Some state colleges face drastic cuts

ASK THIS | April 115, 2009

Applications are up but many schools may have to cap enrollment, freeze hiring, cut programs, delay maintenance and raise tuition.

Q. In a survey, 62 percent of university board executives surveyed agreed that the economic crisis was having a “substantial impact” on their schools. Reporters and editors: what’s the situation in your state?

By Alexa Millinger
alexamillinger@gmail.com

Florida’s public university presidents gathered outside the state’s Capitol April 23rd to plead with lawmakers to reconsider drastic cuts in higher education funding. Florida State University says it would likely have to cut 21 degree programs, a satellite campus and hundreds of employees. The president of Florida International University, Mitch Maidique, declared the situation for the state’s public higher education system “Armageddon” if proposed budget cuts are passed.

In Nevada the chancellor of higher education has warned that the governor’s proposed 36 percent cuts in the budget for public universities could “destroy education in the state,” and the head of the Louisiana State University system warned that proposed cuts would undo the state’s progress. The governor's cuts would be actual reductions from curent spending.

As President Obama urges the United States to prioritize education and strive to be the model for the world, some public universities are in distress over draconian cuts that have the potential to do everything from limit enrollment to downgrade education quality. Universities are in the middle of a mad dash to urge state legislatures to reconsider drastic cuts before the budgets are finalized at the close of legislative sessions in early May.

It’s an important story for news organizations in almost every state.

A recently released report on the financial conditions of the national public university system by the Association of Governing Boards of Universities and Colleges found that 62 percent of university board executives surveyed agreed that the economic crisis was having a “substantial impact” on their institutions. With funding slashed mid-year and a dismal outlook for the upcoming fiscal year, many schools are left to make dramatic changes including hiring freezes, cutting programs, delaying maintenance, raising tuition and capping enrollment.

Public higher education has been faced with declining budgets and recessions in the past, but Pat Callan, president of the National Center for Public Policy and Higher Education, said the current conditions are largely” conditions. The turmoil comes at a time when an increasing number of college-age students are applying and enrolling, and unemployed adults are looking to return to college to retool their skills. Among the hardest hit are states like California and Arizona, which face increasing population growth, furthering their distress.

Amid program and staff cuts, many universities realize they need to maintain or expand financial aid to make college feasible for students – especially in a recession – and have been working out ways to do so in their proposed plans.

But increases in financial aid may end up being absorbed by increases in tuition, Callan said, – with double-digit increases proposed in some states. Callan added that a rise in aid will likely not see much increased benefit for the middle class.

“Most colleges and universities will try to protect the low income students they have already…but we’re not getting a lot of low income students in higher education in this country,” Callan said. He added that “the best thing to do would be to not raise tuition,” which inevitably squeezes the middle class.

An increase in federal Pell Grants will help financial aid as well, Callan said, especially as students will be likely to borrow less in private loans to pay for college amid recession and the higher interest rates private loans carry. The Wall Street Journal reported this week that default rates on student loans have skyrocketed.

Dan Hurley, director of state relation and policy analysis for the American Association of State Colleges and Universities, said the federal stimulus money will have some effect at mitigating the problems universities face, but “is not going to be enough to eliminate them by any means.” He cautioned that the stimulus money could create an environment where states become dependent on the funds, creating more problems down the road.

“When [federal money] dries up, states better be positioned to fill in that void, otherwise you may see states having to increase tuition dramatically or make huge reductions in their freshman class,” Hurley said.

Students are of course caught up in the uncertainty, as many will have to wait until university governing boards decide on tuition, likely in May, to find out what they will be paying come fall.    

Situations vary widely from state to state. The Minnesota House of Representatives passed a bill in late April that would use federal stimulus funds to curb tuition increases, Ohio and Maryland have worked to freeze tuition and Callan said some states, like Texas, appear to be largely unaffected.

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