Over the past three decades, it has become obvious that taxpayers are unwilling to fully fund public higher education in America; they see it, in many cases, as a private benefit for “other people’s children.” Gene V. Glass in his recent book, Fertilizers, Pills, and Magnetic Stripes: The Fate of Public Education in America, argues that we are living through a tragic loss of public support for public education at all levels arising from a pattern of uncontrolled personal debt, an aging population, and changing racial demographics. As he provocatively puts it, “It is about a nation growing older and poorer and caring less and less about the fate of those unlike themselves who were never invited here anyway.” The answer for many voters, according to Glass, is to lower the funding of education for the poor and privatize it for the white middle class. Furthermore, the definitional line separating private from public institutions is evermore blurred, given the public support received by independents in the forms of financial aid, tax exemptions, and research grants. Remove federal financial aid alone and many private institutions, and for-profits as well, would be in danger of going under. We live then in an environment in which universities, regardless of type, are debilitated by the process of hunting for funding that too often competes with attention to core missions—including providing access to low-income students.

At the same time, the meaning and function of college in our society has changed. As I explored in my recent research, there is a growing realization of the uneven benefit to individuals of a college degree and the questionable effectiveness of universities in encouraging social mobility. In fact, the numbers tell a bleak story of lessened access to college and subsequent financial impact on students from low-income families. Students who are in best position, because of social-economic class and family background, to take advantage of public resources tend to do so. In this way, financial aid and admission to the most selective institutions has in a general way eluded low-income students. For instance, while federal financial aid in the form of loans increased greatly at the end of the 20th century, the percentage of students from upper-income families taking advantage of loans increased 21 percent in the 1990s, while the rate remained flat for low-income students. Overall, the least academically qualified students from wealthy families have as much chance of going to college as the highest performing kids from low-income families.

American higher education needs to find sustainable economic models to confront the challenges in serving those most in need and to provide an authentic avenue to the American Dream. The notion of an entrepreneurial university has been floating for well over a decade and a half in various forms by leading scholars in higher education. Burton Clark’s 1998 book, Creating Entrepreneurial Universities: Organizational Pathways of Transformation described the government as an “unreliable patron” causing a “deepening asymmetry between environmental demand and institutional capacity to respond.” In response, after considering European models arising out of funding challenges similar to the ones now experienced in the United States, he advocated that universities take chances and experiment with new models which could produce much-needed discretionary funds to be reinvested, creating further innovation. 

Confronted with the new reality of insufficient funding, public higher education must evolve. In writing about the dramatic post-WWII shift of colleges to serving a much broader and diverse population, Peter Drucker remarked that “No better text for a History of Entrepreneurship could be found than the creation and development of the modern university, and especially the modern American university.” We need now to make a corresponding historic transition to more innovative organizational models in higher education to better serve low-income students.