In the news. The battle spread outside the classroom, too, with the most extreme incidents attracting the most attention. College mascots came under attack: The University of Alabama- Birmingham had to ditch "Blaze," its Nordic warrior mascot, because he seemed too macho and too white. Speech codes at schools like Brown, Emory, and the University of Michigan–aimed, their supporters said, simply at restricting racial, sexist, and homophobic slurs–were criticized as inhibiting free expression. The codes quickly inspired lawsuits and such incidents as the charge of racial harassment against a Jewish student at the University of Pennsylvania for calling several African-American women making noise outside his dorm "water buffalo." (His supporters said that the Hebrew-speaking student was using a literal translation of nonracially tinged slang.)

All the squabbling drowned out a subtle shift in how the nation thought about higher education. The prevailing wisdom had been that the country as a whole benefited from a college-educated citizenry. In the 1980s, that notion was supplemented by increasing evidence that the economic benefit to individuals was substantial. (Indeed, bachelor degree holders earned 89 percent more than high school grads in 2001, the most recent year for which data are available.) "The government used to give financial aid to people because the country benefited," says Arthur Levine, president of Columbia University's Teachers College. "During the Reagan era, we made a fundamental change and decided it benefited the individual."

That meant that paying for college became the student's responsibility, not the government's, and loans overtook grants as the chief form of federal financial aid. Twenty years ago, the Pell grant took care of 84 percent of the total price tag (tuition and room and board) at public universities; with college costs rising, the Pell covered just 42 percent in 2002. New programs introduced in the 1990s, like tuition tax credits and state-sponsored merit scholarships, tended to favor the middle class. "There's been a real tilt in the last 20 years away from making [higher education] available to all citizens toward helping people who might need help less," says Bok. Sixty-eight percent more low-income high school graduates head off to college today than did in 1972, but the amount of debt they carry by the time they graduate has also increased. Public university students at the lowest income level have seen their debt load go up nearly 70 percent–after inflation–since 1989.

Students now face increasing tuition sticker prices, as well. Average college costs are around $25,000 at private schools, while some publics have instituted double-digit-percentage tuition increases in the face of severe budget constraints. The rising cost of personnel accounts for much of these changes, as does students' appetite for fancy gyms and plush dorms. The main culprit for public universities, however, is the decreasing state support of higher education. Over the past two decades, running a public university became increasingly expensive, and state legislatures--beset with ballooning healthcare and primary and secondary education costs–were paying a shrinking share. "The funding structure of higher education changed from being high state support and low tuition to moderate support and moderate tuition," says David Ward, president of the American Council on Education and formerly chancellor of the University of Wisconsin-Madison. Universities learned quickly that if they wanted to be better than average, they needed to turn elsewhere for support. Fundraising activity increased, and private donations to public schools have shot up 159 percent since 1980. And this past spring, the University of Virginia became one of the first public universities to receive more of its operating budget from private sources than from the state. (The state provided a mere 9.6 percent of the university's total budget last year.)

Public and private universities, alike, have become much more savvy about finding money. Luckily for them, as the chief providers of what Bok calls the three ingredients essential to prosperity–"well-trained people, expert knowledge, and new discoveries"–opportunities for colleges to cash in have multiplied over the past two decades. Industry is funding more scientific research, and legislation passed in 1980 allows universities to patent and license findings from federally funded research. Since then, 3,870 companies have been formed to turn these patents and licenses into products (the Google search engine is one of the more famous ones); in 2001, they had an income of $1.1 billion. Universities have also been quick to introduce new programs tied to the employment needs of potential students, including vocational master's degrees in such fields as healthcare leadership, computational finance, and human-computer interaction–and charged hefty fees for them.