Deregulating Higher Education

New England Journal of Higher Education, The, Summer 1998 by McMahon, Eleanor M

Deregulating Higher Education

Is quality in higher education contingent on liberating colleges and universities from excessive regulation? That's the central theme of a new text that is extraordinarily responsive to the major challenge facing American higher education. (Seeking Excellence through Independence, Terrence MacTaggart and

Associates, Jossey-Bass Inc., 1998, $29.95.)

University of Maine System Chancellor Terrence MacTaggart and professional associates present a number of case studies aimed at helping institutions find excellence through independence.

In Part One, MacTaggart and his coauthors present the argument for deregulating public colleges and universities. They note that prior to the 1960s, U.S. higher education was burdened by relatively few federal and state regulations, but that the situation has changed dramatically in recent decades with a plethora of requirements laid down by the Internal Revenue Service and state and federal departments of education and environmental protection as well as other agencies.

The authors argue that the time is now ripe for deregulation given new opportunities presented by changing information technologies and distance learning along with the imperative to help public institutions manage themselves more like private companies and private colleges.

In Part Two, the authors present two case studies of deregulation. The first focuses on St. Mary's College of Maryland, a public institution, which in 1992 was granted a lump-sum budget and exemption from most state controls in exchange for an agreement to cap state tax support at a mutually agreed-upon level. The second case study examines the 1994 reorganization of higher education in New Jersey and attendant decentralization and deregulation.

In Part Three, Patrick Ml. Callan, president of the National Center for Public Policy and Higher Education, and colleagues offer examples of how deregulation can work in the context of increased demand for higher education, growing public concern about educational responsibility and quality, severe constraints on resources and rapidly changing technologies.

The recommendation that emerges is that higher education should pursue a federalist model that is at once centralized and decentralized. More specifically, a federalist system is characterized by a strong center devoted to serving its components but avoiding centralized decisions that could be made at lower levels. The authors present Virginia and Illinois as effective models of federalism, offering a structure of checks and balances and "the promise of management autonomy within a context that promotes cooperation, economies of scale and flexibility."

While federalism is not a panacea for what ails higher education, Callan and colleagues note: "It offers one productive alternative to the centralization-autonomy debate that has stifled productive discussions of state higher education governance for too long."

Noting St. Mary's College's record of expanded state fiscal support, its success in raising private funds and record of academic excellence cited by a 1995 Middle States accreditation team, as well as the positive effects of the New Jersey reorganization, MacTaggart effectively documents his contention that independence is a sine qua non of higher education. He concludes that at a time when quality is among the most critical challenges facing the enterprise, the key to success is to liberate colleges and universities.

There is a remarkable convergence between MacTaggart's conclusions and those of a recent report by the Association of Governing Boards of Universities and Colleges, which summarizes an 18-month study of how public higher education governing boards may reconcile the interests and ambitions of their university or system on the one hand and the financial, strategic and public policy demands of the state on the other. (Bridging the Gap Between State Government and Public Higher Education, Association of Governing Boards of Universities and Colleges, 1998, Free)

Bridging the Gap concludes that state legislatures and governing boards must "establish relationships that allow for more flexibility, less regulation and greater respect of broad policy authority."

The report argues further that public higher education governing boards must remain independent if they are to do their jobs while being accountable to governors and legislators. This argument echoes the conclusion of MacTaggart and his associates that federalism may be the critical mechanism to free colleges and universities from excessive regulation and thereby enhance excellence by expanding independence.

-Eleanor M. McMahon