When Disaster Capitalism Comes for the University of Puerto Rico

When Disaster Capitalism Comes for the University of Puerto Rico

When Disaster Capitalism Comes for the University of Puerto Rico

The ongoing privatization of Puerto Rico’s recovery threatens not only the university’s autonomy, but its very existence.


EDITOR’S NOTE: This article has been edited to clarify Apollo Education Group's link to Puerto Rico's bond debt. They are partly owned by Apollo Global Management, a direct bondholder.

As the University of Puerto Rico (UPR) begins a new semester, its future is anything but certain. Hurricane María dealt a blow to its infrastructure last year; now, both the federal and local governments seem intent on further damaging the island’s public-university system rather than repairing and strengthening this crucial asset for Puerto Rico’s socioeconomic development. In a territory with soaring poverty and unemployment rates, students face a 100 percent increase in tuition alongside the elimination of the waivers traditionally offered to athletes, choir members, and other students providing services to the university—all at an institution that for over a century has been the island’s main channel for upward mobility.

The ongoing bid to reduce Puerto Rico’s government spending—what the non-elected Fiscal Board appointed by the federal government euphemistically calls “right-sizing”—threatens not only the UPR’s autonomy but its very existence.

In the weeks following Hurricane María, the US Department of Education made $41 million available to support students at colleges and universities impacted by the hurricane, of which the UPR system received only 20 percent. Meanwhile, institutions in Louisiana and Mississippi were able to access $190 million after Hurricane Katrina. A considerable portion of the María relief funds were distributed to private institutions like New York University and even some private, for-profit institutions like Grand Canyon University, to host a relatively small number of students who came from Puerto Rico.

In addition to making few funds available to rebuild UPR, the federal government has also gutted essential aid programs, like work-study grants, with little explanation. In Puerto Rico, where the median annual household income is below $20,000, and jobs increasingly difficult to attain on an island still recovering from a natural disaster, these policies are particularly damaging: Many students will have to drop courses in order to secure a livable income.

But austerity for UPR has been a long time coming. Long before Hurricane María, the Fiscal Oversight and Management Board (a body, locally referred to as “La Junta,” with nearly absolute powers over Puerto Rico’s finances, appointed by then-President Barack Obama) had begun their work restructuring the island’s debt by targeting the university as a site of fiscal reform. Following a familiar script of austerity measures and privatization, the board, often in collaboration with the local government, implemented a number of dramatic changes, including pension reductions, school closures, the relaxation of environmental protections, and budget cuts to public services such as public higher education. What these changes say is clear: The federal and local governments have abandoned the university as a social priority

The University of Puerto Rico is one of the strongest contributors to upward mobility and the local economy, and one of the public agencies that has best managed its own debt. Despite this, La Junta demanded cuts equivalent to about a third of the UPR’s total budget, with no rationale offered for this decision.

One can speculate, however. The university has been historically a site of resistance to neoliberal reforms, and its role as a cradle of island-wide political movements casts it as a threat to the highly unpopular Junta. Higher education is strongly linked to increased political participation: A study in Puerto Rico carried out by Yarimar Bonilla, one of the authors of this piece, found that those who attended public institutions had much higher rates of what social scientists describe as “political knowledge” than those who attended private institutions—something that would be of interest to a government body intent on slashing public resources. The University of Puerto Rico, moreover, is known for a robust student movement that has vigorously protested colonial intervention since 1948 and spearheaded national resistance to austerity measures in 1984, 2010, and, most recently, against La Junta in 2016.

Members of La Junta were making public declarations about the need for huge cuts to the public university’s budget as early as January 2017. The actual numbers were a moving target: first $350 million, then $450, then $500. The rationale for each calculation was never made public, but the cuts represented roughly a third of the system’s total budget. After more than a year of ignoring feedback and alternate budget plans drafted by the university leadership as well as student and faculty groups, La Junta imposed its own plan in April 2018, which led to an immediate doubling of tuition costs, with increases of up to 175 percent soon to come. The plan also unveiled a euphemistically described “campus consolidation” that will likely result in the closing or significant shrinking of seven campuses, and a dramatic reduction of the student body, faculty, and staff. Ironically, La Junta itself will cost Puerto Rico over $1,530 million in five years—almost the same amount it will cut from the university’s budget in that period.

Given Puerto Rico’s historical juncture, one would expect the government to facilitate and encourage research initiatives in all areas after Hurricane María, from the creation of new solar technologies to the treatment of social trauma. The UPR is a crucial center for research, generating over 70 percent of the scientific research output in the island. Despite carrying heavy teaching loads with few of the resources that faculty in the continental United States take for granted, the University of Puerto Rico has a world-class faculty that includes award-winning humanists and scientists, and has been an important site of scientific innovation and critical thinking. While many universities in the states struggle to increase the number of STEM degrees they produce, particularly among Latinx students, the UPR is one of the top schools in the country graduating STEM students at the baccalaureate and graduate levels.

But rather than promoting and strengthening public resources, the government seems intent on outsourcing services to foreign companies and fueling private profit at the expense of the public good. Important local facilities like a state-of-the-art Comprehensive Cancer Center—which would play a crucial role in Puerto Rico’s recovery, and also bring much-needed funds to the UPR—stand idle because of government inaction, and initiatives like the “posterriqueño,” which would cut the cost of public lighting in half, are thwarted by local bureaucracy.

Meanwhile, the newly appointed UPR president, Jorge Haddock Acevedo, has declared the draconian budget cuts imposed by La Junta to be “manageable.” The local Governing Board of the UPR, guided by partisan politics and dominated by political appointees, has done little to defend the institution. The complicity between the UPR Governing Board and La Junta means that the legal efforts to resist these drastic cuts, under the Title III bankruptcy clause of the PROMESA law, are being led not by university trustees or administrators but by a coalition of faculty that is already stretched thin. A lawsuit filed by the APRUM (La Asociación de Profesores y Profesoras del Recinto Universitario de Mayagüez) argues that the university must be protected as an “essential service” and seeks a budget amendment to ensure its continuity, particularly in this time of crisis.

The tuition increase has been justified by La Junta and its local supporters by pointing out that tuition at the UPR is much less expensive than at public universities in the 50 states and should change to be on par with them. But when you take into account variables such as net price and median income, Puerto Rican students actually pay more, not less, than their counterparts in the states. Forcing them to take out loans to pay tuition in the context of Puerto Rico’s depressed job market just adds insult to injury. Moreover, the shrinking or closing of smaller campuses in the name of “efficiency” will have a negative, cascading impact on the regional economy and job markets of some of the most depressed parts of the island, forcing students who can’t afford to move to either stay out of college or turn to the predatory for-profit college industry.

This attack on the public university, a widely respected institution that a member of La Junta himself recently described as “essential,” cannot be viewed in isolation. It needs to be understood as part of a broad, violent takeover of disaster capitalism, where those who stand to profit from Puerto Rico’s tragedy have been gifted not by one but two disasters: Puerto Rico’s unpayable debt (around $72 billion in bonds and $50 billion in pension obligations), and two hurricanes, Irma and María, with estimated damages of $ 90 billion ($ 133 million for the university) and a death toll in the thousands.

Indeed, we still don’t know the full extent of the death toll (although study after study has shown it to be in the thousands), and the government has ignored local attempts at documenting and analyzing the impact of Hurricane Maria, preferring instead to outsource this effort to researchers at the private George Washington University—itself an example of how all aspects of Puerto Rico’s recovery are fueling the transfer of resources and basic services from public to private hands. Similarly, private, non-Puerto Rican firms were given large contracts to carry out the process of rebuilding after Hurricane Maria—often with disastrous results. At present, plans are underway to sell Puerto Rico’s electric utility, and a portion of the public-education budget will be funneled into the coffers of private and charter schools.

How this will play out for UPR is less explicit but perhaps more sinister. In an island where over 40 percent of the population and over 50 percent of children live under the poverty level, the students affected most by these cuts are precisely the ones with the greatest need. This is not only because of the increased tuition, but also because the regional campuses targeted for closures largely serve low-income, place-bound students in poorer municipalities. These students are likely to be absorbed by a for-profit college industry similar to the one in the 50 states that already markets heavily to them—and with some of the very same actors. Unsurprisingly, these companies are lobbying heavily and successfully for decreased regulation and more freedom from public scrutiny. Most ironically, some of the firms that own for-profit colleges in Puerto Rico are owned by holders of Puerto Rico’s bond debt. This is the case, for example, of Apollo Education Group, the corporation behind the University of Phoenix, which is partly owned by Apollo Global Management, a bondholder in Puerto Rico’s debt.

The dangers faced by students at for-profits in Puerto Rico are the same as those that have been described in the 50 states. With a few exceptions, for-profits often have dismal graduation rates and offer low-quality degrees. Students who attend them are often left with no degree, no job, and in debt. The UPR, by contrast, has the opposite track record: It boasts among the best overall graduation rates in Puerto Rico, and has been recognized by many scholars as an engine of social mobility that helped move previous generations out of poverty and into middle-class status. While student advocates in the United States denounce the fact that only around 10 percent of the American public flagship institutions are affordable for low-income students, at the UPR’s flagship campus, 64 percent of the student body is low income. In fact, Puerto Rico has the highest Gini coefficient, which measures inequality, in the Americas and ranks third among 101 countries overall, surpassed only by Zambia and South Africa. Contemporary economists agree: The current attacks on the university—and on the Puerto Rican public education and economy as a whole—will decrease upward mobility, hamper economic growth, and increase the already soaring social inequality.

Members of La Junta have said that the University of Puerto Rico must become like the “universities of the north,” meaning that they should receive minimum support from public coffers. They have justified the attack on the UPR saying that it is a burden to the state and needs to follow the model of universities in the 50 states. But perhaps those universities should be following the UPR’s model instead. Throughout their history and to this day, the people of Puerto Rico have viewed their public university not as a cost or as a burden but as a public good and an investment—the kind of investment most needed in times of economic crisis.

Thank you for reading The Nation

We hope you enjoyed the story you just read, just one of the many incisive, deeply-reported articles we publish daily. Now more than ever, we need fearless journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media.

Throughout this critical election year and a time of media austerity and renewed campus activism and rising labor organizing, independent journalism that gets to the heart of the matter is more critical than ever before. Donate right now and help us hold the powerful accountable, shine a light on issues that would otherwise be swept under the rug, and build a more just and equitable future.

For nearly 160 years, The Nation has stood for truth, justice, and moral clarity. As a reader-supported publication, we are not beholden to the whims of advertisers or a corporate owner. But it does take financial resources to report on stories that may take weeks or months to properly investigate, thoroughly edit and fact-check articles, and get our stories into the hands of readers.

Donate today and stand with us for a better future. Thank you for being a supporter of independent journalism.

Ad Policy