Lack of Success in Experiments Deregulating Public Higher Ed

A new study from Policy Matters Ohio finds that experiments in deregulating higher education have not met goals such as making college more affordable, increasing access for low-income students or raising the rate of college graduates within the state. The study further concluded that the factors that have most significantly contributed to increased access and low tuition were public support for higher education and increased government money for need-based financial aid.

The report is a response to calls for deregulation of the higher education industry in Ohio in an effort to increase the number of college graduates in the state. Policy proposals that have been considered include lessening of requirements that imposed fiscal and administrative regulations, less government oversight in college and university construction projects and real estate transactions, lifting student caps and allowing each campus freedom to set tuition.

The above initiatives were combined in the Enterprise University Plan put forward by the current Ohio governor John Kasich that study authors believe will form the basis of how public universities in the state will be managed in the future. However, the results in Deregulation and higher education: Potential impact on access, affordability and achievement in Ohio conclude that similar initiatives attempted in other states have failed to yield positive results.

“Deregulation in other states has not made tuition more affordable, increased access for low-income students, or increased graduation rates,” said Wendy Patton, senior project director at Policy Matters and report co-author. “Public support for universities and funding for need-based aid, not management structure, are the key factors that lead to lower tuition and more access.”

Easing control over public universities is something that has been attempted by a number of states in the past two decades. According to a release accompanying the study, the Kasich proposal differs from those tried before because, in addition to other deregulatory measures, it also removes mandatory performance targets such as retention, graduation, and affordability that would allow the government and Ohio residents to judge the initiative’s success.

Policy Matters compared enrollment, graduation, affordability, and low-income student access for the nation as a whole with three smaller groups of states: highly deregulated states like Colorado and Virginia; partially regulated approaches like in Illinois, New Jersey and Texas and coordinated systems as in Kentucky, Maryland and Minnesota.

If the Enterprise University Plan performs as well as other highly deregulated university systems in the country, then it will see the biggest hikes in university tuition of the three groups when adjusted for inflation. Tuition at flagship universities in highly deregulated systems jumped by nearly 89% over the time period covered in the study. When all four-year universities were figured in, the partially-regulated university systems showed the biggest tuition increases.

The report concludes that reducing public control over Ohio’s university system could result in higher tuition and lower access for students from middle- and low-income families. The report recommends that, instead of deregulating, Ohio adequately fund higher education, commit to need-based aid, and establish strong performance targets.