A new model for financing public colleges and universities

Purpose - The purpose of this paper is to suggest public service corporations as a new means of helping to finance comprehensive public colleges and universities based on a well-documented assumption that the current shared responsibility for financing public colleges is broken. Design/methodology/approach - The paper focuses on financing comprehensive public colleges and universities, and explicitly does not focus on research, community, or proprietary institutions. The paper draws heavily from national data and literature on college finance and productivity, and uses New Jersey's state colleges and universities as primary examples. Findings - The paper asserts that a new funding rationale for public colleges is imperative or these institutions will fail the principal mission of broad access for middle-income students. Citing examples from New Jersey and other states, and drawing on work of other policy analysts, the paper proposes creation of new public service corporations not only as a means of generating new revenue to replace diminished state investment, but also as a means of enhancing transparency, accountability and public trust. The paper discusses explicit purposes and measurable benefits of the public service corporation. Originality/value - The paper is written by two higher education policy practitioners with a combined 40 years executive experience in higher education law and policy at the state and national levels. They have been a leading voice for policy innovation in New Jersey. The paper has significant value for college presidents, trustees, governors, legislators, and policy analysts.