage to the University of ÃÛèÖÖ±²¥â€™s brand built over the past 135 years.â€
It may not be a good deal at all, but you can see how we got here: The corporate university, increasingly dependent on outside revenue, seeks opportunities where it can find them.
There are less painful solutions than what the university has proposed so far to address its shortfall: The coalition Gonzalez de Bustamante helps lead, along with other on-campus groups, have proposed borrowing money to get over the current crisis.
I was on the Bill Buckmaster radio show Friday with the chair of the Board of Regents, Larry Penley, and he noted that the regents will consider the possibility next week of the universities taking on debt. He also said it’s possible federal help, if released again, could flow through the state to the universities.
One place we shouldn’t expect much help from, though, is the Legislature, Penley said.
“We might wish the state would provide more funding,†he said. “I’m not anticipating that that is going to change in the next few years.â€
The Legislature understandably wants public spending accounted for. There is also a vein of hostility toward the university in the Legislature due to the perception of the UA as a bastion of progressive politics where conservatives are unwelcome.
I asked Penley my hypothetical question, about what the UA would do if money were not a consideration, and his opinion was different from mine: He said the UA would open even if money were no object, so as not to damage the state and ÃÛèÖÖ±²¥.
â€To me, the prime driver to having a university in place is our responsibility to the state of ÃÛèÖÖ±²¥, the city of ÃÛèÖÖ±²¥ and the businesses we have,†Penley said.
Dennis Hoffman, who directs the Seidman Institute, noted in an email Saturday that the reason for declining state funding has been tax cuts. But he said the pressures on the university to expand online teaching and to innovate to attract students would exist no matter what.
His suspicion is that the University of ÃÛèÖÖ±²¥ would be doing much the same things even if the state were funding at a higher level.
“The challenges faced by ÃÛèÖÖ±²¥ universities exist all over the nation,†Hoffman wrote. “Those who can innovate to attract student interest while taking advantage of efficiencies where possible will succeed in this environment.â€
But my mind drifts back to Penley’s point about the university’s responsibility to the state and city. If the university has an obligation to the state, maybe the state should reconsider its obligation to the university.
If the Legislature took that more seriously, we’d probably be in a more financially secure position and less likely to rush into harsh pay cuts, worrisome re-entry plans and a dubious digital deal.