To understand how public universities reached their present state of decline and near-crisis, you might look back a century and a half to July of 1862, when Abraham Lincoln signed the Morrill Land Grant Act into law. The act, to which we can credit many of the higher-education triumphs of the United States, did not, as is sometimes believed, give states acreage upon which to build huge public universities. Instead, each state was granted rights to federal land in the western territories, the income from which would be used to create:

at least one college where the leading object shall be, without excluding other scientific and classical studies, and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life.

To implement the law, the federal government gave states scrip redeemable for land. Flooding the market with newly printed currency caused inflation, and many states sold their land rights quickly for 30 cents an acre. In New York, by contrast, Ezra Cornell convinced state leaders to wait for the market to rebound and eventually directed the purchase of a half million acres of valuable pine forest in Wisconsin, returning nearly $10 an acre to the university bearing his name.

Thus, the Morrill Act helped establish bedrock features of America’s public universities that persist to this day. Tension between mechanic arts and classical studies–between the practical and the sublime–would be built into their character. They would serve industrial and other classes who had seldom if ever before been seen as worthy of higher education. The states would be given free rein to run public universities in such manner as their legislatures prescribed. And some states, in matters financial and otherwise, would prove much wiser than others.

The focus on useful skills was policy as prescience. As the United States transformed into an industrial behemoth in the latter half of the 19th century, mechanic arts became increasingly valuable. At the same time, elite universities began adopting the German university model, in which faculty were required to obtain doctorates and devote substantial energies to research. Public universities, as has long been their tendency, followed the lead of famous private institutions and divided up their professors into autonomous academic departments.

When America became the first country to make high school graduation a common (if still too-often-unrealized) expectation for all students, public universities grew to meet them. They did so again after World War II, when the federal government gave returning veterans higher education benefits through the G.I. Bill. As lives lengthened and the transition from youth to adulthood became less abrupt, public universities provided acculturation to the children of the expanding middle class. College became a rite of passage and a mark of social ascension.

When the federal government girded itself for the Cold War, public universities built out their scientific departments accordingly. State College, Pennsylvania is not traditionally known as a maritime center, being located nearly 200 miles away from the nearest deep-water port. Yet Penn State (whose historic administration building features 1,300 square feet of Land-Grant-celebrating frescoes) maintains a thriving research program in hydroacoustics, hydrodynamics, navigation, and propulsion, the legacy of decades building better torpedoes for the United States Navy’s Sea Systems Command.

Today, despite a century-and-a-half of expansion and success, American public universities see themselves under siege, their futures uncertain and their best days behind them. This is partly a financial problem. While the federal land grants provided some seed capital, the majority of public dollars spent on higher education come from state governments that have undergone fiscal transformation over the last 30 years. Aging populations and rising medical costs inflated state Medicaid spending at the same time that legislatures embraced criminal justice policies designed to incarcerate vast numbers of nonviolent drug offenders at public expense. Meanwhile, anti-tax zealotry ate away at state revenue streams without exercising corresponding discipline on voters’ need and appetite for public services. As a result, California is in the process of, almost unimaginably, dismantling the greatest public higher education system the world has ever known, slashing funding to the University of California, jacking up tuition, and shutting down the pipeline of students moving through the California Community College and California State University systems. Other states are taking similar if less drastic steps while steadily shifting the burden of paying for college onto the backs of students and parents.

The ongoing privatization of public higher education has been abetted by an academy that tacitly embraces the opportunity to walk away from the messy, difficult burden of educating students from all strata of an ever more diverse society. Building public institutions in the research university mold has had far-reaching consequences. It meant that most university professors would be trained in graduate programs more prestigious than those that eventually employed them. A relatively small number of public universities, like those in the UC system, are legitimate world-class research institutions. But below them are hundreds of regional universities, former normal schools, and other less selective institutions that, despite training few graduate students and producing little notable research, are nonetheless staffed by people trained to be scholars, not teachers.

Many of those educators are fine, dedicated teachers. But they work in a system with a clearly defined, broadly shared value system that holds up the expensive, exclusive research university as the one and only model of prestige. So when state legislatures announce the latest round of indefensible budget cuts, public university leaders gnash their teeth and resign themselves to the not entirely unpleasant task of raising prices and enrolling more wealthy students from out of state and, increasingly, out of country. (There is a burgeoning import market in wealthy Chinese students, ordered up through middlemen like the latest crop of junior college transfers acquired to temporarily shore up the basketball team.) That strategy requires new expenditures on marketing and a run up the U.S. News & World Report college rankings. From there it’s a straight path toward football coaches with million-dollar salaries, corporate-branded student recreation centers, and faculty who rarely if ever see the inside of an undergraduate classroom. The industrial classes become an afterthought.

Tragedy is when decent people make rational, defensible choices in an incentive system not of their making. The collective consequence can be that vital public institutions lose their public character in a manner that’s difficult, sometimes impossible, to reverse. The emergent public university helped create the triumphant American century, and there are few plausible visions of continued American prosperity that do not include vibrant, publicly supported institutions of higher learning.

Steering a different course will require a return to fiscal sanity among the states. The best higher education policy California could implement would be a constitutional convention that abolishes the supermajority requirement for tax increases and the absurd system of lawmaking via constant ballot initiative. Higher education renewal will also require the federal government to play a stronger role in shaping public universities. The combination of rising prices and state disinvestment has made Uncle Sam the college funder of last resort. Total annual disbursements of federal financial aid have increased from $60 billion to nearly $170 billion in just the past 10 years. Leaving public universities to exist and operate in whatever manner state legislatures prescribe made sense in a century when the federal government was radically smaller, few people went to college, and human lives were largely local. In a time when most people go to college and international competitiveness depends substantially on our store of human capital, a robust national higher education policy will be unavoidable.

Effective federal action will require a careful balance between the traditional autonomy and diversity of higher education and the need to direct public resources in a manner that helps more students earn valuable degrees at a reasonable price. Academia’s lobbyists tend to oppose federal higher education policies that don’t involve blank check writing. But the traditional system of simply making financial aid available and trusting state regulation, market forces, and voluntary accreditation to take care of the rest isn’t working well enough. Prices are rising too quickly; quality is suspect; and dropout rates at many public institutions are unconscionably high, particularly among minority students.

We need actionable information about institutional quality, but there is currently no publicly available, comparable information about how much students attending a given college or college program learn between initial enrollment and graduation. Colleges are not accountable in any meaningful way for student learning, and, to the extent that they assess learning internally, most keep the results to themselves. Providing such data seems like a reasonable condition to place on $170 billion in federal disbursements.

The federal government has already taken steps toward accountability by establishing a new regulatory structure that judges programs at for-profit institutions based on their graduates’ success in obtaining well-paying jobs and paying back loans. Similar data should be collected and reported for all colleges and universities, profit-seeking and otherwise. Getting a good job isn’t the only reason people go to college, but it’s the most important reason, and in a time when the most popular undergraduate major (by far) is business, students and parents borrowing billions of dollars per year should know what they’re getting for their investment in return.

At the same time, the federal government should revisit the principles of the Morrill Act and adapt them for the new age. The mechanic arts remain vital, but many of the machines are in cyberspace now, and online higher education has exploded in size and scope over the last 10 years. Public universities have often been laggards in taking full advantage of information technology, leaving for-profit higher education corporations the task of building online programs, many of them of questionable quality.

The Morrill Act worked because the federal government made substantial public resources available under clearly defined conditions and then allowed new public institutions to rise up and meet them. It could do the same again, this time on the virtual frontier. Such new public organizations wouldn’t be universities as we presently define them. They wouldn’t require elaborate physical campuses or have to contend with the difficulty of changing deeply rooted organizational cultures. They would have no association with uncontrollable professional sports teams. Their only conditions would be low cost, high quality, and a relentless, highly transparent focus on student learning and long-term success in employment and life. Such a renewed commitment to public higher education, designed for the modern world, could ensure that all classes of students continue to receive a liberal and practical education in all pursuits and professions.

Kevin Carey is the director of the Education Policy Program at the New America Foundation.

*Photo courtesy of gb_packards.