2020 Showed That Colleges Don’t Have Revenue Problems. They Have Funding Shortfalls.

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As the year ends, one of the bigger higher education stories of the moment is Mackenzie Davis (née Bezos) gifting tens of millions of dollars to numerous low-endowment colleges and universities, most specifically HBCUs.

These gifts—$30 million to Winston-Salem State, $40 million to Morgan State, $50 million to Prairie View A&M University—are in most cases the largest donations in institutional history, larger even than the existing endowments at each institution.

In contrast, Yale’s endowment increased by almost a billion dollars—20 times Davis’ largest gift—even after spending $1.5 billion out of the endowment between 2019 and 2020.

The news of the donations by Davis is welcome, of course. There’s no doubt that these institutions and their students will benefit from receiving this welcome and necessary lifeline. At the same time, though, the donations highlight the longstanding structural problems that have left some institutions flush and others needing bailouts. There is nowhere near enough billionaire philanthropist cash to go around.

2020 is the year that the disconnect between the purported mission of post-secondary institutions—enhancing the intellectual, social, and economic potential of students, staff, faculty, and community—and the actual operations became apparent to all. In 2016, now chancellor of the University of California Berkeley, Carol Christ remarked in an interview, “Colleges and universities are fundamentally in the business of enrolling students for tuition dollars.” The scramble of many institutions to attempt to open for some semblance of face-to-face instruction in the midst of a global pandemic showed how true this is, as well as how it fails to fully capture the situation institutions find themselves in. It’s not just tuition dollars they require, but revenue from dining, dorms, and other services as well.

That this attempt was only semi-disastrous is a testament to a combination of ingenuity at some institutions, combined with a gradual collective numbness around the mounting number of infections and the death toll associated with the coronavirus. Perhaps college students did not spread the virus as much as some feared, but there is no doubt that college activities increased the spread of the virus and that more institutions going full remote would have been a far superior choice if our primary goal was to reduce the impact of the disease.

That so many colleges and universities felt compelled to open their doors in order to try to survive because they did not receive sufficient governmental support to weather the pandemic storm puts them in the same boat as many other businesses like restaurants, theaters and sports.

But of course colleges and universities are not businesses. Educational institutions are more properly viewed as part of our collective national infrastructure. The pandemic has revealed how far we’ve strayed from that vision over the last forty or so years, as public funding for higher education has been replaced by private money.

The pandemic did not cause any problems that were not already present in higher education.

I spent the early months of the pandemic writing a book that I hope illuminates these problems and suggests a way forward, Sustainable. Resilient. Free. The Future of Public Higher Education. As I say in the book, the difficulties of the pandemic have made me strangely hopeful for change. The pandemic revealed that there is no managing of the status quo that will solve these problems. There never was. My hope is that this is now apparent to more people.

Colleges and universities do not have revenue problems. That’s the stuff of business. Instead, they have funding shortfalls. Decades of failing to invest in this infrastructure have left us in a difficult spot, but we have no choice but to navigate out.

Either we will see a rebirth of the collective understanding that higher education should be considered a public good, or we will see it become a luxury good for an increasingly shrinking population of the lucky few.

I know which I prefer.

This op-ed is part of a series of year-end reflections EdSurge is publishing as 2020 concludes.



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