Editor’s note: Charles Cieppo is senior fellow and James Stergios is executive director of the Pioneer Institute, a nonprofit institute located in Boston, Massachusetts.
At the beginning of 2003, state finances in Massachusetts and elsewhere looked a lot like they do now—bleak. Knowing that new approaches would be needed to put the state back on a solid financial footing, incoming Governor Mitt Romney made a number of sweeping proposals to change the way Massachusetts did business.
Among the most controversial was to restructure the state’s public colleges and university. It included a proposal called for privatizing two specialized public colleges, the Massachusetts Maritime Academy (Mass Maritime) and Massachusetts College of Art and Design (Mass Art).
Privatization proved too controversial, but as the state budget wound its way through the legislature, a hybrid proposal known as the “New Partnership” emerged. This approach was ultimately adopted for Mass Maritime, Mass Art, and the University of Massachusetts Medical School. The plan borrowed liberally from the successful experience of St. Mary’s College in Maryland, a public institution that has thrived under an arrangement in which the campus was given far more autonomy in return for less up-front state support.
In many ways, Mass Art’s conversion has been a remarkable success. But the experiment is not over yet.
Under a five-year pilot program agreed to in 2003, the three Massachusetts campuses received greater authority to set tuition and fees (and were allowed to retain them rather than give them back to the state). The schools can also set their own enrollment goals and admission standards, and their boards of trustees have the power to make multi-year planning and budget decisions.
The strategy was to increase overall enrollment and especially the number of students from outside New England. The underlying idea was that freedom to raise and spend revenues independently and have more control over their destinies would yield better, more efficient schools—schools that would attract more students from outside the region, who would pay more than in-state students. Because tuition and fees for those students would be similar to those charged by their private competitors, the schools would compete on quality, not price. The new revenues would be used to keep tuition down for in-state students, improve academic quality, and upgrade student equipment and facilities.
The campuses were also charged with maintaining the diversity of the student body and keeping in-state enrollment from falling too low. They must report annually on their performance goals.
With Mass Art as a case study, results from the first five years of the New Partnership have been largely positive. In fact, President Katherine Sloan wrote in 2009 that the new approach has “positioned the college to continue advancing its mission in preparing students as leaders in both the cultural life and the creative economy of New England.”
As expected, out-of-state charges (tuition and fees) for Mass Art students increased dramatically. They are currently $8,400 for in-state students, compared with $24,400 for students outside New England. (Under the New England Board of Higher Education’s “tuition break” program, students from other New England states pay less than those from other states–$14,900). The college also maintained affordability for Massachusetts residents; in-state charges have risen by no more than 5 percent each year, less than was anticipated in the New Partnership business model.
Enrollment and the quality of the student body have gone up. Between the fall of 2003 and fall 2007, enrollment increased 18 percent, from 1,352 to 1,592. Prior to the New Partnership, Massachusetts students accounted for about 70 percent of Mass Art’s enrollment. Under its agreement with the Bureau of Higher Education, in-state enrollment was not to go below 60 percent. But after five years, the percentage of in-state enrollment actually increased slightly, to 71 percent.
Between 2002 and 2008, the average SAT scores of incoming freshmen went from 1085 to 1107. Average high school GPA rose from 3.17 to 3.31, and average class rank went from the 69th to the 73rd percentile. Freshman retention rates hover between 85 and 90 percent, and Mass Art’s 65 percent six-year graduation rate is the highest among both its art college peers and New England public colleges.
Private support has also increased. Annual fundraising is up from $2 million to $4 million and the endowment has tripled from $2.8 million to $8.5 million. Mass Art now gets just under one-third of its operating budget from the Commonwealth, the lowest percentage of any Massachusetts state or community college.
Yet the school has not achieved the expected out-of-state enrollment, a critical part of the New Partnership model. Out-of-state revenues increased by 58 percent between 2004 and 2007. But only 11 percent of the freshman class in 2008 came from outside New England.
Although out-of-state student applications have risen dramatically, yield rates have been “modest,” according to President Sloan.
One probable reason is that Mass Art is actually more expensive than its private competitors. Although Mass Art’s student charges are similar, schools like Pratt Institute and the Rhode Island School of Design offer far more in the way of scholarships and tuition discounts. To increase yield among students from outside New England, Mass Art may have to reduce its charges or offer more aid to those students.
In “Charter Colleges: Balancing Freedom and Accountability,” published in 1999 by the Pioneer Institute, authors Robert Berdahl and Terrence MacTaggart listed improved management efficiency, responsiveness to consumer needs, and the ability to attract more effective leaders as benefits that often result from a more deregulated model. Among the potential minuses were reduced access for low-income and minority students and potential duplication of programs (because of the reduced role played by a central authority, which might nix new program proposals).
Mass Art has experienced many of the benefits Berdahl and MacTaggart listed and not suffered too many of the negatives. For example, although Mass Art has launched two new programs under the New Partnership, the college’s unique niche makes duplication less of a problem. Access for low-income and minority students has also been sustained, because racial and ethnic diversity of the student body is one of the metrics Mass Art must report on annually.
On balance, the initial years of the New Partnership have been good for both the Massachusetts College of Art and Design and the Commonwealth as a whole. That success merits more attention as public universities struggle in the current recession.
Editor’s note: For an overview of the privatization trend around the country see “Privatizing for the Public Good?”.
