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The rapid rise of online enrollments in public universities has been fueled by a reliance on for-profit, third-party providers—especially online program managers. However, scholars know very little about the potential problems with this arrangement. We conduct a mixed methods analysis of 229 contracts between third-party providers and 117 two-year and four-year public universities in the US, data on the financing structure of third-party providers, and university online education webpages. We ask: What are the mechanisms through which third-party relationships with universities may be exploitative of students or the public universities that serve them? To what extent are potentially predatory processes linked to the private equity and venture capital financing structure of third-party providers? We highlight specific mechanisms that lead to five predatory processes: the targeting of marginalized students, extraction of revenue, privatization by obfuscation, for-profit creep, and university captivity. We demonstrate that contracts with private equity and venture capital financed third-party providers are more likely to include potentially problematic contract stipulations. We ground our findings in a growing body of work on “platform capitalism” and include recommendations for state universities, accreditors, and federal policy.

Sociologists have theorized U.S. universities as a heterogenous organizational ecology. We use this lens to compare student debt and college prices for low-income students across public universities according to their research intensiveness and varied state grant aid policies. We show that students at research-intensive public universities have had an easier time repaying student loans than at other schools. By linking multiple data sets, we also provide the first comprehensive assessment for all 50 states of state-level need-based grant aid programs, which might alleviate loan repayment challenges. We find large disparities. California, Washington, Wyoming, and New Jersey spent more than $4,000 on aid per low-income student in 2015, more than the federal expenditure on Pell Grants for their state. Most states spend little in comparison. Contra the Bennett hypothesis, we also find that state need-based aid is strongly associated with both lower net prices and lower student loan nonrepayment rates.

This paper argues that private colleges with substantial endowment wealth have increasingly become ivory tower tax havens. The author, Charlie Eaton, explains that these colleges have been supported by three large federal tax expenditures. The three tax expenditures involve tax deductible donations to endowments, untaxed endowment investment returns, and a complex new financial strategy known as indirect tax arbitrage in which private colleges use tax exempt municipal bond borrowing in place of endowment assets for capital projects.

This paper examines the recent changes in the relationships between public research universities and financial markets, using the University of California as a case study. Between 2003 and 2011, UC’s outstanding bond debt to investors more than doubled. Funds raised through borrowing were invested into medical centers, dormitories, and athletic facilities at the same time as core university functions were scaled back due to cuts in state appropriations. We argue that these divergent trends are best understood as the financialization of university governance. We first trace the precipitous growth of UC debt beginning in the early 2000s. We then show howthe university has partnered with Wall Street firms to expand its borrowing activities through the use of a broad array of financial instruments. These changes occurred as UC’s administration empowered financial managers and recruited Wall Street veterans to positions as senior university executives and members of UC’s Board of Regents. Finally, we discuss the consequences for university governance of this reorientation towards financial strategies and financial markets.

Between 1980 and 2010 California’s health care policy field shifted from a business-dominated, closed-door pattern of decision making to an open political arena in which a wide-ranging and diversely resourced coalition advocating on behalf of beneficiaries had become an accepted partner in policymaking. This article examines this transformation, considering its broader implications for the political dynamics of the public-private welfare state and the role of advocacy groups in defending beneficiary interests. Our argument emphasizes coalition-building, probing not just which interests combine forces, but also showing how coalitions can expand over time and build their range of capabilities. We focus on three processes that build effective coalitions to influence public private policymaking: 1) an initial link that joins previously unconnected groups in umbrella organizations; 2) resource expansion that enlarges the engaged base by funding more diverse groups and expanding alliances with those organizations; 3) institutionalization of coalitional engagement by changing the rules of the game using such policy levers as regular hearings, provisions for participation, and transparency. We conclude by showing how these capabilities have positioned California to implement the Affordable Care Act and consider the implications for other states.

I argue that growth in private equity and publicly traded ownership of US for-profit colleges has created new shareholder-value pressures for schools to maximize returns for investors. Privately held firms, which had long dominated the sector, were converted to private equity ownership through 88 buyouts since 1987. Private equity managers then used IPOs to establish 20 of 35 publicly traded firms that operated in the sector. I use longitudinal panel analyses of 14,212 federally qualified colleges to show that schools under these ownership forms featured unusually high debts and low graduation rates for students. The results (a) provide some of the most robust evidence to date that shareholder value strategies of cost-cutting and implicit contract violations can adversely affect non-labor stakeholders; and (b) help to theorize the growing but understudied role of private equity as a transitional ownership form that spreads shareholder value strategies to privately held firms. [ABSTRACT FROM AUTHOR]

Research on financialization has been constrained by limited suitable measures for cases outside of the for-profit sector. Using the case of US higher education, we consider financialization as both increasing reliance on financial investment returns and increasing costs from transactions to acquire capital. We document returns and costs across four types of transactions: (i) revenues from endowment investments, (ii) interest payments on institutional borrowing by colleges, (iii) profits extracted by investors in for-profit colleges and (iv) interest payments on student loan borrowing by households. Estimated annual funding from endowment investments grew from $16 billion in 2003 to $20 billion in 2012. Meanwhile financing costs grew from $21 billion in 2003 to $48 billion in 2012, or from 5 to 9% of the total higher education spending, even as interest rates declined. Increases in financial returns, however, were concentrated at wealthy colleges whereas increases in financing costs tended to outpace returns at poorer institutions.We discuss the implications of the findings for resource allocation, organizational governance and stratification among colleges and households. [ABSTRACT FROM AUTHOR]

Between 1980 and 2010 California’s health care policy field shifted from a business-dominated, closed-door pattern of decision making to a more open political arena. Through this process, a wide-ranging and diversely resourced coalition advocating on behalf of beneficiaries became an accepted partner in policymaking. This article examines this transformation, considering its broader implications for the political dynamics of the public-private welfare state and the role of advocacy groups in defending beneficiary interests. We argue that multifaceted coalitions exploit three vulnerabilities of the public-private welfare state, which presents openings for advancing public priorities: 1) diverse and shifting interests, which allow advocates to build broad coalitions that include labor and some providers 2) service gaps that, when publicized, can generate public outrage; and 3) the hybrid institutional form of the public-private welfare state, which can connect service delivery organizations with a broader pro-public coalition. [ABSTRACT FROM PUBLISHER]