From where I sit: Bye-bye, American high

The era of US dominance in higher education, like the era of the expanding American middle class, seems to be over. Its official death knell might have been sounded when Deborah Solomon's interview with Mark Yudof, president of the University of California, appeared in The New York Times recently.

"UC is facing a budget shortfall of at least $753 million (£689 million), largely because of cuts in state financing," she said. "Do you blame Governor Schwarzenegger for your troubles?"

"I do not," he replied. "This is a long-term secular trend across the entire country. Higher education is being squeezed out. It's systemic. We have an ageing population nationally. We have a lot of concern, as we should, with healthcare."

And education, she asked? "The shine is off of it," Professor Yudof said. "It's really a question of being crowded out by other priorities."

This is an appalling thing for a public-university president to say, and Yudof is being properly filleted for it by his faculty. Even more appalling is that it happens to be true.

As recently as the 1980s, states saw it as their obligation to make their public colleges and universities broadly affordable. And then came neoliberalism and with it the evisceration of the ideas of the public sector and the common good.

My own institution, Penn State University, has the dubious distinction of being the most expensive public university in the US. In 1985, we received 45 per cent of our funding from the state, and our tuition fee for state residents was $2,562 a year; today, our level of state support is 9 per cent and dropping, and tuition fees are more than $13,000 a year (more than $24,000 for non-residents).

During that time, we have developed an elaborate kabuki dance with the state legislature. Each year, we ask for a modest 3 to 5 per cent increase in state appropriations, and each year we don't get it, because everyone knows we can make up the shortfall by hiking tuition. We'll just pass the pain on to our paying customers - and encourage them to see themselves as customers.

Students and their families have absorbed the tuition-fee increases by taking out loans: nationally, college graduates now wind up roughly $20,000 in debt.

We try to tell ourselves that it's no worse than asking them to buy a car, but of course the cost of tuition is one car a year - the debt merely represents the "car" payments they are still making. And what happened to our federal student-loan agency? You guessed it: it was privatised years ago.

Meanwhile, the faculty has been flailing about, trying to find ever more instrumentalist justifications for our enterprise. Since it's hard to tell 22-year-olds with five-figure debts that college is supposed to train them for nebulous things such as "critical thinking", "lifelong learning" or "world citizenship", we've tried to argue instead that public universities enhance students' earning potential and therefore indirectly swell the state's tax coffers; that we help them to compete in a global economy; and that we do much of the basic research and development for US industry.

Humanists tend to be uneasy with these rationales, since they seem - and are - 100 per cent intellectual-content-free. But perhaps we need not bother trying to utter them convincingly; they don't seem to work, either.

For Americans - even some American university presidents - the shine is off those bright college years, and no one knows how to bring it back.