In lieu of an abstract, here is a brief excerpt of the content:

Reviewed by:
  • The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them by Christopher Newfield
  • John McGowan
Christopher Newfield. The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them. Baltimore: The Johns Hopkins UP, 2016. 448 pp.

Christopher Newfield has written an indispensable book. Out of sheer doggedness, Newfield (over the past dozen years) has made himself the primary lay expert (i.e. non-economist and non-administrative official) on the financing of public higher education. The Great Mistake is his third book on the subject and provides an incisive, convincing, and terrifying picture of the current condition of state universities, along with an analysis of how we got here and how we might repair all the damage that has been done.

The general outlines of the story are familiar enough. State financial support of higher education has been steadily eroding since the Reagan years. In aggregate, the U.S. has "reduced per-student tax outlay for public colleges by about 25 percent since the mid-1980s." Thus, the declines we have seen since the turn of the twenty-first century are, to some extent, consistent with a longer trend. But Newfield identifies four specific dynamics that, if not entirely new, have intensified over the past fifteen years.

First, the finances of the large public research ("flagship") universities created in the crucible of the Cold War have never been understood—or honestly confronted. Basically, as Newfield has discovered through his careful audits of the books in the University of California system, research does not pay for itself. In fact, "funded research" is a money loser, even with overhead rates above 50%. That research has always been subsidized by state government support of the public university. Only that support added to the federal (or other) grant dollars balances the books. Thus, even as the rankings war (akin to the efforts to top the NCAA basketball or football rankings) among universities leads them to pursue more and more research funding, they are digging themselves into a deeper financial hole with each successful grant. Crucially, it is not the cost of educating students that is the big financial burden. It is the cost of research. And when state support falls, that money has to come from somewhere else.

Second, the search for new sources of money got public universities into the fund-raising game. My own school, the University of North Carolina, had as few as six fund-raisers as recently as 1990. Our bicentennial campaign of 1992-1994 represented the first significant fund-raising effort in the University's history. As a college president friend of mine told me: "The daily contradictions of the job are inescapable. I must, as a matter of fundamental responsibility, raise money for my college. But every time I successfully do so, I am telling the state legislature I can do without their support. I am the Red Queen, running ever faster to stay in place. Every dollar I raise is a dollar that the state will not appropriate next year." Newfield understands [End Page 567] this dynamic—and the fact that it is universally the lot of top administrators. The result, he rightfully notes, is that there are no advocates, from within the universities, for a sustained and sustainable commitment to publicly funded education. Those leaders accept that private fund-raising is central to (the absolute top priority of?) their jobs. Everything lines up for the abandonment of the very notion of "public goods."

Third, the other source of revenue is student tuition. But the real scandal here is not so much the tuition increases (bad as they are), but the corrupt way the whole tuition structure has evolved. For starters, the public support (both federal and state) that still exists for higher education comes increasingly through student aid packages rather than through direct appropriations to the universities. Those aid packages combine outright grants and loans in such a way as to encourage (force?) students to go into debt. And that debt (the Obama administration did reform this system to some extent) was "owned" by private lenders who secured (among other benefits) statutory protection against any defaults. Newfield...

pdf