Creative Financing of Higher Education

One of the central influences of the legislation has been increased tuition rates in order to compensate for the state’s continued lack of funding. Better linking corporate R&D with university research is only one mechanism for increasing W&M’s revenue stream.

Offering online courses could be an even simpler avenue. Some may argue that online courses could never have the same quality as physically learning in a classroom. Validity of such a criticism would not necessarily override the desire of those in other countries who want to receive education from an American university. If transparency is an utmost virtue of information and if education is a right—both premises admittedly contentious though widely accepted—then it is easy to see how offering online courses would be noble. Such nobility coincides swimmingly with financial practicality.

William and Mary is a public university. Due to its current wiring, it seems unfathomable that it would privatize itself. Apart from the legal issues of severing itself from the state, there are financial complications with privatization. W&M’s endowment of roughly $500 million pales in comparison to its academic peers, who generally have endowments of over $1 billion. Furthermore, privatization implies an immediate cease in state funding. Although the funding has decreased dramatically over the last few decades, it still constitutes an important portion of W&M’s budget.

But what if W&M privatized only to issue an IPO? This public-private-public progression may seem intuitively nonsensical, but it is not unheard of for private universities to go public. In fact, there are a handful of online universities that have gone public. For example, DeVry University is an online university with offices in 28 countries, and it earned a profited in one year alone of about $67 million or about 13.4% of W&M’s endowment size.

In reference to this blog and its predecessor, there are definite criticisms of the R&D, online, and IPO ideas. Some may argue, for instance, that linking corporate R&D with university research would infringe on the intellectual freedom of the students and faculty. What if John doesn’t want to research for Geico in his introductory marketing class? But consider general educational requirements (GERs). These curtail the academic path of students. And what the faculty member and his corresponding department find important enough for a specific class under the GER further confines the students’ study. However, this is justified on paternalistic grounds: the W&M administration and faculty know what parameters of classes constitute the best liberal arts education better than the students do. Could the same be said for better aligning corporate R&D with W&M research? One could argue that the revenue and expertise from corporations would also enhance the learning environment. In this way, the paternalistic grounds for GERs could be applied to fastening the bond between corporate R&D and W&M’s research.

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