Fund drive for varsities: Commodification of education is pretty, and a necessary evil

Education is no more a public good, it’s a commodity to be traded in the free market place. Seats at institutions of higher education are up for grabs, for those who pay the ‘sticker price’.

As much as commodification of education sounds an oxymoron, it is here and each country grapples with it. Education left to the market forces, its commodification and monetisation is the consequential outcome. The fact that each country is the best critic of its own educational system is a good thing.

Since 1980s free market forces have swept the planet and did not spare education of the citizens of their respective countries. Education as a public good, therefore to be supported by the public, quickly faded away.  Left to the forces of free market, education turned to be a sport for management gurus to introduce lean and mean practices in the name of efficiency. The driving question became “what is the value of education?” Here “value” took on a distinctive industrial meaning; industry practices took over the administration of the educational institutions. Quantification of every aspect of education is the norm. Universities began to deliver human resources to the industry, instead of well-educated members for society. As a “requirement” for competing in the marketplace, educational institutions transformed themselves in country clubs with dazzling technology, often as eye-candy, without much educational value. “Being trained” is more important than being educated.

How to finance education in the marketplace? This is a perennial anxiety-inducing question and at the same time a quotidian reality, which drives every move a university makes in the process of delivering “good education” to its students. The growing privatisation of public higher education system has created enormous challenges as private interests take over the public good of education.

Departments of Institutional Advancement, a fancy name for fund-raising, and marketing, at every university and college in the USA is a high-tension operation, under the close scrutiny of the President, a fund raiser-in-chief, and of the board of trustees of the university.

Elite educational institutions have significant endowments with robust mechanism for generating vast streams of revenue other than tuition. For elite schools, money generates money, and moneyed people in general can afford high-price educational institutions and they are well- disposed to support elite institutions. These institutions operate in a different universe.

Most of the non-elite educational institutions, which educate the majority of students, are tuition-dependent, and thus are in a perennial anxiety about generating “a diverse stream of revenue.” The accelerated decrease of government funding has driven universities to explore all kinds of revenue generation streams, including questionable private partnerships across the world. By following the industrial model, and in the name of “efficiency,” universities have outsourced what they perceive as “non-core” activities to market forces, and allowed “consultants” to run the academia. Revenue generation is at the heart of every deliberation and decision in managing academics institutions.

The management of universities is in the hands of management specialists with MBA qualifications, who apply business models at every level of functioning of the university. The USA federal student tuition aid keeps the financing of the education enterprise; 44 million students take student loans and spend their lifetime to pay them off.

Forbes analysis gives a sobering picture of the cost of the education  https://www.forbes.com/sites/zackfriedman/2018/06/13/student-loan-debt-statistics-2018/#669ab9d97310   According to American Student Assistance, 12 million (60 per cent ) students annually take the federal student aid loans.  

The corporatisation of universities has become an accepted model of “delivering” education, where mortgaging the commodity of education is the new normative. In the battle of the political ideologies in the USA some State public universities are getting out of the “business” of education, while other state public universities are funding the education to its residents, albeit with significant conditions. Universities, private and public, are in search of more students who can pay full tuition. Recruiting foreign students has become a critical priority because, in general they pay the “sticker price.” Universities have been practising a disingenuous marketing ploy, which has gained legitimacy, of using high “sticker price” to signal the prestige of the institution, but, actually, offers significant tuition discount to a large number of students.

The diminishing school/college age demographics in USA compel universities to look beyond their borders; however, the national political disposition towards international students creates uncertainties. Moody’s Investor Services gave a negative outlook to US higher education system for 2018. It concerns that growth will slow for most revenue streams, the rate of expense growth will outpace softening revenue growth, and the uncertainty at the federal-level continues to contribute to potential sector volatility.

Financial experts assess that only 500 or so of more than 4,000 colleges/universities in the US are financially in good standing. Most colleges/universities struggle to meet demands of ongoing technology upgrade, while being buffeted by changing demographics and economic forces.

The free marketeers have almost successfully argued that education is not a public good, rather a need for industry success. The neoliberal position on education is that it is a private benefit, measured in terms of economic and social attainment. Whereas, the education as a public good is understood, where benefits spread across society in terms of employment, economic prosperity, health and social cohesion; and as Unesco stated, where “individuals, especially women, aspire to live healthy, meaningful, creative and resilient lives. It strengthens their voices in community, national and global affairs. It opens up new work opportunities and sources of social mobility.”

While the debate over education as public good or a commodity continues, higher education in the United States is at a tipping point. It is difficult to define and measure value; compulsions and obsessions to focus on the core, reduce costs, outsource and monetise assets, and develop online and lower-cost programmes will grip us. “Disruptive innovations” will change the landscape within higher education, and the value proposition, economics, marketing and recruiting, outcomes and assessment will have to be adjusted continuously.

Prof. Basilio G. Monteiro  is Associate Professor in the Department of Mass Communication, and Director of the Graduate Programme International Communication at St. John’s University, New York