Blog Post

Why College Is Not a Business: U Iowa as Case Study and Action Plan

A national trend?

This week has seen a lot of activity surrounding the surprising and, for many, exceptionally disappointing hiring of Bruce Harreld, a former executive at Boston Market and other companies, as the new President of the University of Iowa.  I want to say up front that I have no connection to the U of I except admiration.  I once had a short-term visiting faculty residency there.  I lived on campus for about ten days. I fell in love with the brilliant, energetic students and faculty, the spirit of the community, but my interest in this case isn’t about personal investment in the place itself so much as it is in what passes for “educational reform” and the tired mantra of “running a university like a business”—a phrase used without much real consideration of what that actually entails, not just in Iowa but throughout public higher education. But what does it mean?  As one UI alum, Laramie Wall, asked pointedly in a recent Facebook exchange:   “If the UI is to be run as a business, shouldn't they stop asking for alumni donations? I mean, what kind of business begs for money?”



The University of Iowa as Case Study

As I understand it from what I have been reading (and I hope I can count on insiders to correct me if I have some of the facts wrong), in a slate of four candidates presented to the Regents, Bruce Harreld was the only candidate to draw a vote of no confidence from the faculty.  Despite that, and despite strong support for the other three candidates, the Regents decided in a mere 1.5 hours to go with “their” candidate.   Since their decision, the no confidence has spread.  It’s not just faculty but now there is a strong coalition of protest against Mr. Harreld’s appointment from faculty across the university, graduate students, undergraduates, alumni, staff, and the Iowa chapter of the AAUP.   


Apparently, in a survey of opinion of over 750 faculty, students, and staff conducted by AAUP, only 2.5% of those responding thought Mr. Harreld was competent to the task of leading one of the nation’s finest public universities.   2.5%!  I’m not sure I have ever seen a survey with such low results.  (One thinks of the SAT’s where you get 10 points for writing your name; the same is true of most surveys about just about anything.  There are some angry folks in Iowa City (by one perhaps apocryphal account Mr. Harreld recently said the university was located in Ames, home of Iowa State University, IU’s rival).


The reasons for this level of distrust are multiple.  On the face of it, he has no experience in higher education.  That alone, to my mind, does not exclude him.  People move across institutions all the time and there are certain management skills in running highly complex organizations that are transferable.  However, there are many rumors of too cozy a relationship, bordering on conflict of interest in an ethical if not legal and technical sense, with the Regents and in particular with one influential donor with close ties to the Governor.   Next, in his talk before the faculty, it became clear that Mr. Harreld’s prepping for his job mostly entailed reading the Wikipedia page about UI.  If true, that alone should have disqualified him.  How insulting!   Finally, and this is documented, Mr. Harreld’s resume included a company that turned out not to exist.   He explained that, not convincingly.  Then it turned out to have a number of citations and entries with missing information—co-authors, collaborators, and other crucial data.   To put it bluntly:  these are the kinds of misrepresentations that would have put a student in violation of the University of Iowa’s own Honor Code and required a judicial hearing. 


Inexperience coupled with lack of preparation and topped off with professional dishonesty (or, if one accepts his explanation, haste and carelessness) are not acceptable, as someone said in one critique, for the assistant to the President.  As the leader of a great university, these are unconscionable. 


Why would you want to run a university like a business?

Being a “business man” and being able to bring “change” to Iowa by running it more
“like a business” are somehow being embraced by the Regents as values more important than relevant academic experience, preparation for the job, and integrity of self-representation.   So then we need to ask what, exactly, is meant by running a university like a business.  And is this really a good thing?  Is it a value judgment? A management style?  A tax designation? An aspirational model?  A metric by which you determine which programs stay and which go?


And is the reason beyond this imperative to run higher education like a business in order to save tax payers money? To bring down tuition dollars?  Or to bring revenue to educational technology and other for-profit educational vendors and purveyors? Saving money how and for whom should be the main questions.  For far too long we’ve been defunding public higher education but in 2015 we’ve gone even further--it seems almost as if it is a blanket political platform, blind cost cutting without much rationale or focus or stated purpose (as in Wisconsin's supporting the subsidized building of a new sports arena that costs just about what is being cut from the state's higher education budget: is that investing in the state's future? what business model is that?). 

More and more it seems we want to see public higher education less as a public good than as a private business opportunity--the way the CEO of Nestle wants to think of water not as a human right but as a consumer item and opportunity for commercial water sellers. There are deep questions of community values here, questions that our society needs to be asking now.


I share the concern about money that many in higher education and in state legislatures and that all students and parents face.  But here is again where we have to think about our business model.  You cannot talk about cost without also talking about revenue.  Costs for higher education have skyrocketed as revenue (especially state and other forms of subsidy) have plummeted.  It's not rocket science.  It's basic math.

The average in-state tuition in the US at public universities is now around $29,000 a year, a rate that has grown far faster than the rate of inflation due largely to public disinvestment in higher education.  The numbers are stark.  As Aaron Bady and economist Mike Konczal (2012) note, “For every $1,000 of personal income in California, the state invested only $7.71 for higher education in 2008, about 40 percent below the $12.86 invested as late as 1980.”  The situation has grown worse since then and comparably in nearly every state. 

The United States has ended its strategic investment in its youth.  That is a business model in and of itself.  You invest in the next generation or you rob from and shortchange it.  This is in contrast to Sweden, Brazil, Germany, Finland, France, Norway, Luxemburg, and Iceland where college is tuition free, Mexico where it is close to free.  This is a social choice, a choice with consequences for the future of our society.

The real question is not whether you want to run a university as a business but whether it is good business to have the cost of higher education borne so heavily by the students rather than by society as a whole. 


We can ask what is the business model for our public university?  Or we can ask what is the business model for a productive society?  What is the business model for investing in our future?



How do you run a university like a business?

Good question.   Very good.  And let’s think about this for a while.  There is a lot of hypocrisy in this idea that we’re going to be thinking about a university or any higher ed as a business since, in business, the point is the profit of the business and those who hold shares in the business.  


At a university, presumably the point is the well being of those who are being served by the institution.   Those are radically different goals.   And, to return to that excellent question, why should any business, any philanthropic foundation, or even any granting agency—public, private, corporate or otherwise—give its money to higher education if it is a business?  And, looking ahead, we well might ask why does it deserve non-profit status if it is a business? 


What I want to ask here, using UI’s situation as an example, is whether a college is a business.  Is that a model we should even be applying?  And, if so, what needs to be cut first.  It certainly wouldn’t be the humanities if we are just talking about a business model:  the humanities, study after study show, more than pay for themselves, and are quite a bargain in a university’s bottom line.  If reading and writing, critical thinking and creative thinking, interpretation of complex texts and historical perspective, cross cultural understanding and linguistic fluency are all necessary survival skills in a contemporary world, then teaching and learning in the humanities is cheap.  Period. 


However, there are big financial drains on higher education, especially large state universities such as UI:  the football team, the medical school and hospital, or, for that matter, even such student-centered features that parents expect when they send their 18 year olds off to a residential college for four years (but perhaps are not reasonable to expect of a “business”) such as psychological services.  What place do these have if a university really is a business?


And to return to the point made by the UI alum:  why do we even want to cultivate loyalty if it is a business?  Alumni are loyal to an institution for all the reasons that are precisely not about business.  That doesn't mean that we cannot find better ways of keeping the costs down.   But those ways have to be in keeping with the deep mission and value of the institution or you are throwing out baby and bathwater.


These are extremely important questions.  Since America’s founding, there has been an idea that an educated citizenry is important to democracy.  Since at least the Morrill Act, we’ve supported public higher education to that end.  But the last year’s have seen an organized, orchestrated, serious effort not just to defund public education but to shift the mission of higher education—politically motivated, economically motivated, fiscally motivated.


It has to stop.   We have to stop it.  No other first world nation charges its youth so much to gain an education that will allow them to be fully functional contributors to their own future and the future of society.  The pricetag we are leaving our children and grandchildren is the biggest debt we could possibly be leaving them. If we don’t stop this trend, the next generation is going to hate us.   And they should.


Organizing at Iowa

It is painful to watch how much pain the Iowa community is experience now-- yet it is also inspiring to see them come together, en masse, for a serious conversation about their university, its mission, and the kind of leadership it deserves.  Whatever happens, this organizing of students, faculty, staff, and alum bodes well for the future—not just at UI but everywhere. 


This isn’t the first time a Board of Regents has overruled the faculty and put its own person at the helm of a university.  It won’t be the last time.  But even in these cases, faculty and students and alumni and staff are not powerless.  There are contractual agreements, legal agreements, that develop the infrastructure of shared governance and that can be used effectively if “change” is ill-considered, political, deceitful, corrupt, misguided, or ill-informed.  By organizing effectively across departments and across constituencies, perhaps there is a chance that shared governance can also mean shared opposition.  More than that, perhaps it can also mean shared work towards meaningful “educational reform,” not coerced, enforced, top-down models.  At the very least, maybe we are seeing a first step.


Ensuring a wise, thoughtful, organized response (no matter what happens next in this case) is crucial.  Should Bruce Harreld step aside (which I doubt), whoever takes the job will find a remarkable coalition of people who love UI and want to keep it strong.  If President Harreld stays in the job, he will be foolish if he does not work hard—very, very, very hard—to work with this coalition to gain their trust and earn their respect and work, together, towards productive change. 


Given that universities run by shared governance, no leader can afford to start off with governance this united in opposition.  Because universities aren’t businesses, President Harreld is going to have to listen.  And listen well.  Because a lot of people are speaking eloquently and forcefully.


No business can run like this

Whenever I am asked to try to solicit contributions from the alumni of universities with which I have been lucky to be affiliated, I always lead with the greatness and glories of what the university accomplishes that could not be accomplished anywhere else.   As I was writing this piece, I came across the beautiful tribute to the late writer, neurologist, poet of difference, and great humanitarian and communitarian Oliver Sacks, written by the brilliant anthropologist Lawrence Cohen in The Wire: No business could produce an Oliver Sacks—or a Lawrence Cohen, for that matter.   The degree of conversation and community, across disciplines, across conventions, across boundaries, across science and the arts, across the secular and the religious, can only happen in a community where the value is not placed on profit but on inquiry, openness, conversation, exchange, and understanding.  


There is not much serious, informed interdisciplinary interchange of ideas in our society these days. Certainly it doesn't happen on most news media anymore. The business model of cable and national TV no longer allows it, really.  Journalism has sold itself, sadly, to a demand for "click bait":  another business model, necessary to its survival.   We don't need universities to go down that path.  Not in a democracy. 

At its best, informed discourse is what the university is about: not just expertise but communication of that expertise to the public, in a way that makes all of us smarter and better as a society. 

That's the ideal, the mission, the goal.  No business aspires to that lofty, essential, and--in the long run--rich (in every sense) ideal.  

That's what universities, at their best, are designed for.  That's a university worth fighting for.  












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