University Business - March 2009 - (Page 34)

Special Report: Higher Ed and the Economy • The California State University system announced plans in November to reduce enrollment, and one of its 23 campuses, Fresno State, suddenly stopped taking applications three weeks before its initial February 1 deadline. “We’ve been through recessions before, but I think this one is deeper and probably has more consequences than any one prior to this, and universities are feeling the brunt of it. It’s almost a ‘perfect storm,’ with state appropriations being cut back while people are losing their jobs and investment portfolios are dwindling,” says Sal Rinella, vice president of the STRATUS division of Atlantabased Heery International. STRATUS, comprised of former senior university officers, helps institutions create competitive advantages by leveraging assets. Rinella, previously president of Austin Peay State University (Tenn.) also is president of the Society for College and University Planning. But he and others who work in or with the higher ed community see actions colleges and universities can take—and many are taking them—to mitigate the problems they’re experiencing while waiting for the economy to improve. when Congress and Obama were in the initial stages of developing a stimulus plan. Community colleges in particular stand to be hard-hit and could benefit significantly by a reduction in that pressure—ironically, at a time when they are under pressure to accept more students who want to enroll. Historically, community colleges see higher enrollments in an economic downturn as laid-off workers seek to upgrade their job skills or learn new ones. “That’s the favorable impact of what is happening in the economy. But it gets to be problematic because community colleges get a high proportion of their funding from state and local governments. Except for the Pell Grants, we get a very small percentage of our funds from the feds,” says Norma G. Kent, vice president for communications at the American Association of Community Colleges. More families that otherwise might consider four-year institutions for their children also are likely now to shift to community colleges because they cost less, according to a report, “Impact of the Economy on College Enrollment,” released in January by Longmire and Company, a Kansas-based marketing, research, and consulting Federal Stimulus The basic line of thinking is that it will take federal funding, a lot of it, to make things right again at the country’s public colleges and universities. As 2008 ended, a coalition of 30 national higher education associations called on Congress to make higher ed a critical part of a massive stimulus package that Obama and congressional leaders already were considering. Spearheaded by the American Council on Education, the higher ed coalition proposed a series of federal investments in student aid and campus infrastructure to provide both immediate benefits as well as long-term investments. As 2009 began, a group of Democratic governors called for a $1 trillion economic stimulus that would include $250 billion for education at all levels, from pre-kindergarten to postsecondary. Without aid like that, said Wisconsin Gov. Jim Doyle, “we will see a great restriction of university education or such soaring tuition that ordinary hardworking families will be unable to afford it.” In mid-February, Obama and the Congress took a significant step toward satisfying both constituencies when lawmakers passed, and the President signed, a $787 billion stimulus bill that includes about $100 billion for education at all levels. Among other things, the American Recovery and Reinvestment Act of 2009 increases the maximum Pell Grant for needy college students by $500, to $5,350 this year, and $5,550 in 2010. It also provides a tax credit up to $2,500 of the cost of college tuition and related expenses this year and next. In addition, the package includes $53.6 billion for states to use for education purposes. That type of support “could relieve some of the pressure that might result in higher ed budget cuts at the state level,” ACE Senior Vice President Terry Hartle suggested earlier 34 | March 2009 Some public institutions are raising tuition, ‘substituting tuition dollars for state dollars.’ —Joseph Marks, Southern Regional Education Board firm that works with colleges and universities on enrollment issues. In the decisions families will make about colleges, says President Robert H. Longmire, “cost is an overriding factor, more than we have seen over the years.” Joseph Marks, director of Education Data Services at the Southern Regional Education Board, explained in December at a seminar in Atlanta for higher ed reporters that as state funding levels decline, some public institutions are raising tuition, “substituting tuition dollars for state dollars.” But “to keep college tuition affordable, don’t let it go up faster than family income levels in your state,” advised Patrick Callan, president of the National Center for Public Policy and Higher Education, also a speaker at the seminar, which was sponsored by the Hechinger Institute on Education and the Media at Columbia University’s Teachers College. Private Colleges While public institutions await government support, private colleges are left largely on their own to find ways to maintain operations as close to normal as they can while hoping for an economic upturn that will restore the value of endowments already significantly reduced, jump-start lagging fundraising, and otherwise stimulate fiscal growth. In mid-February, Harvard administrators announced buy-outs for non-faculty employees in light of a 22 percent drop in its endowment, which supports about 35 percent of the university’s universitybusiness.com http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - March 2009

University Business - March 2009
Contents
Editor's Note
Company Index
Advisory Board
College Index
Behind the News
Human Resources
Viewpoint
Money Matters
Special Report: Higher Ed and the Economy
Helping the Help Desk
Acts of Adaptation
10 Questions & Answers About the Cloud
What's New
End Note

University Business - March 2009