January 01, 2017 Public Contract Law Journal

Infrastructure-Based Public-Private Partnerships: A Partial Solution to Mitigating Funding Challenges in Public Postsecondary Education

by Erica M. Koser

Erica Koser (ekoser@law.gwu.edu) is a J.D. Candidate at The George Washington University Law School, an Articles Editor for the Public Contract Law Journal, and President of GW’s Law Association for Women. She would like to thank her parents and sister for their endless support, and Professor Megan Bartley for her feedback throughout the Notewriting process.

I.  Introduction

A robust system of postsecondary education is essential for a well-trained, globally competitive workforce.1 According to the U.S. Bureau of Labor Statistics, postsecondary education is required for more than one-third of jobs in the United States.2 Research projects that this number is growing, and by 2020, postsecondary education will be necessary for sixty-five percent of all U.S. jobs.3 Student attendance has grown to match this anticipated demand, with full-time enrollment in postsecondary education 8.6 percent higher in 2015 than in 2008.4

Paradoxically, at a time when the need for postsecondary education is high, postsecondary endowments have diminished, regulatory demands have increased, and decreases in state appropriations have largely persisted.5 These funding challenges have driven public postsecondary institutions and state governments to look for strategic ways to ensure tomorrow’s students continue to have access to high-quality, affordable public postsecondary education.6

Public-private partnerships (PPPs) have emerged as a viable solution.7 A PPP is a contractual agreement between a public agency and a private entity designed to deliver an infrastructure or a service to members of the public.8 In a standard PPP, the contractual agreement allows for greater than normal private sector participation.9

Presently, public postsecondary institutions use PPPs almost exclusively to fund infrastructure.10 However, the centric focus on infrastructure- based PPPs is a detriment to public postsecondary institutions because in public postsecondary education, the largest portion of funding is spent on costs related to instruction, not infrastructure.11 Moving forward, public postsecondary institutions must utilize instruction-based PPPs in conjunction with infrastructure-based PPPs. This dual-PPP approach will help overcome public postsecondary education’s current funding challenges and ultimately support the goals of postsecondary education.12

This Note urges public postsecondary institutions to expand the use of PPPs into areas of instruction by creating strategic partnerships with local businesses to reduce the costs of providing instruction in the rapidly changing world of postsecondary education. First, Part II of this Note traces the background of PPPs in the United States, including the history of PPPs, the most common PPP models in the field of postsecondary education, and the challenge in defining the term “public-private partnership.” Next, Part III highlights the short- and long-term benefits of infrastructure-based PPPs in public postsecondary education. Finally, Part IV provides an overview of various proposed models of instruction-based PPPs, their benefits, and potential impediments that may arise during their implementation. 

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