Higher Education Under the Influence of Neoliberalism

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Are modern American universities contributing to the public good or private prosperity? Higher education in the United States has undergone a significant shift during the past several decades. The institutions that once served the general public now seem to be more focused on accumulating profit and view universities as business entities rather than foundations for knowledge dissemination. The current state of higher education is marked by the increased role of economic forces of the free market, which impose continuous competition between higher educational institutions in pursuit of gaining more customers and more profit. Therefore, US higher education is now in the state of a crisis caused by the inconsistency between its neoliberal management approaches and the ethical purpose of universities to contribute to public knowledge and intelligence.

It is reasonable to start with the identification of what neoliberalism is. The term has entered the discourse only several decades ago and has marked the global economic and political tendencies toward profit-making. Neoliberalism is a philosophical doctrine that views political and economic policies as those driven by capital accumulation by means of free-market and privatization (Martinez & Garcia, 1997). The main characteristics of neoliberalism include the rule of the free market, minimizing public funding of social services, privatizations, lack of accountability, and the diminished role of communities (Martinez & Garcia, 1997). Under such circumstances, any profit-making activity is justified by its monetary contribution, even if it causes harm to the public good and is inconsistent with common ethical considerations. Consequently, the neoliberal tendencies in higher education cause a shift in universities’ evolution toward profit-making rather than facilitating the general public’s intelligence.

Higher education as a system is now represented by a set of business entities that function according to the competitive market. The modern-day American universities “are acting more and more like for-profit patent factories, while professors are behaving more like businessmen” (Open Society Foundations, 2005, para. 2). Diversification of educational institutions is aimed to match the scope of interests and demands of the prospective customers (Staley & Trinkle, 2011) Indeed, history shows the continuous competition between the best American universities to achieve constant improvement and expansion (Rossi, 2014). Now, such universities as Harvard and NYU are competing over their potential students by improving their facilities and customizing their services and products according to the demand. Thus, the institutions of education have changed their approach to management, where business factors prevail.

The influence of free trade and privatization on the development of higher educational institutions is derived from the gap between insufficient state funding and the growing demand for education. With the diminished public funding of higher education as enforced by “Republican governors like Ronald Reagan,” the majority of American colleges and universities have become more dependent on privatization (Rossi, 2014, para. 4). In response to such a shift, the universities started raising tuition, thus “passing the burden of costs to the students who now become consumers and debt-holders rather than beneficiaries of enlightenment” (Fish, 2009, para. 14). Also, they began cooperating with industries striving for achieving financial benefits and employing part-time employees who have little interest in making an academic contribution (Fish, 2009). As a consequence, the cost of higher education grows rapidly and imposes significant monetary debts on students. Indeed, according to Rossi (2014), “nation’s student loan debt … now exceeds $1 trillion” (para. 2). Free education is no longer an option, and the growing costs of education impose significant inequality of access to education that leads to a shift in the cultural and ethical judgment of neoliberalism in academia.

The critical cultural and ethical mission of universities, which is educating the public, transforms toward the one concerning accumulating financial benefits and achieving a competitive advantage on the market. Firstly, the close connection of the universities with big corporations, which fund the research activities and educational processes, imposes the pursuing of business interests by means of higher education (Open Society Foundations, 2005). In other words, the forces that define the course of university performance do not serve the public good but work for business interests. Secondly, the changes in the perception of a traditional student have caused social shifts, where a student is now a person in their mid-twenties who are employed because they have to pay for their education (Staley & Trinkle, 2011). Consequently, the burden of educational costs imposed on students constrains their learning opportunities and diminishes the role of education on a larger scale. Such cultural implications of the neoliberalization of universities have a nonreversible change on the overall perception of education and its necessity for professional development.

One of the ways to address the impact of neoliberalism on higher education in the USA and overt the crisis is to attract public investors and the state’s funding to the development of universities. Although it is a long-term goal and a challenging project that might require controversial decisions (in the light of the modern neoliberal trends), the attempt to transform higher education might bring significant positive results. The steps that will be required to succeed in the implementation of this action might include designing community-based programs for attracting public funding with an aim to provide graduate specialists in the crucial fields. Also, it is important to raise awareness about the importance of universities’ performance as a public service to reduce tuition and minimize the influence of corporations.

In such a manner, the university will have an opportunity to educate intelligent professionals in the fields that are of crucial importance for the state. It will be an independent non-profit institution whose priority will be to expand its academic influence and knowledge (Open Society Foundations, 2005). The students will benefit from such an endeavor due to the reduction of tuition caused by public funding. Also, it will have a long-term effect on the positive educational outcomes and the favorable perception of gaining a degree by society.

In conclusion, modern-day higher education in the United States is in a state of crisis. The crisis is caused by the neoliberal transformation of universities from non-profit institutions working for the public good into business corporations led by free-market forces and continuous competition. As a consequence, the universities operate under the influence of big corporations and evolve as business entities imposing the burden of costs on students. To eliminate the crisis, one should address the causes. Thus, the university needs to focus on developing a program aimed at attracting public funding to establish close cooperation with the state. It might be implemented through the investigation of the state’s demand for specific professions and providing high-quality specialists in those domains. It will benefit the university by ensuring its ethical and cultural worth and minimizing the tuition burden for students.


Fish, S. (2009). Neoliberalism and higher education. The New York Times. Web.

Martinez, E., & Garcia, A. (1997). What is neoliberalism? Corpwatch. Web.

Open Society Foundations. (2005). University Inc. – The corporate corruption of higher education. Web.

Rossi, A. (2014). How American universities turned into corporations. Time. Web.

Staley, D., & Trinkle, D. (2011). The changing landscape of higher education. Educause Review. Web.

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"Higher Education Under the Influence of Neoliberalism." ChalkyPapers, 8 Feb. 2022, chalkypapers.com/higher-education-under-the-influence-of-neoliberalism/.


ChalkyPapers. (2022) 'Higher Education Under the Influence of Neoliberalism'. 8 February.


ChalkyPapers. 2022. "Higher Education Under the Influence of Neoliberalism." February 8, 2022. https://chalkypapers.com/higher-education-under-the-influence-of-neoliberalism/.

1. ChalkyPapers. "Higher Education Under the Influence of Neoliberalism." February 8, 2022. https://chalkypapers.com/higher-education-under-the-influence-of-neoliberalism/.


ChalkyPapers. "Higher Education Under the Influence of Neoliberalism." February 8, 2022. https://chalkypapers.com/higher-education-under-the-influence-of-neoliberalism/.