institutionalfinance

Deep Recession-Era Cuts Making for a Difficult Rebound

Many states are moderately restoring higher education funding, but major cuts during the 2008 recession have made for an uphill battle.

In 47 states, per-student public funding for higher education remains well below prerecession levels, according to a report released Wednesday by the Center on Budget and Policy Priorities. That's in spite of the fact that 37 states increased higher education funding last year by an average of nearly 4 percent. The average state is spending $1,805 per student, or 20 percent less than before the 2008 recession. In severe cases -- like in Alabama, Arizona, Louisiana, Pennsylvania and South Carolina -- funding has been reduced by 35 percent.

“Deep state funding cuts have had major consequences for public colleges and universities. States (and to a lesser extent localities) provide roughly 53 percent of the revenue that can be used to support instruction at these schools,” stated the report.

The data in the report are based on the latest edition of an annual report on state appropriations for higher education by the Center for the Study of Education Policy at Illinois State University and the State Higher Education Executive Officers.

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$150M Gift to Yale for Campus Center

Yale University on Monday announced a $150 million gift to renovate several historic facilities and to create a campus hub for student life with a mix of educational, cultural and social functions. The gift is from Stephen A. Schwarzman, the Blackstone founder and a Yale alumnus.

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Norfolk State, With Enrollment Dropping, Cuts 97 Jobs

Norfolk State University announced Friday that it will eliminate 97 jobs -- some of them currently vacant -- to deal with a $16.7 million deficit in the budget for the next academic year, The Virginian-Pilot reported. Norfolk State is a historically black college that is struggling with enrollment and, as a result, with finances. Enrollment for the fall is expected to be about 5,100 -- a drop of 900 in a year. Of particular concern is that only 500 freshmen are expected.

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Wisconsin Governor's Higher Ed Autonomy Plan Killed

Wisconsin Governor Scott Walker's plan to give state colleges autonomy while substantially cutting their funding was axed by Republican legislators Tuesday. 

Legislators said they planned to decrease Walker's proposed $300 million in higher education cuts. By how much they weren't sure.

Walker had planned to create a separate authority for the University of Wisconsin System, but instead legislators are now proposing very limited autonomy gains, such as freeing the Wisconsin system from state procurement guidelines. "We think it's an idea we should look at. We're just not prepared to implement it in this biennium," said State Senator Alberta Darling, according to the Milwaukee Journal Sentinel.

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Report says administrative bloat, construction booms not largely responsible for tuition increases

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A new report suggests that while growing personnel and construction costs are a factor in the rising price of public higher education, a decline in state funding is the real culprit. 

Howard U Turns to Alumni to Help Students Pay Bills

Wayne A. I. Frederick, president of Howard University, last month sent an appeal to alumni on behalf of 180 seniors who were on track academically to graduate this month, but who would be blocked from doing so because they owed money to the university. The Washington Post reported that Frederick described the seniors' circumstances (hometowns, majors, grades and debts) without giving their names. Their balances ranged from $313.50 to $27,871.75. The students collectively owed about $380,000 when Frederick sent out the appeal. So far the university has received $160,000 in response.

 

Cheyney U Didn't Track $50M in Student Aid

For three years, Cheyney University failed to meet its requirements to track federal student aid awarded to its students, The Pittsburgh Post-Gazette reported. Colleges and universities are required to do such tracking to make sure students are eligible, and Cheyney could have to repay funds for which it can't document student eligibility. Just under $50 million in aid awards was not tracked, and that process has now started. It is unclear how much the university could owe. Cheyney, a historically black college in Pennsylvania, is already facing significant financial problems.

 

Jury Rejects Suit Over Cal State's 2009 Tuition Increase

A California jury has rejected a class action against the California State University System over a 2009 tuition increase, City News Service reported. Students challenged the increase as illegal since they had already paid tuition. But the university argued that it had warned repeatedly of the possibility of tuition increases as the state imposed deep cuts in appropriations for higher education.

 

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Sanders enters presidential campaign and touts free tuition plan

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Bernie Sanders, the Vermont Independent, enters Democratic presidential race with a pitch for his free tuition plan, possibly putting some pressure on Hillary Clinton's left flank.

Performance-Funding Bill Advances in Texas

The Texas Senate on Thursday passed a bill that would require public colleges to meet several performance standards in order to increase tuition rates beyond the rate of inflation. Performance-based funding formulas, while controversial, are becoming more popular among state legislatures. The bill in Texas, which now goes to the state House for consideration, likely will draw national attention.

The 11 performance requirements in the proposed legislation include measures of graduation rates, student completion milestones, the number of degrees earned by at-risk students and the institution's administrative costs. 

In 2003 the Texas Legislature ceded its ability to set tuition rates at the state's public institutions. That move was a response in part to deep budget cuts, The Dallas Morning News reported. But tuition has risen quickly since then, said lawmakers who support the bill.

“The cost of college education has skyrocketed to where students are being priced out of higher education altogether or required to take out exorbitant student loans to finance their education,” said State Senator Charles Schwertner, a Republican, according to the Dallas newspaper.

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