Open Letter from the GCPF Director

Dear Higher Education Professional,

When we started the Global Center on Private Financing of Higher Education (GCPF) in 2006, we knew that there was a great deal of interest in almost every country in the world in expanding the numbers of people entering higher education and receiving degrees. Expansion of higher education was correctly seen as a necessary component to drive economic expansion and to improve civic discourse and individual intellectual development.

One of the premises for the formation of our center was that government resources alone could not finance the necessary expansion. Additional financing would be necessary from sources other than the state. This was by no means a new idea. The fact that higher education benefits both society as a whole and individual citizens was often noted as a reason why payment for higher education should come from both the state and the individual. The concept of public- private “cost sharing” was explored widely beginning with pioneering work in the 1970s by Maureen Woodhall at the World Bank and most recently by D. Bruce Johnstone at the State University of New York at Buffalo.

We also knew at our founding that there was great concern around the world about potential negative consequences of growing private support for higher education. In many countries students paid no fees as higher education was entirely state supported. Students in these countries were vocal in resistance to expansion which might require the imposition of fees. Administrators and faculty were concerned that private support would lead to private control and erosion of university autonomy. Others, who feared that expansion would lead to dilution of quality in higher education, opposed infusion of outside non governmental funds precisely because they feared this would lead to successful expansion and hence dilution of quality.

Because of this concern about "privatization" of higher education, we changed the original working title of GCPF. In the early drafts, we used the name "Global Center for Private Financing of Higher Education." We changed this to Global Center on Private Financing of Higher Education. We wanted to signal that GCPF was to be a forum for open discussion of the issues not an advocacy group.

During our start up years we have successfully met the goal of non partisan inquiry and discussion of the issues around private support for higher education. We have issued papers, held a very successful conference, and established a web site which has become an active nexus for researchers and policymakers. This work was spearheaded by excellent work for from our first research associate, Ryan D. Hahn, who has since moved to the World Bank where he helps to spread the word about our work. Since Hahn’s departure, IHEP has retained Robin Matross Helms, an international education consultant, to provide research assistance and update the Web site. Since September 2008, nearly 150 new articles and other resources have been added to the Web site, and we have created new sections of the site to feature resources on endowments, tuition and fees, and student loans.

The work of GCPF is enriched by other work done at IHEP that complements its mission and goals. In 2003, IHEP published Private Loans and Choice in Financing Higher Education, funded by TERI. A follow-up study called The Future of Private Loans: Who is Borrowing, and Why? was published in 2006, funded by the Pew Charitable Trusts. In 2005, we also published a groundbreaking report on the importance of private scholarships in helping students finance higher education, called Private Scholarships Count: Access to Higher Education and the Critical Role of the Private Sector, funded by Lumina Foundation for Education. These studies demonstrate that there is substantial and on-going interest in these topics in the higher education and funding communities.

While we are pleased with the progress we have made, we know that we are living in a very different world than we were when we started the center. The economic events of recent months which have caused such upheaval have also been felt in higher education around the world. Plans for expansion have been summarily reduced or eliminated. Even the venerable and wealthy Harvard University has abruptly stopped a major physical expansion already under construction. Corporations which once were seen as financial backers of higher education are fighting for their own survival. Financial mechanisms which our center studied such as student loans and student loan securitizations, public bond issues, and university corporate research projects have ground to a halt. Private philanthropies, whose support for higher education was a topic of our work, are weakened.

Yet the basic circumstances of our founding remain. Three years ago we said that expansion of higher education was necessary for economic growth. Today there is substantial agreement that higher education will be a primary driver of economic recovery. As David Leonhardt points out in a recent New York Times Magazine article exploring best ways to combat current economic difficulties, “more educated people are healthier, live longer and, of course, make more money. Countries that educate more of the citizens tend to grow faster than similar countries that do not.” He also points out that expanding the numbers of people attaining education widens the distribution of income leading to less disparity between the rich and the poor.

The need for expanded higher education worldwide is, if anything, even greater today than it was three years ago. Yet the fact remains that national treasuries are under great pressure to fund many other basic societal needs—health, welfare, and infrastructure to name a few. Higher education, despite the fact that it is arguably a key a world wide economic recovery, is unlikely to fare well in the fight for share of public funding.

One of the crucial questions of the day then is how will the nations of the world find the necessary resources to increase higher education attainment for more people.

Public-private partnerships may be the only way to fund the expansion of higher education necessary to resuscitate the world’s economy. In these circumstances the need for GCPF is greater now than it ever has been. That is why we have updated our web site, renewed our commitment to research about best practices in private support for higher education, and rededicated ourselves to the goal of expanding participation in higher education around the world. We will continue to update the website with timely articles and other resources, and will post updates on GCPF projects as they develop. As always, we welcome feedback, and hope our activities lead to on-going dialogue and collaboration on these important issues among scholars, policymakers, and other stakeholders in the higher education enterprise worldwide.

Sincerely,

Thomas D. Parker, Ed.D.
Senior Associate, IHEP
Director, GCPF