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Higher Education in Context

Economic Factors, An Era of Competition, Demographic Realities, Governmental Political and Legal Challenges, Religious Factors

Universities are not ivory towers and never have been. They are subject to pressures and influences from external social forces of many kinds. This is not surprising, in light of the importance of universities to society, as well as the fact that institutions of higher education obtain their funds from external sources such as the government, students and their families, and donors. In the twenty-first century, universities are subject to the pressures of society more than ever, largely because of their importance to knowledge-based economies, and because more than half the college-age population attends postsecondary institutions.

Influences from external forces come from two basic directions. The first constitutes broad societal factors, such as economic trends and demographic factors, which affect the directions and realities of higher education. The second comes from the specific requirements of funding sources, government agencies, and others to account for, and sometimes control, the expenditure of funds, the nature and scope of research, and other university activities. This entry mainly discusses the broader external factors affecting higher education.

Economic Factors

Academic institutions, with few exceptions, constantly face financial challenges. All, even the most wealthy, depend on external elements for financial survival, including tuition payments provided by students and their families, funds from the government for operating expenses, research and training grants and contracts from a range of external agencies, charitable donations from alumni and foundations, and income-generating projects (including, for a few, intercollegiate athletics).

In the United States, 80 percent of postsecondary students attend public colleges and universities. For almost all public institutions, financial support from state governments is critical. Indeed, most postsecondary institutions depend on a combination of student tuition and direct support from the state for their financing. Federally backed student loans are also a central financial underpinning for higher education. These grants and loans are provided to individual students, who may use them at any accredited academic institution. Private universities and colleges depend to a much lesser extent on public support. Most are eligible for the student loan programs, and some states provide direct financial support to private institutions. Private institutions can also receive government research funding.

During the last decades of the twentieth century, there was a significant change in government policy concerning funding for postsecondary education. Previously, higher education was seen by most as a public good–an investment in human capital that, in the long run, benefited society as well as the individual, and is therefore worthy of public support. However, academic study is increasingly seen as a private good–something that mainly benefits the individual and should be paid for by the individual. Most states are less generous in their funding for higher education, and tuition charges have been raised. Nationally, students and their families are paying a higher proportion of the cost of higher education than was the case in the past. For many public universities, especially the nationally known public research institutions, less than one-third of income now comes from the states, with tuition, research grants, income generation, and donations constituting the majority of income.

Partly as a result of this change in philosophy, and partly because of competing state priorities and a general unwillingness to raise taxes, public higher education has faced financial problems, sometimes even during the boom years of the 1990s. External financial pressures also affect private colleges and universities. While the wealthiest institutions have endowments that provide a measure of financial stability, most private schools depend largely on tuition income. In the 1990s tuition increases were often higher than the level of inflation, and in the early twenty-first century there is resistance from students to high levels of tuition, and especially to rapid tuition increases. Private institutions have been forced to limit tuition increases, and this has had an impact on their financial viability in a competitive environment.

An Era of Competition

Competition has always been an element of academic life–for prestige, for the best students, and for donations, among other things–and competition has become one of the central driving forces in higher education. Competition for the best faculty, for students, for research grants, and for the ever more important rankings by U.S. News and World Report and other publications are all central to the contemporary academic enterprise. The most prestigious academic institutions see themselves in a race to provide better dormitories and sports facilities, faster access to computer networks, and improved campus services as part of a competitive struggle with their peers.

A central element of the new competitive environment is that students increasingly see themselves as "buyers" of a higher-education product. They demand that the academic institutions serve their specific needs in terms of curriculum, degree offerings, and facilities. This is an age of student consumerism, where even the most prestigious and selective institutions must respond to student interests and concerns. Academic institutions have moved to provide flexible degree structures, new majors to meet student demand, and to supply, in many other ways, the educational "product" demanded by an increasingly sophisticated market.

Demographic Realities

This increased competition is partly a result of the changing demographic realities in American higher education. Dramatic changes have taken place that affect academic institutions. With the exception of a brief baby-boom echo for a few years at the beginning of the twenty-first century, the number of traditional college-age young people (18–21 year olds) has been modestly declining. Colleges and universities are thus competing for a declining number of potential students. Furthermore, the period of expansion in the proportion of college-age youth attending postsecondary education institutions has largely come to an end as well. The proportion of young people attending college increased from perhaps 20 percent in the period following World War II to more than 60 percent in the 1990s, but it did not increase between 1990 and 2000. Higher education in the United States has reached what sociologist Martin Trow has called "universal access."

A significant part of the numerical expansion of enrollments in the late twentieth century consisted of nontraditional students–people who are older then the usual college age and who begin or return to study mainly for vocational reasons. Another new population group consists of students who do not possess all of the skills needed for postsecondary study. These students often require remedial courses that colleges and universities must provide. As American higher education has become a mass phenomenon, the academic system has had to adjust to a more diverse student body and a wider array of student interests.

There have been other important changes in the student population that have affected academe. With 14 million students attending the nation's more than 3,000 colleges and universities, there is unprecedented diversity. Women constitute a majority of the student population, and racial and ethnic diversity has grown dramatically, with African Americans, Latinos, and especially Asian Americans present in large and growing numbers. Higher education is no longer a preserve of the white middle classes, and many working-class students are able to gain access. Higher education is seen as a passport to economic success, and statistics show that those with a bachelor's degree earn much more over their lifetimes than those without academic qualifications. A majority of students study part-time and the traditional model of a full-time traditional-age student living on campus is no longer valid.

The pressures of demography on the higher-education system have been immense. The dramatic expansion of the student population, increased diversity, and more variation by age, ability, and interest have all transformed the academic landscape.

Governmental Political and Legal Challenges

The higher-education system, as well as individual academic institutions, is affected by politics and government. The U. S. constitution stipulates that education is a responsibility of the states, and thus the fifty states have basic responsibility for higher education. As noted earlier, the states provide the bulk of funding for public higher education. They are also responsible for organizing and regulating public university systems, providing a legal structure for these systems, and in most cases providing charters and legal recognition for all higher-education institutions, both public and private. The state governments determine tuition charges, sponsor loan and grant programs, and in some cases determine admissions policy for the public colleges and universities. State authorities appoint governing boards (although in a few cases these boards are elected).

The policies of the fifty states are central to public higher education, though the states differ substantially in their approaches to higher education. Some states, especially in New England, where there is a strong tradition of private higher education, have provided limited support for public colleges and universities and tend to charge high tuition. In Massachusetts, for example, more than half the students attend private colleges–the highest proportion in the United States. In the Midwest and the West, however, states have been more supportive of large, and often excellent, public higher-education systems. California has the largest public higher-education system, and has been a model for shaping state higher education in an era of mass access. A combination of community colleges, four-year schools, and research universities has characterized the California system, and is common in other states. California has always had relatively low tuition, while the New England states typically charge students more. The policies of the state governments concerning student tuition, financial support, access and accountability, and the size and shape of state systems of higher education are all crucial to public higher education. State policies also affect private universities and colleges. In some states, public funds are available for scholarships and other programs for private higher education, and in a few states, such as New York, the state has the power to approve degree programs and other initiatives in the private sector.

The federal government also has a significant impact on higher education. Indeed, the role of the federal government has increased dramatically in the period following World War II. The G.I. Bill, the major federally sponsored scholarship program following the war, enabled millions of returning veterans to attend college and resulted in a wave of expansion in higher education. Stimulated in part by the cold war, the federal government increased funding for research and became the major source of funding for scientific research. In the period of greatest expansion, during the 1960s, federal funds became available to build new facilities and expand libraries. Perhaps most important, the federal student loans programs and the Pell Grant system have become a major part of financing postsecondary education for millions of students.

The federal government regulates certain aspects of higher education, and these regulations reflect the external influences on American colleges and universities. Federal regulations affect such aspects of academic life as athletic programs, which are subject to regulations concerning gender equality and access, the use of human subjects in research, the treatment of animals in laboratories, and access to facilities through the Americans with Disabilities Act. Federal regulatory authority expanded during the 1980s and 1990s. Universities that receive federal funding, which means almost all American academic institutions, are subjects to regulations and reporting requirements. Statistics concerning the composition of the faculty and the student body, statistics on campus crime, and other aspects of academic life must all be submitted to the federal government to comply with regulatory requirements.

The legal system also affects higher education and constitutes an important external societal force for colleges and universities. Court decisions of all kinds directly affect higher education. Of considerable importance–and much controversy–have been court decisions concerning affirmative action for both students and faculty. The courts, for example, have limited, and in some cases even eliminated, considerations of race in university admissions and other programs, and they have ruled on faculty hiring and promotion. Courts occasionally intervene in university decisions concerning tenure and promotion if specific complaints are made, and academic decisions are sometimes overturned. Court decisions thus set precedents for academic policy.

Government, at all levels, is a central external force affecting colleges and universities. Because 80 percent of American postsecondary students attend public colleges and universities, governmental policy is especially important. The government provides the bulk of funding for public institutions, which are directly subject to government policy and direction. Although government funding supports a declining proportion of academic budgets, government influence and control remain strong. Higher education is subject to accountability at many levels, and the political, legal, and regulatory system of higher education has a strong influence on higher education at every level.

Religious Factors

Historically, religion has been a central force in American higher education. Most of the early colleges, including Harvard and Yale, were established by religious organizations with specifically religious purposes in mind. For almost two centuries, religion was one of the major motivations for the expansion of higher education, and a large majority of academic institutions were controlled by religious bodies. The curriculum was a combination of religious and secular subjects, with the religious elements gradually decreasing in importance. Regulations imposed by church sponsors governed extracurricular life, and had an impact on the faculty as well. By the end of the nineteenth century, with the expansion of public higher education, church-related institutions became a smaller part of the higher-education system.

By the end of the twentieth century, religious influences became much less pervasive. Religion plays no significant role in the public colleges and universities in the early twenty-first century. This reduced role is strengthened by the constitutional separation of church and state. Many of the private colleges and universities once sponsored by religious bodies have become secularized. Church groups no longer sponsor institutions such as Harvard, the University of Chicago, and Duke. At the same time, there are hundreds of religiously sponsored institutions–there are more than 200 Roman Catholic colleges and universities, and a large number of Protestant institutions. But these schools educate only a small part of the student population, and even they are, in general, less influenced by religious factors than was once the case. It is fair to say that religion is no longer a major factor in American higher education, and that its influence is limited to a small number of private religiously sponsored colleges and universities.

Societal Influences

Societal trends and developments uniquely influence American colleges and universities. Academe has always been attuned to demands for new curricula, new initiatives, and in general to the interests of external forces. This is in contrast to academe in many other parts of the world, which until recently were mostly elite institutions less influenced by society. Americans historically have established new institutions to meet perceived needs, from the desire of the Puritans to educate clergy, which led to the establishment of Harvard in 1636, to the growth of women's colleges in the nineteenth century to serve the needs of women seeking access to higher education, and to the inclusion of research in university curricula at the end of the nineteenth century to help meet the needs of a developing society.

Academic institutions have also moved quickly to expand and diversify the curriculum to meet new societal needs, whether it be the growth of medical education in the universities or the remarkable expansion of business schools in the post–World War II period. There is an inevitable tension between ideas of autonomy ingrained in academic institutions and pressures from society. In the twenty-first century, external pressures of all kinds–economic, political, and others–charcterize the higher-education system.


ALTBACH, PHILIP G.; BERDAHL, ROBERT J.; and GUMPORT, PATRICIA J., eds. 1999. American Higher Education in the Twenty-First Century: Social, Political, and Economic Challenges. Baltimore: Johns Hopkins University Press.

ALTBACH, PHILIP G. ; GUMPORT, PATRICIA J.; and JOHNSTONE, D. BRUCE., eds. 2001. In Defense of the American University. Baltimore: Johns Hopkins University Press.

KERR, CLARK. 2001. The Uses of the University. Cambridge, MA: Harvard University Press.

LEVINE, ARTHUR. 1980. When Dreams and Heroes Died: A Portrait of Today's College Students. San Francisco: Jossey-Bass.

LEVINE, ARTHUR. 1993. Higher Learning in America: 1980–2000. Baltimore: Johns Hopkins University Press.

MARSDEN, GEORGE. 1994. The Soul of the American University: From Protestant Establishment to Established Nonbelief. New York: Oxford University Press.

SHILS, EDWARD. 1992. "Universities Since 1900." In Encyclopedia of Higher Education, ed. Burton R. Clark and Guy R. Neave. Oxford: Pergamon.

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