The New Interest in Charter Universities and State Performance Contracts

Charter and enterprise universities emerged as major issues in recent legislative sessions. Although charter colleges or universities have been debated previously in a few states, they are still relatively new and untested concepts in higher education policy. Charter and enterprise universities, or similar designations, redefine an institution’s relationship to the state and are largely outgrowths of shifts in state funding capacity. To some observers, these redefined relationships are steps toward the privatization of public colleges and universities; to others, they are steps that can reaffirm public purposes and government commitments. In many cases, only public flagship/research universities or special purpose colleges with a strong resource base are likely to benefit from new definitions or designations. Performance contracts, management agreements, and memorandums of understanding are the vehicles to “operationalize” a redefined higher education-state government relationship. Only time will tell whether these developments endure.