There are two basic approaches to the renewal of Catholic higher education in the United States. The first is the method of leavening--that is seeking to transform the present Academy by becoming members at established institutions and working to move them in the right direction. There are many saintly scholars and administrators quietly doing this kind of work at the established, prestigious Catholic Universities. Many students (who are usually already quite strong in their faith or who through contact with robust Catholicism at their college become so) come away from these institutions on fire for the Gospel.
The problem is that these type of students are often in the minority. Many others either lose their faith or come away from their college life with a minimal or distorted understanding of the Catholicism they profess.
The other method is to create, either from scratch or on the stump of a dying institution, something new that more closely corresponds (if never perfectly) to an ideal Catholic education.
Concerns I have had of the latter approach are a) lack of scholarly rigor, b) isolationism and c) a utopianism that focuses too much on externals. As I have gotten to know graduates of these institutions better, I realize that these concerns do not in fact pan out as often as one might think. In fact, as Christopher Derrick argues in Escape from Scepticism, because these students are allowed to develop their minds in an environment relatively free from the poisonous influences of our culture, they are more able in the long run to enter into healthy dialogue with the good and bad trends of our culture. All Catholic institutions of higher learning should take note of what the graduates of these institutions are really like (and the graduates of the mainline colleges), rather than going by some kind of hypothetical judgment of "sectarianism."
A genuinely Catholic university will be concerned not only with excellence the intellectual environment, but in the moral and spiritual environment as well. Although, as Newman points out, the purpose of a University is universal knowledge, if a college administration is interested in the person who is studying at his institution, he will want that person to stay away from those things that will harm him and have available those that help him. Besides, as Mark Shea says, sin makes one stupid. Further, spiritual maturity makes one smarter. So, to avoid sin and seek communion with the Lord will help one in his pursuit of the truth, even if it doesn't relieve him of the hard work of thinking.