Yet, as with the auto industry in the 1960s, there are signs of peril within American higher education. It is true that the problem with car companies was monopoly, whereas U.S. colleges compete in a vibrant marketplace. Students, often helped by federal scholarships and loans, may choose among 6,000 public, private, nonprofit, for-profit, or religious institutions of higher learning. In addition, almost all of the $32 billion the federal government provides for university research is awarded competitively.
But as I discovered myself during my four-year tenure as president of the University of Tennessee in the late 1980s, in some ways, many colleges and universities are stuck in the past. For instance, the idea of the fall-to-spring "school year" hasn't changed much since before the American Revolution, when we were a nation of farmers and students put their books away to work the soil during the summer. That long summer stretch no longer makes sense. Former George Washington University president Stephen J. Trachtenberg estimates that a typical college uses its facilities for academic purposes a little more than half the calendar year. "While college facilities sit idle, they continue to generate maintenance, energy, and debt-service expenses that contribute to the high cost of running a college," he has written.
Within academic departments, tenure, combined with age-discrimination laws, make faculty turnover—critical for a university to remain current in changing times—difficult. Instead of protecting speech and encouraging diversity and innovative thinking, the tenure system often stifles them: aspiring professors must win the approval of established colleagues for tenure, encouraging likemindedness and sometimes inhibiting the free flow of ideas.
Meanwhile, tuition has soared, leaving graduating students with unprecedented loan debt. Strong campus presidents to manage these problems are becoming harder to find, and to keep. In fact, students now stay on campus almost as long as their presidents. The average tenure of a college president at a public research university is seven years. The average amount of time students now take to complete an undergraduate degree has stretched to six years and seven months as students interrupted by work, inconvenienced by unavailable classes, or lured by one more football season find it hard to graduate.
Congress, acting with the best of intentions, has tried to help students with college costs through Pell Grants and other forms of tuition support. But some of their fixes have made the problem worse. The stack of congressional regulations governing federal student grants and loans now stands twice as tall as I do. One college president lamented to me that filling out these forms consumes 7 percent of every tuition dollar.
Because of the recession, Harvard is laying off workers and Stanford is selling a billion dollars of its endowment. Declining state support makes the pain in public universities even worse. From 2000 to 2006, total state higher-education funding rose only 17.6 percent while average tuition at public four-year institutions went up 63.4 percent. The main cause of declining state support was the runaway costs of Medicaid, which rose over the same period by 62.6 percent. And Congress is now considering a health-care reform bill that would shift even more Medicaid costs to the states. The recent federal stimulus dollars offer only temporary relief. Tennessee Gov. Phil Bredesen described the situation in his March budget address: "When this money ends 21 months from now, our campuses will suddenly need to begin operating with about $180 million less in state funding than they had this year."
