21 July 2010

With End of Federal Stimulus, Tough Times for Public Colleges

USA Today

WASHINGTON — Most state governments depend on federal stimulus money to keep public colleges and universities afloat, a new report says. But these funds may be drying up as the new fiscal year begins.

Thirty-nine states used stimulus money to support higher education in the past year, compared to only 14 states the year before, according to the report by the National Conference of State Legislatures. To receive federal funds, states were required to keep higher education funding at or above 2006 levels.

As a result, public funding for higher education increased an average 2.3% last year. Without stimulus money, it would have fallen 2.5%, according to the report.

Public funding for colleges and universities still fell in 23 states, despite the overall increase. Hawaii made the most drastic cuts, at 26%, and Michigan and Louisiana each reported reductions of over 5%.

Experts say it won't be long before stimulus dollars disappear for good, forcing state colleges and universities to raise tuition, cut enrollment, or lay off faculty — trends already apparent at institutions across the nation.

"Higher education funding will continue to take significant cuts in most states," said William Zumeta, a public affairs and education professor at the University of Washington. "Very little of the federal stimulus is left for this fiscal year, and it looks unlikely that there will be any more for higher education."

Since colleges and universities can raise tuition to compensate for reduced state funding, any extra stimulus money will likely go to Medicaid and other state services, Zumeta predicted.

"Higher education is the only state function that can look to its customers to pay more," he said.

Tuition at public institutions already has risen, climbing 6.5% last year at public four-year colleges and universities, and 7.3% at two-year colleges.

This year, tuition rose 32% in the University of California system. Hikes are also expected for Michigan college.

The recession is "a double whammy for students," said Don Heller, director of Pennsylvania State University's Center for the Study of Higher Education. "Students and parents have fewer resources to pay for college during recession, and at the same time, tuition is going up."

To make matters worse, he added, many states have reduced funding for financial aid programs.

Dustin Daniels, student body president at Florida State University, where tuition will increase 15% next year, said some students are struggling financially.

"I don't think we've gotten to the point where we're pushing a lot of students that can't afford tuition to the wayside, but I think we're getting there really fast," he said.

Last year, FSU laid off 21 tenured and 34 tenure-track professors after state support fell by $82 million.

Such drastic moves may become a trend, experts say. Concerns about the deficit mean Congress is unlikely to approve more stimulus spending this election year. And problems with higher education funding may not end with the economic crisis.

Jim Palmer, editor of Grapevine, an Illinois State University publication that tracks state tax support for higher education, said current methods for funding higher education are outdated and need to be revamped if the country is to meet President Obama's goal of having the world's highest proportion of college graduates.

"Our aspirations for higher education have outpaced our funding systems," he said.

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