It’s probably a safe bet to say most state-aided universities in the country are facing severe fiscal challenges. Likewise, a high percentage of private colleges and universities are having to figure out how to carry out their missions with fewer dollars.

Kansas University officials have made cuts in various programs as the percentage of the school’s operating budget covered by state funding continues to dwindle.

Tuition, private philanthropic giving and federal grants make up the bulk of funds to help pay the bills. How much higher can tuition and fees be raised before many students and their families are priced out of the ability to attend KU? Will potential private contributors become sufficiently disappointed in the operation of the university that they will decide to cut back or even eliminate their usual giving to KU? And, with the federal budget in such bad shape, how long will it be before there are sizable reductions in federal grants to a research school such as KU?

In the face of likely cutbacks, universities are studying ways to maintain or elevate their excellence within their own complex. Officials at the University of Minnesota, one of the nation’s largest and most respected state-aided universities, currently are giving serious study to the possibility of depending on private money rather than unreliable state funds to support several of their schools.

Due to shrinking state funding, Minnesota’s School of Law and the Carlson School of Management are looking at the possibility of operating without state funds, relying on private support. Those in favor of the plan claim being self-reliant would give the schools more control over how they operate and offer more incentive to improve and increase their private giving.

The new University of Minnesota president, Eric Kaler, who has been on the job for less than a month, will make the final decision, but he is faced with huge budget cuts and pressures to hold back on tuition increases.

Minnesota operates on a $3.7 billion budget. Former President Robert Bruininks said he lamented the privatization trend but considers it inevitable that a few of the university’s schools will break from state funding.

Bruininks said, “By having some state funding in each of our colleges, it encourages all of us to be more self-conscious about our public missions, our public responsibilities, our public commitments. When you get in a strictly revenue-driven model, there could be a temptation to think of yourself as something separate from the whole of the university.”

According to a news report, deans of the law school and school of management said they had not sought this change but that, if it came about, they would not opt out of their financial obligations to the university.

In 2006-07, state money totaled about 17.6 percent of the school of management’s operating budget. Under a budget approved last month, it will account for just 3.6 percent. The law school’s share will drop from 22 percent in 2008-09 to single digits next year.

Minnesota is not alone in splitting away from state funding. The University of Virginia School of Law gained financial freedom from the state in 2005 and now operates with slight state and university control. The university’s business school also has become self-supporting, as has the University of Michigan’s business school. According to a Minneapolis news report, the UCLA school of management also is considering the option of operating without state money.

The University of Minnesota’s chief financial officer noted that as state funding approaches zero, “What does it mean for a college to be out of state money?

“They are not going to give up the instruction. That’s their bread and butter. But does research then become too expensive? Or does the public service mission suffer? Or not? We just don’t know.”

With state support dropping for Kansas universities, what are the chances that KU’s School of Law or School of Business might consider operating without state funding? Apparently, a growing number of deans, chancellors and presidents across the country are thinking about it.

Two new dynamic deans are taking leadership roles on Mount Oread: Stephen Mazza at the School of Law and Neeli Bendapudi at the School of Business. What do they think needs to be done to find the funding necessary to energize and elevate the academic and research excellence of their respective schools? Their energy and vision is likely to infect other deans and administrators who have become somewhat resigned to or accepting of lower levels of state funding. The university has a short supply of energy, vision, new ideas and enthusiasm.

KU Provost Jeff Vitter has been leading a broad examination and study of the university’s academic structure and how to make it more efficient and relevant. However, a number of senior educators say they are likely to be dead or have accepted positions at other schools before any findings from the study are put into practice.

There’s also the question of whether the Kansas Board of Regents and state legislators would approve major changes, particularly if KU officials try to engineer a plan that would try to elevate the school to a higher or special level compared with other state universities. What would they say about significantly higher tuition charges that would make it far more costly and difficult for many students to obtain a degree from KU? Or is this what some KU officials want, an elite school for perhaps fewer Kansans but more out-of-state students?

How does private funding for particular schools within the university fit into KU’s future?