Four million undergraduate students enroll in regional comprehensive universities each year. Numbering close to 420, these universities have been called "democracy's colleges" in recognition of their role in facilitating educational opportunity through requiring low barriers for admission, emphasizing teaching as opposed to research, and engaging in the civic and economic life of their regions. These activities have given rise to the three elements of their public purpose; specifically, they are often student-centered, regionally engaged and open access. Despite the important function regional comprehensive universities serve, they are facing unprecedented challenges created by a neoliberal public policy context that narrows their purpose to their role in improving the market. Within a neoliberal public policy context, these universities are facing rising expectations, demands for greater private sector engagement, cuts to public funding and the introduction of performance based funding. This dissertation is a qualitative case study of the institutional responses of four regional comprehensive universities in a single state to challenges created by a neoliberal state public policy context. University stakeholders including senior administrators, staff, faculty and community leaders of the four universities were interviewed. Also interviewed were national policy and education experts and senior policymakers from the state under study. Findings show that a neoliberal public policy context coupled with declining student enrollments have forced the four universities into a series of Faustian bargains about which elements of their public purpose they can afford to maintain and which they must allow to be eroded. Specifically, the universities are eschewing access missions and becoming more selective in order to enroll students who will be more likely to graduate and improve the university's standing in performance based funding allocations. Some are also curtailing regional civic engagement efforts in favor of economic development. Findings also show that universities whose organizational identities embody their public purpose are better positioned to preserve elements of their purpose within a neoliberal public policy context. Finally, two of the universities were found to be striving to create alternative models of legitimacy focused on embodying their public purpose. Implications for public policy, educational opportunity and regional public life are described.