All Commentary
Wednesday, September 1, 1999

Independent Schools at Risk

Accepting Government Money Leads to a Loss of Independence

Jacob Huebert is a student at Grove City College and an intern at FEE.

As discontentment with government schools grows, tax-funded “school choice” has emerged as the leading reform proposal. School-choice programs typically include a voucher plan, although some would make direct payments from the government to private schools. Those proposals are intended to give parents new school alternatives, which are sorely needed, particularly in inner cities. Yet at the same time, private schools, by accepting the money, would become much like the public schools against which they are supposed to compete. Historical examples of government-sponsored school choice, here and in other nations, show that when private schools sign on to such programs, they often sign away their independence.

What has happened in American higher education provides strong evidence that accepting government money leads to a loss of independence. In the 1950s and 1960s, both public and private colleges and universities began accepting direct aid from the federal government.[1] Nevertheless, it caused alarm among many college presidents, prompting a commission consisting of the presidents of Johns Hopkins University, Union College, the California Institute of Technology, the University of Missouri, Stanford University, and Brown University; the former president of Columbia University; and the provost of Harvard University to declare:

We are convinced that it would be fatal were federal support to be substantially expanded. Power means control. Diversity disappears, as control emerges. Under control, our hundreds of universities and colleges would follow the order of one central institution and the freedom of higher education would be lost.[2]

Their concerns would prove to be legitimate. As schools quickly became increasingly dependent on government money, the feds began to exert an ever-increasing amount of control over the recipient institutions.

Today, the dependence of schools on federal funds has become such that formerly independent schools are willing to do nearly anything to appease the government in order to retain their funding. William McGill, president of Columbia University in the 1970s, admitted that when the federal government threatened to take away his school’s funding, which constituted half of its budget, he was ready to “promise almost anything” in order to get the government off Columbia’s back.[3] The government was threatening the university because of concerns about minority representation in its student body and faculty. This was despite the fact that Columbia was already “trying every means” to increase minority representation.[4] It would thus appear that the government was not interested in Columbia’s attitude toward minorities. It was interested in control.

The Power to Define

As federal control over public and private education expanded, so did the very definition of a “recipient institution.” In 1975, the Department of Health, Education, and Welfare (HEW) sent a letter to all colleges and universities asking them to sign an “assurance of compliance” that would guarantee they were complying with federal regulations under Title IX of the Educational Amendments of 1972. Although Title IX was only to apply to programs and activities directly receiving aid, HEW now said the regulations could be applied to an entire institution if even one part received federal aid.[5]

The majority of schools simply signed the form and returned it. Most of the scant few that saw the form as a threat to their independence did nothing at all with it and hoped no one would notice. One school, Hillsdale College, wrote to HEW refusing to sign because of the control that would follow.[6]

Eventually, after another school, Grove City College, became involved, the matter was litigated and ultimately appealed to the Supreme Court of the United States in Grove City College v. Bell (1984). In that case, the court ruled that a school could be considered a recipient institution if any student on campus received an education loan or a grant, and that funds could be withheld from school programs that were found to be not compliant with regulations.[7]

In another blow to private independent schools, Congress passed (over President Ronald Reagan’s veto) the Civil Rights Restoration Act of 1987, which made it explicit that any school (including any elementary or secondary school) that enrolls students who receive federal aid is subject to regulation by the federal government.[8] Hillsdale and Grove City were presented with a choice: they could accept government control or they could accept only students who received no government aid. Although it would give them a disadvantage in the market, both schools chose the latter.

Advocates of voucher programs often assume that any school could follow this path and choose not to participate, nullifying concerns about independence. Joseph L. Bast and David Harmer insist: “Participation in voucher plans is never mandatory: those who manage private schools are free to remain outside the program if they believe the [inevitable] accompanying regulations are too burdensome.”[9]

What Bast and Harmer fail to account for is that schools which refuse vouchers will be at an enormous disadvantage with those that are less concerned about independence, eager to accept vouchers, and happy to offer a “free” education to any student.

Replacing Government Money

Hillsdale president George Roche has been forced to deal with loss of federal student-aid funding since the Grove City College decision and the passage of the Civil Rights Restoration Act. In 1992, the school had to raise $1.4 million to replace the money students would otherwise have received through federal grants and loans. This figure is likely to rise because the government has the unfair advantage of being able to supply as much money as it wants to students who choose to accept its aid and who, accordingly, go to other schools. As Roche notes, “It’s impossible to make money as fast as a counterfeiter.”[10]

Hillsdale and Grove City have managed to get by without government money, but they are schools with long histories and many generous alumni benefactors. Under “school choice” for primary and secondary education, a new school wishing to remain independent would face a far greater disadvantage.

The implications for primary and secondary education under voucher programs are clear. By the logic of Grove City College and the Civil Rights Restoration Act, any school that accepts a voucher would also almost certainly have to accept what Sheldon Richman calls “a raft of government standards that before long would make the private schools virtually indistinguishable from the public schools.”[11] Former voucher advocate David Barulich changed his views on the issue when he realized that since, under a “school choice” program, the government would inevitably define the sort of organization that would be eligible to accept vouchers, it would essentially turn private schools into clones of public schools.[12]

Even the cases in which the federal government uses its power over private schools to prevent discrimination (ostensibly the purpose of Title IX and the Civil Rights Restoration Act) could seriously affect a school’s ability to maintain its independence and standards, as anti-discrimination statutes have recently been extended to protect “rights” of “new” minorities, that is, claims from special-interest groups.[13]

Further, the U.S. Task Force on Assessing the National Goals Relating to Post-Secondary Education has called for “uniform standards” for all colleges—standards that go well beyond matters of putative civil rights.[14] There is no question that these developments could undermine the goals and independence of private schools.

Experience Abroad

Government money has been used for “private” education in certain other nations for some time, with predictable results. In France and Germany, for example, differences between Catholic schools and ordinary government schools have essentially disappeared since government funding of private religious education began. In these and other European countries, government-enforced uniformity has resulted in the weakening or even the elimination of religious teaching in private religious schools.[15] When Australia attempted a government-funded “privatization,” the results were similar. Economist Estelle James of the World Bank notes that with the program came “increas[ed] regulation and centralization of decisions and the loss of private school autonomy.”[16]

James also did an extensive study of the government-funded school choice program in the Netherlands. She notes that with the high level of government funding for private schools has come an amount of regulation that is virtually directly proportionate.

Not only do the regulations for recipient schools specify required numbers of teachers, salaries, and conditions of work, they also limit schools’ authority to fire teachers and never allow schools to fire teachers for lack of competence.[17] Further, all schools are forced to follow a “uniform curriculum” prescribed by the government.[18]

The record of American higher education and of government-funded private schooling around the world reveals that government money inevitably leads to government control. While free choice is a worthy cause for those who support liberty and quality education, it may reasonably be concluded from all available evidence that voucher programs and other government subsidies to private schools will lead to increased bureaucracy, increased controls over the lives of individuals, and quite possibly the end of independent private schooling in America. If greater educational freedom and diversity are desired, government money and control are not the means to achieve it.


  1. George Roche, The Fall of the Ivory Tower (Washington, D.C.: Regnery Publishing, Inc., 1994), p. 99.
  2. Ibid., p. 100.
  3. Ibid., p. 105.
  4. Ibid.
  5. Ibid., p. 112.
  6. George Roche, One by One (Hillsdale, Mich.: Hillsdale College Press, 1990), p. 4.
  7. Ibid., p. 5.
  8. Douglas D. Dewey, “Separating School and State: A Prudential Analysis of Tax-Funded Vouchers,” Vouchers and Educational Freedom: A Debate. Cato Policy Analysis No. 269, March 12, 1997. See
  9. Joseph L. Bast and David Harmer, “The Libertarian Case for Vouchers and Some Observations on the Anti-Voucher Separationists” in Vouchers and Educational Freedom.
  10. The Fall of the Ivory Tower, p. 115.
  11. Sheldon Richman, Separating School and State: How to Liberate America’s Families (Fairfax, Va.: The Future of Freedom Foundation, 1994), p. 83.
  12. Dewey.
  13. The Fall of the Ivory Tower, p. 128.
  14. Ibid., p. 129.
  15. Charles L. Glenn, Choice in Schools in Six Nations (Washington, D.C.: U.S. Department of Education, 1989), pp. 41–42, 115, 189; cited in Dewey, p. 37.
  16. Estelle James, “Private Education and Redistributive Subsidies in Australia” in Privatization and Its Alternatives, W. Gormley, ed. (Madison: University of Wisconsin Press, 1990), p. 108, cited in Dewey, p. 38.
  17. Estelle James, “Public Subsidies for Private and Public Education: The Dutch Case” in Private Education: Studies in Choice and Public Policy (New York: Oxford University Press, 1986), p. 122.
  18. Ibid., p. 123.