Column: When universities try to behave like businesses, education suffers

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The bill of particulars against Linda Katehi, the suspended chancellor of UC Davis, certainly is eye-opening.

As set forth in a letter from University of California President Janet Napolitano, Katehi’s offenses include nepotism, the spending of $175,000 to scrub from the Internet references to the 2011 pepper-spraying of student protesters by a campus cop and the misuse of student fee revenues as alleged by an unidentified whistle-blower.

But what should have disturbed Napolitano more was something that didn’t appear on her list at all: Katehi’s membership on the boards of two businesses whose corporate interests arguably conflict with those of her university.


These are DeVry Education Group, a chain of for-profit schools that not only functions as a competitor to public higher education but is under federal investigation on allegations of deceptive advertising about job and income prospects for its graduates; and John Wiley & Sons, a textbook publisher.

The prestige of the private sector now requires imitation by the public sector. It’s almost as if we’re intimidated.

— UC Santa Barbara literature professor Christopher Newfield

After the disclosures of the board memberships caused an uproar and before she was suspended by Napolitano, Katehi resigned from the DeVry board and said she would donate to charity $200,000 in Wiley stock she had received as a director.

Corporate board memberships by UC administrators have been a sensitive topic ever since 2006, when Marye Anne Fox, then the chancellor of UC San Diego, was reported to be holding down seven paid directorships or committee seats. Her defense was that “the university’s profile is enhanced by board service” by top administrators.

The UC Regents later restricted administrators to three for-profit board seats and the issue went away – until now.

But Katehi’s activities point to a disturbing trend in higher education, especially among public institutions such as UC: Universities are getting cozier with businesses and industrialists, and less discerning about the pitfalls of these relationships, which include accepting donations with strings attached. What’s worse is that universities are adopting the corporate model of profit and loss as though they’re businesses themselves.


Students already are losing out. They’re not only saddled with an increasing share of the direct costs of their education, but are offered a narrower curriculum as universities cut back on supposedly unprofitable humanities and social science courses in favor of science, engineering and technology programs expected to attract profitable grants and offer the prospects of great riches from patentable inventions.

In one of the most extreme examples, the State University of New York at Albany moved in 2010 to ax its French, Italian, Russian and classics programs. That left the institution looking like a glorified vocational school for engineers and research scientists.

But the issues swirling around Katehi, a Greek-born engineer, have exposed the same rift within UC Davis, where members of the science and engineering faculties defend her as an effective supporter of diversity in science and technical education, and members of the humanities faculty tend to see her as an avatar of the “privatization of the public university,” as three dozen humanities faculty members put it in a letter to the Davis Enterprise newspaper.

These developments, however, are based on fundamental misconceptions of the purpose and the economics of higher education.

For most of the post-World War II period, it was well understood that universities, whether public or private, operated under a model distinct from business. That began to shift in the 1980s and 1990s as American culture became fixated on the virtues of private enterprise, says Christopher Newfield, a literature professor at UC Santa Barbara and a leading critic of the corporatization of academia.

“Until then, the private sector wasn’t the model for the public sector,” Newfield told me. “But the prestige of the private sector now requires imitation by the public sector. It’s almost as if we’re intimidated.”


Adding to the pressure is a “massive defunding of public higher education” by state governments, says Hank Reichman, an emeritus professor of history at Cal State East Bay who writes frequently for the blog of the American Association of University Professors. In California, per student spending from the state’s general fund has fallen since 1980 by 43% at the California State University system and 54.7% at UC.

Administrators scurrying to replace these lost resources have turned to what appear to be promising sources — scientific research grants and patent royalties. But the idea that these programs are the key to sustainable budgets is mythical.

At some institutions, patent income looks like a big number, but it’s seldom more than a tiny fraction of total needs. UC patent royalty and fee income averaged about $104.5 million annually from fiscal 2011 through 2014; it soared to $177.2 million in fiscal 2015 thanks largely to the licensing of a single prostate cancer drug, Xtandi, developed at UCLA. But $43.4 million of that sum was distributed to the inventors; the net income flowing to UC amounted to a paltry one-half of 1% of the system’s total operating budget of $27 billion.

Science and engineering programs are heavily funded by outside grants, but the traditional patrons – government and industry – have been stepping away from the plate. A 2014 survey by the Council on Governmental Relations, an association of research universities, found that federal spending on university R&D had fallen to 59.5% of the total in 2012, the lowest share since 1956, before the Soviet Union’s Sputnik launch spurred a massive increase in U.S. scientific research. Contributions from state and local governments and industry had fallen by roughly two-thirds.


The burden of costs in higher education has been shifting to students: At UC, tuition and fees now cover 46.3% of the budget, according to the California Budget Project, up from 18.9% in 1998.

These trends have pushed universities into questionable deals with donors. Last year, UC Irvine accepted the first installment of a $6-million gift from the Dharma Civilization Foundation for four endowed chairs in Hindu studies, before faculty members raised an alarm about the political agenda of the foundation. UCI ultimately rejected the entire donation. Arizona State in 2014 specified that applicants for a post at its new Center for Political Thought and Leadership display a focus on “the relations between free-market institutions and political liberty in modern history,” which came suspiciously close to the mindset of the Koch family, which had contributed $1.3 million in seed money for the center.

What’s really at stake in the corporatization of academia is the traditional role the university as a repository of culture and training ground for open inquiry. “The obvious risk,” says Michael Meranze, a professor of history at UCLA who shares a blog on academic issues with Newfield, “is that academic research gets done to advance the interests of outside corporations, rather than guided by the logic of the university’s mission.”


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