Privatize it: Outsourcing and privatization in higher education

Abstract

As costs continue to rise while appropriations to institutions of higher education are declining, colleges and universities are increasingly turning to the private sector as a means to diversify revenue sources, reduce costs, improve efficiency, and maintain quality education. From academic year 2007-2008 to academic year 2008-2009, tuition and fees increased 6.4% at public 4-year institutions (in-state tuition) and 5.9% at private 4-year institutions. Between academic years 1998-1999 and 2008-2009, tuition and fees increased at an average annual rate of 4.2% at public 4-year institutions and 2.4% at private 4-year institutions, after adjusting for inflation. Total state and local appropriations for higher education for academic year 2006-2007 were 2% higher than in 1996-1997, but 4% lower than in 1986-1987 (College Board 2008). These figures demonstrate that tuition and fees are increasing at a faster rate than public appropriations. Given the current situation facing colleges and universities today, there is increasing debate regarding the future of institutions of higher education. More pressure is being placed on institutions regarding fiscal responsibility, accountability, and effectiveness. © 2010 Springer Science+Business Media, LLC.