Privatizing Institutions of Higher Education

H.4621 transfers ten institutions of higher education to not-for-profit organizations, for the purpose of operating them as private institutions. The institutions specified and the transfer timetable are as follows:

  • July 1, 2017 – the University of South Carolina and affiliated branches or campuses, including USC Upstate, USC Beaufort, and USC Sumter;
  • July 1, 2018 – Clemson University;
  • July 1, 2019 – Medical University of South Carolina;
  • July 1, 2020 – The Citadel;
  • July 1, 2021 – South Carolina State University;
  • July 1, 2022 – Winthrop University;
  • July 1, 2023 – Lander University;
  • July 1, 2024 – Francis Marion University;
  • July 1, 2025 – College of Charleston; and
  • July 1, 2026 – Coastal Carolina University.

The not-for-profit organizations would be either existing organizations affiliated with the respective schools and selected by the governing boards of the institutions, or established by the boards and consisting of alumni, staff, and friends of the respective institutions. The transfer would include all assets and liabilities, but the state would remain “continently liable” on general obligation bonds pertaining to the institutions.

At the time of privatization the State Fiscal Accountability Authority (SFAA) would have the option of transferring existing general fund appropriations or other cash on hand of the institution to a reserve fund which could be used to pay future liabilities and obligations of the institution.

If one of the not for-profit organizations ever wants to get rid of the institution, it has to offer to transfer it back to the state under the same terms and conditions first.

Funding and running colleges and universities is not a core function of state government. A cursory look at the finances of most public universities in South Carolina should disabuse a reasonable person of the idea that these schools depend on state government subsidies to survive. State subsidies do not generally allow universities to survive or even better serve students, but they do enable administrative bloat and endless construction, both items of dubious worth to a university’s mission of education.

Privatizing South Carolina’s public universities would better allow state government to focus on its core functions, and would make university leadership more accountable and therefore more likely to keep their institution efficient and on mission.

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