Oberlin has had its share of financial woes in recent months, but it is not alone. Across the country, public and private colleges and universities are struggling to contain an explosive funding crisis.
Public colleges and university systems are feeling the heat from state lawmakers, who are looking for ways to close the gap of massive state deficits. Private institutions, meanwhile, are trimming budgets and augmenting tuition after two years of negative endowment returns.
A recent study conducted by the National Association of College and University Business Officers found that endowment performance at American colleges and universities had reached its lowest levels since 1974. On average, colleges lost six percent in fiscal year 2002.
“It’s across the board,” NACUBO spokesman Damon Manetta said. “With an average negative of six percent on investment, you’re talking about just everyone being hit
The falling fortunes of colleges nationwide paint a stark picture of higher education belt-tightening.
At Christian Newport University, a 4,800-student public liberal arts school in Newport News, Va., trustees voted last fall to hike tuition 9 percent for the 2003-04 academic year after the state announced they would slash their funding by 20 percent. This came on top of this year’s 9 percent increase. A nursing program as well as recreation, sport and wellness management program will disappear in the fall, as well as 10 percent of its workforce.
“Virginia, in particular, because of their budget though is trying to balance their budget on the higher ed folks,” said Margaret Yancey, the university’s director of development. “We would certainly hope that higher ed would be spared this time around. We need to maintain the core mission of the university.”
Some institutions even face the threat of mid-year budget slashing.
Santa Clara’s College of the Canyon faces a $2 million gap in the schools $45 million budget – money that has already been spent – under Gov. Gray Davis’ plans to nix $215 million this year to community colleges.
“These are absolutely the worst [financial troubles] that I’ve seen in community colleges in two and a half decades,” College of the Canyon President Diane Van Hook told the Daily News of Los Angeles. “For the community colleges to be subjected to disproportionate cuts when we are the engine that’s driving a lot of things — an ability for people to go on to higher education in a quality way and to retrain workers — lacks reason. It makes no sense.”
In Massachusetts, public colleges are feeling the wake of a $12 million mid-year funding cut proposed by new Republican Governor Mitt Romney, who is wrestling with a deficit-laden state budget inherited from his predecessor.
Two weeks into the semester, the proposed February cut — which come on top of $65 million the state’s public colleges have lost since 2001 — will mean mid-semester course corrections and probable staff reductions. The UMass state college system, which educates tens of thousands of students each year, has lost 10 percent of its faculty since 2001, and has significantly raised fees — twice — drawing student ire.
New York’s public colleges are also facing sizable cuts. Gov. George Pataki has proposed $184 million in cuts for the State Universities of New York, seeking to shake the state’s $11.5 billion deficit. In addition, in-state students are facing tuition hikes of 40 percent.
“In the past decade, as costs have increased, state support for higher education has decreased,” President, SUNY Student Assembly George Pape said. “Something is wrong with this picture.”
Unionized staffers launched a massive media blitz several weeks ago, purchasing billboard ad space that declared, “If you think education is expensive, try ignorance.”
This 11 percent across-the-board cut, said Miriam Kramer, higher education coordinator for New York’s Public Interest Research Group, “makes it questionable whether these programs are even public.”
“Low- and middle-income students are going to be hit the worst,” Kramer said. “[It’s] almost $1500 more a year than they’re currently paying. These are students who are already struggling to make ends meet.”
College students feel the pinch as trustees approve larger tuition hikes.
Last year, American public colleges and universities hiked tuition 10 percent, according to a study by the College Board. Private institutions, their endowment portfolios battered by a turbulent stock market, saw tuition increases of 9.6 percent, a hike of nearly 6 percent from two years ago.
Over the last decade, the College Board reported, tuition has mushroomed 38 percent, even during a period of modest inflation.
Debts at colleges and universities have also skyrocketed, underscoring the dire need of many schools to either cut services or hike tuition charges. Three years ago, the median debt held by a public college or university was $87 million. It passed $140 million last year.
Private institutions, which depend more heavily on endowments to meet revenues, are facing the doubly frustrating dilemma of sinking endowment while concurrently needing to siphon out large sums of money to meet spending needs.
Even the largest universities are feeling the pain of a bedeviled economy. Harvard University lost nearly $800 million from their endowment, the world’s largest for a private educational institution, falling to $17.2 billion. Massachusetts Institute of Technology was down 12.6 percent, slipping $778 million to $5.4 billion.