American Enterprise Institute
·
Published
July 16, 2024
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Summary

  • Adam Kissel at American Enterprise Institute argues that public universities suffer from a culture of timidity in discussing conservative ideas and that privatizing these institutions could introduce market discipline, potentially saving states billions in subsidies.
  • The article advocates for states to wait until interest rates drop below 4 percent before attempting to privatize universities through an endowment/bond plan, suggesting this transition will lead to institutions better aligned with market needs and free from bureaucratic constraints.

Overview:

This article was written by Adam Kissel at American Enterprise Institute. 

  • Public universities in the U.S. often avoid sharing ideas outside the prevailing academic norms.
  • Interest rates should drop below 4 percent before states pursue university privatization through an endowment/bond plan.

Key Quotes:

  • "Public universities suffer from demonstrated cultures of timidity when it comes to sharing ideas that stand to the right of the prevailing academic regime."
  • "States seeking to privatize their universities through an endowment/bond plan should wait for interest rates to return below 4 percent."

What They Discuss:

  • Public universities demonstrate a noticeable reluctance to entertain conservative ideas, contributing to a perceived culture of speech suppression.
  • Privatizing public universities is proposed as a solution, potentially saving states like Texas nearly $14 billion annually.
  • One privatization approach involves gradually reducing state funding to zero while giving colleges ownership of their land.
  • Alternatively, states could use an endowment/bond plan that maintains revenue neutrality by appropriating funds equivalent to eighteen to twenty times the average funding from the past five years.
  • Fairmont State University serves as a case study, highlighting issues like low graduation rates and high drop-out rates despite significant state subsidies.

What They Recommend:

  • States should consider privatizing public colleges either gradually or through an endowment/bond plan.
  • State legislatures should wait until interest rates fall below 4 percent before adopting the endowment/bond approach.
  • Resources should be redirected towards students most likely to succeed rather than continuing blanket subsidies for institutions.
  • States could reallocate savings from privatization to other public needs or reduce taxpayer burdens.

Key Takeaways:

  • Privatization could address cultural and financial inefficiencies in public universities.
  • Approaches to privatization include reducing state funding gradually or using a revenue-neutral endowment plan.
  • Privatizing universities could improve the intellectual climate and financial accountability in higher education.
  • States could save billions in subsidies by privatizing public institutions and should wait for favorable interest rates to proceed.

This is a brief overview of the article by Adam Kissel at American Enterprise Institute. For complete insights, we recommend reading the full article.

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Original Read Time
9 min
Organization
The Brookings Institution
Category
Israel-Gaza War
Political Ideology
Center Left

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