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Elimination of State Governmental Financial Subsidies for Private Higher Education Institutions Aditi M Sengupta, Eastern Michigan University, Harvard Medical School,Post Graduate Association Format of presentation: 1.Introduction. 2.Main Body. Redirecting of the Funds. Gradual and Grounded Subsidy Cut. Ensuring of High Education Quality. 3.Conclusion. Higher education is an engine of economic growth. There are two historically developed branches of American higher education: public and private ones. The private sector of American higher education includes both the most and the least prestigious institutions. Its characteristic feature is that it relies greatly on nongovernmental revenue. Recently, politicians argue stability and independence of private institutions, which allow reduce and even eliminate governmental financial subsides. Decreasing support from government does not mean rejection from financing. It means redistributing of costs among parents, students, taxpayers (in fact, the Government) and sponsors. Like any other fundamental reform, this one requires well considered approach for overcoming obstacles preventing this reform. There are some burning points needing discussion and immediate resolution. Obviously, the Government faces other compelling public needs, besides private higher education. And one of them is improving of primary, secondary and K-12 education. The point is that basic education gives ground for further studies. Its sector, in overwhelming majority, is a public one, because basic education should be provided for all the citizens. Surely, it requires strengthening and lacks funds, because of constant growth of pupils and the demand to assure diverse and profound education for everybody regardless incomes, social status, nationality and mother tongue. Of course, teaching pupils at schools demands more expenditures, because they have no possibility for earning enough some of money to provide for their education with only several exceptions. Thus, expenses on teaching staff, needed equipment and modernization of teaching methods are substantiated. Under conditions of budget deficits, possible solution to this problem arises from cut of subsidies fro private education and redirecting of them to basic education. The problem of money lacking tends to be solved primitively by increasing tuition and education costs. The causes of rising costs fro higher education are multiple, including a long period of reduced state and federal government support for higher education, the high cost of new technologies, and efforts to keep salaries as business and government, as well as other institutions, via for the best faculty (A Brief Guide to US Higher Education 2007, 39). In fact, expenditures bear heavily on students and their parents. As majority is composed by the representatives of the middle class, who cannot boast on very high incomes, the changes should be conducted on a pilot basis. Increase in deficit menaces personal budget. It can be compensated by loans. To avoid loan burden, the subsidies should be cut by tentatively. Research and experiment in financial sphere, as well as experts consulting and public opinion poll, are called to facilitate and simplify this process. Without a doubt, much depends on the institution management. A lot of colleges and university, in their burning desire to solve the problem of money deficit, address to alternative funding sources. Among them find-rising campaigns and endowments from sponsors are the most popular. And towards the reducing of financial consumption, we may mention lowering of faculty costs. Quality is one of the overarching problems in contemporary higher education. As Johnstone stated (2005), within the private sector, expenditure levels as well as patterns of pricing and price discounting vary greatly according to institutional wealth and the depth, demographics, and family affluence of the applicant pool. Concerns about institution’s overall quality, as well as their instruction, research, and service, have resulted in calls for … evidence that institutions are meeting benchmarks for efficiency and productivity (A Brief Guide to US Higher Education 2007, 40). We may hope that if the Government claims this point, quality of education will be guaranteed. In fact, it is primarily the state, who suffers low professionalism among employees. Private enterprises along with high salaries demand high quality of education and experience from professionals seeking job. The outcome of low education quality may be employees with insufficient qualification. And this price is two high for lack of financial support from the Government. Experts and professionals are a world-wide recognized proud of the United States. At the same time, despite obvious reasonability, there exists public opinion that politicians are just inclined to seek private solutions to public problems. And the impulse to this was given by declining public revenues because of globalization. Increasing dissatisfaction with governmental intrusion does not have ground and lacks understanding that higher education is not as fortunate as goods-producing enterprises (Johnstone 2005). Expenses for research organization, needed stuff and a team of highly professional instructors are extremely high. Institutions are not able to provide for it by themselves. Besides, prices will constantly increase, and older students will face mounting debt loads. Vast majority of American colleges look like cross-eyed creatures. One eye is focused on the financial status of the college, the other on the desires of the student (Hersh & Merrow 2005). Educational institutions should focus only on the quality of education, having neither time nor primary goal to solve financial problems. The goals of research and providing labor-market with qualified specialists are much more important, than routine financial problems. Actually, this point of view has some reason, but such claims are controversial. To begin with, it confronts the demand for more costly and intrusive accountability (Johnstone 2005). During historical development the Government was in charge of this accountability. Thus, independence of institutions contradicts the requirements for governmental subsidies. Parents and students pay costs of higher education and value it, besides students seek for accretion of degree level. So, it is completely own choice to study in the private educational institution. The assistance to private colleges and universities is provided by means of student aid. Parents would finance their children’s education from current income, savings, and in future by means of indebtedness. Students would finance their own education from savings, summer earnings, term-time earnings, loans. Sponsors will give endowments. And the Government will contribute to financing of higher education through taxpayers, but gradually decreasing this part of incomes, facilitating the reform by all possible means. Education is an essential part of prosperity of the state, and needs financing support. Current processes in the world demand new approach towards this financing. And one of the disputing questions is whether the Government should play the first flute in subsiding higher educational establishments, especially, in the private sector. We made an attempt to analyze various sides of these problems, and came to the conclusion that the process of alternation from giving subsidies to their elimination should be provided only by means of elaborated and considered methods. Rough approach can destroy not only the public sector, but also higher education as well. Private educational institutions occupy leading positions and can become a ground for preparation of highly qualified specialists in different spheres and scientists with great potential in various fields of big science. Reference List American Council on Education. (2007). A Brief Guide to US Higher Education. Washington, DC Hersh, R.H., & Merrow, J., Eds. (2005). Declining by degrees: Higher education at risk. New York: Palgrave Macmillan. Johnstone, B. D. Financing Higher Education. Who should Pay? (2005). In Altbach, P. G., Berdahl, R. O, & Gumport, P. J. (2nd Edition). American higher education in the twenty-first century: Social, political, and economic challenges (pp.369-392). Baltimore, MD: Johns Hopkins UP.
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