Page 279 - Crisis in Higher Education

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the loans. Public universities would be prohibited from covering these
losses or cosigning loans. Universities often use football and basketball
facilities for concerts and graduation. Concerts have revenue, so an appro-
priate fee can be charged to the promoter. If the university wants to use
these facilities for graduation, arrangements can be made.
Proponents may argue that athletics is an essential part of an under-
graduate education, but that is not true. To outsource athletics does not
argue that athletics has no value and universities should drop their pro-
grams. It simply states that athletics must be self-supporting.

11.6.3.2 Outsourcing Ancillary Services with
Separate Revenue Streams

Outsourcing services is an effective way to reduce costs, upgrade qual-
ity, gain access to specialized expertise, and increase customer satisfac-
tion. Ancillary services, items 2 through 5 in Table 11.3, are activities that
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are needed by universities but are not critical to their mission, and other
organization can provide these services as well as or better than the univer-
sity. In addition, there are separate revenue streams for housing, food ser-
vices, book stores, and parking. Hospitals and clinics, item 6, are ancillary
services when universities have medical schools. In this case, these facili-
ties are essential to their mission, but they have separate revenue streams.
University executives know little about any of these activities, so they are
highly attractive candidates for outsourcing. For most of these activities,
it should be relatively easy to find private companies to manage them and
compensate the university in some manner for the opportunity. There may
be other activities that should be outsourced such as university-provided
childcare and computer services. Some universities have golf courses and
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airports located on campus and are considering outsourcing. 34
For decades, universities have been outsourcing housing, but only by
accident. After one or two years of living in dormitories or other university
housing, students often seek off-campus apartments or condos because
they can live there more cheaply and have more freedom. Outsourcing
housing allows universities to reduce administrative staff and place the
management of housing with experts who can do the job better and more
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cheaply. Food services and bookstores have been outsourced success-
fully at many universities. In some cases, universities have made space
available in the student union for private restaurants. Housing, park-
ing facilities, and hospitals and clinics are less commonly outsourced,