Higher Ed Slashed, Left Dripping in Red

The Chronicle of Higher Education released a survey of chief financial officers at four-year universities across the country and it is no treat; their outlook for this budget year (FY 2010) was gloomy, by next year? Even scarier. According to universities surveyed, 62% of officials expect the worst of financial pressures are still to come, with higher education budgets dripping in red ink, bitten by the recession looking forward.

This is despite the fact that universities have already slashed budgets, passed hair-raising tuition hikes, and in some cases chopped enrollment. At least 34 states already took the ax to public colleges and universities, reducing faculty and staff, coupled with steep tuition increases for the upcoming year.

And fiscal year 2011 looks equally sour, a total of 39 states expect to face or have already addressed shortfalls, amounting to an estimated $80 billion or 14 percent of state budgets. Although no real specifics, these fiscal challenges will surely trickle down to effect higher education spending even further.

To make up at least some of the difference, universities are spooking students with truly frightening tuition rates. On average the past year, tuition rose by nearly 10 percent for public four-year institutions. This comes after students were tormented with tuition increases of over 60 percent adjusted for inflation since 2000.

Meanwhile, enrollment and aid cuts are furthering the pain for students in a number of states. The California State University system plans to cut enrollment by 40,000 students. In Illinois, about 140,000 undergraduates (a quarter of all Illinois college students) will likely lose financial aid from the state. Ohio cut its top grant program in half, by $224 million.

And it is not just universities, weak state budgets are haunting community colleges equally. The majority of community college administrators predict that they will have mid-year budget cuts next year. While students can expect tuition to rise more than double the rate of inflation, as 46 states predict tuition increases at their community colleges.

And community colleges are feeling the effects of this recession in another way, as throngs of returning workers seek skills or job retraining. But the timing could not be worse. By a margin of 3:1 states report stress on their institutions to accommodate growing enrollment amid classroom cuts. In fact, in many cases, community colleges are so overextended that they now offer classes well into the graveyard shift to meet demand.

So what can be done to alleviate the skeletal state of higher education? A good start will be if the Senate passes the Student Aid and Fiscal Responsibility Act that expands Pell Grants and invests in community colleges. But that will not stop the bleeding alone. A second stimulus to help bridge state budget gaps for the upcoming year is critical until the economy shows signs of life again. While also, greater student aid and the creation of a ‘micro-Pell grant’ for workers to help pay for non-degree training can improve accessibility and affordability. While looking outward, we must start considering a way to better finance our education system, so it no longer resembles a sugar high and low.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future