The Crisis of the Neoliberal Model of Higher Education: Part Two

Jon Kofas *

Washington D.C., August 24, 2016 (Alochonaa): Read the first part here


The Media and the Corporate Model of Higher Education

All of the mainstream media came out against the Sanders proposals of reexamining the neoliberal model of higher education, including the Washington Post and the New York Times promoting themselves as “liberal”. Every day their pages are promoting neoliberal economic policies and neoconservative foreign and defense policies, but they continue to project the fake image of a liberal media. No matter where one looks in the mainstream media, there is no support for making higher education a national priority, and certainly not at the expense of cutting defense and the generous corporate welfare programs that benefit the richest Americans.;

Although the Sanders plan would cover about 70% of college students, and it would cost an estimated $75 billion annually split between the federal government and the States, Republicans and most Democrats find this plan reprehensible because it calls for a new tax on Wall Street speculation. It must be stressed that the Federal government makes an estimated $11 billion profit annually from student loans. In short, the media has no problem with Wall Street speculation, higher defense costs and higher corporate welfare costs, but it decries free tuition for public colleges and universities. A number of prominent university professors on the payroll of corporations including media companies have come out in opposition to ending the neoliberal model arguing that free tuition would: a. stifle innovation and creativity; b. undermine private colleges and universities; c. too much government involvement in higher education would impede entrepreneurship in higher education; d. deprive people of “freedom of choice; and e. free tuition will necessarily mean that quality suffers. ;

Presenting itself as America’s premier newspaper and supposedly liberal, the New York Times came out against free tuition because: “free tuition means fewer resources to teach students. Unintended consequences could include reductions in need-based financial aid, which would harm the low- and middle-income students free tuition is meant to help.” Oblivious to the current $1.3 trillion in student debt expected to rise sharply by 2030, the media insists that higher education must not become a national priority. After all, the majority of both Republicans and Democrats agree with Wall Street that the economy cannot afford free tuition when it has already set its priorities in the domain of defense and corporate welfare. Along with politicians, the media is silent when it comes to the for-profit online unaccredited colleges and universities that government subsidizes by providing subsidies for low-quality to dubious educational experience for students.

It makes sense that corporate and business opposition in general would be forthcoming on this issue for a number of reasons. First, the businesses would lose the influence they currently enjoy over universities in every matter from curriculum to faculty and top administrators running the university on the existing commoditized model. When the most important function of its administration is to raise money rather than deliver a good education the question arises about the hold that the wealthy donors have on the university either by request or because the university is obligated to cater to the corporate ideological framework.
Just as millionaires and billionaires have a hold on the political arena because they finance campaigns and control the media that provides coverage to politicians, similarly hundreds of millions have been flowing into universities from Koch brothers and other billionaires and millionaires wishing to influence what is otherwise academic freedom.

Most of the donations to universities go to the already wealthy private institutions, but almost always with conditions that determine everything from curriculum to hiring and program development. “In Kentucky, Papa John’s pizza founder John Schnatter teamed up with the Koch Brothers Foundation to fund business school programmes at the University of Louisville and at the University of Kentucky. Both donations came with the caveat that the donors can stop funding if they do not feel that their mission – the teaching of free market economics and business practices – is being carried out to their satisfaction. To some, such stipulations imply that students will be taught by professors sympathetic to the political and economic views of the donors.”

In the past forty years, the faculty-to-student ratio has remained about the same, although the corporate model has meant relying increasingly on part time faculty. This reflects the corporate model of relying of low-paying part time employees and avoiding the costs of fulltime people. During the same forty-year period of a rise in part-time faculty, there has been an astronomical rise in the administrative bureaucracy that deals with the university as a business and injects a corporate ideology into an otherwise non-profit institution of higher learning. The least educated and most opportunistic elements invariably wind up in administration positions that pay much higher than any faculty position. Administrators identity and self-interest is not with the students but with the business community and they in turn project that value system into the university. (Benjamin Ginsberg, The Fall of the Faculty: The Rise of the All-Administrative University and why it Matters. 2011);

Corporatization of the University and College Administration

It makes sense that private colleges would object to ending the neoliberal model and supporting Sanders because they would have to reduce tuition and costs. Of course, the wealthy that would rarely consider a public school in the first place will continue to attend private colleges. Moreover, the free tuition of public schools would permit the private schools to promise they are the elite. Representing 1000 private universities, the National Association of Independent Colleges and Universities (NAICU) opposes Sanders’ proposal despite its acknowledgement that costs are very high.

“But one of the things we very firmly believe is that as it has been for the last 50 years or so, that federal aid money must follow the student, and stay with the student.” In other words, do what you will with public schools, as long as federal and state funds also flow into private schools based on student choice. “There is no trend we can discern yet that suggests schools are going to start cutting back on the amounts of money that they need for the expanding services they offer. There may be a decrease in growth if tuition increases, but nobody is decreasing tuition, nobody is decreasing the number of services offered, and therefore schools are continually getting more expensive.”

In every state where there is a major corporation its influence is heavily felt very clearly on the state institutions. Whether it is Eli Lilly in Indiana or 3-M in Minnesota, the influence of the long arm of the corporate world in ubiquitous in universities that fight amongst themselves to secure corporate funding no matter the cost to academic freedom. Not just humanities and social sciences faculty, but those in the “hard sciences” are constantly fighting to secure grants for their research and as government slashed National Science Foundation money (16% cut proposed for 2016), faculty look to corporations. Scientists depend on the agrichemicals, pharmaceutical and biotech industry for research funding, so they structure their research around what the corporation expects.;

In his article entitled “Higher Education or Education for Hire? Corporatization and the Threat to Democratic Thinking”, Joel Wetheimer writes: “The effects of corporatization on the integrity of university research – especially in the sciences – has been well-documented elsewhere. Readers of Academic Matters are likely familiar with the many cases of scientific compromise resulting from private commercial sponsorship of research by pharmaceutical and tobacco companies. Indeed, faculty throughout North America are already deluged with requests or demands to produce research that is “patentable” or “commercially viable.”

A land grant school, the University of Illinois-Champaign-Urbana campus is one of many public institutions heavily indebted to the private sector. Upon accepting massive grants from agrichemical companies such as Monsanto, the university caters to the wishes of the donors to hire faculty in the field of expertise the company dictates, namely in genetically modified seeds and agrichemicals that would have a direct impact on its multinational business. In other words, this is just another very cheap way of outsourcing research and development. On the surface, there appears to be nothing wrong with this, expect that this is a public tax-supported institution whose work is geared to serve the corporation. In short, the general taxpayer is indirectly subsidizing corporations.

As Wenonah Hauter, executive director of Food & Water Watch put it: “Sound agricultural policy requires impartial and unbiased scientific inquiry, but like nearly every aspect of our modern food system, land-grant school funding has been overrun by narrow private interests….Private-sector funding not only corrupts the public research mission of land-grant universities, but also distorts the science that is supposed to help farmers improve their practices and livelihoods,” said Hauter. “Industry-funded academic research routinely produces favorable results for industry sponsors. And since policymakers and regulators frequently cite these university studies to back up their decision-making, industry-funded academic research increasingly influences the rules that govern their business operations.”

The highly paid university administrators urge faculty to forge closer ties with the corporate world. They bring with them a corporate value system and worldview intended to make the university an institution that models itself after the corporate world. These leaders of the universities are among the most adamant opponents of doing away with the neoliberal model. Catharine Bond Hill, Vassar College president, a Clinton backer argued that Sanders is wrong to propose free tuition for public colleges. There is a vast administrative bureaucracy handling everything from loans to scholarships with layers of vice chancellors and vice presidents in the larger universities. One concern that college administrator have if the Sanders proposal goes through is the inevitable cuts in the administrative bureaucracy that will not be needed to deal with student loans, scholarships, and fundraising for student aid. From 1985 to 2005, the number of administrators rose by 85% and their attendant staff by 240%. People assume that tuition goes for the direct educational experience of the student. “This is no longer the case. Instead, a large chunk of a check made out for tens of thousands of dollars is feeding the burgeoning administrative staff on college campuses.

The cozy relationship between the corporate world and college administrators illustrates that the neoliberal model is not a theoretical construct but a sinister reality. To university administrators and board of trustees invariably serve on the boards of businesses large and small. It may surprise the reader to discover that 42% of the Board trustees at public universities come from large corporations and they make the decisions about university governance and direction.;

One reason Sanders has captured the vast majority support of voters under 30 years of age, especially college students is because they agree with him on free college tuition, among other issues such as addressing Wall Street control of politicians. Having lost confidence in the neoliberal model of the university system, the majority of people under 30 have lost confidence in the neoliberal political economy. A Harvard University study recently shows that 51% of people between 18 and 29 oppose capitalism and 33% stated they support socialism.;; The youth in America is moving farther to the left of its neoliberal political, business and academic establishment, showing the entire societal structure of which higher education is an integral part is not working for the benefit of most citizens. Despite this reality, the neoliberal establishment has deep institutional roots.


There are those who insist that there is nothing with taxpayers subsidizing the rich and the coprorations any more than there is anything wrong with taxpayers subsidizing tax-exempt churches at a cost that some estimate between $70 to $80 billion annually. While many see no problem of the taxpayer subsidizing the lavish lifestyle of some of the wealthiest ministrers, they have a problem with free tuition. While many see no problem of the government paying between 15% and 350% in cost overruns to defense contractors, money that runs into the billions, excluding the corruption that is associated with such contracts. No matter the cost to society, who would dare propose ending the subsidies of churches and of corporations?

It is indeed amazing that the US model of higher education with all of its problems is actually one that other countries are trying to emulate. Although it has been cultural diffusion, especially the contributions of a global academic talent that has made American Higher Education as productive as it has since the end of WWII, many around the world and here in the US confuse this catalyst to success with the neoliberal governance and operational structure. The fact that high school students in Japan and many European countries actually score at par with US college graduates is indicative that the high cost of US colleges does not translate to better education. Graduation rates across the board are in the mid-50s, and for the lower tiered schools in the low 20s and high teens. Why is it that graduation rates are so low across the board, although tuition and fees keep going higher and grade inflation is a reality driven mostly by an administration that views students as paying customers? If the neoliberal model of education is the best one possible why do we have such grim results?

Billions of dollars in endowments and funding for research from the federal government and states allows the top universities mostly private to buy the best academics in their respective fields. However, the pyramid structure of American higher education suggests that the very few at the top, mostly private with some public schools, enjoy the big money and reputation. Despite a second tier with good departments in all fields from humanities to business, the bottom of the pyramid is where most students attend and where the system shows its cracks. It is at the bottom of the pyramid – The following are all for profit mostly online mostly low-quality education that does not compare favorably to a state university and does not have commensurate weight in the job market.

University of Phoenix at $35.5 billion
Walden University – $9.8 billion;
DeVry – $82 billion;
Capella University – $8 billion;
Strayer University – $6.7 billion
Kaplan University – $6.7 billion

The schools listed above have graduation rates in the low 20s compared with mid-50s for the national average. In short, these places take the students’ money but fail to retain them. The burden of very low graduation rates and such high level of debt falls on students that come mostly from working class backgrounds without the usual social/professional connections that the upper middle class students attending private universities enjoy. As more people find it difficult to afford the cost of public universities, they will turn to the degree mills mostly online that will result in high debt and low prospects for a rewarding career. The results of doing nothing with the current neoliberal corporate model of higher education will be the following:

1. Higher student debt as many studies have indicated considering the six-fold rise between 2008 and 2016.

2. A New elite class will emerge of college graduates with advanced degrees that will become increasingly unaffordable to the majority of American families.

3. Convergence of costs between public and private universities will make higher education increasingly unattainable for the majority of Americans.

4. Second and third tier low-quality for-profit schools will continue to prop up marketing themselves as the alternative to a solid college education.

5. Blacks, Hispanics and poor whites will be the worst to suffer the elitist neoliberal system of higher education.

6. Lower number of students that attend four-year colleges, choosing instead the bogus online universities and corporate institutions that are in essence degree factories taking the money and providing very little in return.

7. Rich-poor gap widening in society owing to lack of opportunity for a college education as the ticket to upward social mobility.

8. More jobs will be exported with the rise of the educational level in other countries while the US will assume increasingly characteristics of a Third World society.

9. A less educated citizenry may serve the interests of the political, financial elites and those in academia and media whose careers are linked to the elites, but it is a reflection of an autocratic society that deliberately prefers backwardness for the majority of its citizens.

10. US competitiveness with the rest of the world will diminish over time, although this does not appear to be a problem today because of the chronic “brain drain” from many developing nations coming to the US.

America’s neoliberal model of higher education will not change because the political economy is based on the neoliberal model and the entrenched elites support it. Among those that view college students as customers and universities as a business, there have been many who argue that higher education will become obsolete in the future. Considering that higher education has existed for nealy 1000 years, an considering the need for an even more highly education population in our post-digital era, why would anyone even think to do away with colleges and universities?

Who needs Princeton, the University of Illinois, or the California Community college system when you have computers and cell phones at your ginertips? Besides, the employer will train the employee-candidates for the specific job. This thinking assumes two things. First that technology is not a vehicle for facilitating learning but a substitute for it and that technology can teach critical thinking even better than a university professor. Second, higher education is narrowly defined by the specific perimeters of one’s work tasks, for as long as those last of course. Never mind that a person entering the work force today will probably change not only jobs but careers an average of seven times in a life time. The larger issue here is the very narrow utilitarian definition of higher education that reduces human beings to extensions of the cell phones and laptops, all so that private sector can use them and dispose them just as readily as commodities.
There are Republicans, including Trump, that are interested in privatizing Veterans affairs health care system, thus indicating the course of neoliberal policies will continue not diminish. This privatization craze is at the core of neoliberal ideological framework, and this is one reason they oppose free tuition for public universities. The success of higher education in Germany, France, Norway, Sweden, Finland, among some of European countries offering college-free tuition, as well as Brazil and Argentina means nothing to the neoliberal defenders of the system. Only a crisis deeper and wider in society would bring about change in higher education and that will come with the next inevitable contracting economic cycle that may be much deeper and longer lasting than the Great Recession of 2008.

*Jon Kofas is a retired Professor . He has published many works including; Independence From America: Global Integration And Inequality, Under the Eagle’s Claw: Exceptionalism in Postwar U.S, Greek Relations and The Sword of Damocles, and The IMF, the World Bank, and U.S. Foreign Policy in Colombia and Chile, 1950-1970.

** is not responsible for any factual mistakes (if any) of this analysis. This analysis further is not necessarily representative of’s view. We’re happy to facilitate further evidence-based submissions on this topic. Please send us your submission at

Categories: Academia, Academic

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