Will private investment mean universities can’t fulfil their public role?

Research, rather than teaching, benefits from the revenue gained from increasing student numbers

The decline in government investment in higher education and the ever-increasing reliance on fees and other sources of income has made universities more like private for-profit corporations.

As institutions of higher learning that receive government funding, universities are obligated to fulfil a public role.

Students as customers

As students assume more and more of the cost of their higher education, they tend to view it as a personal, private investment that benefits them rather than a public good.

Conservative economists tell us that fee-paying students are rational egoists primarily concerned with maximising the return on their investment.

This means they are anxious to graduate and obtain the best paying jobs as soon as possible. They exert their customer prerogative to request universities include more applied courses to suit their vocational aims.

As students incur a greater cost for their higher education, they see it more as an investment rather than a public good.

While preparing students for gainful employment is an important public responsibility of universities, it is short-sighted to prioritise short-term job-readiness over academic skills such as critical thinking, particularly as numerous changes in employment are predicted in the life of the typical graduate.

The focus on applied knowledge has led to a decline in critical thinking.

This has impacted on all disciplines but the humanities have suffered the most because of their perceived inability to generate profits, as revealed by several searing critiques from the UK.

Research valued over teaching

Research, not teaching, is the beneficiary of the increased revenue received from the proliferation of students.

Less money is spent on teaching through the casualisation of staff, the preference for large lectures rather than interactive small groups, and modes of assessment that are quick to mark.

Full-time academics are now expected to prioritise research, particularly applied research, over teaching because it is more lucrative. This entails being entrepreneurial in the pursuit of grants and the commercialisation of research outcomes. Grants allow teaching to be bought out completely and responsibility devolved to casuals.

But universities compromise their public role if they fail to nurture adequately the intellectual capital of their students.

Justice and equity

Universities perform a civic role in preparing graduates to go out into the community, but high fees have the potential to skew leadership positions in the professions and the public service in favour of the sons and daughters of the wealthy.

Fee deregulation inevitably shifts the balance away from the egalitarian values of equity, access and upward mobility for the less well off.


Universities perform an important civic role, but high fees have the potential to favour the wealthy.


Middle-class students are more likely to see the high cost of a degree as an investment, whereas the less well-off tend to be deterred at the prospect of substantial debt.

FEE-HELP, the income-contingent loan scheme, mitigates the class impact somewhat, but recent research from the UK showed a marked decline in the enrolment of male students from lower socio-economic families since 2010 when fees were trebled.

The US experience of high fees has also found that students are hesitant to pursue less well paid careers in public interest and social justice in case they are unable to meet their loan repayments. They prefer high paying jobs on the corporate track which effectively tips the social scales in favour of the wealthy.

When the public good role is compromised by the market

There have been many revelations of late of universities admitting or passing sub-standard students because they are full-fee paying.

Universities are keen to emulate the American Ivy League’s ability to generate substantial endowments through donations, but the issue is fraught.

Some universities have accepted donations by companies, where the contractual details are shrouded in secrecy and the independence of researchers could be compromised.

Not only have we seen a shift away from the traditional idea of the university where knowledge is pursued for the betterment of society as a whole, but private good has become normal in university life.

Vice-chancellors now seem to regard themselves as CEOs of for-profit corporations and command extraordinary salaries, frequently joining the $1m+ club ─ earning more than their counterparts at Oxford or Harvard.

Bizarrely, according to a University of Auckland study, academics too have come to accept that personal, private investment and immediate financial returns are now being cast as the new source of public good.

If this is what academics believe, what hope is there of reclaiming universities’ public role?

Margaret Thornton will be taking part in a panel debate on 23 November to discuss the issues raised in the piece as part of the Challenging the Privatised University conference.

The ConversationMargaret Thornton, Professor of Law, ANU College of Law, Australian National University

This article was originally published on The Conversation.
