Panel warns university funding cuts hurt US global competitiveness

A panel of business and academic leaders warned funding cuts to higher education are hurting the global competitiveness of U.S. research universities, the latest sign of financial strain that is intensifying battles over school leadership and has led to several high-profile departures of university presidents.

U.S. research universities "are in grave danger of not only losing their place of global leadership but of serious erosion in quality," the committee of 22 academic, business and nonprofit leaders warned in a 250-page report issued Thursday. The report, commissioned by Congress, called for a combined effort among the schools, governments and corporations to reverse the decline.

Richard Vedder, director of the Center for College Affordability and Productivity and retired economics professor at Ohio University, reviewed parts of the report Thursday and was skeptical. He said he has found no correlation between extensive university research and a nation's economic prosperity. The Center for College Affordability is a research group that focuses on free-market solutions for rising college costs.

"It read to me like a lobbying effort for the National Research Council," he said, referring to the report and the organization that appointed the panel.

Public research universities—generally defined as those that compete for research funding and offer advanced degrees—typically depend on federal and state appropriations for more than half of their budgets. Private research universities get about a third of their funding from the government.

Employee fringe benefits, including retirement plans, accounted for 13.6% of total spending at 124 four-year public research universities in 2009, according to federal data compiled by the Delta Cost Project, a nonprofit group that examines higher-education funding.

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