JEFFREY BROWN:And now: the role and future of public universities.

The battle over the top leadership at the University of Virginia came to a dramatic and surprising end yesterday. The university's governing board voted to reinstate president Teresa Sullivan, capping what had been a painful spectacle for a school whose roots go back to founder Thomas Jefferson.

MAN:With high honor and great pleasure, yes.

JEFFREY BROWN:The move came 16 days after the same board had ousted Sullivan, leading to strong protests by faculty, students and others around the state. The precise reasons for the board's initial action were never clear, but were said to involve differences over how fast the university should move in response to budget pressures and changing technology.

Yesterday, Sullivan called on all concerned to come together.

TERESA SULLIVAN, President, University of Virginia: I do not ask that we sweep any differences under a rug, but rather that we engage one another in candor and respect. All of us seek only one thing, what is best for our university.

JEFFREY BROWN:In fact, while the specifics differ, public institutions across the country are facing similar pressures and problems, including slashes in state funding and increasing tuition rates.

The University of California system, for example, was hit with state cutbacks in the last year totaling $750 million. U.C. Davis chancellor Linda Katehi spoke to the "NewsHour" about the impact.

LINDA KATEHI, Chancellor, University of California, Davis: We are making higher education more of a private good. We are asking the individual families and the individual students to pay for their own education. The time when the state was the main contributor to the cost of higher education is gone. And I don't necessarily see us going back to that.

JEFFREY BROWN:Even with Teresa Sullivan holding her job at Virginia, all in all, it's been a rough year for leaders of public universities. The universities of Illinois, Wisconsin and Oregon have all seen top-level changes in the past 12 months.

And we pick up on parts of this story now with Gordon Gee, president of Ohio State University. George Cohen is professor of law at the University of Virginia Law School and current chairman of the school's faculty senate. And Anne Neal is president of the American Council of Trustees and Alumni, an independent nonprofit organization that tracks issues in higher education.

And I should say for the record before we begin that I am a tuition-paying parent of a University of Virginia student.

That out of the way, Gordon Gee, I will start with you. I want to come to you first as a university president watching this from afar. Can you tell us in brief what you take from what happened at Virginia? What does it speak to for universities like yours?

GORDON GEE, President, Ohio State University: Obviously, these are pressure times for universities.

And I think that—I think that what this is evidence of is that the fact that there are a lot of changes that are taking place external to universities, internal to universities, and how one aligns that between boards, faculties, staff, student, alumni, and friends.

This is an early example of a number of the kinds of pressures that I think we're going to face, because this is a fundamental resetting of the American economic system, as you well know.

JEFFREY BROWN:Anne Neal, you told us earlier that you generally were supportive of the board at Virginia. What do you think is the most important factor now facing public university? What is the problem, exactly?

ANNE NEAL, President, American Council of Trustees and Alumni: Well, I want to say first that clearly the process was deplorable in terms of its lack of transparency.

But I do think it's very important that we not let the process eclipse the more important issue, really about the future of public higher education. And I think what we have learned in the University of Virginia situation—and we can look at California and institutions across the country—is that we really are at a defining moment for public higher education.

And I would suggest that, if public higher education continues on its current course , that it is, in fact, on a collision course. One of the things that we have noted in our various studies is that, today, we spend two times the average of any industrialized nation on higher ed, but our results are far worse.

We're graduating less than 60 percent in six years. A study called "Academically Adrift" looked at the learning gains of college student across the country and found that 45 percent didn't learn or had very minimal cognitive gain in the first two years.

And, as you know, as a tuition-paying parent, tuitions have gone up, been skyrocketing for decades, and I think finally have reached a point where colleges and universities are beginning to realize—and, thank you, board of the University of Virginia for bringing this to the fore—that we start—we have got to start looking at different ways of doing what we're doing.

JEFFREY BROWN:All right, let me bring George Cohen in, because you were opposed to the board's original ouster of the president there.

Picking up on what you just heard, do you think everyone buys in, first, to the need for a new model, the sense that things aren't working, and a change is needed?

GEORGE COHEN, University of Virginia: I think everyone agrees there are a number of problems facing universities, and the faculties that I have talked to are all understanding of that, and ready to move forward and work cooperatively toward change.

I think what happened at the University of Virginia was we felt that we had a president who was able to work with faculty and was going to move us toward change, and the board made this sudden decision without consulting anyone, really, including faculty.

And what we want is a voice at the table, and we want to be able to contribute positively to constructive solutions to the problems we know we all face.

JEFFREY BROWN:There was -- Professor Cohen, just staying with you for a moment, there was this question of incremental vs. rapid change.

Does—does—from where you sit, does it feel like rapid change is possible of the kind that we just heard, for example, called for by Ms. Neal?

GEORGE COHEN: I think there are a number of problems that need to be dealt with in a number of different ways and can't—there is no simple solution to a lot of these things.

So, for some problems, incremental change may be what's called for. For other problems, there may be room for some kind of rapid, rapid change. But I think it's important to note that I don't see anything of the kind of emergency where there can't be a full and open discussion and debate about the things that need to be done, where you can include a variety of experts and different views.

We have lots of expertise, for example, on the faculty at the University of Virginia, including experts on things like online education, which has been done in a lot of different aspects—areas of the university for a number of years. And we ought to build on that expertise and bring these people in to help create solutions.

JEFFREY BROWN:Well, let me ask Gordon Gee.

I mean, one of the issues here that's always raised is, should universities, especially public ones, be run more like businesses, just more on a sort of corporate model? Can you see yourself—well, how do you see yourself? Are you a CEO of a major corporation, or what would that mean?

GORDON GEE:No, you know, the issue for universities is the fact that we are now in a moment in time in which we're really going to have to think very aggressively about change.

At the same time, we have to understand that our business is the business of ideas. And so ideas are sometimes messy. Sometimes, they're difficult to put your arms around. But, in my view, what we're about is we're about returning to the core.

In my own instance, in my own institution, we are focusing on teaching and learning and research and ideas and faculty, staff, and students, and 11 million Ohioans. And if that is—and if what we're doing at the university is not central to that core, then we will do something differently. We have just privatized our parking, as an example, as an ability—now giving us an ability to be able to invest, clearly, in the central core of the institution.

And often I hear this notion about we're privatizing, therefore, we're corporatizing. That just is nonsense. What we're about is we're about really developing a new strategy for the funding and the structure and the dynamics of higher education. And you can do it in an inclusive manner, but you have to move forward. There's a real urgency about what we need to do in higher education.

JEFFREY BROWN:Anne Neal, one thing that comes—another thing that comes up is the question of dropping departments or dropping parts of what the academy, various universities do, unsuccessful or unproductive ones, however one would define that. Would you advocate looking at that as things that universities need to do?

ANNE NEAL: Well, I think we're going to have to look very broadly at a whole range of activities on our college campuses.

Effective and efficient use of our academy focused on academic excellence doesn't take a corporate raider to do it. And I think this is in fact what has been raised very effectively at the University of Virginia, that there have been many, many topics that, quite frankly, haven't really been on the table, looking at the budget for '12-'13, questions of faculty teaching loads, can they teach more and go back to the standards, for instance, of the 1980s, where they taught nearly one more than they do now?

Can we find ways to reduce administrative bloat, which has really ramped up across the country at institutions elsewhere? Can we do something about the proliferation of classes? For instance, we looked at the University of Virginia and we found there were 71 classes where there were 10 or fewer graduates.

And these are the kinds of issues, the kinds of questions that should be on the table. I don't think we necessarily need to dictate the outcome, but the fact is, unless we have that robust discussion, and now, it really will be a model of ever adding, ever adding that we just simply can't deal with anymore.

I think it's interesting that since the G.I. Bill, it really has been a growth model. And Clayton Christensen of the Harvard Business School in his book "Innovative University" has talked very much to trustees and other communities that the growth model doesn't work and here is an opportunity now for universities to really focus on what they do well.

JEFFREY BROWN:All right, let me ask George Cohen to react to what you just heard, specifically using a business model, taking hard choices.

GEORGE COHEN: Well, I agree that there are hard choices that need to be made.

I think we need to keep in mind, also, the value of a liberal arts education, which is that if you have people who are trained to reason well, write well, speak well, do effective research, we don't know where the jobs of the future are going to be. And we need to be flexible in the way we educate our students, because we don't know which languages will be the most important ones and, in 20 years, which technologies will be the most important ones.

You need people who are able to adapt and respond to changing circumstances. And there is a value in being able to offer a portfolio of courses and subjects that can help students be trained to be adaptive.

JEFFREY BROWN:Gordon Gee, do you want to weigh...

ANNE NEAL:Jeff, I...

JEFFREY BROWN:Let me ask Gordon Gee to weigh in on this.

GORDON GEE:Well, obviously, I think that the process of change—I describe universities, American universities, this way. I think that we're elephants. I think we have to become ballerinas, or else we're going to become dinosaurs.

And we have to take charge of our own ability to be able to make those changes. Otherwise, they are going to be imposed from other places. We have to work very collectively. We have to work with our boards, but we have to move forward because we have no choice.

I think that we also have to understand the American university is not broken. We still are at the pinnacle of higher education worldwide. But we also are greatly threatened if we do not make the kinds of changes that I believe are necessary in order to be able to be successful.

JEFFREY BROWN:All right, we are going to have to leave it there, a very interesting subject which we will return to.

Gordon Gee, Anne Neal and George Cohen, thank you, all three, very much.

GEORGE COHEN:Thank you.

GORDON GEE:Thank you.