Elimination of Financial Subsidies for Private Higher Education Institutions

Higher education is an engine of economic growth. There are two historically developed branches of American higher education: public and private ones. The private sector of American higher education includes both the most and the least prestigious institutions. Its characteristic feature is that it relies greatly on nongovernmental revenue. Recently, politicians argue stability and independence of private institutions, which allow reduce and even eliminate governmental financial subsides. Decreasing support from the government does not mean rejection from financing. It means redistributing costs among parents, students, taxpayers (in fact, the Government), and sponsors. Like any other fundamental reform, this one requires a well-considered approach for overcoming obstacles preventing this reform. There are some burning points needing discussion and immediate resolution.

The Government faces other compelling public needs, besides private higher education. And one of them is improving primary, secondary, and K-12 education. The point is that basic education gives ground for further studies. Its sector, in the overwhelming majority, is a public one because basic education should be provided for all citizens. Surely, it requires strengthening and lacks funds, because of the constant growth of pupils and the demand to assure diverse and profound education for everybody regardless of income, social status, nationality, and mother tongue. Of course, teaching pupils at schools demand more expenditures, because they have no possibility of earning enough money to provide for their education with only several exceptions. Thus, expenses on teaching staff needed equipment, and modernization of teaching methods are substantiated. Under conditions of budget deficits, a possible solution to this problem arises from the cut of subsidies for private education and redirecting of them to basic education.

The problem of money lacking tends to be solved primitively by increasing tuition and education costs. The causes of rising costs fro higher education are multiple, including a long period of reduced state and federal government support for higher education, the high cost of new technologies, and efforts to keep salaries as business and government, as well as other institutions, via for the best faculty (A Brief Guide to US Higher Education 2007, 39). Expenditures bear heavily on students and their parents. As the majority is composed of the representatives of the middle class, who cannot boast on very high incomes, the changes should be conducted on a pilot basis. An increase in deficit menaces personal budget. It can be compensated by loans. To avoid the loan burden, the subsidies should be cut tentatively. Research and experiment in the financial sphere, as well as expert consulting and public opinion polls, are called to facilitate and simplify this process. Without a doubt, much depends on the institution’s management. A lot of colleges and universities, in their burning desire to solve the problem of money deficit, address alternative funding sources. Among them, find-rising campaigns and endowments from sponsors are the most popular. And towards the reducing of financial consumption, we may mention lowering of faculty costs.

Quality is one of the overarching problems in contemporary higher education. As Johnstone stated (2005), within the private sector, expenditure levels, as well as patterns of pricing and price discounting, vary greatly according to institutional wealth and the depth, demographics, and family affluence of the applicant pool. Concerns about institution’s overall quality, as well as their instruction, research, and service, have resulted in calls for … evidence that institutions are meeting benchmarks for efficiency and productivity (A Brief Guide to US Higher Education 2007, 40). We may hope that if the Government claims this point, quality of education will be guaranteed. It is primarily the state, who suffers low professionalism among employees. Private enterprises along with high salaries demand high quality of education and experience from professionals seeking a job. The outcome of low education quality may be employees with insufficient qualifications. And this price is too high for lack of financial support from the Government. Experts and professionals are worldwide recognized as proud of the United States.

At the same time, despite obvious reasonability, there exists a public opinion that politicians are just inclined to seek private solutions to public problems. And the impulse to this was given by declining public revenues because of globalization. Increasing dissatisfaction with governmental intrusion does not have ground and lacks the understanding that higher education is not as fortunate as goods-producing enterprises (Johnstone 2005). Expenses for a research organization that needed staff and a team of highly professional instructors are extremely high. Institutions are not able to provide for it by themselves. Besides, prices will constantly increase, and older students will face mounting debt loads. The vast majority of American colleges look like cross-eyed creatures. One eye is focused on the financial status of the college, the other on the desires of the student (Hersh & Merrow 2005). Educational institutions should focus only on the quality of education, having neither time nor a primary goal to solve financial problems. The goals of research and providing the labor market with qualified specialists are much more important than routine financial problems.

This point of view has some reason, but such claims are controversial. To begin with, it confronts the demand for more costly and intrusive accountability (Johnstone 2005). During historical development, the Government was in charge of this accountability. Thus, the independence of institutions contradicts the requirements for governmental subsidies. Parents and students pay the costs of higher education and value it, besides students seek for accretion of degree level. So, it is completely my own choice to study in a private educational institution. The assistance to private colleges and universities is provided using student aid. Parents would finance their children’s education from current income, savings, and in the future using indebtedness. Students would finance their education from savings, summer earnings, term-time earnings, loans. Sponsors will give endowments. And the Government will contribute to the financing of higher education through taxpayers, but gradually decreasing this part of income, facilitating the reform by all possible means.

Education is an essential part of the prosperity of the state and needs financing support. Current processes in the world demand a new approach towards this financing. And one of the disputing questions is whether the Government should play the first flute in subsiding higher educational establishments, especially, in the private sector. We attempted to analyze various sides of these problems and concluded that the process of alternation from giving subsidies to their elimination should be provided only using elaborated and considered methods. A rough approach can destroy not only the public sector but also higher education as well. Private educational institutions occupy leading positions and can become a ground for the preparation of highly qualified specialists in different spheres and scientists with great potential in various fields of big science.

Reference List

American Council on Education. (2007). A Brief Guide to US Higher Education. Washington, DC

Hersh, R.H., & Merrow, J., Eds. (2005). Declining by degrees: Higher education at risk. New York: Palgrave Macmillan.

Johnstone, B. D. Financing Higher Education. Who should Pay? (2005). In Altbach, P. G., Berdahl, R. O, & Gumport, P. J. (2nd Edition). American higher education in the twenty-first century: Social, political, and economic challenges (pp.369-392). Baltimore, MD: Johns Hopkins UP.

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