Privatization in reference to higher education refers to a process or tendency of colleges and universities (both public and private) taking on characteristics of, or operational norms associated with, private enterprises. Although the term is not a precise one (any more than the distinction between a "public" and a "private" college or university), privatization connotes a greater orientation to the student as a consumer, including the concept of the college education as a "product"; attention to image, competitor institutions and "market niches"; pricing and the enhancement of net earned revenue; and aggressive marketing. Privatization also suggests the adoption of management practices associated with private business, such as contracting out, or "outsourcing" (i.e. turning to private firms to perform non-academic services such as printing, food services, bookstore operations, or general building maintenance), aggressive labor relations and minimization of payroll expenditures, decisive decision-making and "top down" management, widespread use of audits and accountability measures, and an insistence that each unit (department or academic program) contribute to profitability, or at least to the organizations particular metric of "success." Proponents of more privatized higher education claim that it makes colleges and universities more responsive to the needs of students and employers alike, in addition to generating efficiencies that can enhance the institutions goals, whatever they may be.
Movement in the direction of greater privatization may mean any or all of the following:
- Seeking greater autonomy from government, as in getting relief from state budget "line" or "billet" controls and moving toward "lump-sum" budgeting.
- Raising tuition (at least in the public sector).
- Putting considerable resources and managerial attention to marketing.
- Embracing the concept of "enrollment management," which limits financial assistance, or institutional "price discounts," to those students whom the institution most wants and who also require the least discounts to matriculate.
- Adopting a culture of service to the student as a client.
- Fund raising (to lower dependence on state taxpayers).
- Contracting out auxiliary enterprises (e.g. bookstore and food services) as well as certain administrative functions such as printing and maintenanceor at least putting such services "on their own fiscal bottoms" and making them compete with private providers.
- Trimming departments and other units that seem not to be attracting students or research dollars, or otherwise justifying them being "carried" by the units that do.
Privatization may best be viewed as a direction along the continua of several related yet distinct dimensions, shown in Table 1, below.
Privatization in Higher Education as
Direction or Tendency on Multiple Dimensions
|Dimensions||High "Publicness"||High "Privateness"|
|1. Mission or Purpose||Serves a clear "public" mission as determined by the faculty or the state.
||Mission is avowedly both pubic and private, but as defined by faculty.
||Mission is mainly to respond to students private interests, mainly vocational.
||Mission serves private interests of students, clients, and owners.
|2. Ownership||Publicly owned: can be altered or even closed by state.
||Public corporation or constitutional entity.
||Private non-profit: clear public accountability
|3. Source of Revenue
||All taxpayer, or public, revenue.
||Mainly public, but some tuition, or "cost sharing."||Mainly private, but public assistance to needy students.
||All private revenue: mainly tuition-dependent.
|4. Control by Government
||High state control, as in agency or ministry.
||Subject to controls, but less than other state agencies.
||High degree of autonomy; control limited to oversight.
||Controls limited to those over any other businesses.
|5. Norms of Management
||Academic norms; shared governance, antiauthoritarianism.
||Academic norms, but acceptance of need for effective management.
||Limited homage to academic norms; high management control.
||Operated like a business; norms from management.