Privatizing State Universities

In wake of a state budget crisis and a temporary infusion of stimulus funds, Colorado State University is considering a partial privatization of the public university. By 2011, it will see a $230 million reduction in state subsidies – about 4% of CSU’s budget. In response, officials are forming a plan that would partially privatize the college by charging different tuition rates for more expensive degrees.

Part-private and part-public universities already exist in New York, Virginia, and Pennsylvania. In PA state-related schools like Penn State are quasi-private, with about 10% percent of it’s operating budget coming from state funds. But given the recent outcry over delayed of higher education funding, you would think it was much higher, and the school was shuttering Beaver Stadium on Saturdays.

Private college are more attuned to students needs, particularly financial restraints, because they are more dependent on tuition dollars. But public schools could partially replicate this phenomenon if states would channel all of their funding through the students instead of the institution. Giving students the power of the consumer is the first step to lowering the costs of higher education.